Chapter 5

Funding Applications and Agreements
The process for transit agencies to apply for state and federal funding varies with the type of funding. The Iowa DOT has developed a Consolidated Transit Funding Application to use for state transit assistance (STA), and state administered federal operating and capital assistance. Other funding programs use separate application processes and may involve application through the Iowa DOT or directly to Federal Transit Administration (FTA). This chapter will provide an overview of the application processes for different funding programs, as well as the types of agreements used by the various programs.

Consolidated Transit Funding Application
Iowa's Consolidated Transit Funding Application is used by all transit agencies to apply for STA funds and federal 5310, 5316 and 5317 funds. Small urban and regional transit systems, along with the Des Moines Area Regional Transit Authority (DART), a rural provider in Polk County, also use this process to apply for state administered federal transit assistance under the 5311 program. Any system applying for statewide 5309 capital earmarked funds must include its request in the consolidated application. The consolidated application also requests information on expected direct-funded federal transit assistance grants for large urban transit systems under the 5307 program. Any individual earmarks from the 5309 capital program for all transit systems should also be included.

Each December, the Office of Public Transit (OPT) announces the department's forecast of allocations of state transit assistance and federal formula assistance under the 5310 and 5311 programs to all transit systems and planning agencies. These numbers are provided to assist local transit systems in budgeting for the next fiscal year. The numbers are also used to develop the transit element of the local Transportation Improvement Program and the Consolidated Transit Funding Application. The 5310 and 5311 allocations are the actual dollars allocated, unless federal apportionments change. The STA allocation will include the transit system's percentage share of STA for the next year and a projection of the dollar amount. However, STA funds depend on the revenues from the motor VEHICLE use tax, which cannot be projected with any certainty.

The Consolidated Transit Funding Application is posted each December on OPTs website at http://www.iatransit.com/resources/applications.asp.  The application information includes the directions for submitting a Consolidated Transit Funding Application by the first business day in May. The projected STA allocations, allocations of 5310, 5311 and 5307 Federal Transit Assistance and New Freedom “marks” will also be available, along with the current year’s Programming Guidance for Transit VEHICLEs.

The application must be submitted to OPT by the first business day in May. OPT staff reviews each application for accuracy and completeness. The Iowa DOT approves the STA allocations in June. At approximately the same time, the 5311 and 5310 projects are finalized with FTA.

5310 project proposals are received through the Consolidated Transit Funding Application process.  Eligible projects must be contained in the local Passenger Transportation Development Plan (PTDP) and the Transportation Improvement Program (TIP).  Funds for these programs come from the current fiscal year’s federal appropriation to Iowa.

5316 and 5317 project proposals are generally received through the Consolidated Transit Funding Application process.  Each project must be submitted on the specific project proposal application form for that funding program.  Copies of the forms are available on OPTs website at http://www.iatransit.com/resources/applications.asp.  Eligible projects must be contained in the local Passenger Transportation Development Plan (PTDP) and the Transportation Improvement Program (TIP).  Funds for these programs come from the current fiscal year’s federal appropriation to Iowa.   Projects are reviewed and selected by OPT staff and submitted to the Iowa DOT Director and Iowa Transportation Commission for approval. 

The 5307 formula allocations (for large urban systems in areas with population from 50,000 to 200,000 population) and all capital requests received through the Consolidated Transit Funding Applications are finalized after the next year's federal appropriation bill is adopted and FTA announces the apportionments to Iowa. Within 30 days of the announcement, the 5307 formula allocations are communicated to the affected transit systems and to FTA. The decisions on capital requests are normally discussed with the Iowa Public Transit Association (IPTA) in November, and finalized by the Iowa DOT in December.

The Consolidated Transit Funding Application (Funding application materials can be found on the OPT website at http://www.iatransit.com/resources/applications.asp.) 

