Transportation 2035 - State of Rhode Island: Division of Planning

December 2012With an average project cost allocation of 80 percent Federal and 20 percent State, the State funds needed to match $214 million of federal funds would be$53.5 million each year. If the State fully matched the federal funds and all obligation authority translated into actual dollars spent, the total funding availablefor the highway program each year would be approximately $267.5 million. Rhode Island provides an annual match of approximately $40 million (see alsoState Funding Resources discussion on Page 3-8) and uses 100 percent federal funding as permitted and appropriate. All federal funding provided to RhodeIsland is allocated. Yet, even if all obligation authority was utilized in every year, there would not be sufficient funding to meet the transportation needs andimprovements required by Rhode Island businesses and residents. Each time the TIP is updated, implementation of some programmed projects are deferreddue to lack of funds. The TIP includes a category of projects which are unprogrammed but important. These projects could be ready for construction shouldadditional funding sources become available.ADVANCED CONSTRUCTIONIn order to maximize the use of available FHWA funds, Rhode Island utilizes the financing technique known as Advanced Construction. Federal regulationsrequire the authorization of all federal highway funds necessary to complete a project at the time the project starts, unless the State utilizes AdvancedConstruction. Most of the TIP projects are multi-year in nature, so that under normal procedures, federal funds are tied up in projects that won't use the fundsfor months or perhaps years into the future. Large multi-year projects can greatly reduce the amount of funds available for smaller projects since the totalamount of federal funds available to the State on an annual basis is limited.Advanced Construction is a valuable financing tool where the State is able to phase-in the federal funding to match the anticipated annual project need.Typically, federal funds in the first year for Advanced Constructed projects are authorized only for expected expenditures during that year. In future years,federal funds are applied to projects to cover each year's anticipated expenditures. The application of federal funds in future years is know as AdvancedConstruction Conversion.The risk in Advanced Construction is that if federal funds are reduced in future years, the State may not be able to obtain federal reimbursement immediatelyfor project expenditures. To limit the State's liability for Advanced Construction, Rhode Island has chosen to restrict itself to $25 million of total AdvancedConstruction for the annual Highway Program. As Advanced Construction projects are converted by application of federal funds, new projects are started withAdvanced Construction in an equal amount.Transportation 2035 (2012 Update)State Guide Plan Element 611Rhode Island Statewide Planning ProgramPage 3-3