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Project Development Academy (PDA) “Project Funding”

Project Development Academy (PDA) “Project Funding”. September 19, 2007. Ron Rigney, P.E. & P.L.S. Director Division of Program Management.

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Project Development Academy (PDA) “Project Funding”

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  1. Project Development Academy (PDA)“Project Funding” September 19, 2007 Ron Rigney, P.E. & P.L.S. Director Division of Program Management

  2. The Division of Program Management is responsible for preparing the programming documents for authorization of state and federal funding for the Preliminary Engineering (PE) and Environmental, Design, Right-of-Way, Utility, and Construction phases of KYTC projects.

  3. Programming documents are required for authorization of the initial funding to begin the corresponding phase activities and the modifications to previously authorized funding. Modifications add or reduce funds to correspond with the projected amount of required funding to complete the remaining work of the corresponding project phase.

  4. The majority of the funding for transportation projects is either state funding or federal funding. However, a project may include both state and federal funding and may even include partial funding from a local city or county agency.

  5. Various transportation funding programs are available for transportation projects within KYTC. Each of these funding programs has state/federal regulations which must be followed throughout the entire project process. The regulations outline the type of project activities that are eligible for the designated funding and the required processes that must be followed throughout the entire project.

  6. Funding for KYTC projects include transportation projects funded through the Rural Secondary Program with funds allocated to each of the 120 Kentucky counties for construction, reconstruction, and maintenance of secondary and rural roads in each county. The program is funded by 22.2 percent of the motor fuels taxes and distributed by formula to each of the 120 counties. The projected annual amount of funding through the Rural Secondary Program is approximately $110 million per year.

  7. Also, funding for KYTC projects include transportation projects funded through the County Road Aid Co-op Program allocated to each of the 120 Kentucky counties for construction, reconstruction, and maintenance of secondary and rural roads in each county. The program is funded by 18.3 percent of the motor fuels taxes and distributed by formula to each of the 120 counties, but the funding is expended by the fiscal court in each county. The projected amount of funding through the County Road Aid Co-op Program is approximately $92 million per year.

  8. In addition, funding for KYTC projects include transportation projects funded through the Municipal Aid Co-op Program for construction, reconstruction, and maintenance of urban roads and streets within 421 incorporated cities and 46 unincorporated urban places throughout Kentucky. The funding is 7.7 percent of the motor fuels taxes and is distributed by formula and expended by the fiscal court within each of the urban areas. The projected amount of funding through the Municipal Aid Co-op Program is approximately $38 million per year.

  9. The Rural Secondary Program, the County Road Aid Co-op Program and the Municipal Aid Co-op Program are administered through the Department of Governmental Relations, Office of Rural and Secondary Roads.

  10. Also, state funding provided through the Division of Maintenance and the Division of Traffic Operations are provided for normal maintenance and operations of existing roadways throughout the entire Commonwealth of Kentucky. The projects include bridge maintenance, pavement resurfacing, guardrail, slide repairs, drainage, pavement markers, pavement striping, roadway signing and lighting, and other traffic operations projects. The projected amount of funding through the maintenance and operations programs is approximately $280 million per year.

  11. In addition to these KYTC programs, KYTC has projects funded through the state road fund (FD04) and through the federal transportation funding (FD52) programs. The projects funded through the FD04 and FD52 programs must come through the Six-Year Highway Plan (SYP) process and must be approved by the Kentucky General Assembly. Each fiscal year, the projected amount of funding available for the FD04 program is approximately $200 million and approximately $600 million through the FD52 federal program.

  12. In addition to the FD04 and FD52 programs, the 2005 General Assembly approved the sale of $300 million in state bonds and $150 million in federal GARVEE bonds.

  13. The 2006 General Assembly approved the sale of $350 million in state bonds and an additional $290 million in federal GARVEE bonds.

  14. The combined bond programs provided $650 million in state bonds and $440 million in GARVEE bonds for funding construction phases of KYTC roadway projects.

  15. Kentucky Six-Year Highway Plan (SYP)

  16. KYTC projects that are funded through the state road fund (FD04) program, through the federal transportation funding (FD52) program, through the 2005 and 2006 state bond programs, and through the 2005 and 2006 GARVEE bond programs must come through an “Enacted Six-Year Highway Plan (SYP)” approved by the Kentucky General Assembly.

  17. KYTC submits to the General Assembly in February of even number years a “Recommended Six-Year Highway Plan” containing a listing of proposed projects including the scheduled project phases, proposed type of funding, scheduled fiscal year, and the estimated cost of the corresponding project phase.

  18. The General Assembly reviews the projects identified in the Recommended SYP, and they may make revisions to projects, they may add projects, and they may even remove projects before they approve the SYP. Approval of the SYP normally is in April of even number years and also depends upon approval of the state budget by the General Assembly.

  19. The Enacted SYP is the state document that by law as outlined within KRS, the Transportation Cabinet can proceed with the identified project phases scheduled within the next biennium depending upon the availability of identified funding for each project.

