(Source: MIRS.news - Published 03/30/2022) The Governor signed legislation permitting local road agencies to participate in a federal aid swap with the Michigan Department of Transportation (MDOT) as an outlet for minimizing road repair costs.
Tuesday, SB 465 by Sen. Jim RUNESTAD (R-White Lake) and SB 466 by Sen. Michael D. MACDONALD (R-Sterling Heights) became Public Acts 49 and 50 of 2022, authorizing state dollars to stand in for federal funds under a specific "buyout strategy." According to Legislative Liaison Ed NOYOLA of the County Road Association, the same system has already been utilized in 15 other states.
"A rural county may have only one federal aid project every few years and is less likely to be staffed or experienced in federal aid projects, and may struggle with the red tape and detail work required to execute it," Noyola said in a press release from Runestad's office.
According to the press release, MDOT estimates that from meeting federal standards, like bidding requirements and reports, local road agencies experience an expense increase of between 20% to 30%. Meanwhile, MDOT calculated an increase of only 10% to 15% in its cost to fulfill federal mandates.
"This is because MDOT has an operation that is more suited to handle the administrative federal requirements than smaller municipalities, since the state department already receives 75% of those funds," the press release reads.
MacDonald said "allowing local agencies to swap federal funds for state dollars – and avoid the burdensome requirements that come with the federal dollars – could help local communities save substantially on their costs and more effectively use their resources to improve local roads."
Runestad said the Senate Fiscal Agency (SFA) projected that the reform could result in local governments saving up to 30% annually due to reduced compliance and overhead costs.
"By giving our local transportation agencies more flexibility to cut their costs, we can help them fix more of our local roads and make a real difference in the lives of our hardworking taxpayers and families," Runestad said. "Just imagine how many more miles of local roads could be fixed throughout our state with that amount of savings. It's a game-changer."
