Bureau of Rail Freight Policy - PennDOT Letterhead Template

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					OS-2 (11-08)




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                          Rail Freight Grant Program Policy

Background

The Rail Freight Assistance Program (RFAP) and Rail Transportation Assistance Program (Rail
TAP) provide financial assistance for investment in rail freight infrastructure. The intent of the
programs is to (1) preserve essential rail freight service where economically feasible and (2) preserve
or stimulate economic development through the generation of new or expanded rail freight service.
The programs provide financial assistance to eligible applicants for the maintenance or the new
construction of rail freight infrastructure. Funding for both the RFAP and Rail TAP are subject to
annual authorization by the General Assembly. Funding for the programs has grown substantially
from when these programs were first created in the mid 1980's; however, the programs remain very
competitive and not all applicants receive full or partial funding.
Project Funding

The Bureau of Rail Freight, Ports & Waterways (BRFPW or Bureau) is charged with the
administration of monies allocated from the Commonwealth General Fund to the RFAP and
monies from the Capital Budget for Rail TAP grants. Rail TAP, also known as Capital Budget, is only
available to those applicants who have a line item in a Capital Budget Bill. Applicants should
contact their local state representative or state senator to secure a line item. The RFAP and Rail
TAP monies are available on a matching grant basis to eligible applicants who meet certain project
eligibility requirements. Because the dollar value of requests for financial assistance through the
RFAP and Rail TAP usually exceeds the available funding, not all eligible applications receive
funding or the full amount requested. Policies guiding the funding of both programs include:

        The maximum Commonwealth funding for an eligible RFAP project is up to 70 percent of
         the total project cost, not to exceed $700,000. The funding for the new construction portion of
         an RFAP project cannot exceed $250,000. The final grant award is based upon the actual bid
         costs.
             o RFAP funded projects may use other local, Commonwealth or federal sources of
                 funding for matching grant purposes; however, these projects may not use Rail TAP
                 awards for matching grant purposes.
             o RFAP funded projects may not use more than 15% of the final grant award for costs
                 associated with railroad crossing bed maintenance or reconstruction within the
                 applicant’s right-of-way.
        The maximum Commonwealth funding for an eligible Rail TAP project is up to 70 percent
         of the total project cost, not to exceed the amount of the line item. The final grant award is
         based upon actual bid costs.




Bureau of Rail Freight, Ports & Waterways| PO Box 2777| Harrisburg, PA 17105-2777|717-783-8567
           o Rail TAP funds are subject to approval and appropriation by the Pennsylvania
             Legislature.
           o Rail TAP funded projects may use other local, Commonwealth or federal sources of
             funding for matching grant purposes; however, these projects may not use RFAP
             awards for matching grant purposes.
           o Rail TAP funded projects may not use more than 50 percent of the final grant award
             for right-of-way acquisition.
           o Rail TAP funded projects may not use more than 15% of the final grant award for
             costs associated with railroad crossing bed maintenance or reconstruction within the
             applicant’s right-of-way.
           o Rail TAP funded projects may not use more than five (5) percent of the final grant
             award for the acquisition or refurbishment of rolling stock.
           o No Rail TAP funded project shall be allocated more than ten (10%) of the total
             program’s appropriation in any given calendar year.

Project Eligibility

RFAP and Rail TAP monies are available to railroad companies, transportation organizations,
municipalities, municipal authorities and the users of rail freight infrastructure that submit
applications clearly demonstrating that the proposed project will preserve rail freight service or
stimulate economic development through new or expanded rail freight service. Policies guiding the
eligibility of both RFAP and Rail TAP projects include:

