II. Pre-Grant Award
Questions and Answers
1) Question: How were the funding allocations announced?
Answer: The ARRA funding allocations for the Transit Capital Assistance (Urbanized Area Formula, Nonurbanized Area Formula and Growing States and High Density States) and Fixed Guideway Infrastructure Investment programs can be found in the March 5, 2009 Federal Register Notice (PDF). Government-wide information is also available on http://www.recovery.gov/. A separate Federal Register notice on ARRA Capital Investment Grants program allocations will be published soon. The funds available for the Transit Capital Assistance (Public Transportation on Indian Reservations) and Energy Consumption and Greenhouse Emissions Reduction programs will be allocated on a discretionary basis. Federal Register notices announcing the availability of funds, soliciting project proposals and providing application procedures will also be published. FTA-specific information will continue to be posted on this website.
2) Question: Can a local agency combine ARRA funds and other sources to implement a project?
Answer: While each recipient must apply for a separate grant for each ARRA funding source, a single project may be funded with multiple funding sources, including economic recovery and other FTA formula and discretionary resources.
3) Question: Can grantees receive ARRA grants if the agency’s ability to apply for FTA program funds is currently suspended?
Answer: Grantees that are currently in a fundable status to receive a grant under FTA programs will be eligible to receive ARRA funds. Grantees concerned about their status should contact their FTA regional office.
4) Question: What can ARRA funds be used for?
Answer: The law states that funds will be available for capital expenditures authorized under 49 U.S.C. 5302(a)(1), which describes eligible capital expenses. States may continue to use up to 15% of funds apportioned at the State level to administer the non-urbanized program on FTA’s behalf.
5) Question: Can ARRA funds be used for capital intercity bus stations and terminals?
Answer: Yes, as stated in Section 5302(a)(1)(G) ARRA funds can be used for the construction, renovation, and improvement of intercity bus and intercity rail stations and terminals. (Note: The Federal Register notice published on March 5, 2009, inadvertently omitted a comprehensive list of all eligible items under the definition of capital.)
6) Question: Are project administration costs eligible for funding?
Answer: Yes. ARRA funds can be used to fund the administrative costs directly associated with administering capital projects, including costs associated with reporting on project and grant status.
7) Question: What is the maximum amount of project administration costs for grants using ARRA funding?
Answer: Project administration costs must be directly associated with administering the capital project. While there is no cap, the costs must be allowable, reasonable, allocable, and in accordance with the applicable Costs Principles. Regional offices should use the same limits that are currently used for FTA grants. For further guidance on costs principles see 2 CFR part 225 for States and local governments, and 2 CFR part 230 for non-profit organizations.
8) Question: Can grantees charge indirect costs to an ARRA grant other than those Statewide ARRA administration costs referenced in OMB guidance M-09-18 and M-10-03?
Answer: Yes, a grantee with an approved Cost Allocation Plan may bill indirect costs to an ARRA grant if those costs were included in the grant project budget at the time of obligation. These indirect costs are either included with an ALI for project administration or imbedded in the costs of capital projects, depending on the specific circumstances of the cost allocation plan approval and how the grant was structured.
9) Question: Can a state charge statewide administrative costs to ARRA grants?
Answer: A State with an approved Statewide Cost Allocation Plan that includes ARRA administrative costs may charge State agencies that have been awarded FTA ARRA grant up to 0.5% of each ARRA grant for Statewide indirect costs.
For more information, please refer to the following links to OMB guidance documents M-09-18 and M-10-03:
10) Question: Can a grantee use ARRA funds to purchase vehicles if the agency's spare ratio will exceed the applicable standard?
Answer: A grantee wishing to use ARRA funds to purchase vehicles that would cause the grantee's fleet to exceed the applicable spare ratio requirements should contact their FTA regional office. FTA will consider approving exceptions to a spare ratio requirement if the request meets certain criteria, such as: the excess spare ratio would be temporary in nature, with it returning to within the 20 percent level within 2-3 years of delivery of the new vehicles, or whether the buses would “green” the fleet of the transit agency.