Authorizing Resolution – Each Consolidated Transit Funding Application must include an authorizing resolution. The authorizing resolution includes:

• dollar amount of funding;
• type of project in each funding program;
• transit system’s percentage of state transit assistance FORMULA FUNDS;
• request for advanced payment of state funds as required by the Iowa Code;
• CERTIFICATION that the transit agency has the required non-federal MATCH; and
• designation of the transit system’s authorized signatory who will be able to execute any agreements on the behalf of the transit system.

The authorizing resolution must be signed by the chief executive officer of the governing body.

Public Hearing Documentation – The Consolidated Transit Funding Application requires the transit agency to hold a public hearing to explain the state and federal funding requests. Public hearings MUST take place in an accessible building.  Comments from the public regarding the need for the project will be recorded. A notice of the public hearing must be published in a newspaper of general circulation in the vicinity of the proposed project(s) approximately 30 days in advance of the hearing. The notice must describe the project(s) in sufficient detail to allow the public to be aware of the projects and funding sources. VEHICLEs must be broken out by category and listed with other major capital items with separate estimates of costs.

The hearing notice should be submitted to OPT to be posted to the private sector clearinghouse website. Applicants not submitting their notices to OPT at least three weeks prior to the hearing are responsible for sending the notice to the local private sector transit providers and other providers throughout the state who have requested all notifications. The notices must be sent return-receipt mail. Copies of the receipts must be included in the system's funding application.

The following documentation of the public hearing must be included in the application:

• a copy of the hearing notice;
• an affidavit from the newspaper that the hearing notice was published; and
• a copy of the hearing transcript or minutes.

TIP Documentation – All projects submitted in the Consolidated Transit Funding Application are required to be included in the annual transit element of the local Transportation Improvement Program (TIP.) The funding requests in the application must MATCH the amounts programmed in the TIP. Rollingstock projects must use the ceilings for federal participation provided on the Programming Guidance for Transit VEHICLEs document posted on the website as part of the Consolidated Funding Application.  Project justification for some projects, such as capital projects that are not replacement or REHABILITATION of existing VEHICLEs, is required in the Transportation Improvement Program (TIP). A copy of the Draft Transit Element of the local TIP must be included as part of the Consolidated Transit Funding Application.

Statewide Capital Project Justification Form - Developed by the PTMS Committee, the Statewide Capital Project Justification Form is a required element of the Consolidated Transit Funding Application. All statewide capital projects, other than rollingstock replacement and REHABILITATIONs projects relying on the PTMS factors for their justification, will need to be justified/described on this form.  Go to Exhibit 1 for a copy of this form.

FTA CERTIFICATIONs and Assurances – Each small urban and regional transit system must include a signed copy of FTA's current CERTIFICATIONs and Assurances. Large urban systems applying for statewide 5309 capital funds must also provide a copy. These individual forms will be the basis for OPT's CERTIFICATIONs and Assurances in the statewide application to FTA.

Large urban transit systems participating in FTA's TEAM electronic grant management system only need to provide the date on which they executed the CERTIFICATIONs and Assurances electronically.

Labor Protection Documentation – All transit systems must submit a signed Labor Protection Agreement (Exhibit 2) certifying that the transit system will comply with the terms and conditions of the Special FTA labor Protection Warranty for the 5309, 5311, 5316, and 5317 programs.

In addition, each small urban and regional transit system must supply two tables listing surface transportation providers in the project area. The first table should list providers under contract to the transit system (See Exhibit 3). The second table should list providers not under contract, but operating in the area (See Exhibit 4).  In both tables, the address and the union affiliation (if any) of the provider's employees must be listed. OPT is required to submit this information to the U.S. Department of Labor as part of the statewide 5309, 5311, 5316 and 5317 applications each year. These tables are part of the Consolidated Funding application package and can be found on OPT's website at http://www.iatransit.com/resources/applications.asp..

