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

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13 CHAPTER TWO EFFECTIVE SMALL-SCALE PROJECT DELIVERY: BY FEDERAL-AID PROGRAM agencies, (3) efficient completion of ROW appraisals, (4) multiyear earmarks, and (5) resource agencies’ response times for agreement and permits. One example provided in the case study interviews illustrated the challenges to the LPA program presented by staff turnover. In one state, local agencies typically are awarded small-scale federal-aid proj- ects every 3 to 5 years. During this period, it was found that either local agency engineer staff turns over or staff at the local agencies is reduced. Because the institutional knowl- edge of federal-aid programs is no longer available to a local agency in this situation, once it is awarded a new project it presents a high risk to the LPA program that it may not com- ply with federal regulations. A 2007 FHWA program review on LPA in Florida included interviews with 14 local agencies to garnish their perspective of the program (McCarthy and kurtz 2007). The benefits of LPA program, as described by 14 local agen- cies, consistently cited the opportunity to use federal dollars for funding projects sooner. Most of the smaller agencies also indicated that they could build larger, more expensive projects because of budget increases through the LPA pro- gram. The challenges of LPA, as described by 14 local agen- cies, included time delays resulting from the Florida DOT (FDOT) LPA certification process, time constraints through the LPA agreements, and cumbersomeness of the process for smaller-budget projects. The general feeling reported by the 14 LPAs was that federal requirements are too strict for local projects and ultimately can incur more time and resources costs. Finally, concerns were raised about the impact of the NEPA process for locally administered projects. Local agen- cies reported that the NEPA process would not be required for small projects such as sidewalks or milling/resurfacing of existing roadways. In addition, the unknown possibil- ity of an earmark being attached to any LPA project pres- ents potential merit in adjusting regulations regarding the NEPA process for certain types of low-complexity projects. In addition, local agencies have raised their frustrations with the need to “go back to Square 1” on added capacity or other more complex projects, after the project has already advanced into design or construction. This additional cost and delay has made a few local agencies decide to no longer participate in the LPA program. Other local agencies stated that they would not pursue federal funds unless a project will cost $5 million or more. INTRODUCTION This chapter provides an overview of the various federal- aid programs that support small-scale projects. Information reported will help to define streamlining techniques or orga- nizational approaches, as specific to each federal-aid pro- gram. This is accomplished through a review of literature, survey responses, and insight provided through the many interviews to present examples of what effective practices are being used by state transportation agencies and other agencies involved in the LPA program. Obstacles to Streamlining Small-Scale Federal-Aid Project Delivery From the survey results and interviews, the three obstacles to streamlining that were raised by multiple states were (1) lack of availability of local match funds, (2) complexity in time and resources of the NEPA and ROW process, and (3) prohibition of the use of local agency forces for small construction projects (e.g., less than $600,000). This study will also address issues and concerns with the LPA program as mentioned by LPA administrators in the ten case-study DOTs. A majority of the focus states indicated that treating small-scale federal-aid projects as a “one size fits all” pro- cess hinders use of small federal programs. Several DOTs believe as if NEPA is too stringent for small-scale federal- aid projects, inducing extra costs and delays to completion. As an example, the Oregon Parks and Recreation Depart- ment noted that the largest obstacle to streamlining project delivery of small-scale RTP projects was the environmental review (meeting NEPA standards). Oregon DOT offered an example of the complications created by endangered species, which result in significant added cost to the environmental process for small-scale federal-aid projects. Another trend found was that all federal regulations are being applied on every LPA project, regardless of whether they apply or not. Another obstacle listed was the problem of matching funds and how many local agencies simply do not have the budget to easily provide a match. Other obstacles cited in the survey include (1) prohibi- tion against specifying use of proprietary items on historic restoration enhancement projects, (2) staff turnover at local