      Eligible RFAP projects include the replacement and/or installation of ties, rails, plates,
       spikes, ballast, turnouts, and other track materials or purchase and installation of structural
       materials and additional ballast to restore, improve, or maintain an existing railroad line to
       the level necessary for its safe operation or use.
            o Eligible projects must have an estimated useful life of at least five (5) years.
            o RFAP grant awards may not be used for the acquisition cost of land, rights to land,
                buildings, or building materials to construct a new building unless such buildings are
                used exclusively for rail freight or intermodal operations.
      Eligible Rail TAP projects include projects to purchase ties, rail, ballast, other track materials;
       structural materials in sufficient quantity to construct a railroad line (where none exists) or a
       rail-associated facility to a level necessary for its operation or use; and for the acquisition cost
       of land.
            o Eligible projects must have an estimated useful life of at least five (5) years and may
                include acquisition cost of land or rights of land.
            o Rail TAP grant awards may not be used to purchase buildings or the materials to
                construct a new structure unless such structures are used exclusively for rail freight
                or intermodal operations.
      An applicant may submit only one RFAP and one Rail TAP application per calendar year.




Bureau of Rail Freight, Ports & Waterways| PO Box 2777| Harrisburg, PA 17105-2777|717-783-8567
Application Requirements

RFAP and Rail TAP applications must be fully completed and received within the published
acceptance period. Following the close of this period, applicants are given the opportunity to
present their projects in Harrisburg in order to allow Bureau staff members to more effectively
evaluate the projects and in order to optimally invest the allotted program monies. Policies guiding
the application requirements of both programs include:

       RFAP and Rail TAP applications can only be submitted during the open application period.
            o The open application period for RFAP will be determined by the Bureau on an
               annual basis.
            o The open application period for Rail TAP will be determined by the Bureau on an
               annual basis.
       Applications must be filed electronically using the dotGrants web-based application or using
        other means identified by the Bureau.
       Applications must be fully completed, include a detailed project schedule with identified
        milestones and completion date and demonstrate the applicant project’s capacity to meet the
        programs’ track work inspection criteria, carloading compliance, and competitive bid
        requirements.
       Only applications received during the open application period will be considered to have met
        the application deadline for a fiscal year.

Application Evaluations and Grant Selections

The Bureau is responsible for awarding grants based upon the results of an objective evaluation
process that serves the legislative intent of the programs and promotes the public interest. All
projects are scored and evaluated for selection based on scoring criteria that reflect the intent of the
project and the initiatives of the Commonwealth. Once the projects are evaluated, the Deputy
Secretary of the Bureau presents a recommended list of projects to the Program Management
Committee (PMC) and the State Transportation Commission (STC) for approval. After approval by
the STC, all the applicants are notified of their funding status. Policies guiding the evaluation and
selection of both RFAP and Rail TAP applications include:

       The Bureau will evaluate each eligible RFAP and Rail TAP project in terms of its expected
        payback as measured in terms of its potential to:
           o Meet the goals and objectives of the individual programs;
           o Meet the goals and objectives of the statewide rail long-range plan;
           o Meet the goals and objectives of the applicant’s representative Metropolitan Planning
               Organization (MPO) or Rural Planning Organization (RPO);
           o Re-establish or create new rail service;
           o Improve public safety;
           o Provide economic development and job growth;
           o Achieve a positive benefit/cost ratio;
           o Positively affect the environment; and



Bureau of Rail Freight, Ports & Waterways| PO Box 2777| Harrisburg, PA 17105-2777|717-783-8567
          o Increase carloadings.
      The Bureau may confer with an applicant or conduct a site visit to clarify the intent or
       amend the scope of a proposed project. Under no circumstance will such consultation be
       considered as intent by the Bureau to offer a grant to the applicant.
      The Bureau will notify each applicant who has submitted a complete application as to
       whether or not the Bureau intends to offer a grant.
          o If the Bureau intends to offer a grant to an applicant, the following conditions apply.
                   The applicant will receive a letter notifying them of the decision and any
                       specific grant conditions.
                   The applicant must notify the Bureau in writing within thirty (30) days of
                       receipt of the proposed grant offer of their intention to accept or decline the
                       offer.
                   If the applicant either declines the proposed grant offer or does not notify
                       the Bureau in writing of its intention to accept the grant offer within thirty
                       (30) days, the Bureau may, at the discretion of the Director, withdraw the
                       grant offer.
          o If the Bureau does not intend to offer a grant to an applicant, the following
              conditions apply.
                   If additional funding becomes available or if a previously offered applicant
                       declines a proposed grant offer, the Bureau, at the discretion of the Secretary,
                       may notify the applicant of a change in circumstance and an intent to award a
                       grant.
                   Upon notification of intent to offer the same conditions will apply to the
                       applicant as if the applicant was initially offered a grant.