COST ALLOCATION Plan/Indirect Cost Rate Documentation – The federal Office of Management and Budget (OMB) requires that each entity receiving federal funding prepare either a COST ALLOCATION plan or an indirect cost rate proposal, if any indirect costs will be charged to the federally assisted project. Each transit system has submitted either a COST ALLOCATION Plan or Indirect Cost Rate Proposal (or a statement that no indirect costs are charged to the transit program) to OPT in the past. Each year, as part of the Consolidated Transit Funding Application, any system requesting federal funds that will be administered as part of a statewide grant must either reaffirm the COST ALLOCATION/indirect cost information previously submitted or provide an updated plan/proposal/statement. These Certificates are part of the Consolidated Funding application package and can be found on OPT's website at http://www.iatransit.com/resources/applications.asp or Exhibit 5 or Exhibit 6 in this Chapter.

Pending Litigation/Civil Rights Complaints Documentation – Each transit system requesting funding that will be administered as part of a statewide grant must report all pending litigation or civil rights complaints that may affect its ability to implement the project(s). Systems that have previously reported any such incidents must also report on the outcome.

ADA COMPLIANCE Documentation – Any transit system requesting funds for purchase of VEHICLEs not meeting the standards of the AMERICANS WITH DISABILITIES ACT (ADA) (possible only for demand-responsive service) must submit a CERTIFICATION that their system, when viewed in its entirety, provides equivalent levels of service for persons with disabilities.  The transit agency must also include an ADA Needs Analysis for Demand-Responsive Public Transit, supporting the CERTIFICATION (See Exhibit 8). This form is also posted with the Consolidated Funding Application materials on the OPT website at http://www.iatransit.com/resources/applications.asp.

Facility Feasibility Documentation – Any transit system requesting statewide capital funds for a new transit facility or facility improvement must submit a FEASIBILITY STUDY documenting:

1. the need for the project;
2. an examination of project alternatives showing that the proposed solution is the most beneficial;
3. the detailed project concept;
4. the detailed budget estimate for the project; and
5. the environmental assessment.

A project for which a FEASIBILITY STUDY is not submitted with the Consolidated Funding Application is not eligible for statewide capital funding. If the project is funded through an individual earmark and a FEASIBILITY STUDY is not included, the transit agency may be denied the option of having the project administered under the statewide grant for that year.

Applications for Other Funds Not Included in the Consolidated Funding Application
Iowa’s Clean Air Attainment Program (ICAAP) – Iowa DOT's Office of Systems Planning conducts an annual competitive application process for this program. ICAAP supports projects designed to reduce congestion and improve air quality. Highway, transit, and trails projects, as well as educational campaigns, are eligible and evaluated on the basis of projected impact on congestion and air quality. Local applications are due to Systems Planning by October 1, for funding that is available approximately one year later. Projects do not need to be in the TIP/STIP at the time of initial application. Projects selected to receive ICAAP funding are usually recommended for approval to the Iowa Transportation Commission in February, to allow for inclusion in the next year’s TIP/STIP.

Funding for transit projects selected to receive ICAAP funding is transferred from FHWA to FTA. The Office of Program Management will request transfer of the funds at the national level. If the applicant is a large urban transit system (over 200,000 population) or is a large urban system (50,000 – 200,000 population) the ICAAP funds will be administered under the 5307 program.  If the transit system is a small urban transit system (<50,000 population) or a RURAL TRANSIT system, the ICAAP funds will be administered as part of a statewide 5311 grant. In each case, OPT will include the projects in its statewide applications based on project information obtained in the ICAAP applications.

Surface Transportation Program (STP) – The application process for these flexible funds varies from area to area. The competition for STP funds is at the local Metropolitan Planning Organization or the Regional Planning Affiliation level. When STP funds are programmed for transit projects, the planning agency is required to send a letter to the Iowa DOT’s Office of Program Management requesting that the funds be transferred to FTA. If the applicant is a large urban transit system, the STP funds will be administered under the 5307 program, and the transit system is responsible for including the project in its annual 5307 application to FTA. If the successful transit applicant is a regional or small urban transit system, the STP funds will be administered as part of the statewide 5311 grant. In this case, OPT will include the project in its statewide application, based on project information obtained from the transit system.