  20. Federal-Aid Highway Program Funding

  21. The Enacted SYP contains the listing of projects scheduled to utilize state roadway funding (FD04) and federal-aid highway program funding (FD52).

  22. The federal-aid highway program funding is in accordance with the current federal transportation act, “Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU).”

  23. Legislative approval by Congress for SAFETEA-LU was signed into law by President Bush on August 10, 2005.

  24. Normally, a transportation act covers a period of six years, but SAFETEA-LU only covers five years – FY 2005 through FY 2009.

  25. With SAFETEA-LU scheduled to expire at the end of FY 2009 (October 1, 2009), preliminary work has already begun on the next transportation act.

  26. CongressionalProcedures

  27. To better understand the federal-aid highway program the following terms are provided:

  28. Authorization Act: This is the current transportation act (SAFETEA-LU) which establishes or continues federal transportation programs or agencies and establishes an upper limit on the amount of funds for the program(s).

  29. Appropriations Act: Yearly action by Congress that makes funds available for expenditures with specific limitations as to amount, purpose, and duration. It permits funding previously identified in the authorization act to be obligated and payments made.

  30. Apportionment: The distribution of funds as prescribed by a statutory formula.

  31. Allocation: An administrative distribution of funds for programs that do not have statutory distribution formulas.

  32. Obligation Limitation: A restriction, or “ceiling,” on the amount of federal funding that may be obligated during a specified time period.

  33. Obligation: The federal government’s legal commitment to pay or reimburse the states for the federal share of a project’s eligible costs.

  34. The obligation limitation of federal funds do not affect the apportionment or allocation of federal funds. It controls the rate or the amount of which funds may be used.

  35. Thus, the amount of apportionments and allocating of federal funds made available in each fiscal year that is actually available to obligate is controlled by the amount of obligation limitation for each program.

  36. The obligation limitation received each year normally ranges between 85 to 95 percent of apportionments, with some allocation programs receiving 100 percent obligation limitation.

  37. The federal-aid highway program is not a grant program.The federal-aid highway program is a reimbursement program, which means project expenditures must be paid first with state funds, and then the state sends requests to FHWA for reimbursement of eligible costs.

  38. KYTC submits a weekly federal billing to FHWA requesting reimbursement of federal funds, and the turn-around time to receive reimbursement runs 6 to 10 days.

  39. Contract Authority Programs

  40. Kentucky Statewide Transportation Improvement Program (STIP) and Federal Discretionary Funding Programs

  41. As noted, the Enacted SYP is the state document required by KRS, however, federal regulations require that KYTC prepare and submit to FHWA and FTA a Statewide Transportation Improvement Program (STIP).

  42. The STIP identifies the transportation programs and projects within Kentucky that will utilize federal funding. The STIP is prepared in the summer of even number years and includes highway, public transit, aviation, transportation enhancement, Safe Routes to School and recreational trail projects. Each of the programs contains a listing of scheduled projects and scheduled costs for the next four Federal Fiscal Years. The scheduled costs of the projects listed in the STIP must be fiscally constrained.

  43. The Division of Program Management is also responsible for preparing applications and documents for FHWA federal discretionary funding programs.

  44. The FHWA federal discretionary programs represent special funding categories where FHWA solicits for project candidates and selects projects for funding based on applications received for each of the different discretionary programs. Each of the federal discretionary programs has its own eligibility and selection criteria that are established by federal regulations.

  45. Since 2000, the projects receiving federal discretionary program funding have been identified through Congressional earmarks. However, the FY 2007 discretionary program will be selected through applications submitted to FHWA from KYTC.

  46. The Division of Program Management is responsible for monitoring the approved STIP and verifying that funding requests for proposed projects are identified within the STIP.

  47. In addition to the STIP requirements, federal funded projects located within the nine Metropolitan Planning Organizations (MPO) areas must be identified within their MPO Transportation Improvement Program (TIP) before project funding can be authorized. If a project is not identified within the MPO TIP, KYTC must request the MPO to amend their TIP to include the project, and this process may take several months to complete. MPO Areas • KIPDA Jefferson, Bullitt, Oldham Counties, KY Clark, Floyd Counties, IN • OKI Boone, Kenton, Campbell Counties, KY Butler, Clermont, Hamilton, Warren Counties, OH Deerborn County, IN • FIVCO Boyd and Greenup Counties, KY • EUTS Henderson County, KY • GRADD Daviess County, KY • BRADD Warren County, KY • LTADD Hardin County, KY • CMCRPC Christian County, KY • LFUCG Fayette and Jessamine Counties, KY

  48. KYTC“Cash Management Balance Process” & Processing Project Funding Requests

  49. The Division of Program Management is also responsible for tracking the availability of state and federal funds for projects identified within the Enacted SYP and STIP. We are in close communication with each of the Districts, each of the Central Office Divisions, Office of Budget and Fiscal Management, Executive Directors, the State Highway Engineer, the Commissioner of Highways, and the Secretary of Transportation.

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