Oro Valley's success in getting legislation approved to swap federal highway funds for state money has saved the town more than $200,000 in the past two years and stands to save the town hundreds of thousands more in the years to come, according to local transportation officials.
The exchange program, signed into law by Gov. Jane Dee Hull in March of 2000, allows municipalities to exchange federal Surface Transportation Pro-gram money for state highway user revenues. The municipality receives 90 percent of what would be allocated by the federal government, but in the process avoids having to pay construction and design management costs to the Arizona Department of Transportation, said Oro Valley Public Works Director Bill Jansen.
Under the program, federal funds for road improvements are allocated to PAG and projects are funded based on a priority ranking. PAG distributes the money and the state takes its share of the federal money from PAG, said Tim Ahrens, the agency's transportation finance manager.
The only project done by Oro Valley under the exchange program thus far has been about $750,000 in paving work on Rancho Vistoso from Oracle Road to Big Wash, Jansen said. Savings from that project totaled more than $100,000 under the exchange program, he said.
"Federal requirements for funding are much more complex and dealing with the state bureaucracy can be extremely time consuming," Jansen said. In addition, "the state often lacks the staff to devote to a project to keep it on a fast track to completion."
The exchange program has been "a tremendous advantage for Oro Valley in that it allows the town to get funding much sooner than if we had to wait for it to arrive through the normal bureaucratic process," agreed Oro Valley Town Manager Chuck Sweet. "It just takes federal budget oversight regulations out of the system," he said.
While Oro Valley may lose 10 cents on the dollar in the exchange, it saves as much as 30 percent by not having to pay ADOT for construction and design management costs, Jansen said.
Also, by being able to manage projects on its own, which Oro Valley is not normally certified to do as Tucson and Pima County can, Oro Valley may be able to shorten construction times by as much as a year or two, Jansen said.
Until Oro Valley's push for the legislation, only rural areas were allowed to make these exchanges, said Ahrens.
Since its passage, Oro Valley has been able to do very well for itself, he said.
In the 2003 fiscal year which began July 1, Oro Valley will receive $3.2 million toward the widening of First Avenue from two to four lanes from Oracle to Tangerine Road and $3.3 million the following year through exchange program, Ahrens said.
This is a major accomplishment since the entire Pima County area is only eligible for up to $5 million a year in exchange funding, he said.
Oro Valley has been very innovative. "They see a good program and they jump on it," Ahrens said.
But as cities and towns become more familiar with the program's advantages, competition can be expected to increase dramatically, he said.
"After all, there's only so much to go around," he said.