11) Question: Is the Capital Cost of Contracting an eligible expense?
Answer: Yes, capital costs associated with contracted services are eligible. The entire contract may or may not be eligible. The current capital costs of contracting guidance can be found in FTA’s Capital Investment Program Guidance and Application Instructions Circular 9300.1B.
12) Question: Who will be eligible to receive ARRA funds?
Answer: ARRA funding will be made available to current recipients of: FTA’s Urbanized Area Formula Program (49 U.S.C. section 5307); Formula Grants for Other Than Urbanized Areas Program (49 U.S.C. section 5311); Fixed Guideway Modernization Formula Program (49 U.S.C. section 5309); federally recognized tribes (49 U.S.C. section 5311(c) (1)); and Capital Investment Grants (49 U.S.C. section 5309)
13) Question: Can ARRA funds be used for operating expenses?
Answer: When ARRA was on enacted on February 17, 2009, only capital projects were eligible program costs. However, the Defense Supplemental Appropriations Act 2009 (H.R. 2346) included a provision allowing 10% of an area’s Urbanized Area Formula (5307) or Non-urbanized Area Formula (5311) apportionment to be used for operating assistance, consistent with the purpose of ARRA. More detailed questions and answers regarding the use of ARRA funds for operating assistance can be found at the ARRA page on the FTA website.
14) Question: Can ARRA funds be used for preventive maintenance activities?
Answer: Yes. Capital projects as defined by 49 U. S. C. 5302(a)(1) are eligible under the law, and preventive maintenance is included in the list of eligible capital expenditures.
15) Question: Can ARRA funds be used for preliminary engineering activities?
Answer: Yes. Capital projects, as defined by 49 U. S. C.5302(a)(1), are eligible under the law. Specifically, 49 U.S.C. 5302(a)(1)(A) includes engineering and design work, location surveying, mapping, and right-of-way acquisition as eligible capital expenses.
16) Question: Can ARRA funds be used by State DOTs to administer the program?
Answer: Yes. States may continue to use up to 15% of funds apportioned at the State level to administer the program for non-urbanized areas on FTA’s behalf.
17) Question: If a contract has already been signed and/or a bid awarded, can ARRA funds be used?
Answer: Yes, if local funds were used to advance a project under FTA’s pre-award authority provision or a Letter of No Prejudice.
18) Question: If an FTA grantee receives ARRA funds from FHWA, can the funds be transferred to FTA?
Answer: Yes, if the funds are Surface Transportation Program funds.
19) Question: If funds are flexed from FHWA to FTA, when will the clock for the 50% of funds awarded during the 180 day period start?
Answer: Funds are transferred from FHWA to FTA for ready- to- go projects. After transfer, the funds must be obligated in an FTA grant by September 30, 2010.
20) Question: Can FHWA funds transferred to FTA be used for operating?
Answer: No. FTA will follow current Surface Transportation Program transfer rules which say Federal highway and public transportation statutes include provisions that permit certain categories of funds to be used for either highway or transit purposes. Flexible fund programs include:
- Surface Transportation Program (STP), 23 U.S.C. 133;
- Equity Bonus Program, 23 U.S.C. 105;
- Interstate Maintenance Program, 23 U.S.C. 119;
- Highway Bridge Replacement and Rehabilitation Program, 23 U.S.C. 144;
- National Highway System Program, 23 U.S.C. 104(c);
- Substitute Highway Program, 23 U.S.C. 103(d); and
- Congestion Mitigation and Air Quality Improvement (CMAQ) Program, 23 U.S.C. 149.
Although these Federal Highway Administration (FHWA) programs have intermodal flexibility, there are limitations on the uses of some funding. For example, recipients may not use STP funds for operating assistance on public transportation projects; however, recipients may use STP funds for any public transportation capital project.
21) Question: Can ARRA funds be used to substitute for money in an existing grant that has not been expended?