14 Office of Traffic, Safety and Technology 2010). The pur- pose of the partnership is to raise awareness and develop tools to reduce the number of fatalities and injuries result- ing from traffic crashes in the state. Consolidated efforts are presented that support the Minnesota Strategic Highway Safety Plan created in compliance with the HSIP. As part of the safety investment program, Mn/DOT allocated 64% of safety funds for local roadways. The TZD has also expanded the involvement of local stakeholders in the effort to develop effective safety programs and projects. One of the focus areas was expanded Mn/DOT SRTS training to more than 600 local agency, school district, or planning organization participants. Mn/DOT identified that since the beginning of SAFETEA-LU, 92 SRTS projects (totaling $7.5 million) have been awarded to more than 110 schools. Another effec- tive practice reported during the interview with Mn/DOT dealt with the HSIP and HRRR programs. Safety efforts in Minnesota are classified as either proactive (roads where accidents have not yet occurred) or reactive (roads where accidents have already occurred) projects. HSIP funds are distributed through the traffic office and Mn/DOT allows local agencies to jointly conduct projects (e.g., striping). The streamlining that was reported as a result was found dur- ing the NEPA process because these projects tend to have little environmental impact and they are an areawide-type delivery. The FHWA teamed with APWA, NACE, AASHTO, and Local Technical Assistance Program (LTAP) to conduct a domestic scan in seven states to identify good practices for funding, coordination, and technical assistance for local roadway safety (Anderson et al. 2010). The study focused in particular on state efforts to improve local agency par- ticipation and effective obligation of safety funding. Some of the findings from the scan apply to effective delivery of small-scale federal-aid projects. One effective practice reported was the allocation of DOT staff resources, such as the Illinois Bureau of Local Roads and Streets, to coor- dinate with local agency staff and administer funding and project agreements for local safety projects, particularly in “navigating the complicated federal-aid requirements, and providing guidelines for approval.” In terms of key stream- lining efforts undertaken for roadway safety programs in the scan study states, DOTs looked to reduce the time needed for local agencies to apply and receive federal funding. For instance, it was reported that local agencies without crash data analysis tools faced dilemmas in securing federal fund- ing for safety projects. As a result, advanced data collection tools have been implemented to “significantly aid” DOTs and local agencies in determining problem areas that may be suitable for federal funding under a local roadway safety program. Additionally, the scan notes that states stressing a “strong relationship between the strategic highway safety plan (SHSP) and pursuit of systematic safety improvements,” rather than unique location improvements, have experienced an increase in the rate of funds programmed and projects EFFECTIVE FEDERAL-AID PROGRAM DELIVERY PRACTICES The following sections highlight various approaches used by federal, state, and local governments to effectively address federal requirements relative to specialized federal-aid pro- grams. Although the examples generated from interviews with focus states only covered some of the federal-aid pro- grams (HSIP, SRTS, RTP, etc.), any federal-aid program could benefit from methods described in this chapter. Safety-Related Programs (HSIP, HRRR, SRTS) In November 2009, the Safe Routes to School Partnership issued a report that provides information for local program managers and state transportation agencies on how to use noninfrastructure components to enhance the SRTS pro- gram (Driesse 2009). The report includes several successful examples of noninfrastructure elements from various states, as well as a section on how to best use noninfrastructure funding such as minigrants. The Delaware DOT (DelDOT) has reported a streamlin- ing practice for the delivery of its SRTS program. It receives $1 million annually for SRTS projects. Typically DelDOT handles all agency approvals (utility clearance, ROW clear- ance, and environmental actions) for the local agencies and issues all statements. The approval process takes approxi- mately 4 to 6 months for small-scale federal-aid projects. If the contract is administered by the sponsor, DelDOT issues a notice-to-proceed to the sponsor for advertisement once all agency approvals are in place. If the project is administered by DelDOT, then the contract is turned over to its contract administration section for advertisement by competitive bid. Then DelDOT issues a task order, which competitively bids a lump-sum quantity for 1 year. This open-end task order contracts on construction projects are advertised and con- tracted by DelDOT on behalf of the local agencies. This “bundling of contract lettings” is reported by DelDOT as streamlining the implementation and delivery administra- tively of LPA projects and results in the completion of SRTS projects within 1 year. The Oregon DOT (ODOT) SRTS program committee implemented project cost minimums between $100,000 and $500,000 because of a history of project delays and environ- mental clearance costs that were not originally anticipated. Most of the projects that ODOT sees come in for less than $300,000 end up costing more than originally estimated. Thus, project minimum costs were introduced as a mecha- nism for better ensuring successful delivery of these LPA projects. The Minnesota DOT (Mn/DOT) founded a multiagency partnership Toward Zero Deaths (TZD) that includes fed- eral, local, academic, and various state agencies (Mn/DOT

