Effective Delivery of Small-Scale Federal-Aid Projects (2011)

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5 was an overview of regulatory issues, including a summary of the legal basis for program requirements and the small- scale programs affected by these requirements. The second item was an analysis of programs that legally allow more flexibility than others (e.g., RTP) and innovative ways that states and local governments have effectively addressed federal requirements (e.g., levels and delegation of authority and accountability). Pertinent training, educational materi- als, and other resources available to help small-scale project delivery could also assist program staff. To better understand hindrances to the effective delivery of federal-aid projects, it is critical to identify the attributes of small-scale projects that present the most risk, consume the most time, and have the highest costs. Any inconsistencies between the interpre- tation of regulatory or procedural requirements and their implementation also need to be identified. Opportunities for improving small-scale project delivery and ways that states have streamlined the program delivery process was another key element. Finally, the panel determined that it needed to identify and document information on one or more states, metropolitan planning organizations (MPOs), or municipal- ities that have grouped small-scale projects under a single environmental document to satisfy the National Environ- mental Policy Act (NEPA) process. SYNTHESIS OBJECTIVE This synthesis was conceived from the need to identify and explore methods for meeting federal requirements for small- scale projects in a more streamlined fashion, and therefore this need is also the synthesis objective. The synthesis will specifically address how ten focus state transportation agen- cies are organized, what educational tools they use, and what delivery techniques they have for the local program agency (LPA) program. The synthesis will aid public agen- cies, nongovernmental organizations, and other stakehold- ers in administering small-scale federal-aid projects more efficiently and cost-effectively. STUDY APPROACH Many federally funded transportation programs provide funds for small-scale projects that are administered by state agencies, local governments, and nonprofit organizations. In the case of small projects, the use of federal funds may result CHAPTER ONE INTRODUCTION BACKGROUND This chapter introduces background information on locally administered federal-aid programs, including a discussion of techniques for efficient small-scale project delivery. The survey and interview processes and organization of the report will also be described. For the purposes of this study, “small-scale” is defined as transportation projects with a federal share of up to $300,000. Many federally funded transportation programs provide funds for small-scale projects administered by state agen- cies, local governments, and nonprofit organizations. In the case of small projects, the use of federal funds may result in a disproportionate amount of resources needed to imple- ment the projects. Several federal-aid programs support small-scale projects, such as the Transportation Enhance- ment Activities (TE), the Nonmotorized Transportation Pilot Program (NTPP), the Safe Routes to School Program (SRTS), the National Scenic Byways Program (NSB), the Highway Safety Improvement Program (HSIP), the Surface Transportation Program (STP), the Recreational Trails Pro- gram (RTP), and the Congestion Mitigation and Air Qual- ity Improvement (CMAQ). A study was created to highlight and explore methods for meeting federal requirements for small-scale projects in a more streamlined fashion. The syn- thesis will aid public agencies, nongovernmental organiza- tions, and other stakeholders in administering small-scale projects more efficiently and cost-effectively. The legislation presented in the most recent surface trans- portation authorization legislation, SAFETEA-LU (Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users), expanded existing categories of funding to provide more opportunities for including local agencies. This expansion allowed local agencies to gain access to funds for smaller projects sooner. According to SAFETEA-LU, state transportation or resource agencies are responsible for locally administered federal-aid projects. It is the state agency’s responsibility to determine whether the recipients of federal funds have sufficient project delivery systems. In forming the basis of the synthesis report, the expert panel identified several items as critical to more effective delivery of small-scale federal-aid projects. The first item

