Section 4.04. Project costs.

 

(1)  Eligible project costs are limited to the operating expenses of an urban mass transit system, including labor, fringe benefits, materials and supplies, utilities, insurance, purchased transportation services, license fees and lease expenses. For publicly owned mass transit systems, only the wages and fringe benefits of those employees whose activities are directly related to the day-to-day operation of the system shall be considered eligible project costs. If those employees do not work full time on transit, only that portion of their time spent on transit shall be considered. For services provided by private transportation providers operating under mass transit contracts, eligible project costs may include profit, return on investment, interest on short term debt obligation, and depreciation of facilities and capital equipment used directly for the provision of urban mass transit services, provided that the facilities and equipment were acquired without benefit of public financial assistance. If a facility is a joint-use facility, depreciation costs for only that portion of the facility used in the provision of urban mass transit services are eligible project costs. For shared-ride taxicab services provided by private transportation providers operating under mass transit system contracts, eligible project costs may include management fees.

(2)  Eligible project costs may include the costs of user-side subsidies provided to disabled persons. User contributions to the user-side subsidy service are considered eligible project costs in accordance with s. 85.20 (3m) (b) , Stats.

(4)  

(a) If urban mass transit service is provided under a local public body contract with a private provider chosen following advertisement for competitive bids, eligible project costs may include profit, return on investment and depreciation of facilities and capital equipment used directly for the provision of urban mass transit services, provided that the facilities and equipment were acquired without benefit of public financial assistance. If a facility is a joint-use facility, depreciation costs for only that portion of the facility used in the provision of urban mass transit services are eligible project costs. If competitively bid, eligible project costs may only include costs associated with the bid accepted by the local public body. If transit services are competitively bid, no costs shall be eligible project costs unless the eligible applicant uses the competitive bid process set forth in par. (b) . A contract awarded to a private provider following the competitive bid process may not exceed 5 years in length.

(b) Eligible applicants shall use the following competitive bid process:

1. An eligible applicant shall prepare a "request for qualifications" document. That document shall request expressions of interest from providers, shall describe essential provider qualifications and shall describe criteria for evaluating the provider qualifications. The eligible applicant shall send the request for qualifications document to all providers of passenger transportation services, either for the general public or for elderly or disabled persons, operating within the service area of the applicant. The eligible applicant shall also cause an appropriate notice of the request for qualifications to be published in a local newspaper of general circulation.

2. If only one qualified provider expresses interest in providing the eligible public transportation service, the eligible applicant may negotiate a contract with that provider. The negotiated contract shall be subject to the department's approval.

3. If 2 or more qualified providers express interest in providing the eligible public transportation service, the eligible applicant shall send each party a "request for proposal" document. The document shall describe the eligible public transportation service requirements and the criteria that shall be used in evaluating the bid proposals.

4. When a publicly owned mass transit system responds to a request for proposal issued by a local public body under subd. 3. , the cost proposal shall include an analysis of fully allocated costs that will be used as the basis for evaluating costs when ranking proposals. The analysis shall include all of the system's costs measured in accordance with generally accepted accounting principles, regardless of whether these costs are otherwise paid for through other public financial assistance, including operating subsidies and capital grants. When the public body which owns the mass transit system has prepared a cost allocation plan in accordance with United States office of management and budget circular A-87, or OMB circular A-87, costs of the mass transit system shall be allocated in accordance with that plan. When the mass transit system has not prepared a cost allocation plan in accordance with OMB circular A-87, costs which are allocable to the mass transit system shall be determined using the principles outlined in OMB circular A-87. Expenses of the mass transit system shall be allocated to segments of service considered using the following categories:

a. Costs that depend on the number of vehicle hours operated, including particular operators salaries and fringe benefits.

b. Costs that depend on the number of vehicle miles traveled, including fuel costs, maintenance costs and maintenance personnel salaries and fringe benefits.

c. Costs that depend on the maximum number of vehicles that are in service during the day, including administrative and capital costs.

5. The "request for qualifications" and the "request for proposal" may be combined and sent to transportation providers as one document.

6. When a contract is awarded based on bids for purposes of state aids, the proposed costs shall be reduced by an allowance for operating and capital costs subsidized through other state and federal grants.

7. An eligible applicant shall establish an appropriate procedure for resolving bid proposal complaints and conflicts.

(c) If a local public body contracts for urban mass transit service with a private provider on the basis of negotiated procurement, eligible operating expenses may include as costs depreciation of facilities and capital equipment used directly for the provision of urban mass transit services, provided that the facilities and equipment were acquired without benefit of public financial assistance. If a facility is a joint-use facility, depreciation costs for only that portion of the facility used in the provision of urban mass transit services are eligible project costs.

(5)  The following expenses are not eligible project costs:

(a) Depreciation and amortization, except as authorized by sub. (1) .

(b) Taxes paid which are subject to rebate.

(c) Interest expense, except as authorized under sub. (1) .

(d) Profit, except as authorized by sub. (1) .