15 The second report revisited seven of the sites that were under review in the first phase. The sites were selected based on whether the project type had high rates for CMAQ funds and if it warranted more analysis after exhibiting character- istics of a best practice defined during the first phase report. By evaluating these projects, the report noted various best practices, including transparent project solicitation, priori- tization, and selection process; standardized approaches to project evaluation and ranking; and adaptability in response to evaluations and changing conditions. Transportation Enhancements Ohio DOT reported that a majority of the 17 MPOs in the state of Ohio prioritize LPA project funding through stream- lined application processes. For example, the 10% of federal funds set aside for Ohio’s transportation enhancement pro- gram is turned over to the MPOs, which generate a form of request for proposal (RFP) for the CMAQ and regional surface transportation programs (RSTPs). The MPOs then score and rank projects, prioritizing one or two according to “solicitation schedules” to be followed. Ohio DOT reported that once a local agency has a concept for the TE program and approaches the MPO, the Ohio DOT district office staff will implemented. Another effective practice established by the scan is funding incentives to aid local agencies with proj- ect matches, or “providing subsidies for preliminary engi- neering” costs. The report states that this practice has led to increased applicants for federal-aid programs. The scan also noted that a few states, such as New Jersey, “rely heavily on the MPO to administer funding and oversight, improv- ing the integration of planning processes and offering new opportunities for partnerships with stakeholders” (Anderson et al. 2010). Other streamlining efforts found during the scan include those reported in Table 4. Congestion Mitigation/Air Quality Program FHWA published a report regarding proper implementation of the CMAQ program, intended to provide helpful informa- tion to both state DOTs and MPOs. This report is the second part of a two-phase study of the program (Regan et al. 2009). The first report evaluated 67 CMAQ projects using both emissions and cost-effectiveness data. Several best practices were found from this phase: standardized methods to calcu- late benefits, procedures for ranking projects, consideration of cost-effectiveness, and coordination with air quality and local agencies during the project selection process. TABLE 4 STREAMLINING APPROACHES FOR FEDERAL-AID PROCESS IN LOCAL ROADWAY SAFETY PROJECTS State Streamlining Approach Details Alabama Creation of abbreviated HSIP process Reduced plan requirements to 8½-by-11-inch documents; created guide- line reference booklets with program requirements and contacts distrib- uted to all local and state safety practitioners Use of force accounts Pays for construction work on basis of time taken and material con- sumed to complete safety projects; reported time savings on project completion schedule STIP placeholders specifically for safety projects Specific funding program (HRRR, SRTS, etc.) dedicated to each proj- ect; separates funds from capital improvement projects in STIP; ensures a pool of HSIP funds ready for programming for future projects Creation of HRRRP Committee Includes officials from DOT, counties, FHWA Division; creates com- petitive method for selecting projects; lays out regulations and proce- dures for HRRRP funds; committee reevaluates eligibility requirements yearly to guarantee that competitive funding has impact on crash reduction Illinois Online HSIP application tool Includes benefit-to-cost analysis tool; information on requirements for LPAs; reduces time spent by LPAs during application process; clear deadline for applications; projects must be authorized for completion in same fiscal year as awarded Michigan Standard call for HSIP projects Spread over several months to allow local agencies to react to more restrictive HRRRP program; projects not chosen for HRRRP will be “rolled over” for HSIP consideration Minnesota Process of submitting one application to be considered for all safety projects regardless of funding source Reduces complexity and need for additional resources for both DOT and LPA Position of State Aid Engineer for every DOT district Streamlines application and funding processes; engineers aid in coordi- nation between agencies for joint projects [Source: Anderson et al. (2010)].