Programming and Procurement Requirements

The Bureau provides each selected applicant with a grant agreement for review and signature in a
timely manner after receiving the applicant’s final selected bid(s) and project specifications. The
grant agreement outlines the procurement requirements governing the project, including the
prevailing wage and competitive bid requirements. Once the signed grant agreement is received by
the Bureau, the Bureau provides grant recipients with written approval to begin the project. Policies
guiding the programming and procurement requirements of both RFAP and Rail TAP projects
include:

      No RFAP or Rail TAP project shall begin without a signed and approved grant agreement.
      No RFAP or Rail TAP project shall begin without the Bureau’s written approval of “Notice
       to Proceed”.
      RFAP and Rail TAP project grants shall continue for up to a maximum of 2 fiscal years.
      All RFAP and Rail TAP projects are subject to prevailing wage requirements.




Bureau of Rail Freight, Ports & Waterways| PO Box 2777| Harrisburg, PA 17105-2777|717-783-8567
              o It is the grant recipient’s responsibility to obtain the prevailing wage rates from the
                  Department of Labor and Industry1 (L&I) and to meet L&I requirements in this
                  regard.
              o Questions regarding prevailing wages should be directed to the Department of Labor
                  and Industry's Bureau of Labor Compliance at (800) 932-0665.
         If the estimated cost of the subcontracted work or procurement of materials for either a
          RFAP or Rail TAP project exceeds $5,000, the grant recipient must secure competitive bids
          in a manner that is compliant with the Bureau’s competitive bid requirements.
              o A grant recipient may request that the Bureau waive the competitive bid
                  requirements if the grant recipient can demonstrate that lowest bidder has performed
                  poorly on past projects within the last three (3) calendar years.
         All grantees must make a good faith effort to insure materials purchased with funds derived
          from the RFAP or Rail TAP programs are made in the United States. If materials necessary
          to complete a project are not manufactured in the United States, documentation must be
          provided to the Bureau that such materials are unavailable.

Reimbursement and Reporting Requirements

The grant agreement provided by the Bureau to all grant recipients outlines the reimbursement and
reporting requirements governing each project, including payment requests, eligible expense
categories, reports, etc. Policies guiding the reimbursement and report requirements of both RFAP
and Rail TAP projects include:

         Reimbursement payment requests shall be limited to monthly submissions.
         Payment requests shall be made in a manner specified in the grant agreement subject to the
          following conditions:
              o A grant recipient shall forward payment requests to the Bureau on the forms
                  provided by the Bureau or in a manner specified within the grant agreement.
              o A payment request shall include submission of actual cost documentation consisting
                  of approved contract estimates of work-in-place, approved invoices or other
                  evidence of incurred costs accepted by the Bureau.
         Only those categories of expenses expressly identified in a grant agreement are eligible for
          reimbursement. Grant agreements will stipulate the following conditions:
              o Costs incurred by the grant recipient in the preparation of a RFAP or Rail TAP
                  application are ineligible for reimbursement.
              o Lodging, meals, in-house administrative costs, and in-house engineering costs
                  incurred by the grant recipient are ineligible for reimbursement under both programs.
         A grant recipient, having received full or partial payment / reimbursement under a grant
          agreement, shall make payments within seven (7) calendar days from receipt of funds to
          vendors and contractors for services and materials properly invoiced under the project.


