The town government does not directly receive federal aid through federal transportation formula programs. By contrast, the Nantucket Planning and Economic Development Commission (NP&EDC—the regional body) has Federal Highway Administration (FHWA) “obligation authority” to spend up to a certain amount of federal aid on projects that have passed certain design thresholds and requirements. The apportioned amount for this authority is based on a funding formula defined in federal legislation, which is then further divided up at the state level across regions in Massachusetts. Typically, Nantucket’s region—the NP&EDC—is authorized to program and spend between $600,000 and $700,000 per year on transportation projects. Obligation authority is a limit or ceiling on the amount of federal aid that can be used year to year, but this amount excludes discretionary competitive grant programs or other various forms of state and federal aid. If state and federal aid transportation project costs exceed the obligation ceiling, Nantucket must identify additional funding support for projects.
It is important to note that “obligation authority” refers to the ability to spend federal aid but does not necessarily mean that the region uses these funds each year. In other words, the region isn’t simply given $600,000 to $700,000 each year to do with what it pleases. For the region to be able to use these funds, a project must be documented in the region’s Long Range Transportation Plan (LRPT) and Transportation Improvement Program (TIP). The project’s design must then be reviewed and deemed acceptable by MassDOT and the Federal Highway Administration (FHWA). Projects using state and federal aid are also subject to design compliance and reporting beyond that of local regulation. The required reporting and coordination for state and federal aid projects typically results in a longer timeline for project execution. As such, federal aid is typically reserved for longer multi-year projects.