Answer: No. ARRA program funds cannot be used to replace funds already obligated in an existing FTA grant even if those funds have not been expended. ARRA funds can, however, be used to replace program funds identified in STIP and TIP but not yet awarded in a grant. Also, because FTA needs to segregate the funds being made available from ARRA legislation, agencies will need to apply for the ARRA funds in a new grant application.
22) Question: Is the pre-award authority limited to the Federal Fiscal Year starting October 1, 2008, or can it be used to cover an operator's costs in their normal fiscal year which starts on July 1. 2008?
Answer: ARRA program funds that are distributed by formula have blanket pre-award authority beginning October 1, 2008. Costs incurred before that date are not eligible for reimbursement.
23) Question: We plan to use ARRA funds distributed under 49 U.S.C. Sections 5311 and 5307 formulas for construction of a new bus facility. Is that allowable?
Answer: Yes. ARRA funds can be used for eligible capital projects as defined in 49 U.S.C. Section 5302(a)(1)(A). Because ARRA funds must be segregated, however, the project would be funded in two separate grants.
24) Question: We would like to use ARRA for capitalizing maintenance, which our small urban agency does not currently do. This would free up local operating overmatch to use for service expansion. Is this acceptable?
Answer: Yes. The law states that ARRA funds are available for capital expenditures authorized under 49 U.S.C. 5302(a)(1)(A) and preventive maintenance, which is described as all maintenance, is an eligible capital expense.
25) Question: When is the last day to request a “flex transfer” from FHWA to FTA before the 120 day redistribution takes place in Highways?
Answer: FHWA and FTA are no longer processing transfers.
26) Question: If a State requests a “flex fund transfer”, when will the funds be available to obligate in FTA?
Answer: All transfers were completed in time for processing by FTA before the September 30, 2010 deadline for obligation.
27) Question: For FY 08-09 we will be entering a 5307 application for the capital cost of contracting. We plan to also enter a 5307 ARRA application for the capital cost of contracting. If we can segregate which part of the contract each is applied to will that be allowable?
Answer: ARRA states that funds must not be comingled. Therefore, applications for Section 5307 funds received through the yearly appropriations process cannot be combined with Transit Capital Assistance (5307) ARRA funds. ARRA funds must be applied for using stand alone grants. You can, however, split fund a single project (for example, your capital cost of contracting) between two grants if you can track the expenses allocable to each funding source.
28) Question: Are NEPA activities eligible expenses under ARRA?
Answer: ARRA transit funds are authorized for capital projects only. The funds are eligible for activities that fall within the scope of the engineering, design and construction of a facility. More specifically, section 5302(a)(1) defines a capital project, in relevant part, as the construction or acquisition of a facility for use in public transportation as well as expenses incidental to the acquisition or construction, including designing, engineering, location surveying, mapping and acquiring rights-of-way. FTA has interpreted this statutory language to allow ARRA funds to be used during the engineering phase of the project for engineering, environmental, financial, and other technical studies undertaken in support of preparing and publishing a Final Environmental Impact Statement for the project, under the federal National Environmental Protection Act (NEPA). However, ARRA funds cannot be used for planning activities that address a wide range of public transportation alternatives in a corridor or subarea or to conduct technical studies related to public transportation, rather than to a specific transportation project. (See, e.g., 49 U.S.C. 5305(b)(1).) Thus, ARRA funds may be used to prepare the necessary environmental documentation to fulfill the requirements of NEPA as well as other preliminary engineering supporting that particular project.
1) Question: What actions do State DOTs and MPOs need to take, in coordination with transit agencies to ensure timely award and expenditure of funds?
Answer: Update Planning Documents. States and MPOs, in coordination with transit agencies, should conduct the transportation planning activities necessary for adding proposed ARRA program projects to plans, TIPs and STIPs. Planning tasks such as conducting public involvement, demonstrating fiscal constraint, and performing travel model runs and analyses prerequisite to making transportation air quality conformity determinations should take place now. This is necessary to ensure timely amendment of the documents to include ARRA projects and to award funds as soon as possible. This work should have already begun. If it has not, it should be started immediately.