Intercity Bus Assistance Program (ICB) – Although funded under FTA's 5311(f) program, Iowa's Intercity Bus Assistance Program has a different application process and timetable. Commercial intercity carriers and transit systems may apply for this program. Applications are solicited and received by OPT in the fall of each year. Recommended projects are approved by to the Iowa DOT in December, and are funded during the following calendar year. A complete copy of the Intercity Bus Assistance application package is available on OPT's website at http://www.iatransit.com/resources/applications.asp.

Transportation Planning Applications – The process for MPOs or RPAs to apply for transportation planning funds, including FTA funds allocated for that purpose, was addressed in Chapter 4. It is also possible for large urban systems to program part of their 5307 formula allocation funds for support of planning-type activities, either in-house or by consultants. Projects should be documented in both the planning agency’s Transportation Planning Work Program (TPWP) and in the TIP. These planning funds would be applied for as part of the large urban transit system’s annual 5307 application directly to FTA. 

Transit Capital MATCH Loan Program (Amoco Loan) – Amoco Loan applications may be submitted at anytime during the year. OPT periodically announces the amount of uncommitted Amoco Loan funds available and encourages transit systems to apply. The application is in the form of a letter, requesting the loan and proposing a repayment schedule, which may be subject to negotiation. The request is also required to estimate the energy conservation benefit of the project to be funded. Loan decisions are made by OPT.

The administrative rules for the Amoco Loan Program indicate preference that applications are a part of the Consolidated Transit Funding Application, to coincide with the capital funding application that it will MATCH. However, the timetable for decisions on capital funding no longer coincides with the Consolidated Transit Funding Application. It is still possible to submit an application for an Amoco Loan as part of this process, but no commitment will be made until a decision on the request for federal capital funding is made by OPT.

Federal Level Grant Applications
All applications for grants from the FTA must be submitted electronically through the Transportation Electronic Award and Management (TEAM) system. The Iowa DOT submits the statewide grant applications to the FTA for Section 5310 ELDERLY and persons with disabilities program, 5311 non-urban program, the statewide 5309 capital program, and the statewide 5316 and 5317 programs. 5309 program funds may also be set up as individual applications for transit system who serve large urban areas over 50,000 in population. 5316 and 5317 grant applications may be submitted by transit systems serving large urban areas with greater than 200,000 population.  5307 urban applications are submitted by individual urban systems.  ICAAP and STP grants administered by OPT are also submitted through TEAM.

Statewide Applications to FTA
5310/5311 Formula Grants – The statewide 5310 and 5311 applications are normally submitted to FTA by OPT each year in late December. The 5310 application contains "cost of contracted services” and capital projects for the upcoming state fiscal year, based on the state’s formula allocation process used for both the 5310 and 5311 programs. The 5311 application contains capital projects and also operating assistance projects for the upcoming state fiscal year, based on the state’s formula allocation process used for both the 5310 and 5311 programs. A separate 5311 application includes capital transit projects programmed for small urban or regional transit systems from flex fund programs such as STP or ICAAP.

Each application includes a "Program of Projects" which lists each subRECIPIENT project, with information as to whether the subRECIPIENT has completed all CERTIFICATIONs and assurances, etc. A summary project budget and the state's CERTIFICATIONs and assurances are also included. Approval by FTA is generally obtained 60-90 days after grant submittal, although complications related to capital projects, sometimes delay the approval process.

5309 – The statewide 5309 application is normally submitted to FTA by OPT in late December each year. It contains the capital projects selected through the PTMS process, in consultation with the Iowa Public Transit Association for funding from the statewide 5309 earmark. The application may also include capital projects for a transit system that has received an individual earmark, if that system requests the Iowa DOT to administer the grant and agrees to allow unneeded funds to be reprogrammed based on statewide needs. OPT normally submits a separate application for facility projects.

