1. Local Assistance Federal-Aid Funds John Flores Division of Local Assistance Office of Resource Management and STIP Subvention Management Branch (916) 654-4032 John_T_Flores@dot.ca.gov

2. Overview Apportionments vs. Obligation Authority (OA) Obligation Authority Management Policy Early Delivery Borrowing Apportionments from other Regions Rescissions August Redistribution 2

3. Apportionment vs. Obligation Authority (OA) * Both are necessary to obligate a federal-aid project A PPORTIONMENT - The statutorily prescribed division or assignment of federal funds  Current Year apportionments are added to any unused, unobligated balances from prior year  Subject to timely use of funds (AB 1012) and federal lapse requirements  Does not reflect actual, expendable funds – that’s OA 3

4. Apportionment vs. Obligation Authority (OA) (Continued) O BLIGATION A UTHORITY - A federal limitation placed on the amount of funds that a state may spend against apportionments within a given fiscal year  Applies to total apportionments that may be obligated regardless of the FFY they were received  Does not carry forward to subsequent years  Local partners have delivered 100% of OA for 14 straight years 4

5. Obligation Authority Management Policy The latest revision to the OA management policy was approved January 26, 2009 to change the annual release of OA to the local OA pool from June 1 to May 1 http://www.dot.ca.gov/hq/LocalPrograms/AB1012/PDFS/memo.pdf Provides that Regions/Programs can “carry-over” OA to next FFY, but only if DLA delivers 100% in current FFY 5

6. Encourage Early Delivery For the last 10 years, over 55% of funds are delivered from July through September  Creates huge stress on DLA resources Earlier delivery has benefits  Reduces risk of funds subject to lapse  Ensures Regions have access to their funding  Increases potential to receive August Redistribution  Less likely that Region’s apportionments would be subject to federal rescission 6

7. Borrowing Apportionments from other Regions Regions may loan/transfer unobligated apportionments to other Regions via Memorandums of Understanding (MOUs) May provide a Region with needed apportionments to deliver a project in the current year Reduces a Region’s unobligated balances until a future year payback when the funds are expected to be needed  AB 1012  Rescission 7

8. Borrowing Apportionments from other Regions (Continued) Key components of MOUs:  Names of Regions involved  Specific amount of Loan/Transfer and effective date  Fund type(s)/program(s)  If known, amount of current federal fiscal year (FFY) funds  Repayment information – what FFY(s); how much; what fund type  Paragraph stating – the Regions have responsibility to initiate repayment by contacting the Caltrans’ Division of Local Assistance (DLA)  Signed by participating Regional Directors 8

9. Borrowing Apportionments from other Regions (Continued) Issues  If Loan/Transfer includes any current FFY funds, then the MOU should address the Programming capacity and the transfer of Programming capacity  If the FTIP is affected, the FTIP needs to be adjusted to maintain financial constraint 9

10. Rescission of Federal-Aid Funds (for this discussion these are NOT the “off-the-top”/FHWA mandated rescissions) FHWA may issue a rescission notice(s) during the FFY In the past, we have had rescissions of unobligated apportionments The amount of the rescission may vary significantly depending on the authority for the specific rescission Rescissions to unobligated apportionments do not impact OA  Typically, these apportionments are in excess of the current OA limitation FHWA may require California to respond to the rescission request within 10 to 30 days of the date of the FHWA rescission notice 10

11. Rescission of Federal-Aid Funds (Continued) Rescission Methodologies  FHWA – may also take the rescission “off the top” with little to no discretion by California and/or DLA http://www.fhwa.dot.gov/legsregs/directives/notices/n4510765/  FHWA – may exempt programs Remaining “eligible” programs would be subject to rescission  DLA and Rescission Workgroup – Establishes methodology to implement rescission based on DLA share and the FHWA notice instructions Rescission workgroup - Regional representatives, DLA and other Caltrans staff  DLA favors a methodology that is consistent with a priority of 100% delivery 11

12. August Redistribution The August Redistribution process ensures that all one-year obligation limitation for a fiscal year will be utilized prior to its expiration at the end of the fiscal year After August 1 of each fiscal year, the Secretary will revise the distribution of obligation authority made available if a State does not plan to obligate their entire balance The amount returned will be redistributed as formula obligation limitation to those States able to obligate their entire limitation and any additional provided in the August Redistribution process 12

13. August Redistribution (Continued) To qualify for additional funds via August Redistribution, we (Locals/California) must show a Need for additional OA - usually due August 1 st It is critical that the Regions submit the RFAs to the Districts around July 1st so that the necessary information is available to ensure we can meet the federal time frames and request additional OA Local methodology for August Redistribution is to distribute additional OA, if any, to those Local Regions and Programs that over-delivered as of Sept. 30 th 13

14. Tools Available for Managing OA & Apportionments Chapter 2 Local Assistance Program Guidelines (Financing the Federal-Aid Highway Program)  http://www.dot.ca.gov/hq/LocalPrograms/lam/lapg.htm Internet AB 1012 Monthly Balance Reports  http://www.dot.ca.gov/hq/LocalPrograms/AB1012/ab1012.htm http://www.dot.ca.gov/hq/LocalPrograms/AB1012/ab1012.htm Internet RSTP and CMAQ Monthly Activity Reports  http://www.dot.ca.gov/hq/LocalPrograms/CMAQ_RSTP_R_TEA/MARS.html http://www.dot.ca.gov/hq/LocalPrograms/CMAQ_RSTP_R_TEA/MARS.html Internet OA Monthly Delivery & Balance Reports  http://www.dot.ca.gov/hq/LocalPrograms/DROAF.htm District Local Assistance Engineers, HQ Area Engineers, and Subvention Management staff 14

15. QUESTIONS????????? 15