In identifying and proposing additional projects for amendment into TIPs and STIPs, it is reasonable to assume ARRA program funds equivalent to a doubling of the current full-year amount of comparable FTA program funds – Sections 5307 Urbanized Area Formula program, 5309 Fixed-Guideway Modernization program, and 5311 Non-Urbanized Area Formula program. FTA has not determined how Capital Investment Grant Funding (New/Small Starts program in 49 U.S.C. 5309) will be allocated at this time. Once the necessary planning and air quality conformity work has been completed, MPOs and State DOTs may amend their plans, TIPs and STIPs. FTA, in coordination with FHWA, can make any necessary conformity findings on the amended plans and TIPs, and approve the STIP amendment requests.
Attainment and Nonattainment Conditions. If the project is in an area that is in attainment of air quality standards, the MPOs would take action and then submit the amended TIP to the State for incorporation into the STIP. The State would submit the amended STIP to FHWA/FTA for review and approval. With advance coordination among the parties, some of these items can be performed concurrently.
If the project is in an air quality nonattainment or maintenance area, the addition of activities or projects that are exempt from conformity could be accomplished as a simple amendment and would not necessitate a conformity determination. See List of Projects that are Exempt from Air Quality Conformity.
States and the MPOs should begin now to do the necessary planning work, such as model runs for the various scenarios; analysis work needed for conformity, if necessary; public involvement; and any other planning support work to get prepared. This preparatory technical work can be completed, and action taken to approve the necessary amendments along with conformity determination, if required.
Once the planning and any necessary conformity work has been completed, the MPO policy boards and State DOTs may amend their plans, TIPs and STIPs, and FTA, in coordination with FHWA, may make any necessary conformity determinations.
2) Question: Can State DOTs and MPOs count the recovery funds to demonstrate “fiscal constraint” in plans, TIPs, and STIPs?
Answer: Yes. Funds may be used to demonstrate fiscal constraint of plans, TIPs, and STIPs in areas that are in attainment, nonattainment, or maintenance of air quality standards. This special determination is analogous to the assumption of a continuing flow of Federal funds.
3) Question: Can State DOTs and MPOs substitute or replace ARRA funds for FTA funds in projects currently programmed in the TIP and STIP?
Answer: Yes, funds may be used to advance projects that are in any current TIP and STIP. The re-programmed FTA funds must be used for another eligible project before the funds lapse. In contrast, grantees may not substitute ARRA funds for FTA funds that are currently obligated in a grant agreement. Also, because funds being made available from ARRA legislation need to be segregated, grantees will need to apply for ARRA funds in a new grant application.
4) Question: Can substitution of ARRA funds for FTA funds on projects programmed in the TIP and STIP be handled administratively?
Answer: Yes, provided that the action involves only a change in the source of the funds. The adopted amendment procedures governing your specific State or region should be consulted to determine what actions are eligible as administrative amendments to the TIP or STIP.
5) Question: Can ARRA funds be used to support non-federal projects not currently listed in plans, TIPs or STIPs?
Answer: Yes, provided that the non-federal projects are eligible activities for ARRA funding (i.e. capital assistance), that can be amended into plans, TIPs, and STIPs, and that compliance with applicable federal requirements such as the environmental review process required under NEPA, other environmental laws, and any additional applicable federal requirements can be expeditiously achieved.
6) Question: Can MPOs and States process TIP and STIP amendments to add ARRA-funded projects as “lump-sum” amounts?
Answer: It depends. Yes, if the term "lump-sum" refers to a "package" of individually identified projects proposed for amendment into TIPs and STIPs. In addition, in accordance with 23 CFR Part 450, Statewide and Metropolitan Transportation Planning, projects that are not considered to be of appropriate scale for individual identification in the TIP and STIP may be grouped by function, work type, and/or geographic area using the applicable classifications under 23 CFR 771.117(c) and (d) and/or 40 CFR part 93. The adopted amendment procedures governing your specific state or region should be consulted for guidance as to "lump sum" amendments requirements. A "lump-sum" dollar figure without a list of individual projects or indication of overall project “group” would not provide sufficient information for MPOs, States, and FTA/FHWA to approve amendments of TIPs and STIPs or track the use of ARRA funds.
