AASHTO Journal, 28 October 2016
The Federal Highway Administration announced it is creating an experimental, five-year pilot program to let up to five local public agencies, or LPAs, directly receive federal-aid highway funding that would normally be routed through state departments of transportation.
The FHWA, in an Oct. 26 Federal Register notice, said it is calling this pilot the Local Empowerment for Accelerating Projects (LEAP) Program, and will take applications for LPA direct funding through Nov. 25.
It also noted that it will require states or LPAs that take advantage of the pilot program to contribute non-federal funds equal to 1 percent of the first-year direct funding, to cover the FHWA’s costs to administer this program.
This is another in a recent series of actions by the FHWA or other agencies within the U.S. Department of Transportation to make program changes in the final months of the current administration. Others include wide-ranging regulatory proposals that came with short deadlines for public comment.
The LEAP program announcement did not follow any public comment period. The FHWA cited existing statutory authority for it to experiment with innovative ways to encourage infrastructure development, including authority in last year’s Fixing America’s Surface Transportation Act, although the FAST Act did not require it to create LEAP.
Since there is no additional funding for this program, all direct-delivery funds that are made available to the selected LPAs would come from funds now administered by that state’s DOT.
In the Register notice, the FHWA explained that “the federal-aid highway program is a federally funded, state-administered program, under which state DOTs are responsible for determining which projects are federally funded, including highway projects within the boundaries of the LPAs.”
However, it said, “the American Public Works Association (APWA), National Association of County Engineers (NACE) and other local entities have advocated for improvements to the federal-aid highway program delivery to LPAs.”
It added that “the FHWA is aware of concerns expressed by LPAs related to cost and time delays in delivery of projects, inadequate communication and collaboration among transportation partners, accessibility to federal funding, and the need for improved statewide consistency in project administration and oversight, including the need for clarity and consistency as to direction and interpretation.”
The FHWA also said: “Some states are experiencing budgetary constraints that result in oversight challenges and project delivery delays associated with LPA-administered projects.”
The agency said its goals for the LEAP program are to determine if the local agencies can deliver their road and bridge projects faster and at lower cost when they directly receive federal funds, and use their own project delivery processes in compliance with federal and state requirements.
The FHWA also wants to assess the extra costs and other impacts to itself that will be associated with overseeing an expanded number of direct federal-aid recipients, and to “explore various approaches to stewardship and oversight.”
The notice said LPAs own and operate about 43 percent of the roughly 1 million miles of the federal-aid highway network. It also said the LEAP pilot “will reduce state DOTs’ oversight responsibility of their LPAs for projects delivered under the LEAP pilot program.”
But the effort involves state DOTs in several ways. The FHWA said it will seek input from the state agencies about whether an applicant LPA “has an adequate project delivery system” and “has in place the necessary financial management systems and processes to carry out government requirements.”
The notice emphasized that the program turns on a collaborative effort between state DOTs and applicant LPAs.
“The amount of direct aid funding, the formula fund categories, and obligation authority that a selected LPA will ultimately receive depends upon the cooperative relationship between the LPA and the state DOT,” it said.
“A state DOT and LPA that desire to participate in the LEAP pilot program should assess current annual and out-year program needs at the state and local levels. Collaboratively, they should develop a budget that addresses current and projected required budgetary resources to be made available” for the pilot.