16 the secretary of state as a nonprofit organization, an official successor to the organization must be named for liability purposes, the organization demonstrates experience with trail-related activities for at least 3 years, and the organiza- tion adheres to all current nondiscriminatory laws. AMERICAN RECOVERY AND REINVESTMENT ACT The American Recovery and Reinvestment Act of 2009 (ARRA) program was a stimulus program. It was not strictly a transportation program, but also had funding for welfare programs, federal tax cuts, and education. States had only 120 days to determine which projects to fund. According to a memorandum issued by the U.S.DOT Office of Inspec- tor General, the “FHWA identified state oversight and LPA inexperience in handling federal-aid projects as major risks in implementing the American Recovery and Reinvestment Act of 2009, which will increase LPA highway projects by an additional $8 billion over the next 3 years” (Comé 2009). Examples of Effective Delivery of American Recovery and Reinvestment Act Projects in Transportation The FHWA Ohio Division Office reported that the divi- sion normally has one position routinely involved and fully dedicated to the Ohio LPA program. However, with the cur- rent ARRA funding, the office was compelled to involve nine engineers actively with the project development and inspection of selected federal oversight LPA projects. These projects include local intersection and interchange improve- ments, resurfacing, reconstruction, widening projects, road- way bridge projects, and railroad grade crossings. Florida reported significant ARRA impacts. FHWA-FL describes the ARRA program as a significant effort that also provided opportunities to streamline the Florida LPA pro- gram. Some examples include the educational value for both state and local attendees of the statewide ARRA videocon- ference, the recently allowed use of design-build contracts on LPA resurfacing projects, and a boilerplate RFP docu- ment created for local agencies that allows them to contract federally funded projects more quickly and consistently. One FDOT district also developed a comprehensive project man- agement database referred to as the American Recovery and Reinvestment Act Tracking Tool. Appendix G (a web-only document) includes screen captures of the tool. ODOT reported that an effective project delivery method used in conjunction with ARRA was the ability to “bundle” multiple projects under a broader environmental document. More than 100 ARRA projects, including 71 surface pres- ervation projects and 12 intelligent transportation system or signage projects, were batched under three separate envi- ronmental documents. The approach used by ODOT was to create clearly defined guidelines for local agencies on what first investigate whether the project will be eligible and suc- cessful. This advance investigation allows the DOT to alert local agencies about the level of effort and complexities that will be involved before they submit an application for the fed- eral funds, and provides LPAs with an opportunity to revise the application. The Ohio DOT can then guide the local agen- cies from the beginning of a project, rather than waiting until after the project funds are awarded and the project is already in development to investigate potential problems. A time-sav- ing technique defined by Ohio DOT was the flexibility given to the nonhighway TE program by allowing local agencies to solicit projects (e.g., trails, depots) using state procedures. In doing so, projects are advertised for only 2 weeks instead of the 3-week minimum federal requirement. Another effective practice presented by Ohio DOT for the TE program is the delegation of authority on the ROW and design phases to local agencies. In doing so, the local agency is required to contract with DOT-prequalified consultants, but it can handle its own ROW transactions and plan development, which reduces the personnel burden on Ohio DOT. Recreational Trails Program In Oregon’s RTP, a nine-member advisory committee reviews and scores incoming LPA project applications. The commit- tee is composed of one FHWA official, one representative for people with disabilities, three motorized transportation members (one snowmobile and two off-highway vehicle officials), and four nonmotorized transportation representa- tives (one equestrian, one paddleboat, one bicycle, and one hiking official). The DOT believes that the wide-ranging panel will allow for a more balanced representation of the applicant pool. Eligible nonprofit or for-profit organizations are subjected to the same processes as local agencies for con- ducting RTP projects. These organizations will often have to work through a federal, state, or local land-holding agency. In some cases, nonprofits will work on a RTP project with the Bureau of Land Management by entering into an agree- ment with a federal agency to work on U.S. Forest Service land, because nonprofits often do not own large tracts of land necessary for many trail projects. In the state of Ohio, the RTP is administered by the Ohio Department of Natural Resources, which has its own spe- cific review process and streamlining practices. The proce- dure stemmed from office budgetary restrictions and a need to better allocate staff time and resources. Currently, when an RTP application is received, it is immediately reviewed to flag any environmental issues that may come about during project implementation. Through this procedure, the state can alert the local agency of possible challenges to project delivery, as well as make a note internally when the time comes to select projects to receive funding. In Washington, four key criteria must be met to apply as a nonprofit agency: the organization is be registered with

