Federal-aid Programs and Special Funding

This document was superseded on 01/23/12 by the memo "Management of Emergency Relief Funds"

U.S. Department of Transportation Federal Highway Administration

MEMORANDUM

On several recent occasions, the great number of eligible disasters under the ER program have exhausted available ER funding sources. When this occurs, we have been unable to allocate ER funding to the States to cover either additional funding needs on previously approved ER events or funding needs for new disaster requests awaiting action by the Administrator. To lessen the impact of this ER program funding shortfall in the past, we have been able to borrow funds from other Headquarters' controlled accounts; however, this alternative is becoming less effective as the backlog of ER funding needs has significantly increased and the funding potentially available for borrowing from these other accounts has diminished. As a result, ER funding requests received in Headquarters may be held for some time, while we wait for Congress to replenish the ER accounts through a supplemental appropriation.

Recognizing that quick congressional action is not always possible in today's Federal budgetary climate, we have discussed with various division and region offices options that could be used to fund or advance ER projects on an interim basis. The purpose of this memorandum is to share these options with all field offices.

Previously Approved ER Events

For an event that the Administrator has previously found eligible for ER funding, requests to fund additional work under that event could be handled under one, or some combination, of the following:

• Option 1 - Use unobligated ER funds from other ER events in the State

  This option could be available to a State that has had several on-going ER events that have previously received ER funding. Although we allocate ER funds to a State based on funding requests for a specific event, in most instances we do not object to using unobligated ER funds from one previously approved event to cover additional ER needs on another previously approved event. The only time this would not be acceptable is when an ER funding source is limited by law to a specific event. For the most part, our ER funding sources are available for any ER event. For example, ER funding identified by appropriation codes 098, 09G, 09L, 09N and 09Q can be used on any approved ER event.

  For your information, we do not track the amount of ER funding used on a specific event through the fund allocation process. Instead, we track ER funding used on a specific event through obligations shown in the Fiscal Management Information System (FMIS). Therefore, it is important that, regardless of funding source used for an event, the appropriate disaster code, as assigned by Headquarters for the event, be entered in the FMIS (see the Emergency Relief Manual, pages 30 and 31, for a discussion on the disaster code numbering).

• Option 2 - Use regular Federal-aid highway funds

  Regular Federal-aid highway funds, appropriate for the type of Federal-aid highway (NHS or STP), could be used. Regular Federal-aid funds would need to be obligated in accordance with the obligation limitation requirements in effect. For example, if STP funds were used, obligation of the STP funds would require use of a like amount of obligation limitation; however, if minimum allocation funds were used, currently this funding source is not subject to obligation limitation. The Federal share would be that appropriate for the ER work being authorized. For an authorization under this option, the letter of authorization should indicate that the project will be converted to ER funding when ER funding became available, at which time the regular Federal-aid funding, and the accompanying obligation limitation, would be released from the project

  This option could be used for both emergency repairs to restore essential traffic as well as permanent repairs. An advantage of this option is that it allows for immediate Federal reimbursement for costs that are being incurred. Further, it provides a means of securing FHWA authorization of the permanent repair activities so that they may proceed. A disadvantage is that use of regular Federal-aid funding sources (except minimum allocation under current law) will require the use of obligation limitation until the project can be converted to ER funding.

• Option 3 - Use advance construction (AC)

  Although 23 U.S.C. 115 does not contain authority to advance construct ER funds, it does designate several Federal-aid funding sources that can be advance constructed. When a project is advance constructed under Section 115, at the time the project is converted to a regular Federal-aid project, the Federal-aid funding source used at conversion can be any funding source eligible for that specific project activity. Thus, a project advance constructed under one of the funding sources designated in Section 115 could later be converted using ER funds. For example, an ER type project could be authorized as an advance construction STP project, and then, when ER funding becomes available, the project could be converted to ER funding. An authorization under this option should be made following the general guidance for advance construction of Federal-aid projects established in Mr. Kane's May 17, 1996, memorandum to the regions (Subject: Innovative Finance Provisions of the National Highway System Designation Act of 1995). It is also recommended that the letter of authorization indicate the State's intent to convert to ER funds.

  This option could be used in those instances where there is a need for prior FHWA authorization of permanent repair work. An advantage of this option is that it provides a means of securing FHWA authorization of the permanent repair activities so that they may proceed. Further, it does not use obligation limitation. A disadvantage is that a State must have adequate funding resources of its own to proceed with the project until it can be converted to ER funding.

ER Events Awaiting an Administrator Finding

When a potential ER event has occurred, the State is empowered to immediately undertake emergency repairs to restore essential traffic service and to prevent further damage to Federal-aid highway facilities. Properly documented costs will later be reimbursed once the FHWA Administrator makes a formal finding that the event qualifies for funding under the ER program.

However, we realize that circumstances may arise where a delay in the Administrator making a formal finding can cause a delay in the orderly progression of both temporary and permanent repairs. When this occurs, it may be possible to proceed with ER activities using either Options 2 or 3, as discussed in the previous section, subject to the following requirements:

• The State's formal request for ER funding, along with an acceptable field office report or field office endorsement, as appropriate, has been submitted to Headquarters. My February 18, 1997, memorandum to you (Subject: Emergency Relief Applications) discusses various methods for developing State requests.
• My staff managing the ER program has reviewed the ER request and recommends that it be approved, subject to any questionable or ineligible ER activities.
• A FHWA letter of authorization under Options 2 or 3 would be conditioned that any use of ER funding on the project is subject to the Administrator making a formal finding that the event qualifies for funding under the ER program.

It is envisioned that the use of Options 2 or 3 would be limited to specific events where the delay in securing a formal finding is lengthy and is delaying repair efforts. Prior to the division authorizing any work before the Administrator's finding, please coordinate with my office.

Use of Option 1, as discussed in the previous section, is not acceptable in these situations where there is a delay in the Administrator making a formal finding. Under no circumstances can ER funding from any source be used on an event until the Administrator's finding has been made.

General Comments

In any of the above cases where permanent ER repairs are being authorized using regular Federal-aid highway funds or the advance construction process, prior to this authorization, it is highly recommended that the division office review the activities being funded to ensure that they are eligible for ER funding. In other words, it is desirable to resolve concerns regarding eligibility of project features prior to the feature being constructed.

Questions concerning this memorandum should be directed to Mr. Mohan Pillay, 202-366-4655, or Mr. Jim Overton, 202-366-4653, of my staff.

/s/ Original signed by
Dwight A. Horne