MPO Funding

Project summary:

Federal law requires Metropolitan Planning Organizations (MPO) to have a financial plan for transportation investments in their area. It is unclear, however, how this requirement should be implemented. This research project sought to answer the following questions: How are state funds allocated to MPOs? Are state funds allocated to MPOs on a formula basis, a competitive basis, or some other basis? If there is a formula, how was this formula created and who maintains it?

It was found that some states leave MPOs free to make whatever estimates they please. Others dictate either inflation rates or dollar amounts to include in plans. Some require that MPOs use these estimates, others allow MPOs flexibility to choose among a given set of alternatives. Texas has a model that MPOs can use to develop their own estimates. Some states dictate all revenues, while other states may dictate only state funds or federal funds or both. Some states have a collaborative process to come up with inflation estimates and funding estimates, while others have the state DOT just dictate a figure. In some states estimates are informal, while in other states they are formal.

How do MPOs allocate funds to projects in their areas, especially smaller MPOs? Do MPOs develop only one funding estimate or are there multiple funding estimates developed and multiple scenarios of projects selected? How are funding estimates developed?

Virtually no MPOs develop multiple funding scenarios. Almost all MPOs select one estimate to develop funding scenarios around.

Virtually all MPOs have some sort of ranking process. This process is usually two steps, with one group developing an initial ranking while the MPO board provides final approval. DOTs can be involved in both steps, depending on where they sit in the MPO structure. The groups doing the initial ranking can vary from staff to advisory groups to sub-committees of the MPO board.