6 ous laws and regulations to specific federal-aid programs, and introduces a literature summary chronicling methods of state support for the LPA program drawn from the survey and from federal and other agency reviews. It then discusses definitions of risk for small-scale federal-aid projects and addresses obstacles to streamlining small-scale federal-aid project delivery, as reported in survey responses and litera- ture reviews. Chapter two describes effective practices for project deliv- ery for the various federal-aid programs, including effective practices used in delivering safety-related programs, the Appalachian highway system program, congestion mitiga- tion and air quality programs, and recreational trails pro- gram. It also includes a section describing the impacts of and effective practices for the American Recovery and Rein- vestment Act (ARRA) on the LPA program. The chapter concludes with sections introducing existing techniques for the administration of small-scale federal-aid projects, such as the organization of local government offices and project grouping techniques. Chapter three presents effective practices for project delivery per project phase. This includes methods used dur- ing the planning process and through the final project close- out phase. The information presented in this chapter was drawn from the detailed case study interviews. Chapter four examines the educational and organizational techniques used for effective delivery of the LPA program. Educational efforts such as training and guidance docu- ments at the federal and state levels are presented. Organiza- tion efforts such as at the federal, state, and local levels are described. Chapter five concludes the synthesis with a summary of findings and suggestions for further study. These chapters are followed by references, a bibliogra- phy, glossary, and five appendices. Appendix A includes a copy of the print version of the survey questionnaire. Appendix B presents a copy of the print version of the inter- view guides used in the detailed case studies. Appendix C includes a table showing examples of effective practices identified by the ten focus states. Appendix D includes links to resources identified by the focus states or other resources found in the literature review. Appendix E includes an explanation of the various environmental laws and review procedures, along with a table that shows the applicability of various federal requirements in environmental review. Appendix F includes tables that capture the relevant fed- eral regulations pertaining to contract administration and procurement. Appendix G (a web-only document) provides samples of documents that the focus states use to support streamlining. in a disproportionate amount of resources needed to imple- ment the projects. However, a review of the literature, sur- vey of ten state transportation agencies (DOTs), and directed interviews revealed a number of effective practices being used across the country for addressing inefficiencies in the delivery of small-scale federal-aid projects. A literature review of state, local, nonprofit organizations, and national practices was conducted. In every state, the LPA program involves a vast number of staff from munici- pal, state, and federal government, nonprofit organizations, and state resource agencies. Because of the large number of people involved, the panel opted for a more in-depth investi- gation of ten representative state programs. By creating this detailed focus on a small sample of states, more explana- tion and details on various procedures could be obtained. In addition, the relationships established between the state DOT and FHWA, municipalities and state DOTs, munici- palities and state resource agencies, state DOTs and non- profit organizations, and others that facilitate the effective delivery of federal-aid projects could be explored in more detail. Thus, in-depth information gathering was conducted with California, Delaware, Florida, Iowa, Minnesota, North Dakota, Ohio, Oregon, Pennsylvania, and Washington. The panel selected these ten states for their variety of features (small/large federally funded programs, geographical size, diverse histories of LPA programs), along with examples of effective use of federal-aid programs in these states. Sur- veys were generated and sent to the local programs office in the ten DOTs, and all ten responded. The survey question- naire consisted of 29 questions (26 closed-ended and 3 open- ended). Local agency program coordinators were asked to complete the survey, which was used to establish a baseline of the program in each state and provide information for phone interviews with various DOT officials. Follow-up interviews with public sector officials (federal, state, MPO, local transportation, and resource agencies) in the ten focus states were conducted. More than 50 represen- tatives from several agencies and organizations involved at various levels with the locally administered federal-aid pro- cess contributed to this synthesis effort. Multiple representa- tives from agencies (shown in Table 1) responded to a survey questionnaire or were interviewed in person, over the phone, or over e-mail to gather their input on issues and streamlin- ing practices for small-scale project delivery. Organization of Report This synthesis report is organized into five chapters. Chapter one presents the report’s structure, defines key terms, and summarizes the report structure with brief explanations of each chapter’s content. This chapter also includes brief intro- ductions to the specific federal-aid programs typically used by LPAs. In addition, it discusses the applicability of vari-

