Section 6.03. Federal share of project costs.

 

(1)  The federal share of operating project costs shall not exceed 50% of those costs. The department has determined that the following operating revenues and expenses shall be used to establish the project costs.

(a) Operating revenues shall consist of all passenger revenue derived from the project service, including the portion of through revenue attributed to eligible project routes, station revenue derived from the project service and any unrestricted federal, state or local funds received as a result of providing the project service that are not used to match federal section 18 funds.

(b) Eligible operating expenses are those transportation and overhead expenses associated with the provision of public transportation service including labor, fringe benefits, materials and supplies, utilities, insurance, purchased transportation service, license fees and certain lease expenses. The following expenses are not eligible project expenses:

1. Depreciation and amortization for publicly owned facilities and equipment;

2. Expenses that are offset or that will be offset by means that include, but are not limited to, cash discounts or refunds, tax rebates including fuel tax rebates, insurance proceeds or resale proceeds;

3. Interest expense, except that privately owned systems may include interest on short-term debt obligation;

4. Return on investment, except that a private transportation provider that negotiates all or part of a transportation service contract with an eligible applicant is eligible for a return on its investment. Its 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;

5. Lease-purchase payments;

6. Lease payments to a related party which are a less than arms length agreement. Only actual eligible expenses of owning the property, including depreciation and taxes, shall be allowed;

7. Lease payments by small urban area systems for revenue passenger vehicles, unless situations exist necessitating short-term leases. In this subdivision, `short-term lease' means a lease 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 delivery of the purchased vehicles;

8. Entertainment costs;

9. Fines and penalties;

10. Bad debts;

11. Charitable deductions;

12. User-side subsidies except those specifically funded under an intercity bus project;

13. Payments to members of advisory committees, transit commissions or transit boards;

14. Federal, state and local income taxes;

15. Expenses related to contractual agreements for special planning studies;

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

17. Expenses for contingencies or capital acquisitions, including contributions to a capital reserve account or fund. For the 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 the repairs involve replacement of existing items.

18. Fees imposed upon a contracted service provider by the grant recipient, such as taxi license fees.

(c) An eligible applicant that contracts with a provider for eligible public transportation service shall use the competitive procurement process set forth in this paragraph to choose a provider. An eligible applicant shall follow this competitive procurement process for each of its eligible public transportation service contracts not less than once every 5 years. If, however, service is provided by a transit commission formed in accordance with an applicable enabling statute, the competitive procurement process need not be used. Eligible applicants shall use the following competitive procurement process:

1. An eligible applicant shall prepare a "request for qualifications" document that shall request expressions of interest from providers and describe essential provider qualifications criteria for evaluating those qualifications. The eligible applicant shall send the document to the department for its approval and, after receiving departmental approval, shall send it to all local transportation providers and to all known potential local transportation providers. 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 qualified provider a department approved "request for proposal" document. That document shall describe the eligible public transportation service requirements and the criteria that shall be used in evaluating the bid proposals.

4. An eligible applicant shall establish an appropriate procedure for resolving bid proposal complaints and conflicts. The director of the department's bureau of transit shall consider procedural complaints or conflicts that include, but are not limited to, complaints that allege that local procedures have not been followed. The director shall not review the substance of an eligible applicant's decision to select a particular service provider. This limitation may not limit the director's authority to review an eligible applicant's actions or inactions under this section or under other state or federal law.

(d) Paragraph (c) applies only to eligible applicants filing applications due on or after November 15, 1988.

(2)  The federal share of capital project costs shall not exceed 80% of eligible costs, except that the federal share of vehicle-related equipment required by the Clean Air Act or the Americans with Disabilities Act of 1990 may be 90% of the net project cost of such equipment. The department shall establish the appropriateness of each capital expenditure. Where capital items are to be shared by parties not directly involved in the provision of the project service, it shall be shown to the satisfaction of the department that the applicant will use the item at least 50% of the available time before the item shall be considered eligible for funding. The project cost shall be prorated according to the use percentage.

History: Cr. Register, April, 1984, No. 340 , eff. 5-1-84; emerg. am. (1) (b) 1., 3., 4., and 6., eff. 2-12-85; am. (1) (b) 1., 3., 4., 6. and 7., Register, November, 1985, No. 359 , eff. 12-1-85; am. (1) (a) and (b) 4., r. and recr. (1) (b) 2., cr. (1) (c) and (d), Register, December, 1987, No. 384 , eff. 1-1-88; reprinted to restore dropped copy in (1) (b) (intro.), Register, May, 1988, No. 389 ; am. (1) (a), (c) 3. and (2), cr. (1) (b) 18., Register, October, 1989, No. 406 , eff. 11-1-89; am. (1) (b) 12. and 17., (c) and (2), Register, January, 1993, No. 445 , eff. 2-1-93.

Note

Charter, package delivery, and package express operating expenses and revenues for all applicants are assumed to be equal and, therefore, shall not have any net financial effect on the project. Microsoft Windows NT 6.1.7601 Service Pack 1