Urbanized Area Formula

The Urbanized Area Formula Funding program (49 U.S.C. 5307) makes federal resources available to urbanized areas and to governors for transit capital and operating assistance in urbanized areas and for transportation-related planning. An urbanized area is an incorporated area with a population of 50,000 or more that is designated as such by the U.S. Department of Commerce, Bureau of the Census.


After data reporting was required by Congress in 1974, the Federal Transit Administration’s National Transit Database was set up to be the repository of data about the financial, operating and asset conditions of American transit systems.

  • Up to 1999, only Metro Transit reported information to the database and received formula funds.
  • Starting in 2000, Transportation and Transit Development (now Metropolitan Transportation Services) submitted data on all other providers. As a result, in 2000, the region received about $5.9 million of additional 5307 urban formula funds, above what the regional transit system would have received alone from Metro Transit reporting.
  • The Met Council developed principles to distribute FTA 5307 area formula funds in 2001 at Transportation Committee in February and March at the Met Council through Business Item 2001-49. Those principles remain in place today.

2001 funding distribution principles

  • Funds generated by Metro Transit reporting would be distributed to Metro Transit.
  • Funds generated by Transportation and Transit Development (Metropolitan Transportation Services) reporting would be distributed proportionately to:
    • Opt-out providers eligible to receive federal funds
    • Metro Mobility
    • Other regional providers
  • Providers eligible to receive 5307 funds will submit a list of projects. Eligible grant activities will be consistent with Federal Transit Administration guidelines.
  • Funds generated by regular route and rural/small urban providers will be distributed to the general Transportation and Transit Development (Metropolitan Transportation Services) pool of capital funds. Transportation and Transit Development (Metropolitan Transportation Services) will come forward annually with a list of recommended projects, consistent with the Transportation Policy Plan and the 2020 Regional Transit Master Plan.
  • Federal funds not spent two years after the award of the funds will be reallocated to the general Transportation and Transit Development (Metropolitan Transportation Services) pool of capital funds to ensure they are spent before authorization lapses.

Current status

  • The 2001 principles remain in place.
  • Two adjustments have been made to practice. Both adjustments were made for the benefit of Opt-out providers.
    • Opt-out providers’ federal formula earnings are defederalized with regional transit capital for capital eligible projects, or motor vehicle sales tax for projects not eligible for regional transit capital funds.
    • Opt-out providers have not been held to the two-year timeline for reallocation of funds. Providers have been allowed to keep those funds.
  • The Met Council sets priorities for the capital program.
    • Metro Transit programs 5307 earnings to the Metro Transit family of services, which includes bus, light rail and commuter rail.
    • Metropolitan Transportation Services programs 5307 earnings to the Metropolitan Transportation Services family of services, which includes Metro Mobility, Transit Link and contracted bus; and the regional fleet, which includes the Opt-out providers’ services.
  • Opt-out providers program 5307 earnings based on local board priorities. Those funds are passed through from the Council to system opt-opt providers through subrecipient grant agreements.