7 and intracity and intercity bus terminals and facilities. Sub- allocations of apportioned funds from the STP traditionally have included set asides for the transportation enhancement program, and projects for urbanized areas with populations over 200,000 and areas with less than 5,000 population. STP federal funds generally will cover up to 80% of the cost for a project, subject to a “sliding scale” that allows higher federal shares in states with large amounts of public lands. Transportation Enhancement Activities TE activities deal with projects that relate to surface transpor- tation and aims to improve the transportation experience for users of various types of transportation. TE activities provide funding to both independent projects and enhancement of larger projects. Projects must be eligible under 1 of 12 eligible categories. These categories include activities that deal with pedestrian and bicycle infrastructure and safety programs, scenic and historic highway programs, landscaping and scenic beautification, historic preservation, and environmental miti- gation. Routine maintenance is not a transportation enhance- ment. Federal funds for this program generally will cover up to 80% of the cost for a project, which is subject to a sliding scale that allows higher federal shares in states with large amounts of public lands (“FHWA Final TE Guidance” 2009). Safety Programs Highway Safety Improvement Program HSIP was created to significantly reduce the occurrence of and the potential for fatalities and serious injuries resulting from crashes on all public roads. This data-driven program requires that projects are selected and prioritized based on their effectiveness in reducing fatalities and serious injuries. Projects funded through the HSIP must correct or improve a hazardous road location or feature, or address a highway safety problem, and be consistent with the state’s strategic highway safety plan. In general, the federal share for HSIP projects is 90% (“Highway Safety Improvement Program” 2009). TABLE 1 AGENCY REPRESENTATIVES THAT CONTRIBUTED TO SYNTHESIS DEVELOPMENT Definitions The following key terms and definitions pertain to the syn- thesis scope. Additional terms are defined within the con- text of their relevant sections. The report’s glossary further defines acronyms and organizations discussed in the report. Small-scale—Any state, local agency, or other applicant, project with federal fund participation up to $300,000. Federal-aid projects—Any projects that use federal-aid highway program funds, whether on and off the federal-aid system, on and off the National Highway System (NHS), or on and off highway right-of-way (ROW); including all phases of project delivery (planning through project close- out and reimbursement). FEDERAL-AID PROGRAMS Local governments and other transportation or community organizations can use a number of the available federal-aid programs. The FHWA authored a guide that introduced basic information on federal-aid programs, projects, and other program characteristics (A Guide to Federal-aid Programs and Projects 2009). This guide is accessible on the agency’s website and can be downloaded in PDF format. Potential project sponsors apply through a MPO, regional planning administration (RPA), or the state DOT for federal funds toward a project that they would like to implement. Projects are funded through the DOT, which administers the federal funds on behalf of the federal government. Surface Transportation Program STP offers flexible funding for use by states, cities, and municipalities on any federal-aid highway (Contract Admin- istration Core Curriculum Participant’s Manual and Refer- ence Guide 2006). Example projects include those on the NHS, bridges on any public road, transit capital projects,

8 High-Risk Rural Roads Program Each state’s apportionment of HSIP funds is subject to the High-Risk Rural Roads Program (HRRR), which provides construction and operational improvements on high-risk rural roads. High-risk rural roads are roadways that are functionally classified as rural major or minor collectors or rural local roads with a fatal and incapacitating injury crash rate above the statewide average for those functional classes of roadways; or are likely to experience an increase in traf- fic volume that leads to a crash rate in excess of the average statewide rate. HRRR will total $90 million nationally and be applied proportionally to the states’ HSIP apportionments (FHWA High Risk Rural Roads Fact Sheet 2006). Safe Routes to School The intent of the SRTS program is to encourage more chil- dren to walk and ride their bikes to school. This program splits all projects into infrastructure and