Federal Fund Exchange Program

Overview Voluntary program Allows State Aid agencies who have been selected to receive federal funds to trade them with another State Aid agency for state aid funds Process de-federalizes the project donating the federal funds Decreases the project delivery requirements for this Local Public Agency (the donor) There is no additional work for the recipient except the execution of the agreement Brings the project of the recipient up closer to allowable federal participation levels Decreases the total number of federal projects processed each year Decreases review queues for the remaining federal projects

About The Federal Fund Exchange Program (fund swap) was developed to consolidate federal funds and streamline plan processing for all projects. It is not intended to circumvent the Area Transportation Partnership process.

Eligibility Eligible participants Any state aid agency who has been selected to receive federal funds for a project eligible for state aid funding Projects proposed within the same agency may also exchange funds Eligible federal funds to be donated Surface Transportation Program Highway Bridge Program Transportation Alternatives funds

Approval process Exchange Rate Current rate is 1:1 Exchange Approval Process Local agency fills out a fund exchange application The DSAE and SALT review and approve fund exchange SALT prepares State Transportation Improvement Plan (STIP) modification STIP modification is approved Agreements are prepared by SALT to designate fund exchange amounts and timing Agreement is executed by local agencies and SALT State Aid Finance transfers state aid funds from recipient agency to the donor agency’s state aid account.

Approval process (continued) Exchange approval process Recipient agency completes federal process to receive funds for the project (plan approval, permits, etc.) Recipient agency receives federal funds when the project is authorized and payment requests are submitted.

Requirements Requirements Need at least two projects with federal funding Both projects must be eligible for state aid funds Exchanges county to county or city to city Can occur within a district or between districts Both projects must be in the STIP but do not need to be in the same fiscal year (ex. County donor in 2012 and County recipient in 2014) Projects involved in the swap should be constructed in the year they were programmed in the STIP (the one programmed in 2012 (donor) must be constructed in 2012 and the one programmed in 2014 (recipient) must be constructed in 2014) STIP Amendment

Requirements (continued) Federal funds donated cannot exceed federal participation rules for the project Two agreements Between SALT and the “donor” of federal funds Between SALT and the “recipient” of federal Each agreement references the other.

Cautions Cautions Projects constructed with state aid funds still may be federalized if they require an Army Corps of Engineers permit. Accurate cost estimates are extremely important, Once an agreement is executed and funds are transferred, there will be no further adjustments. County State Aid Highway funds cannot be spent on Municipal State Aid Streets or Trunk Highway routes.

Why we don’t do more? Need willing recipients. We have plenty of donor candidates. Need projects that can take on more federal funds without reaching the 80% cap. An extra step.

Questions? Transfer Cindy Degener Agreement Lynnette Roshell cindy.degener@state.mn.us 651-366-4850 Agreement Lynnette Roshell lynnette.roshell@state.mn.us 651-366-3822