Full Funding Grant Agreement Description

For some background and a brief overview, see the letter from Bob White, Executive Director of Sound Transit to the RTA Board of Directors, dated September 11, 2000 that explains the role and content of Sound Transit's FFGA application to the Federal Transit Administration for $500 million.

The Federal Transit Administration (FTA) is required to use a full funding grant agreement (FFGA) in providing Federal financial assistance for new start projects. The Federal Transit Administrator also has the discretion to use an FFGA in awarding Federal assistance for other major capital projects. The FFGA defines the project, including cost and schedule; commits to a maximum level of Federal financial assistance (subject to appropriation); establishes the terms and conditions of Federal financial participation; covers the period of time for completion of the project; and helps to manage the project in accordance with Federal law.

The FFGA assures the grantee of predictable Federal financial support for the project (subject to appropriation) while placing a ceiling on the amount of that Federal support.

The National Environmental Policy Act, the National Historic Preservation Act, Section 4(f) of the Department of Transportation Act of 1966 (27) and the FTA's implementing regulation (28) prohibit FTA from taking any major action before completing the required environmental review process. Hence, FTA will not enter into an FFGA until the environmental review process is complete. The culmination of the environmental review process for projects of major impact is the aforementioned record of decision, issued by FTA after publication and consideration of comments on the Final Environmental Impact Station - FEIS. Issuance of the ROD generally marks the end of preliminary engineering.

An excerpt House Report 106-355 (which is part of H.R. 2805, the DOT Appropriations bill for FY2000) that specifies Congressional directives to the FTA regarding the handling of Full Funding Grant Agreements is given below:

Full funding grant agreements.--The conference agreement includes a provision (sec. 347) that requires the FTA to notify the House and Senate Committees on Appropriations as well as the House Committee on Transportation and Infrastructure and the Senate Committee on Banking 60 days before executing a full funding grant agreement. In its notification to the House and Senate Committees on Appropriations, the conferees direct the FTA to include therein the following: (a) a copy of the proposed full funding grant agreement; (b) the total and annual federal appropriations required for that project; (c) yearly and total federal appropriations that can be reasonably planned or anticipated for future FFGAs for each fiscal year through 2003; (d) a detailed analysis of annual commitments for current and anticipated FFGAs against the program authorization; and (e) a financial analysis of the project's cost and sponsor's ability to finance, which shall be conducted by an independent examiner and shall include an assessment of the capital cost estimate and the finance plan; the source and security of all public- and private-sector financial instruments, the project's operating plan which enumerates the project's future revenue and ridership forecasts, and planned contingencies and risks associated with the project.

The conferees also direct the FTA to inform the House and Senate Committees on Appropriations before approving scope changes in any full funding grant agreement. When submitting such notification to the House and Senate Committees on Appropriations, the FTA shall include a finance plan that details how the project sponsor shall finance the costs to complete the revised project.

FTA is directed to enter into full funding grant agreements only when there are no outstanding issues which would have a material effect on the estimated cost of the project or on the local financial commitment to complete the project under the terms of the agreement. Areas which FTA should consider in ensuring that this condition is met include: the degree of certainty, and any remaining risks in, capital cost estimates and the availability of adequate contingency funds to cover increases in capital costs due to uncertainty; any unresolved issues with respect to non-federal sources of funding for the project (e.g., the need for further legislative action, bond referenda, or other actions to finalize the availability of non-federal funds); and the need for acquisition of existing railroad rights-of-way. FTA should enter into new full funding grant agreements during the final design phase. While a specific level of final design approval cannot be specified because of differences in each project development process, the conferees agree that the agreement should be entered into only once there is no longer a risk that cost estimates are likely to change more than the estimated contingent amounts, and there is no longer a risk that a major part of the local funding will not be made available.

Source: http://thomas.loc.gov/cgi-bin/cpquery/R?cp106:FLD010:@1(hr355): Look under Federal Transit Administration

FTA Circular 5200.1, "Full Funding Grant Agreements Guidance," dated July 2, 1993, provides guidance. Questions regarding full funding grant agreements should be addressed to the Region 10 office of the FTA in Seattle. Contact Bill Fort, 206-220-4461.