noninfrastructure groups. Infrastructure projects may involve improving existing infrastructure such as sidewalks or nonmotorized (pedestrian and bicycle) crossings. Funds for infrastructure projects may be used to reduce speeds near schools, such as through speed reduction improvements and traffic diver- sion. Funds for noninfrastructure projects can be used to help raise awareness on safety to both students and drivers, such as through training workshops and public awareness campaigns. Each state must use at least 10% but no more than 30% of funds from SRTS for noninfrastructure projects (“Safe Routes to School” 2010). Congestion Mitigation and Air Quality Improvement Program The Congestion Mitigation and Air Quality Improvement Program (CMAQ) provides federal funds for transporta- tion projects that improve the air quality through congestion relief or other measures. Two project types that are consid- ered a priority to receive CMAQ funds are diesel retrofitting and cost-effective traffic flow improvements. The program focuses on two main pollutants: ozone and carbon monox- ide. CMAQ projects traditionally have received up to 80% federal funding, but in 2008, 2009, and 2010, many projects were 100% federal share with approval from the state (“Con- gestion Mitigation and Air Quality Improvement…” 2008). Recreational Trails Program The RTP provides funds to the states to develop and maintain recreational trails and trail-related facilities for both nonmotor- ized and motorized recreational trail uses. The program cov- ers trails used for many different types of recreation, such as hiking, bicycling, in-line skating, equestrian use, cross-country skiing, snowmobiling, off-road motorcycling, all-terrain vehi- cle riding, four-wheel driving, or using other off-road motor- ized vehicles. Most states administer the RTP through a state resource or park agency. Each state develops its own proce- dures to solicit and select projects for funding, and has a State Recreational Trail Advisory Committee to assist with the pro- gram (Recreational Trails Program Interim Guidance 1999). High Priority Projects Program High Priority Projects (HPP) program funding is available to any project that is specified in Section 1702 and other sec- tions of the SAFETEA-LU surface transportation authoriza- tion legislation. Since 2005, $2.966 billion has been set aside for this program each year. The federal share is 80% of proj- ect cost except in certain states (Alaska, Montana, Nevada, North Dakota, Oregon, and South Dakota) where the fed- eral government covers 90% of project costs (“High Priority Projects” 2010). Although the HPP program is subject to an obligation limit that cannot be used elsewhere but on the spe- cific project listed, its funding allocation does not expire if it is not used by the end of the fiscal year and carries over until fully obligated (Contract Administration Core Curriculum Participant’s Manual and Reference Guide 2006). Nonmotorized Transportation Pilot Program The Nonmotorized Transportation Pilot Program (NTPP) is a pilot program that endeavors to demonstrate that the amount of people who walk and bike will increase if walking and bicycling networks are improved. The program has pro- vided $25 million to four communities: Columbia, Missouri; Marin County, California; Minneapolis, Minnesota; and Sheboygan County, Wisconsin. The final report on this pro- gram is due in September 2010, but FHWA anticipates sub- mitting the final report in fall 2011 owing to project delays. This final report will include rates of walking and biking, health and environmental measures, and transit use (The Nonmotorized Transportation Pilot Program (NTTP)—Bi- cycle and Pedestrian Guidance—FHWA 2010). Appalachian Development Highway System Program The Appalachian Development Highway System Program (ADHS) authorized $470 million for the ADHS for fiscal years 2005 through 2009 to cover 80% of the costs asso- ciated with constructing the eligible miles. The funds are apportioned to the 13 states based on the latest cost to com- plete estimate. The funds remain available until expended (“Appalachian Development Highway System Program” 2010). The Appalachian Regional Commission (ARC) is a federal–state partnership that awards grants and contracts from funds appropriated to the Commission annually by Congress (“Appalachian Regional Commission: Grants and Funding” 2010). Program grants are awarded to state and local agencies and governmental entities (such as eco- nomic development authorities), local governing boards (such as county councils), and nonprofit organizations (such

