Funding swap discussed: State panel told change would ease building infrastructure

PORT ANGELES — It would be faster and less expensive for small cities and rural counties to build roads and bridges if they could swap federal funding that comes with strings attached, a state panel heard Wednesday.

Clallam County Transportation Program Manager Rich James asked the state Transportation Commission to consider supporting a policy change that would allow local agencies to exchange federal Surface Transportation Program (STP) obligation authority.

Federal STP funds are administered by the state Department of Transporation (DOT), which forbids local agencies from buying out spending authority from other jurisdictions that struggle to meet the stringent federal guidelines.

“We believe such a policy change would be highly beneficial to rural agencies and small cities that lack specialty staffing to meet federal project documentation requirements,” James told the commission in a day-long meeting at Port Angeles City Hall.

“It would be beneficial to agencies that are experiencing problems getting through environmental permitting requirements when federal funding is involved.”

Jefferson County Public Works Director Monte Reinders said applying federal restrictions to small projects is “really inefficient.”

“We would support a concept of swapping funds,” Reinders said.

Clallam County had obtained federal permits to build the partially-federally-funded Old Olympic Highway bridge over McDonald Creek about two years ago.

It had sought to purchase more STP funds from an Eastern Washington county that was unable to use its federal money and was in danger of losing it, James said.

The two counties reached a verbal agreement that Clallam County would purchase the STP fund at a discounted rate, reflecting the fact that the unnamed county was getting money with no strings in return, but the transfer was denied by DOT, James said.

“It was just too far outside of the normal process that they engaged in,” James told the commission.

“Clallam County never really got a good explanation of why the purchase of STP obligation authority that was mutually beneficial to all parties involved could not be facilitated.”

James asked the commission to consider the Oregon model: an STP fund exchange where local agencies can buy and sell federal money at 94 cents on the dollar.

“The two policy changes we have requested would deliver more projects in a faster manner at less cost while reducing WSDOT oversight costs,” James said.

Sequim Public Works Director David Garlington said an STP project was “taxing the resources” in his department.

“It’s just not something that we can dedicate all of our staff to,” Garlington said of the federal regulations. “It turns into a lot of extra hours for us, a lot of extra work.”

Local agencies must spend a portion of their STP funds annually, which often results in small paving projects rather than critical infrastructure, James said.

Members of the Transportation Commission, which makes policy recommendations to the state Legislature and governor, were sympathetic to James’ recommendations.

“To me, it’s like a no-brainer,” Commission Vice Chair Roy Jennings said near the end of the eight-hour meeting.

“Why aren’t we doing that now?”

Earlier in the meeting, Paul Parker, Transportation Commission deputy director, said the panel had heard the same suggestions from other counties and cities across the state.

“We have made this recommendation in prior years to the Legislature to basically move in the direction that Oregon and some other states have,” Parker told James.

“Your examples are really excellent and helpful,” he added.

Reema Griffith, Transportation Commission executive director, questioned whether other counties would be willing to transfer STP spending authority.

“When we went out searching for these funds, we found at least five counties that had in excess of $1 million,” James said.

“The particular county that we contacted had $3 million worth of obligation authority that they literally could not get to the point where they were able to spend it. That was largely due to environmental permitting problems for a bridge project.”

Keith Metcalf, deputy secretary of transportation, said DOT exchanges federal funds with local agencies.

“The concept of swapping it between local agencies is not something that we’ve done, but I don’t know why it couldn’t be done,” Metcalf said.

“Without committing to that, I will commit to at least looking at that and talking to our local programs office to find out the history on this and what the issues were behind it so we can decide whether that’s something we can move forward with or not.”

Jennings questioned whether there was a downside to an STP fund exchange.

“I frankly don’t see a downside,” James said.

“Almost any county, and especially small cities, would jump at the chance to have their federal funding bought out. Clallam County is fortunate that we are in a position to do that.

“Not every county would be, but there are other counties that could take advantage of that kind of an exchange,” James added.

“It’s just a common sense approach to actually getting more projects done.”

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Reporter Rob Ollikainen can be reached at 360-452-2345, ext. 56450, or at [email protected].

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