5316 – OPT submits the two 5316 application to FTA each year.  One application is for the funding available to the small urban and the regional transit systems and the other application is for funding available to the eight large urban transit systems. 5316 applications include projects programmed by individual transit systems which provide OPT staff with project justification and budget information required for each project. OPT compiles and prepares project funding recommendations for presentation to the Iowa DOT Commission. After the projects receive Iowa DOT Commission approval they are submitted to FTA in grant applications.

5317 – OPT submits the two 5317 application to FTA each year.  One application is for the funding available to the small urban and the regional transit systems and the other application is for funding available to the eight large urban transit systems. The New Freedom applications include projects programmed by individual transit systems which provide OPT staff with project justification and budget information required for each project. OPT compiles and prepares project funding recommendations for presentation to the Iowa DOT Commission. After the projects receive Iowa DOT Commission approval they are submitted to FTA in grant applications.

Individual Applications to FTA
5307 – A transit system in areas with more than 200,000 population may submit its individual annual 5307 application directly to FTA anytime after FTA publishes its funding apportionment tables following the adoption of the federal transportation appropriations bill. Systems in areas between 50,000 and 200,000 population may submit their individual annual 5307 application direct to FTA anytime after OPT announces the state's allocations of 5307 funds for these areas. This application may contain operating assistance projects and/or preventive maintenance (operating is allowed only in areas under 200,000 population), capital projects, or planning projects programmed with 5307 funds. The application may also contain transit projects programmed to receive STP funding. All projects must be in the ANNUAL ELEMENT of an approved TIP/STIP. FTA generally approves the application within 60-90 days after submittal.

5309 – Public agencies with individual earmarks of 5309 funding may either request to be part of the statewide 5309 application or may submit their individual 5309 applications directly to FTA anytime after FTA publishes its funds apportionment tables following the adoption of the federal transportation appropriations bill. A private not-for-profit corporation with an earmark must be part of the statewide application or find another public agency to apply on its behalf. Projects must be programmed in the ANNUAL ELEMENT of an approved TIP/STIP. FTA generally approves the application within 60-90 days after submittal, although complicated facility projects may cause delays.

FTA Grant Agreements – FTA issues a grant agreement within the TEAM system when the grant is approved. The grant agreement is in electronic form and is executed by both FTA and the applicant/RECIPIENT electronically. The FTA grant agreement sets forth the specifics of the grant award, in terms of the exact amount and source of funding, the project budget, plus any project specific restrictions or conditions. The grant agreement incorporates, by reference, both the RECIPIENT’s application information and FTA’s “Master Agreement.”

FTA Master Agreement – The FTA Master Agreement is the "boilerplate" for all FTA grant agreements, providing a compilation of all the general requirements imposed for all FTA grants. A new version of the Master Agreement is issued at the beginning of each federal fiscal year (October 1) and applies to all FTA grants issued during that year. To determine which version of the Master Agreement applies, verify the date the FTA grant was approved.

Iowa DOT JOINT PARTICIPATION AGREEMENTs – The Iowa DOT issues JOINT PARTICIPATION AGREEMENTs for State Transit Assistance and each subRECIPIENT project that is part of an approved statewide grant from FTA. The JOINT PARTICIPATION AGREEMENT defines the project, and presents the terms and conditions under which the project may proceed. All JOINT PARTICIPATION AGREEMENTs, except those for STA FORMULA FUNDS, list all the individual project elements funded, the maximum amount available for each, and the percentage of eligible costs that will be reimbursed under the agreement. STA formula agreements include a generic project element description and, rather than a firm dollar amount of funding, a percentage resulting from that year’s distribution formula calculation. The percentage of the total STA funds available each month will be paid.

All of the JOINT PARTICIPATION AGREEMENTs list the project period during which the agreement will be in effect. For STA projects and federal operating assistance or cost of contracted operations projects, the project period is one state fiscal year (July 1-June 30). For federal capital projects, the effective period will begin on the date that the Iowa DOT approves the revised program. The project ending date will be two years from the end of the quarter in which the federal grant is approved. However, there is a provision in the agreement that any project element not obligated within one year of the end of the quarter may be dropped from the contract. Amoco Loan agreements also list the repayment schedule for the loan.