9 APPLICABILITY OF REGULATIONS TO SPECIFIC FEDERAL-AID PROGRAMS A defining difference between the special federal-aid pro- grams and general applications of federal-aid funds comes in the form of applicable federal regulations. Two examples are TE and RTP. A series of FHWA memoranda and sup- porting federal regulations establish flexibilities for states and local public agencies to implement a wide range of nontraditional projects (Contract Administration Core Cur- riculum Participant’s Manual and Reference Guide 2006). For example, TE and RTP projects not located in a highway ROW do not have to be considered highway projects; thus, the FHWA’s construction contracting requirements, such as those related to competitive bidding, do not have to apply. FHWA issued a memorandum (Procurement of Federal-aid Construction Projects June 26, 2008) to clarify that the state DOTs may procure transportation enhancement projects not located within the highway ROW using state-approved pro- cedures under the Common Rule. For consistency, this same rationale applies to all other federal-aid construction projects that are not within the ROW of a public highway. In these situations, the procedures in 49 CFR 18.36(a) apply, and a state DOT may use state-approved procurement procedures (or a local public agency may use state-approved local pro- curement procedures) for these types of projects, see http:// www.fhwa.dot.gov/construction/080625.cfm. Furthermore, projects that are not within the ROW of a federal-aid high- way have flexibility with regard to labor rates. FHWA issued a memorandum (Applicability of Prevailing Wage Rate Requirements to Federal-aid Construction Projects June 26, 2008) to explain flexibilities available to the states; see http:// www.fhwa.dot.gov/construction/contracts/080625.cfm. Some FHWA contracting policies such as Buy America (from 23 U.S.C. 313 2005) and Disadvantaged Business Enter- prises (DBEs) (from 49 CFR Part 26 2005) still apply, and all applicability guidelines are captured in Table F1 of Appendix F. As noted in FHWA’s procurement memorandum, procurement for projects not located within the highway ROW can follow state procedures rather than the federal procurement process (49 CFR Part 18 2004). This flexibility applies to projects not within the highway ROW for most federal-aid programs, including TE, RTP, byways, CMAQ, off-system bridges, etc., but excludes the SRTS and NTPP programs. The memoran- dum explains that when a local public agency is the contracting agency for a federal-aid nonhighway construction contract, it is held to only state-approved procedures. This use of state laws and procedures also applies to the state agency’s awarding and administering of subgrants to local agencies. The flexibility exists for a state DOT to advise local public agencies to follow state procedures, local government procedures, or the proce- dures laid out in the 49 CFR 18.36(b)–(i). General guidelines as schools and organizations that build low-cost housing). Building on the foundation of the ADHS, ARC supports transportation activities aimed at improving travel within the region as well as enhancing access to coastal cities and ports. A complete listing of ARC’s transportation develop- ment strategies is provided online at http://www.arc.gov/ program_areas/index.asp?PROGRAM_AREA_ID=19. Discretionary Programs National Scenic Byways The National Scenic Byways Program (NSB) issues grants for projects on specific roads identified as scenic byways based on several characteristics, such as the historic, archae- ological, natural, cultural, and scenic features of the road. Under this same program, roads can also be nominated to become All-American Roads or America’s Byways. The All-American Road nomination means that a certain road has qualities or features that do not exist on any other road in the country and is also a scenic location (Legislation Related to National Scenic Byways Program 2010). Ferry Boats and Ferry Terminals Program The purpose of the Ferry Boat Discretionary Program (FBD) is to provide funds for the construction of ferry boats and ferry terminal facilities. In recent years, $67 million has been provided for the program. Higher funding priority is given to FBD projects that can carry the highest amount of passengers and/or vehicles, and projects that provide sig- nificant access to areas that do not have a high quality of surface transportation. The federal government will typi- cally cover up to 80% of the FBD funding. A total of $20 million of the program is set aside for projects in Alaska, New Jersey, and Washington for ferry projects within the Marine highway system that serve the NHS (Ferry Boat and Ferry Terminal Facilities 2010). Off-System Bridge Program The off-system bridges not on federal-aid highways are con- sidered as a part of the Highway Bridge Program (HBP). HBP includes a provision that requires an expenditure of funds on highway bridges located on public roads, other than those on a federal-aid highway. Each state is required to spend at least 15% of HBP STP money on eligible bridges that are not located on the federal-aid highways system. However, each state may submit a waiver to FHWA requesting to lower the percentage of funds that must be used for this program. The federal government will cover up to 80% (subject to a sliding scale for public land states) of the cost for any HBP project. (“Highway Bridge Program, Off-System Bridges…” 2010).