7) Question: Can State DOTs and MPOs use ARRA funds to do transportation planning activities necessary to amend TIPs and STIPs in preparation for subsequent fund award?
Answer: Funding from the ARRA program is limited to capital program assistance, and transportation planning is not an eligible activity for the funds that will be made available to FTA. MPOs and States should utilize the planning funds programmed in existing Unified Planning Work Programs and State Planning and Research Programs to support their planning efforts.
8) Question: Now that ARRA fund apportionments have been made, should TIPs and STIPs be revised to reflect the actual apportionment of ARRA funds available to a UZA, or do the original “2x” guidelines still remain?
Answer: Yes, TIP and STIP totals should be revised to reflect actual ARRA apportionments. However, the revisions may be made as “administrative modifications,” within a reasonable timeframe convenient to grantees.
9) Question: Can FTA, jointly with FHWA, make conditional STIP approvals?
Answer: No. Conditional STIP approvals are not allowed under existing regulations. The planning regulations (23 CFR 450.218(b)) do allow FTA/FHWA to: approve the entire STIP; approve the STIP subject to certain corrective actions being taken; or under special circumstances, approve a partial STIP covering only a portion of the State. However, if States and MPOs complete the steps detailed above, FTA/FHWA can approve the STIP amendments immediately.
10) Question: What public review and comment activities do organizations need to undertake prior to receiving funds?
Answer: The public involvement and consultation provisions adopted and published by metropolitan and statewide transportation planning processes apply to planning and programming of projects supported with ARRA funds. The provisions outlined in MPO Participation Plans and documented public participation processes of States describe the locally agreed upon requirements for public review in the planning process, including the schedule and period of time for public input and comment that must be met. Additionally, public review and comment required by the environmental process must be undertaken.
11) Question: What actions do transit agencies need to take before applying for funds?
Answer: Planning Process. Projects must be included in the approved Statewide Transportation Improvement Program (STIP) and, in UZAs, the metropolitan transportation plan (Plan) and Transportation Improvement Program (TIP). Transit agencies should be working within their metropolitan or statewide transportation planning processes to ensure that their priority projects are included in those documents and made ready for grant award. Therefore, FTA strongly encourages transit agencies to reach out to Metropolitan Planning Organizations (MPO) or State Departments of Transportation (State DOT) to begin work as soon as possible to ensure that public transportation projects are included in approved plans, TIPs and STIPs, so that the projects are ready and available to advance to grant award, and to begin expending funds, as soon as possible.
Environmental Review. Environmental requirements that apply to projects – the National Environmental Policy Act (NEPA) and Section 4(f) of the Department of Transportation Act, among others – must be met. Areas should consider prioritizing projects that qualify as categorical exclusions or have completed or nearly completed NEPA in order to meet the anticipated timeframes for obligation of funds in the new legislation. To the extent that other environmental requirements apply and have not been satisfied, grantees should begin consulting with managers of affected resources at the earliest opportunity.
Projects with Incomplete Environmental Processes. A project for which a categorical exclusion or an environmental assessment is in the process of being prepared, but nearing completion, likely will qualify as a “quick-start” activity targeted for economic recovery investment. A project for which an environmental impact statement is nearing completion may qualify as a quick-start activity if a record of decision is expected to be executed shortly. In accordance with section 1609(b) of the Act, FTA staff will provide guidance on the most efficient course of action for completing the environmental process (including the National Environmental Policy Act (NEPA) process and other environmental requirements, such as section 106 of the National Historic Preservation Act and section 4(f) of the Department of Transportation Act, for any project that may qualify as a quick-start activity. Grant Application Preparation. Grantees should be working on drafting an application for funding, including developing a budget and milestones for key activities.
