Municipal Transportation Projects in Pennsylvania- Part III Funding
Funding is a constant challenge for municipalities, especially when considering undertaking a large commitment like a transportation project. To aide in these endeavors, a municipality may apply to the governments for cost reimbursement programs to alleviate a significant portion of the financial burden. If your municipality meets certain criteria, it may be eligible to have as much as 95% of the total project costs funded. Liquid fuels monies may also be used for local projects. We will also discuss the PA Infrastructure Bank (PIB) as a potential funding option.
It is worth noting that reimbursement programs are not the same as grants. With a reimbursement program your municipality must first incur the cost then place a request for reimbursement from PennDOT via a formal invoice.
Cost reimbursement programs include the Surface Transportation Program (STP), State Bridge funding (Act 89), discretionary funding from the legislature, and other various Federal and State programs. For this blog, we will focus on STP, Act 89, and discretionary funding. The STP is used as flexible funding that may be used by states and localities for projects to preserve and improve the conditions and performance on any Federal-Aid highway, bridge, and tunnel projects on any public road. The Appalachian Regional Commission (ARC) is a federal organization responsible for the Local Access Road program funding. Monies from this program are included in STP funding. ARC Local Access Road program funding affords State Governors the opportunity to use up to $3,000,000 of Appalachian Development Highway System Programing awarded to each state. For more information on the Local Access Road program click here. Resurfacing/rehabilitation are not eligible for Local Access Road funding.
Discretionary spending by the legislature is a process in which a specific project is explicitly identified within federal legislation.
Act 89, originally known as the “Bridge Bill” when initially passed in 1982, is the transportation funding vehicle used by the Commonwealth of Pennsylvania. Projects must be included on the Statewide Transportation Improvement Plan (STIP)/Twelve Year Plan (TYP) to receive Act 89 funds. From 2014 through 2019, between $2.2 million and $2.4 million will be spent on transportation projects throughout the Commonwealth. Act 89 is also the funding vehicle for the Dirt and Gravel program, increasing the available monies from $5 million to $35 million and earmarked $8 million for roads with 500 vehicles per day or less. The primary focus of the Dirt and Gravel program is not paving and repaving roads, instead the focus is on long-term environmental benefits. The one limitation to large culvert and bridge replacement is that the structure must be deemed undersized and be the cause of stream degradation. The application process is completed through your local conservation district. Any state or local entity maintaining public roads is eligible to apply.
The PIB provides direct, low-interest loans offered as a financing opportunity for transportation projects throughout the Commonwealth of Pennsylvania. The interest rate is figured at half of prime, 2.125%, at the time of this writing, with a repayment term of up to 10 years. A PIB loan may also be used to meet the matching requirement for cost reimbursement programs. For every project, except equipment loans, a match is required from the municipality. You can read more on PIB by checking out the official handbook online here. Below is an example of what a current projects list from PIB looks like, note the projects that a PIB loan was used to fully fund.
P. JOSEPH LEHMAN, Inc., Consulting Engineers is committed to assisting our clients in any way possible, including assistance with obtaining funding for your project. Our experience Grantsmanship team has worked to assist in obtaining funding for multiple boroughs, townships, counties, and private entities.
If you have any additional questions regarding funding for your project or would like to further know how P. JOSEPH LEHMAN, Inc., Consulting Engineers can possibly assist you with funding for your project please do not hesitate to contact us at (814) 695-7500.