Law-First Plan
6. Creative Funding
See the city budget map: where the money goes and how to move it
Fare-free first: about $0.5 to $0.6M a year. The bigger network phases in later ($13.8M starter, $22.6M full).
The swing bridge proves the model: a clear story plus a federal program plus a local match. Every source below is real and current, and each one is matched to what it legally pays for. The pitch is the same everywhere: Sheboygan is getting ready for universal high income, where a great public mobility system gives everyone more time, health and freedom than a car payment ever could.
6.1 The precedent: how the swing bridge was funded
The city applied to the U.S. DOT RAISE program and won $5,341,931 in August 2022, announced by Wisconsin's senior U.S. Senator, who noted support "through the appropriations process" (Senator's press release, August 10, 2022; WHBL, August 11, 2022). The city committed a $1,335,483 match (Resolution 65-23-24, October 2023). The MPO's 2025-2028 TIP programs $6,677,000 for construction in 2027, 80% RAISE and 20% local. Lesson: a competitive federal grant, backed by a Senator's public support, with a modest local match.
6.2 Congressionally Directed Spending (Senate) and Community Project Funding (House)
What it pays for: transit capital only. Senate THUD guidance for FY2027 says it will not fund operating expenses or administrative salaries. Buses, stations, shelters, mobility hubs and transit planning tied to a specific project are eligible. Every DOT project keeps its normal non-federal cost share, and funds are paid by reimbursement (FY2027 Senate guidance as published by Senate offices).
Recipients: governments and nonprofits only; no for-profit recipients. The House caps all CPF at 0.5% of discretionary spending; the Senate caps CDS at 1% (House and Senate FY2027 guidance).
Realistic amount: $1 million to $5 million per project. Recent Wisconsin examples: a $2,000,000 Milwaukee County bus replacement request by the senior Senator (Senate THUD CDS list), and two FY2027 House requests from the 1st District office totaling $7 million ($5 million and $2 million, both shoreline and harbor projects).
Deadlines: the FY2027 cycle has closed (Senate THUD requests were due April 20, 2026; House THUD March 20, 2026). FY2028 should follow the same rhythm: member intake forms open January to March 2027, with requests due to offices about a week before each committee deadline. Start now.
How to submit: the city sends one project to each of three offices: the senior U.S. Senator's office (online CDS form), the junior U.S. Senator's office (whether it accepts requests is an open question), and the 1st Congressional District House office (online CPF form; this office submitted FY2027 THUD requests). Include council resolution, match commitment, the TIP listing, cost estimate and letters of support.
Pitch angle: "The first city built for universal high income: electric buses and mobility hubs that make car-free life an upgrade."
6.3 Wisconsin state sources
Transit Capital Assistance: the governor's 2025-27 budget (SB 45) proposed a new $20 million GPR program for WisDOT to replace aging transit vehicles. Pays for vehicles (capital). Next step: confirm enacted status and the application round with WisDOT.
Transportation Alternatives Program (TAP): pays for walking and biking capital, the Section 2 sidewalk and crossing work. The 2026-2030 cycle closed October 31, 2025 (49 projects, over $32 million statewide, announced August 21, 2026). The 2028-2032 cycle opens about summer 2027 (WisDOT TAP page).
CMAQ (state-run federal funds): Sheboygan County is an eligible area. Pays startup operating for new or expanded service for up to three years at 80% federal, plus capital. The 2026-2030 cycle is closed; the 2028-2032 cycle information is expected summer 2027 (WisDOT CMAQ page). This is the best operating money for the Harbor Loop and longer hours.
State budget items: the next biennial budget (2027-29) is built in 2027. The city asks its state legislators and the governor's office for a named item, such as a transit capital or mobility hub line. Pitch: the Lakeshore Link as a regional workforce connector from Sheboygan to Milwaukee County.
6.4 Federal discretionary grants
Bus and Bus Facilities (5339(b)) and Low-No (5339(c)): capital for buses and facilities; Low-No for zero- or low-emission buses and charging. FY2026 offered about $21 million (Bus) and $589 million (Low-No); applications closed September 21, 2026 (FTA NOFO; Federal Register 2026-15090). FY2025 Low-No awards ranged from $256,281 to $121 million. Realistic ask: $2 million to $10 million for electric buses and chargers. Next NOFO expected mid-2027. Pitch: a winter-ready electric fleet for a city that runs every day.
BUILD (formerly RAISE): capital for multimodal projects of local significance, up to $25 million. FY2026 closed February 24, 2026 with $1.5 billion; the FY2027 NOFO has not been released (NLC fact sheet; U.S. DOT). Realistic ask: $5 million to $15 million for a downtown and harbor mobility hub with sheltered links. Pitch: the bridge was round one; the hub is round two.
Areas of Persistent Poverty: FTA states no future funding is anticipated (last cycle FY2023). Not a source.
Reconnecting Communities: the last NOFO was 2024; no new round is posted. Not a near-term source.
6.5 Philanthropy and research partners
Guaranteed-income research has a Wisconsin home: UW-Madison's Institute for Research on Poverty co-evaluated the Madison Forward Fund ($500 a month to 155 households, about $930,000, privately funded), with the University of Pennsylvania's Center for Guaranteed Income Research and Mayors for a Guaranteed Income (IRP; CGIR report, October 2025).
The v2 ask: a "Mobility as Income" study. Fare-free, every-day service is a cash-equivalent benefit to every household. Partner with IRP and CGIR to measure time saved, jobs reached, health visits kept and household savings from going car-free. Pays for: research, evaluation and pilot costs, not core operations. Realistic range: $250,000 to $1 million, based on the Madison pilot's scale. Deadline: rolling, by partner.