10 Methods of State Support for Local Program Agency Program The local government or LPA office websites for each state transportation agency were reviewed to capture the kinds and depth of information easily accessible to potential local agency or nonprofit organization project sponsors. Table 2 presents the information posted on each of the state DOT websites related to LPA program. Table 3 shows the types of training and other assistance provided by each state local technical assistance program (LTAP) website. for procurement options are presented in Table F2 of Appendix F and in the Contract Administration Core Curriculum Partici- pant’s Manual and Reference Guide (2006). LITERATURE SUMMARY The following section introduces current approaches used by various state transportation agencies for delivering spe- cific federal-aid projects, as reported by the literature or online sources. TABLE 2 INFORMATION AVAILABLE ON LPA PROGRAM, AS SUMMARIZED FROM EACH STATE TRANSPORTATION AGENCY (DOT) WEBSITE

11 federal funds. The funds are distributed throughout the state proportionally to the population within each MPO. All areas that are not located within a MPO jurisdiction receive funds proportional to the population it contains, as compared to all other areas not within a MPO jurisdiction. After projects are chosen, kickoff meetings are scheduled between the LPA and the DOT Local Programs coordinator (“Local Federal- aid Programs” 2009). The Maryland State Highway Agency provides stream- lining to state and local agencies with a variation on funding small-scale LPA projects through state-aid dollars instead of federal funds (Southern Maryland Transportation Needs Assessment 2008). In Maryland, local governments rely on Literature Related to Local Program Agency Program State Departments of Transportation Methods for small-scale project delivery used in three states (Indiana, Maryland, and Virginia) were mentioned owing to their unique nature. The Indiana DOT posts information to the public on how LPA projects are selected to receive federal-aid funds in their state. Their process requires each district deputy commis- sioner in the state to view the location of the proposed project. The state will then use the input of these district representa- tives to determine which projects will be selected to receive TABLE 3 INFORMATION RELATED TO LPA ON LOCAL TECHNICAL ASSISTANCE PROGRAM (LTAP) WEBSITES

12 three types of revenue sources to provide public services: local-own source revenues (i.e., local taxes and service charges), state aid, and federal grants. State aid is the larg- est of these revenue sources and constitutes about one-third of the total revenue for the counties of southern Maryland. Some Maryland local agencies have used state-aid funds in lieu of federal aid to bundle funding together over sev- eral years and apply it to pavement resurfacing contracts or corridor upgrade projects. The benefits to swapping state funds for federal funds include a more simplified proce- dure for standards and guidelines in providing approv- als, and submissions for funding with quick “turnaround” reviews. Some of the guidelines include: local government/ municipality must contribute 20%; municipality must enter into agreement with the county for use of state aid in lieu of federal aid; projects must be evaluated and approved by the Maryland State Highway Administration’s Office of Environmental Assessment before receiving final funding approval; funds must be used on any county/or municipally maintained roads, streets, and bridges that are included in the State Highway Administration’s road inventory as of December 31 of the year preceding the allocation; and funds can be used on bridge projects, road projects, signalization, or any transportation maintenance function. Virginia DOT (VDOT) has developed a risk-based approach entitled “VDOT Risk and Project Oversight,” which is available in chapter 9 section 9.4.2 of its LAP man- ual [Locally Administered Projects (LAP) Manual 2010]. The manual reports that shortly after the LPA has received concurrence to administer the project, the VDOT project coordinator determines the level of VDOT oversight neces- sary. The intensity of VDOT oversight is determined by a range of factors, including project complexity, highway sys- tem, project funding, and LPA staff experience level with federal-aid projects. Appendix 9B of the VDOT manual pro- vides a good overview of how it approaches the different lev- els of oversight. To assist in this determination, VDOT has developed a risk assessment method that the project coordi- nator may use to establish the likely level of oversight. This method results in a score that provides a generalized analysis of project oversight per project, as explained in Appendix 9-C of the manual. National Cooperative Highway Research Program NCHRP Project 20-68A conducted a domestic scan study to determine strategies and applications used to aid in the success of a state agency project (Capers 2009). The city of Phoenix and six states (Arizona, Florida, Missouri, Utah, Virginia, and Washington) were selected to accurately rep- resent the project delivery practices of most states. The cri- teria used to select these states included program size, work complexity, metrics system, and performance against those metrics. The study determined that agencies use four major practices in their project delivery process: project manage- ment, performance measures, contracting practices, and community involvement. These focus areas were then stud- ied within the selected states in order to identify the best practices within each one.