Potential Government Shutdown

4/7/2011

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Dear Colleague:

I know that many of you have been following with interest the current discussions in Washington about funding for the rest of the fiscal year, including funding for the Federal Transit Administration (FTA).  Throughout these discussions the President has made clear that he does not want a government shutdown, and the Administration is willing and ready to work day and night to find a solution with which all sides can agree. Given the realities of the calendar, however, I am required to apprise you of the procedures that FTA will use to implement an orderly shutdown should Congress be unable to pass a funding bill. 

As soon as funding lapses, FTA will not be permitted to incur further financial obligations.  This means FTA will neither obligate grants nor make payments to grantees.  For projects under development, FTA staff will not carry out environmental, legal, civil rights, and other reviews essential for advancing projects to the point of obligation since these are not related to immediate issues of life and safety.  FTA’s Financial Management Systems will be unavailable for all grant and vendor payments.  FTA will also not obligate or outlay funds for research and technical assistance activities because appropriations will not be available to pay the salaries of the staff executing the payments.

As you know, FTA customarily reimburses grantees for ongoing operations and construction projects to enable you to provide transit services to the public and compensate your employees and contractors.  Recently, these payments have totaled slightly more than $270 million per week.  During the shutdown period, FTA will not continue any of its unfunded core agency functions.  No grants, cooperative agreements, contracts, purchase orders, travel authorizations, or other documents obligating funds will be executed to any of the FTA’s 1300 grantees.

In the event of a shutdown, roughly 90 percent of FTA’s staff will be furloughed.  The remaining staff will be limited to three individuals who will remain in duty status for the purpose of shutdown and startup activities as well as emergency needs.  A small number of additional employees will remain in duty status because they are compensated either from the American Recovery and Reinvestment Act (ARRA) or the emergency legislation providing for the recovery of Lower Manhattan in the wake of the September 11th attacks.  During a shutdown, however, the work of those employees will be limited exclusively to the oversight of already-awarded Recovery Act grants and the Lower Manhattan recovery efforts. 

President Obama, Secretary LaHood and I sincerely hope that Congress will be able to pass a funding bill and obviate the need for all the measures cited above.  Still, we want you to be fully informed of our plans so that you might be able to take measures to minimize the impact of any potential suspension of Federal assistance.


Sincerely,
/s/
Peter M. Rogoff