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City Crescent Building 10 South Howard Street, Suite 2450 Baltimore, MD 21201 Phone: (410) 962-4440 Fax: (410) 962-4054 |
2003 Transportation Enhancement
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| Written by: | Mary Huie and |
September 30, 2003 |
This process review was initiated as a result of Maryland's obligation rate being lower than the national goal in the FY92-00 Summary of Nationwide Spending of Transportation Enhancements Funds Report prepared by the National Transportation Enhancements Clearinghouse. The purpose of this process review is to determine the cause of delay of Maryland State Highway Administration obligating the Transportation Enhancement Program (TEP) funds to the sponsors and to follow-up on a complaint received from the Maryland Department of Natural Resources (DNR) that the TEP process is too complicated.
The Intermodal Surface Transportation Efficiency Act (ISTEA) of 1991 established a dedicated funding stream for a set of newly defined Transportation Enhancements (TE) activities. Ten percent of the Surface Transportation Program (STP) was set aside for these activities, including development of bicycle and pedestrian facilities, scenic beautification, historic preservation, and mitigation of highway runoff.
In 1998, through the Transportation Equity Act of the 21st Century (TEA-21), the ten percent set-aside for TE was continued and the funding level increased by approximately 40%. The TEA-21 legislation expired September 30, 2003, and the Administration's Safe, Accountable, Flexible, and Efficient Transportation Act of 2003 (SAFETEA) is not proposing any changes to the ten percent set-aside of STP funds for the TE program.
According to the Summary of Nationwide Spending of Transportation Enhancements Funds Report prepared by the National Transportation Enhancements Clearinghouse, Maryland's obligation rate for TE projects and reimbursement rates have continued to increase over the past 3 years.
| Apportioned | Programmed | Obligated | Reimbursed | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Amount | Rate | Rank | Nat'l Avg. | Amount | Rate | Rank | Nat'l Avg. | |||
FY |
$67,059,485 |
$86,516,014 |
$45,354,089 |
67.6% |
32 |
67.9% |
$27,504,725 |
41.0% |
36 |
44.4% |
FY |
$78,212,967 |
$91,357,842 |
$59,812,201 |
76.5% |
22 |
69.8% |
$33,488,981 |
42.8% |
39 |
48.2% |
FY |
$89,557,318 |
$101,696,057 |
$73,525,999 |
82.1% |
15 |
72.2% |
$45,445,688 |
50.74% |
29 |
50.6% |
FHWA established 75% as a national goal for obligations in 1996. SHA has exceeded FHWA’s goal in FY 2001 and FY 2002. Of the 50 states and the District of Columbia and Puerto Rico, SHA was ranked 15th in 2002, a substantial improvement since 2000. During FY 2000-2002, Maryland's obligation rate was equivalent or exceeded the national average.
In Maryland, the State Highway Administration (SHA) administers the Transportation Enhancement Program (TEP). SHA solicits proposals from other State agencies, county or municipal governments, private non-profit organizations, community groups, and any individuals that are interested. Projects proposed by non-governmental entities must have an appropriate government agency as a co-sponsor. The TEP funds are distributed on a reimbursable basis. In Maryland, TE funds are only obligated for construction activities. Therefore, the obligation rate is affected by delays that occur in the project development stage, the time between approval of the funding request and obligation of funds.
The objective of this process review is to identify the "choke points" in the TEP process and to make recommendations for improvement that will make it more sponsor-friendly, decrease project delays and increase the obligation rate.
Identify the problems that may be impeding the obligation rate through discussions with SHA TEP staff and request feedback from sponsors. The team members are Mary Huie and Caryn Brookman from FHWA and Mike Haley, Shannon Rousey and Mary Keller from SHA.
The scope is to review the obligation trend during the past three years using the Transportation Enhancements Summary of Nationwide Spending report produced by the National Transportation Enhancements Clearinghouse from FY 2000, 2001 and 2002.
Discuss with SHA TEP staff about what they think the obstacles are during the TEP process.
Request feedback from project sponsors by mailing feedback request forms to 10 current or past sponsors.
SHA does not have a set period (open season) or deadline for accepting proposals. Depending on the funding available, SHA continues to accept and review proposals throughout the year. SHA provides assistance to project sponsors by reviewing draft proposals prior to formal submittal.
According to SHA's TEP Guidelines established in 1999, project selection preference is given to sponsors who can demonstrate that they have all right-of-way secured and a minimum of 30% construction plans completed. This includes identifying additional studies that may need to be undertaken, obtaining community consensus, having reasonable cost estimates and a project schedule, and determining environmental impacts. Once a project is awarded funding, SHA holds a "kickoff" meeting with the project sponsor to further refine the schedule and cost estimate and to explain requirements associated with the TE Program.
In order for SHA to obligate funds for construction, project sponsors must first complete certain activities including completing the necessary environmental and design work, acquiring the appropriate permits, ensuring all right-of-way is clear and obtaining approval to advertise. The project sponsor is responsible for all of the aforementioned activities; however, SHA does provide some technical and administrative assistance in obtaining environmental clearances and approval to advertise.