1   http://www.portal.state.pa.us/portal/server.pt?open=514&objID=552990&mode=2


    Bureau of Rail Freight, Ports & Waterways| PO Box 2777| Harrisburg, PA 17105-2777|717-783-8567
           Within thirty (30) calendar days from receipt of payment the grant recipient shall provide
           proof to the Bureau that payment for all project subcontractors has been made.
          Prior to the disbursement of funds the Bureau may inspect, test, or review audit records of
           accounts to validate, to the satisfaction of the Bureau, that the disbursement of funds is
           warranted.
          The grant recipient must submit quarterly progress reports comparing progress made against
           the schedule included in the grant agreement. Discrepancies between the progress made and
           the proposed schedule must be noted and actions must be identified to insure that the
           project is completed on schedule. Failure to satisfy this requirement may result in forfeiture
           of remaining grant funds.
          The grant recipient must submit yearly annual carloading reports for five (5) subsequent
           years comparing the average guaranteed carloading made against the carloading provisions
           included in the grant agreement. Discrepancies between the carloadings outlined in the
           report and the proposed carloadings identified in the grant agreement must be noted and
           actions identified to insure that the project will achieve the carloadings within six (6) months.
           Failure to satisfy this requirement may require reimbursement of the grant funds. In
           addition, a notification of the grant recipient’s default may be entered into the Statewide
           Contractor Responsibility File per Management Directive 215.9 for consideration in any
           determination of whether to extend future Commonwealth grants to the grant recipient.
          The final ten (10) percent of the total payment will not be paid to the grant recipient until the
           Bureau has completed final inspection of the project and granted final approval.

Engineering and Inspection Requirements

The Bureau requires that all engineering services and inspections be performed according to the
standards outlined with American Railway Engineering and Maintenance-of-Way Association’s
(AREMA) Manual for Railway Engineering (MRE) and to the engineering standards established by
the American Society of Civil Engineers (ASCE) or other relevant agency. Policies guiding the
engineering and inspection requirements for both RFAP and Rail TAP projects include:

          Consistent with the Engineer Land Survey and Geologist Law2 (1945) all Engineering services and
           inspections will be performed by registered Pennsylvania Professional Engineers (P.E.) or
           persons having at least 5 years of rail construction experience if the engineering or inspection
           services are incidental to their primary line of business3.
          All major bridge or tunnel inspections indentified by the Bureau in the grant agreement will
           be performed by registered Pennsylvania Professional Engineers (P.E.).

Audits and Post Award Evaluations

The Bureau requires each grant recipient establish and maintain an adequate accounting record for
each individual project that will allow the Bureau to determine the legitimacy of costs incurred for

2   http://www.elibrary.dep.state.pa.us/dsweb/Get/Version-48765/Section%20120C.pdf
3   P.L.1151, No,151 ' 1(a)(2)


    Bureau of Rail Freight, Ports & Waterways| PO Box 2777| Harrisburg, PA 17105-2777|717-783-8567
the project. The Bureau requires access, for the purpose of audit and examination, to books,
documents, papers and records of the grant recipient that are pertinent to an individual project.

      RFAP and Rail TAP grant recipients shall keep records that will facilitate an effective audit,
       for a period of five (5) years after the date of the submission of the final Bureau’s payment.
      RFAP and Rail TAP grant recipients shall keep records which fully disclose the amount and
       disposition of the grant proceeds, including:
           o The total cost of the plan or program in connection with the grant; and
           o The given or used grant amount and nature of that portion of the cost of the plan or
               program supplied by other sources.
      RFAP and Rail TAP grant recipients shall also keep, at a minimum, the following project
       documents:
           o Vendor’s invoices;
           o Applicable purchase orders;
           o Receiving reports;
           o Inventory records;
           o Method of pricing;
           o Returns;
           o Catalog cuts;
           o Plans;
           o Carloading compliance reports;
           o Inspection reports;
           o Final inspection;
           o Report showing acceptance for the project; and
           o Record of disposition or correction of unsatisfactory work.




Bureau of Rail Freight, Ports & Waterways| PO Box 2777| Harrisburg, PA 17105-2777|717-783-8567