All JOINT PARTICIPATION AGREEMENTs also incorporate, by reference, "Part II" that is issued separately.

Part II (of JOINT PARTICIPATION AGREEMENT) – Part II contains the "boilerplate" for all of Iowa DOT's transit JOINT PARTICIPATION AGREEMENTs. Along with generic agreement language applying to all agreements, Part II includes the terms and conditions that apply to each federal funding program. Included are references to the FTA Master Agreement and various FTA program circulars, as well as state or federal regulations. In most cases these are included as appendices contained in the "Agreement Binder”.

A Table of Contents lists all of the "appendices." Each appendix has a link to documents maintained on OPT's website or to documents maintained on other sites (such as the FTA website, the Code of Federal Regulations or Iowa Code sites).

Procedures for Issuance/Executing JOINT PARTICIPATION AGREEMENTs – JOINT PARTICIPATION AGREEMENTs for STA formula projects, 5310 cost of contracted service, and 5311 operating projects are issued each June. JOINT PARTICIPATION AGREEMENTs for federal capital projects will be issued within two weeks of the approval/execution of the federal grant. Agreements for AMOCO Loans will be issued within two weeks of the loan approval.

When OPT issues a JOINT PARTICIPATION AGREEMENT, three originals of the agreement will be sent to the manager of the applicant transit system. All three originals will already be signed by the OPT director. The transit system manager is responsible for having the authorized signatory sign all three originals of the agreement and returning two of the signed originals to OPT. The transit agency manager keeps one signed copy for the transit system’s files. The JOINT PARTICIPATION AGREEMENT is "fully executed" when the authorized signatory signs the three originals.

Iowa DOT JOINT PARTICIPATION AGREEMENTs – All changes to JOINT PARTICIPATION AGREEMENTs are called amendments. This would include anything from a change in the project expiration date, to a change in the nature of a project element, or a change in the amount of funding for a project element. Amendments should be requested in writing, with a detailed discussion of the proposed change and justification for the change. Proposed amendments are reviewed by OPT staff. Potential action by the staff include:

1. approving the proposed change;
2. rejecting the approved change; or
3. proposing an alternative change.

If either the originally proposed change or alternative change is found to be acceptable to both parties, a revised agreement is issued for execution by both signatories.

Some changes to a project do not require amendments to a JOINT PARTICIPATION AGREEMENT. Transit systems are allowed to buy a larger VEHICLE than identified in the agreement, as long as the transit system is willing to only be reimbursed to the ceiling amount that would apply to the VEHICLE listed in the agreement, and ADA features, or other special features reflected in the ceiling price are not sacrificed. (Special features may include diesel engine, urban ROUTE configuration, etc.) Transit systems may also add ADA features to a VEHICLE originally programmed as non-ADA, with no change to the ceiling listed in the agreement. However, systems wishing to purchase a smaller VEHICLE than listed in the agreement or to drop ADA features, must request an amendment and will be subject to a reduction in the funding ceiling for that item.

It should be noted that OPT considers any funds remaining in a project element after the specified project has been completed available for reprogramming to any statewide need. No preference is given to other projects within the particular agreement, or other existing or proposed projects desired by the transit system holding the agreement.

Funds not obligated within twelve months of the original expiration date may be withdrawn as a provision of the executed agreement.

FTA Grant Agreements – FTA requires a grant amendment any time additional funds are added to a grant. The process of applying for a grant amendment is identical to the process of applying for a grant. Changes to projects within a grant are considered "budget revisions" if the grant total does not change. Budget revisions are handled electronically, through FTA's TEAM system. Some revisions require advance FTA approval. The TEAM system monitors the nature of the revisions and will block the revision until FTA sign-off is received, if required.