There are 52 communities in the State of Tennessee that have populations between 5,000 and 50,000 that receive a “Small Cities” Surface Transportation Program (STP) balance from the Tennessee Department of Transportation (TDOT). The way that Congress sets up the funding through the most current Highway Bill, communities that receive this funding have a deadline to spend this money.
With the most recent Highway Bill, the deadline for obligating funds in September 30, 2014. But what does that really mean?
As I have said many times before the word “obligate” in the TDOT Local Programs world means something very specific. It means that you have a project set up with the TDOT Local Programs Office, a fully executed contract for that project, and most importantly, a Notice to Proceed for that specific phase of work has been issued. Funds are obligated for each phase of work, not all at once. You can’t have your funding for the Construction phase obligated until you complete all of the steps in the TDOT process.
Now back to the idea of funding deadlines. If a local government does not have their Small Cities STP funds obligated on a project by the September 30, 2014 deadline then they will disappear (the MPO funding deadlines are a little different). TDOT will not allow you to roll forward any balance. It is a use/lose proposition.
But does that mean that you have to actually spend the funds that have been obligated by the funding deadline? The answer is no. Once the funds have been obligated for a project, they are essentially taken off the table, and are about as safe as you can get (as long as you are submitting monthly reimbursement requests to TDOT). Funds that are obligated before the deadline, can be spent on the project after the deadline has passed.
Note: In every single TDOT Locally Managed contract, every project has a drop dead date (its on page two, section B.2). TDOT gives you about 4 years to complete your project. At that time the contract on the project expires. Technically you could do a contract amendment to change that date further out, but you had better have a good reason to give TDOT for needing to do that.
Now back to this idea of the September 30, 2014 deadline. It takes time to get contracts set up with TDOT. It takes time to get funds obligated with TDOT and the Federal Highway Administration (FHWA). Getting a project set up can take 4 to 6 months easily. Also keep in mind that TDOT has to start closing out it’s books with FHWA ahead of the deadline. That can complicate getting the funds for your project obligated the closer to the deadline that you get.
So if you think that you can wait until August or September to submit the paperwork for your project and you are ok…Well, I hate to break it to you but that is not the case.
It is my deepest hope that Congress has the wisdom to fully fund a comprehensive four year Highway Bill. That would put the next deadline at September 30, 2018. Considering how long it can take to get a project to Construction, my advice is to get going as early as possible on your project. Four years can sound like a lot. That is until you start looking at a calendar, mapping out schedules, and taking unforeseen project delay’s seriously.