(e) Lease-purchase payments.

(f) Lease payments to a related party which are made under less than an arms-length agreement. Only actual eligible expenses of owning the property, including depreciation and taxes shall be allowed, as authorized under sub. (1) .

(g) Lease payments for revenue passenger vehicles unless the situation exists necessitating a short-term lease. For purposes of this subsection, a short-term lease is defined to be of one year or less in duration. If the grantee is actively pursuing a federal grant to purchase vehicles, the eligibility of lease payments may be extended until such time as the purchased vehicles have been delivered.

(h) Entertainment costs.

(i) Fines and penalties.

(j) Bad debts.

(k) Charitable deductions.

(L) User-side subsidies, except as authorized by sub. (2) .

(m) Payments to members of advisory committees, transit commissions or transit boards.

(n) Federal, state and local income taxes.

(o) Charter-related expenses. Such expenses shall be considered to be equal to the revenue received directly from the provision of charter service, except when charter revenues exceed 10% of the total annual operating revenues of the eligible mass transit system. When charter revenues exceed 10% of the total annual operating revenues of the eligible mass transit system, charter-related expenses shall be determined in accordance with a cost allocation plan approved by the department.

(p) Expenses related to contractual agreements for special planning studies.

(q) Indirect transit-related functions or activities of regional or local entities performed as a normal or direct aspect of general public administration.

(r) Expenses for contingencies or capital acquisitions, including contributions to a capital reserve account or fund. For purposes of determining eligible operating expenses, capital acquisitions are defined as the purchase of non-expendable personal property with a useful life of more than one year and an acquisition cost of $1,000 or more per unit. A unit is defined as one or more like items. The cost of materials and supplies utilized in facility or vehicle repairs, regardless of cost, shall be considered as eligible operating costs so long as such repairs involve replacement of existing items.

(s) For privately owned mass transit systems, the wages and fringe benefits of any public employees, except those employees involved in administration of the mass transit contract or in monitoring the performance of the private transportation provider.

(t) Fees imposed upon a contracted service provider by the recipient public body, such as taxi license fees.

(u) Return on investment, except as authorized by sub. (1) . Return on investment shall be a fixed amount and may not exceed an amount calculated by applying the interest rate the secretary of the treasury specifies under 50 USC App. 1215 (b) (2) as applicable to the period ending on December 31 of the year prior to the project year to the net book value of the private transportation provider's equipment and facilities used in providing the contracted for transportation service.

(v) Expenses that are directly offset by revenues that may include, but are not limited to, expenses related to hauling freight or package delivery, cash discounts or refunds, tax rebates including fuel tax rebates, insurance proceeds and resale proceeds. Such expenses shall be considered to be equal to the revenue derived directly from their incurrence.

(w) Franchise fees paid by the recipient public body to a private transportation provider.

(x) Expenses for the direct operation of private or public transit van pools, except public van pool administrative and marketing expenses associated with the public transit van pool program.

(y) Expenses that are paid for with federal transit administration capital funds authorized under 49 CFR 53 .

(z) For transit systems providing services outside of their jurisdictional boundaries, expenses related to services which duplicate those provided by another public transit system in terms of geographic area served, hours operated, frequency of service and passenger boarding and alighting locations. Decisions on duplication of service shall be made by the department, after consultation with the affected public bodies.

History: Cr. Register, November, 1978, No. 275 , eff. 12-1-78; r. and recr. (1), am. (2), (3) and (4), Register, May, 1982, No. 317 , eff. 6-1-82; emerg. r. and recr. eff. 11-18-83; r. and recr. Register, April, 1984, No. 340 , eff. 5-1-84; am. (1), renum. (2) to be (5) and am. (2) (a), (d) and (l), cr. (2) to (4), Register, October, 1986, No. 370 , eff. 11-1-86; am. (5) (f) and (o), renum. (4), (5) (q), (r), (s) and (t) to be (4) (a), (5) (p), (q), (r) and (s) and am. (4) (a), cr. (4) (b) and (c) and (5) (t), (u), (v) and (w) and r. (5) (p), Register, August, 1989, No. 404 , eff. 9-1-89; am. (2), (4) (b) 1. and (5) (r), cr. (5) (x), Register, April, 1993, No. 448 , eff. 5-1-93; am. (1), (5) (a), (c), (d), (f), (L), (s) and (t), r. (3), renum. (4) (b) 4. and 5. to be (4) (b) 5. and 7. and cr. (4) (b) 4., 6. and (5) (y) and (z), Register, November, 2000, No. 539 , eff. 12-1-00.

Note

Copies of the OMB Circular A-87 may be obtained, without cost, by writing to the Division of Transportation Investment Management, Bureau of Transit and Local Roads, Room 951, P. O. Box 7913, Madison, WI 53707-7913. A copy of this document is also on file with the offices of the Secretary of State, and the Legislative Reference Bureau. Microsoft Windows NT 6.1.7601 Service Pack 1