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                Kansas DOT Administers Funding Exchange to Fund Local Transportation Projects
**Publication Year:** 
            2015
    
        Background

Local agencies (cities and counties) own and maintain about 92 percent of Kansas' road network. The size and expertise of local agency staff varies among agencies. Smaller agencies may not have the resources or expertise needed to apply for federal funds and administer the process to completion. In 2010, the Kansas Department of Transportation (KDOT) Bureau of Local Projects initiated an innovative funding program called the Federal Fund Exchange to help local agencies streamline the process of implementing projects on local roadways, including projects that could improve safety. The program provides local agencies the option to swap their federal funds to KDOT in exchange for State dollars. That option lets local agencies save time and money by avoiding restrictive and cumbersome requirements of the federal aid process.

Description of Practice

Federal transportation funds are made available to KDOT through FHWA. KDOT makes a portion of the funds available to all counties and cities with populations greater than 5,000. The local agency has the option to use their share of the federal funds to develop a federal-aid project in the traditional manner, or it may request to exchange the funds with KDOT. If the latter is chosen, KDOT agrees to accept the federal funds and makes 90 cents of State funds for every dollar of federal funds available to the local agency. The local agency follows local procedures to develop and administer the project, and submits a request for reimbursement to KDOT as costs are incurred. The local agency is reimbursed for 100 percent of the billings until the maximum amount of the exchange is expended. Participating local agencies are required to use the State funds for specific types of road or bridge improvement projects, but have a wider variety of projects and ranges of scope than the federal-aid program would permit. Safety improvements range from signing and pavement marking to roadside obstacles and intersection improvements.

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Key Accomplishments

Over the four years the program has operated, KDOT has committed over $84.9 million in exchange dollars across the State to be used on local projects by eligible local governments. As of October 2014, $51.5 million have been reimbursed.

Results

The program allows greater flexibility in selecting local projects. Projects can be completed on non-federal aid routes and bridges do not have to meet Federal eligibility requirements. Local agencies are now better able to meet their highest local needs, and there is much less overall oversight required by KDOT. The program also results in less local-level oversight and paperwork for FHWA.

The program has allowed roadway improvements on county- and city-maintained roads that may not have otherwise been possible due to resource constraints. The majority of the funds have been spent on resurfacing and bridge maintenance or replacement projects. While these projects are not Highway Safety Improvement Program projects, they contribute to an improved and safer travel experience. The program is a potential funding option for local agencies to identify and implement safety improvements as needed without engaging the federal aid process.

Additional Information

Kansas Department of Transportation Federal Fund Exchange Program Guidelines (November 22, 2010)
	Kansas Federal Fund Exchange Program for Local Agencies Presentation (Presented by Ronald J. Seitz, P.E., Chief of Bureau of Local Projects)
	Up and Running: Update on KDOT’s Federal Fund Exchange, Kansas LTAP articlePublication Year: 2015

Image Description

Graphic that illustrates how KDOT's Federal Fund Exchange works: Federal funds are made available to KDOT through FHWA. KDOT shares a portion of federal funds with cities and counties. KDOT agrees to provide LPA $.90 state funds per $1.00 fed. LPA requests KDOT exchange funds. KDOT reimburses LPA up to maximum amount of total exchange. LPA submits request for reimbursements to KDOT along with appropriate documentation of expenditure. LPA lets/administers project(s) themselves and pays contractor/suppliers. U.S. DEPARTMENT OF TRANSPORTATION

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