Cities attempting to land federal dollars for infrastructure projects got some pointers from the U.S. Department of Transportation at the National League of Cities’ Congressional Conference in Washington D.C. Monday, including the need to have their own upfront funding, which could come from bond proceeds.
DOT kicked things off by warning against applying for funds with half-baked proposals. “There’s a notion that we will come to the federal government with sort of an idea, we’ll get the money and then we’ll flesh it out,” said Polly Tottenberg, the deputy transportation secretary. “It has to work the other way.”
Real scenario questions from the attendees included a long and troublesome effort to replace the I-5 bridge spanning the Columbia River between Washington and Oregon. DOT believes the project is still stuck in the planning stage. Last June it looked like a P3 deal might be coming to the rescue. DOT also counseled West Memphis, Arkansas, Mayor Marco McLendon to spend more time at the planning blackboard for bridge issues separating his city from Memphis, Tennessee.
Coming in totally prepared adds to a list of hoops facing states and municipalities anxious to move their projects into play. Federal requirements include more than a nod to safety concerns, equity issues, climate considerations, innovation, and economic transformation. The feds also prefer using construction materials made in the U.S. to avoid running afoul of the Build America, Buy America requirements.
Charles Small, a deputy assistant transportation secretary, noted the clock is ticking on getting projects approved. “We have 665 days left in this administration,” he said. “Especially at the local level we have to show a lot of urgency in trying to get the right applications not only to the department but being able to guide you through that process so we can ensure that the key projects in all of your communities get funded.”
Funded projects create their own set of challenges including the need for cities to already have some of the proposed project paid for. “A lot of people do not understand that most of our grant programs are on a reimbursement basis,” said Stephanie Pollock, coordinator for project delivery support, DOT. “Make sure your officials and your stakeholders understand that a federal grant does not involve a giant wire transfer into your cities.”
State transit agencies still reeling from a COVID-19-induced ridership drop are facing the same conundrum. Reaching for new infrastructure funding requires matching funds that could be realized via new debt.
Pollock went on to school the attendees on how the federal government defines the terms of obligation and expenditure. Obligation comes with legal stipulations regarding the National Environmental Policy Act and a statutory deadline to spend the money.
“You might think it makes sense to apply for your grant way early when it’s still in its nascent state,” said Pollock. “If you do that, and you have years of community engagement, permitting, and compliance to do, you could walk into that obligation deadline.”
Proving the point, a highway project in Savannah, Georgia, was brought up for discussion by Savanah city manager Jay Melder who partially attributed delays to changes in environmental regulations.
Projects that don’t appear to have any environmental impact can sail through the permitting process with a categorical exclusion. The next more invasive steps include an Environmental Assessment which can take a year followed by a full-blown Environmental Impact Statement that can take up to two years to complete.
Other questions from the audience included a query from Mayor Mark Johnson of Lehi, Utah, whose city is having a squabble with the state over formula funding. The DOT officials recommended an intervention from the Federal Highway Administration.
Despite the challenges, the DOT believes the infrastructure iron is hot enough to strike. “There’s never been a bill like this in terms of resources, its city friendliness,” said Tottenberg. This is a once in a generation opportunity.”