DOT details flexible transportation fund, project selection, and grant strategy

Ron Henke of the Department of Transportation described how the flexible transportation fund was structured for the 2023–25 biennium and how the department plans to operate the fund in 2025–27. He said the 2023–25 flexible fund totaled $222,500,000 and described the department’s selection criteria and scoring process for applications.

Henke said the department received 264 applications requesting roughly $432,300,000 and that the program included a statutorily required set‑aside of 25 percent of a motor‑vehicle‑excise‑tax portion for non‑oil producing counties and townships. “We started in December of ’23. We started awarding in April,” Henke explained, describing a committee that scored projects (county, city, township and industry representatives plus DOT members) and recommended ranked lists to the DOT director for final approval.

Henke said the department selected 44 projects from the non‑oil set‑aside and then added three additional projects late in the process so the state would meet the 25 percent allocation requirement. The additional projects were a bridge replacement in Trail County, a stream crossing in Dickey County and grading/graveling of a major collector in Towner County. He explained the set‑aside split between counties and townships (about 90 percent counties, 10 percent townships) and that townships generally submitted less complete applications, leading to a separate township suballocation.

The department’s post‑session report shows DOT was authorized 1,005 FTEs, a total budget a little more than $2.7 billion, and received $4,000,000 in one‑time general fund appropriations for transit grants. Henke also said the legislature provided $287,100,000 from the State Investment Fund (SIF) for nonspecific road projects and created a new local bridge grant pot of $40,000,000 for the local system.

Henke said DOT retains a discretionary portion of the flexible pot—about $48,300,000 in the program—as flexible DOT dollars the agency can use “for whatever basically is transportation related,” including matching grants and, if needed, emergency projects. He told members the department plans to use established scoring criteria for the 2025–27 cycle, will open applications in early July, run webinars in mid‑ to late July, close applications in September, and aim to have agreements in place by mid‑December so projects can be developed and bid.

On federal funding Henke said DOT expects about $828,000,000 in formula funds for 2025–27 and that the department has been awarded $236,900,000 in discretionary grants to date while awaiting decisions on roughly $7,576,000,000 in grant applications. Henke noted the department received a $55,000,000 federal award to help fund four‑laning of Highway 85 and that the legislature provided a $55,000,000 cash match on that project.

Deputy Director for Engineering Matt Lindeman described operational items for planned changes to posted speed limits tied to legislation raising certain interstate limits to 80 mph: the department bid a sign replacement project in June, has awarded a contractor and expects sign changes to begin on Aug. 1, with exceptions (for example, in some city corridors and the Badlands). “We have a plan in place…They’ll start changing out all the signs on August 1,” Lindeman said.

Henke and staff said they will provide a final 2023–25 report in July summarizing project selection and spending and that the department is tracking projects in separate coding so biennium work remains distinguishable for reporting and completion.