Maryland's TE apportionment of the STP funds has been approximately $10M per year through TEA-21. The funds have been distributed fairly equally amongst Maryland's 23 counties and the City of Baltimore. Charles County is the only county that has not requested any funding.
The following observations were made after meeting with SHA TEP staff and receiving feedback from project sponsors:
General Observations
Most projects have significant scope changes, cost increases, and schedule slips after approval of funding has been received
Cost estimates have not been accurate since most are not based on detailed engineering or in depth project investigations
Sponsors that do submit projects often do not have the knowledge or expertise to successfully complete a TEP project. However, there are now many return sponsors that have had experience dealing with the TEP process
There is a need for clearer guidance from FHWA on eligible vs. non-eligible activities
Requirements should be streamlined based on the type of project and not the full requirements of a regular capital roadway or structural improvement.
Problem with timely internal SHA review (staffing issue)
Large range in project award amounts ($100,000 - $3,250,000)
Project Planning
Environmental clearance is not an issue due to more experienced project sponsors
Project schedules are delayed due to sponsors changing the project scope after funding is approved
Public input received late in the process has impacted the selected design
Right-of-way
Sponsors don't clear right-of-way as per schedule
Sponsors are not held to acquiring ROW before they submit proposals, as long as they have made a "good faith" effort to contact property owners before submitting the proposals
Design
Plans, specification and estimate (PS&E) seems to be having the most problems; especially reviews within sponsor's own agency
Sponsors not submitting 30% design plans
Biggest issue is change in design and scope-Maryland likes to provide some flexibility to the Sponsor to modify the original design usually
SHA looks for a "reasonable" level of design even though their guidelines state that they require 30%, this has an impact on schedule as well
Procurement
Typically takes 24-30 months after award to advertise.
SHA does have abbreviated advertisement procedures for projects under $25,000. However, SHA does not have many projects that are under $25,000 in the TE program.
Advertising package requirements should be revised based on the TEP program project needs.
SHA obligate TEP funds for construction only, therefore money is obligated at the time of award but may not be spent until the actual authorization or start of construction.
Reimbursement
Sponsors are not sending invoices in a timely fashion to SHA for reimbursement
There is no timeframe or time limit put into the MOU for submission of final invoice although SHA has been internally discussing this issue
The 50/50 award and match requirement is confusing and needs better explanation:
Total project cost is all the activities, not just activities eligible for reimbursement. Sponsor can only request for half the total project cost.
The project sponsor must match the cost of the total project cost by 50%, of that 50%, 20% must be in cash. The 20% cash match is of the project's construction cost not the total project cost. So if the total construction cost is more than 50% of the total project cost (and it usually is) then the Sponsor match can equal out to be more than 50% of the total project cost. The TE portion always stays at 50% of total project cost and it is 100% federal funds participating.
Feedback Results
6 of the 10 feedback request forms mailed were returned with informative feedback. Findings from the 6 sponsor responses provided very positive comments for the SHA TEP staff. See a list of complete responses in the Appendix. Some of the problems identified in the feedback forms included:
Improvements Underway by SHA
From the results of the Sponsor Feedback forms and from feedback received from SHA TEP staff, the following recommendations are offered:
There were several common themes presented by both the project sponsors and SHA TEP staff that provided the basis for the above recommendations. First, many sponsors feel that the TEP process is too complicated with too many strings attached and follows the same process as used for capital transportation projects. This can be remedied by streamlining some of the existing procedures used for typical transportation project to be more in line with the smaller scope of TE projects. It is important to incorporate a certain amount of flexibility in the administration of this type of program, however; too much flexibility can sometimes lead to major delays in project schedules. If projects have to be redesigned those funds being withheld could be used for projects that have met all the selection preference criteria. This issue was echoed in many of the comments received especially regarding design or scope changes after the project has been funded. Major scope changes should be discouraged; however, it is acknowledged that it may not always be avoidable.
As a follow-up to DNR's complaint, DNR was selected as one of the project sponsors that we requested feedback from. DNR was an atypical situation, wherein they were acting as an intermediate agency in the distribution the TEP funds. They were awarded $6M for co-sponsoring 15 projects. DNR was not familiar with federal aid regulations and therefore found the TEP process to be complex and difficult. SHA has decided that they will not be using any intermediate agencies to administer the TEP in the future.
According to the project sponsor feedback, SHA TEP staff is an invaluable resource. Many positive comments were received which shows the willingness of the TEP staff to help sponsors through problem areas and in many cases SHA assistance is given even before sponsors formally submit proposals for funding.
With the above issues and recommendations identified, Maryland's TE process would become more streamlined, thereby decreasing problem areas and the time it takes for projects to go from award to obligation of funds. FHWA supports SHA's improvements that are underway and offers assistance in implementing the above recommendations and in helping to streamline the TEP process.
We would like to thank Michael Haley, Mary Keller and Shannon Rousey of SHA, Wesley Paulson and Ken Rucker of the National Capital Trolley Museum, the Old Harford Town Maritime Center, Eileen McGuckian of Peerless Rockville Historic Preservation, Betsy Thompson of City of Rockville and Larry Lubbers of Maryland Department of Natural Resources for their participation and cooperation with the review.
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