17 funding, but the approval and letting processes are imple- mented by the central DOT Office. In Iowa, most federal- aid programs are administered by the six district offices, but certain programs are implemented centrally by the Office of Systems Planning and the Office of Local Systems pro- vides centralized guidance and assistance to LPA and dis- trict DOT staff. When addressing small-scale projects, it is important to distinguish the number of these projects being implemented in each of the ten case-study states. Administrators were asked to estimate a percentage of LPA projects that fit the small-scale criteria of less than $300,000 in federal funding. The study revealed that about half of respondents indicated that between 0% and 25% of LPA projects in their states are small-scale. The remaining four states specified that small- scale federal-aid projects encompass more than 25% of the total number of LPA projects within the state. Project Grouping Techniques Some questions in the survey were aimed at identifying agencies that have grouped small-scale federal-aid projects under a single environmental document to satisfy NEPA processes, or any agencies that have grouped small-scale projects in some other manner to improve efficiency. A prac- tice used by a few states to streamline project delivery is to bundle (or string together) multiple projects during a par- ticular delivery phase. Figure 1 shows the results of a survey question concerning bundling throughout various project phases (e.g., project inception and selection, design, permit- ting, construction, final acceptance, and reimbursement). Half of the focus states indicated bundling projects in the construction phase, possibly by including multiple projects under one construction contract. With regard to the other phases of project delivery, fewer than half of respondents specified that bundling is a practice being used by the focus types of project characteristics could be eligible for grouping under a single environmental document. The types of proj- ects included edge-of-pavement/edge-of-pavement resurfac- ing, video detection systems, solar-powered school crossing sign installations, and upgrade of overhead right-turn lane signs to comply with new design standards. The defining characteristic of all of these projects was that they included no significant environmental impacts and qualified as pro- grammatic categorical exclusions (CEs). The only excava- tion that was done was to fix noncompliant curb ramps as part of the surface preservation program. ODOT estimated that its strategy resulted in a cost savings of $300,000 to $500,000 and time savings of between 8 and 10 months. This estimate is based on historical data that shows that each simple overlay project typically costs $2,500 for filling out paperwork, processing approvals, and the like; whereas ODOT’s bundling of nearly 100 similar projects cost a total of $15,000. TECHNIQUES FOR ADMINISTERING SMALL-SCALE FEDERAL-AID PROJECTS The survey was used to identify communication techniques and staff involved in the administration and completion of small-scale projects funded by the specific federal-aid pro- gram described in the previous section. Organization of Local Government Offices In nine of the ten focus states, the LPA program (also referred to as local governments office and other variations) is han- dled at both the central office and division or district offices. Essentially all of the study states are structured utilizing both the central and district DOT Offices. North Dakota implements all federal-aid projects from its central office in Bismarck. In Minnesota, districts recommend projects for FigURe 1 number of focus states that use “bundling” practices in each project delivery phase.

18 projects is at the environmental phase, as this process has been shown to reduce the time required for NEPA approvals. SUMMARY Table 5 provides a summary of the major findings noted in chapters two and three. As noted previously, these find- ings are based on a literature review, survey responses, and interviews. Table C1 in Appendix C includes a more detailed organization of all the chapters. states. More specific discussion on this practice is presented in chapter three. One effective practice to note at the outset is the Mn/DOT approach to LPA project delivery. Mn/DOT combines LPA projects in any stage of delivery, allowing “bundling” of proj- ects at the planning, environmental, design, and construction phases. Mn/DOT reported that combining more than one proj- ect at any of these project stages reduces the amount of staff time and resources needed at both the DOT and local agency levels. It was noted that the most significant impact of bundling TABLE 5 EFFECTIVE PRACTICES FOR SPECIFIC FEDERAL-AID PROGRAMS CONDUCIVE TO SMALL-SCALE PROJECTS FROM LITERATURE REVIEW AND SURVEY OF FOCUS STATES Effective Practice Examples States Project grouping Open-end task order contracts for combined lettings Tying together (bundling) projects at any phase of delivery CA, DE, FL, MN, ND, OR, WA Funding controls Maximum/minimum project cost limits STIP placeholders State subsidies to LPAs Automatic application rollover to following year AL, CA, DE, IA, MI, MN, NJ, OR Formal partnerships Involve local stakeholders to encourage application for federal-aid funds Processes for nonprofit and forprofit organizations Program-specific review committees AL, MN, OR, PA, WA Assistance with applications Abbreviated and accessible application tools Standard solicitation schedules Boilerplate RFP forms for LPAs AL, FL, IL, MI, MN, OH, OR, PA Application of 49 CFR Part 18 The “Common Rule” Use of state procedures Delegation of authority to LPAs in design and/or ROW phases FL, OH Project management Project tracking database Online training/manuals for specific programs Risk assessment procedures Joint project delivery by multiple LPAs FL, IA, MN, ND, VA