VALPARAISO | The city could be one of the first to try to take advantage of a new state law that allows it to trade federal funds for state dollars to reduce costs and speed up projects.
Mike Jabo, of DLZ consultants, outlined the potential of the law for the city's Redevelopment Commission on Wednesday. A lot of questions remain unanswered because the Indiana Department of Transportation still has to set up the guidelines for trading the funds, and the state might not have any money for trading in some years, Jabo said.
The law states communities can swap federal Surface Transportation Program grants for state dollars at no less than 75 cents on the dollar. Although that will mean having less money for the community to spend, not having to do a project under federal rules could result in enough savings to make it worthwhile.
Jabo said several states have similar laws. In Kansas, communities can trade federal funds granted for a specific project and use the state money for any transportation project they want. The Indiana law restricts the communities to using the state money only on the project for which the federal grant was intended.
How INDOT will decide who gets the money is one question not yet answered. Jabo said it could be done on a competitive bidding process in which the community willing to take the lowest trade would get the highest priority. It also might be based on projects the state considers a top priority, such as bridges.
Stuart Summers, the commission's executive director, said the city is ready to be at the front of the line to try to trade the $3.12 million it is eligible to receive for the reconstruction of Silhavy Road from LaPorte Avenue to Evans Avenue "as soon as the time is right."
The project now has to be ready to go to bid by March 2015 or the federal funds might be reallocated to a project in another community. City Engineering Director Tim Burkman said the plans would have to be ready by November 2014 to meet that deadline, which would be difficult under the required federal procedures.
Federal rules require environmental impact studies and are more stringent, and expensive, in the areas of right of way acquisition, construction material testing and construction inspection.
The city would be required to provide at least a 10 percent local match to acquire the funds, but following state and local procedures will not affect the quality of the project, Jabo said.
Using the 75 percent swap formula, the city could still get $2.34 million for the Silhavy project. That's better than possibly losing the money entirely, Burkman said. Any trade would have to be approved by the mayor and the council.