Employers and hospitals: cash from non-government sources counts as federal local match (49 U.S.C. 5307(d)(3)(A)). Hospitals and large employers can sponsor a route extension, a shift-time trip or a mobility hub. Partners welcome, never required. Pitch: healthier, on-time staff without parking costs.
6.6 Local tools and their limits
TIF: pays for capital only, such as mobility hubs, sheltered stops, sidewalks and heated links inside a district, once listed in the project plan and approved through the Joint Review Board (Wis. Stat. 66.1105). Not operating.
Parking revenue: the parking utility already transfers $70,200 a year to transit (2026 budget). Raising downtown parking rates and routing the increase to transit is a council decision. Pitch: every parking dollar funds the free bus that makes parking optional.
Wheel tax and referendum: the steady operating base (Section 4).
No vehicle advertising: v2 skips bus ads by design, consistent with zero promotion (Section 5.4).
6.7 Ranked action list
1. Now to January 2027: build the FY2028 CDS and CPF package for electric buses and the harbor mobility hub, with council resolution and match.
2. Spring 2027: watch for the FY2027 BUILD NOFO and prepare the mobility hub application.
3. Summer 2027: apply to CMAQ (2028-2032) for Harbor Loop and expanded-hours startup operating.
4. Summer 2027: apply to TAP (2028-2032) for priority sidewalks and raised crossings.
5. Mid-2027: apply to Low-No for electric buses and chargers.
6. 2027: ask state legislators for a 2027-29 budget item and confirm the Transit Capital Assistance round.
7. Rolling: open the "Mobility as Income" research partnership with IRP and CGIR, and invite hospital and employer sponsors.
6.8 Flexible municipal money: CDBG, pandemic funds and budget moves
Municipal budgets move every year by council vote. Three flexible pots fit the plan.
CDBG (Community Development Block Grant). Sheboygan is a HUD entitlement city and receives only CDBG from HUD's formula programs. The 2025-2029 Consolidated Plan projects about $900,000 a year ($4.5 million over five years), and the city anticipates about $928,390 for 2026 (draft 2026 Annual Action Plan, public comment September 16 to October 16, 2026; council action scheduled October 19, 2026). Current uses center on housing rehabilitation, real-property acquisition, public services and a $160,000 yearly Section 108 debt repayment (2025 plan amendment). Best of all, the Consolidated Plan itself names "public transportation during 2nd and 3rd shifts" as a priority need, alongside sidewalks and streetlights. The plan already asks for what v2 delivers.
CDBG capital: stops, shelters, sidewalks, curb ramps, lighting and mobility hubs that serve low- and moderate-income (LMI) areas are eligible public facilities and improvements (24 CFR 570.201(c)).
CDBG operating: transportation services are an eligible public service (24 CFR 570.201(e)). Public services are capped at 15% of the grant plus 15% of prior-year program income, about $139,000 a year on a $928,390 grant before program income. That room funds evening and late-night trips that reach second and third shift jobs.
70% rule: at least 70% of CDBG spending over the certification period must benefit LMI persons (24 CFR 570.200(a)(3)). Fare-free, every-day transit fits naturally: LMI residents ride most, and service can be documented through LMI-area routes and rider surveys.
Section 108: HUD guarantees loans of up to five times the latest CDBG grant, about $4.6 million for Sheboygan, repaid from future CDBG (24 CFR 570.705). The city already uses Section 108, so the tool is familiar. Fit: front-funding hubs and sidewalks now.
Pitch angle: "CDBG builds the floor for universal high income: free, every-day mobility to every job and shift."
Next step: the 2027 Annual Action Plan cycle (comment period about September 2027, based on the 2026 calendar). Ask Planning and Development to add a transit public-service line and an LMI-area stop and sidewalk line.
Pandemic funds. The city received $22,006,206 in ARPA State and Local Fiscal Recovery Funds. The council's final allocation (Res. 134-24-25, December 16, 2024) committed every dollar to 19 projects, led by the $9,550,000 raw water intake and $7,000,000 for affordable housing grants; none went to transit. All funds were obligated by the December 31, 2024 deadline, and spending must finish by December 31, 2026. No unobligated balance remains to redirect.
Transit received its own federal relief through FTA: $3,497,562 in CARES Act operating and capital and $1,426,648 in ARPA operating assistance (FTA Triennial Review, FY2024). WisDOT reports relief dollars bought six new cutaway buses and five support vehicles, replaced the operations facility roof and kept full service running since 2020 (WisDOT 2024 Performance Review). The final pieces were a CAD/AVL system ($100,000, TIP 2025) and $100,000 for engine maintenance in 2025. Fleet renewal also drew on a $2,268,425 FTA 5339 and CMAQ award (2022), and the next five heavy-duty buses carry a $2,100,000 CMAQ award. The lesson: when relief money arrived, Shoreline Metro turned it into vehicles fast. The same readiness wins the next round.
Budget moves. The city general fund, the Capital Improvement Program (bus replacement already ranks as a "mandated project") and Sheboygan County (which already shares sales tax with the city for transportation infrastructure under a 2022 intergovernmental agreement) are all set each budget cycle. A council or county board vote can move dollars to v2 service. Pitch: one line in each budget buys a city where no one needs a car.
Added actions: (8) Fall 2027: put transit service and LMI-area stops into the 2027 CDBG Annual Action Plan. (9) Each budget cycle: ask the city and county for a named v2 line item.