12) Question: Will FTA consider approving grants before completion of the environmental process?
Answer: As a general rule, FTA does not award program funds in a grant until the NEPA process and review have been completed. Grantees with projects in the final stages of NEPA review should contact the appropriate FTA regional office for direction.
C. Certification (1511, 1201, 1607)
1) Question: Will FTA regions be required to verify Section 1511 certification before grant award?
Answer: Yes, section 1511 certification must be completed before grantees receive ARRA funds. The certifications are posted on DOT’s website. The FTA regions will verify that the posted certifications adequately include transit and that the projects applied for are included in the current TIP/STIP as amended. See Answer C.2. for details of what the certification must contain.
2) Question: Must MPOs and/or Urbanized Areas direct grantees to execute a Section 1511 certification before FTA can award an ARRA grant?
Answer: No. DOT has determined that the FHWA/FTA joint planning requirements provide a robust process to ensure that projects have been properly reviewed and vetted and are an appropriate use of taxpayer dollars. Therefore, the Governor or his/her designee’s signature on the Section 1511 certification covers all highway and transit projects in a State under certain conditions. Similarly, a signature by the Chairman of the MPO on the Section 1511 certification covers all highway and transit projects in an urbanized area under certain conditions.
In order for either the Governor’s or MPO Chair’s certification to satisfy the Section 1511 requirement for transit projects in an urbanized area, the certification must cite the TIP/STIP planning process as the basis for certifying that each project has been properly reviewed and vetted and is an appropriate use of taxpayer dollars. The certification must also provide a link to the public web, posting the STIP or the TIP that includes (or will include) any highway and transit project designated to receive ARRA funding. The STIP or the TIP must include a description of each project, the estimated total cost of each project, and the amount of ARRA funds to be used for each project.
U.S. DOT will ensure that the certifications, once received, are posted on DOT’s Recovery site and linked to http://www.recovery.gov/.
If the Governor’s section 1511 certification includes only highway projects, and not transit projects, or if the certification does not provide a link to the proposed transit projects included in the STIP for ARRA funding, it will be necessary for a direct recipient or MPO to submit an additional section 1511 certification or project listing with the requisite section 1511 information discussed above.
DOT Secretary LaHood’s letter to the Governors, dated February 27, 2009, includes sample forms for the Section 1511 certification and two other ARRA certifications required by the Governor.
3) Question: Does the Governor’s Section 1511 certification cover direct ARRA grants to Indian tribes?
Answer: While in some cases the STIP referenced in the Governor’s Section 1511 certification may include the Tribal transit projects, Tribes are not required to submit the certification described in Section 1511. Section 1511 only specifies that State or local governments must submit a certification; it does not mention ARRA infrastructure investments by tribal governments.
4) Question: Must the direct recipient in one of the Insular Areas (Guam, Northern Marianas, American Samoa, and the Virgin Islands) provide a Section 1511 certification for transit projects?
Answer: Yes, if the projects are not included in a Section 1511 certification by the chief executive officer of the insular area. When transit projects in an Insular Area are not included in a certification made at a higher level, an appropriate official should sign a Section 1511 certification and provide a list of the transit projects that have been properly reviewed and vetted as an appropriate use of ARRA funds. DOT will post the certifications received.
5) Question: Do all grantees have to submit the certifications required by Section 1201(a) (Maintenance of Effort) and Section 1607 (accepting ARRA funds)?
Answer: No. These certifications are one-time certifications at the State level to be signed by the Governor of the State.
6) Question: What types of assistance should a State include in its 1201(c) Maintenance of Effort Certification for the Transit Capital Assistance Program?
Answer: The State should include all sources of State funding that were planned to be expended for capital transit projects as of February 17, 2009 when ARRA was enacted. The State should include all sources of State funds that were planned to be expended for capital projects, including any sources that the ultimate recipient could use fungibly for either capital and operating assistance. However, the State should not include separate accounts that were available only for operating assistance.