CDOT Offers Local Communities Flexibility to continue Projects

The Colorado Department of Transportation will offer financial flexibility to local governments that are looking to continue key transportation projects in a more difficult budget outlook. CDOT is able to provide this relief by using its balance of toll credits with the U.S. Federal Highway Administration (FHWA). Toll credits are earned when the state, a toll authority or a private entity funds a capital transportation investment with toll revenues earned on existing toll facilities. Toll credits are earned and can be used to replace match requirements on federal-aid transportation projects. Toll credits are not “real dollars,” but rather a tool which State DOTs can utilize to reduce requirements for matching funds.

For example, a $1 million project has $800,000 in federal funds and $200,000 in required local match. If the scope of the project can be reduced from $1 million to $800,000, the project can proceed with no local match and 100 percent federal funding. If a project scope cannot be reduced, but additional federal funding is available from other sources, toll credits can be used to replace the local match with the additional federal funding. In this case, the project would proceed with no local match and 100 percent federal funding. More information on CDOT’s work with local project planning is available here.

 “While budgets are tight, governments need to be creative and use the tools that we have to help our partners get through this challenging time.” said CDOT Executive Director Shoshana Lew. “We’ve heard a lot of concern from local governments who are concerned about meeting match requirements, given the revenue shortfalls that we are all experiencing. We are hopefully that making state toll credits available can help alleviate some of those concerns.”

“Because Colorado has invested its toll revenue into further infrastructure investments, toll credits are an innovative financial tool we can make available for local governments at a critical time,” said FHWA Colorado Division Administrator John Cater. “At FHWA,we will continue to keep our partnerships with CDOT and local governments strong so that important projects can continue despite numerous challenges.”

Local agencies in urban areas should work through their appropriate metropolitan planning organization to apply for toll credits. MPOs are designated in federal law as the primary governing body for local transportation projects, and nearly 20 percent of federal support for transportation programs goes directly to MPOs. Local agencies outside of MPO areas should coordinate with their CDOT Regional planning contact to set up an initial project discussion with CDOT's Office of Financial Management and Budget, discuss project specifics and begin the evaluation process and coordination with FHWA or other parties.  

“While our communities are facing multiple challenges at this unprecedented moment in our country, we must still deal with the transportation needs in our areas,” said North Front Range MPO Executive Director Suzette Mallette. “As our member communities reassess their budgetary plans, this added flexibility gives options to figure out how to get needed projects built.”

“We must continue to plan responsibly and manage our rapidly-growing population,” said Pikes Peak Area Council of Governments Executive Director Andrew Gunning. “It is important that we stretch every available dollar, and toll credits offer an important tool to make that happen.” 

Additional information about toll credits is available here from FHWA’s Office of Innovative Program Delivery.