Wis. Admin. Code Department of Transportation § Trans 4.04 - Project costs

(1) Eligible project costs are limited to the operating expenses of an urban mass transit system, including labor, fringe benefits, materials and supplies, utilities, insurance, purchased transportation services, license fees and lease expenses. For publicly owned mass transit systems, the only wages and fringe benefits that shall be considered eligible project costs are those of employees whose activities are related to the day-to-day operation of the system. For employees who do not work full time on transit system operations, only expenses related to that portion of their time spent on transit shall be considered eligible project costs. For urban mass transit services provided by a private provider operating under contract with an eligible applicant, eligible project costs may include profit, return on investment, interest on short term debt obligation, and depreciation of facilities and capital equipment used directly for the provision of urban mass transit services, provided that the facilities and equipment were acquired without benefit of public financial assistance. If a facility is a joint-use facility, depreciation of only that portion of the facility used in the provision of urban mass transit services is an eligible project cost. For shared-ride taxicab services provided by private providers operating under contract with an eligible applicant, eligible project costs may include administrative fees that the eligible applicant incurs in the course of satisfying state and federal requirements.
(2) Eligible project costs may include the costs of user-side subsidies provided to individuals with disabilities. User contributions to the user-side subsidy service are considered eligible project costs in accordance with s. 85.20(3m) (b), Stats.
(3) If an eligible applicant contracts for mass transit service with a private provider, it shall execute a formal written contract with the provider. Only costs incurred under a properly executed written contract shall be considered eligible project costs.
(4)
(a) If an eligible applicant contracts with a private provider to operate an urban mass transit system on its behalf, it shall do so using the competitive proposal process set forth in par. (b), and eligible project costs are limited to those costs associated with the proposal accepted by the eligible applicant.
(b) Eligible applicants shall use the following competitive bid process:
1. An eligible applicant shall prepare a "request for proposal" document. The document shall request expressions of interest from providers, and describe essential provider qualifications and criteria for evaluating those qualifications. The eligible applicant shall post the document, along with any ancillary documents, on the department of administration's statewide goods and services electronic purchasing system website. The eligible applicant shall also cause an appropriate notice of the request for proposal to be published in a local newspaper of general circulation.
2. If only one qualified provider expresses interest in providing the urban mass transit service, the eligible applicant may negotiate a contract with that provider. The negotiated contract shall be subject to the department's approval.
3. If 2 or more qualified providers express interest in providing the urban mass transit service, the eligible applicant shall rank each provider on the criteria set forth in the request for proposal.
4. When a publicly owned mass transit system responds to a request for proposal issued by a local public body under subd. 3., the cost proposal shall include an analysis of fully allocated costs if so required by the request for proposal. The analysis shall include all of the system's costs measured in accordance with generally accepted accounting principles, regardless of whether these costs are otherwise paid for through other public financial assistance, including operating subsidies and capital grants. When the public body which owns the mass transit system has prepared a cost allocation plan in accordance with 2 CFR 200, costs of the mass transit system shall be allocated in accordance with that plan. When the mass transit system has not prepared a cost allocation plan in accordance with 2 CFR 200, costs which are allocable to the mass transit system shall be determined using the principles outlined in 2 CFR 200. Expenses of the mass transit system shall be allocated to segments of service considered using the following categories:
a. Costs that depend on the number of vehicle hours operated, including particular operators' salaries and fringe benefits.
b. Costs that depend on the number of vehicle miles traveled, including fuel costs, maintenance costs and maintenance personnel salaries and fringe benefits.
c. Costs that depend on the maximum number of vehicles that are in service during the day, including administrative and capital costs.
6. The proposed costs in an awarded bid shall be reduced by an allowance for operating and capital costs subsidized through other state and federal grants.
7. An eligible applicant shall establish an appropriate procedure for resolving bid proposal complaints and conflicts, and shall include the procedure in its request for proposal.
(c) If a local public body contracts for urban mass transit service with a private provider on the basis of negotiated procurement, eligible project costs may include depreciation of facilities and capital equipment used directly for the provision of urban mass transit services, provided that the facilities and equipment were acquired without benefit of public financial assistance. If a facility is a joint-use facility, depreciation only of that portion of the facility used in the provision of urban mass transit services is an eligible project cost.
(5) The following expenses are not eligible project costs:
(a) Depreciation and amortization, except as authorized by sub. (1).
(aa) Job access and reverse commute project expenses, except in cases where the recipient's grant agreement with the department explicitly authorizes use of funds for such project(s).
(b) Taxes paid which are subject to rebate.
(c) Interest expense, except as authorized under sub. (1).
(d) Profit, except as authorized by sub. (1).
(e) Lease-purchase payments.
(f) Lease payments to a related party which are made under less than an arm's length agreement. Only actual eligible project costs of owning the property, including depreciation and taxes, shall be allowed, as authorized under sub. (1).
(g) Lease payments for revenue passenger vehicles unless, and only for the term, pre-approved by the department.
(h) Entertainment costs.
(i) Fines and penalties.
(j) Bad debts.
(k) Charitable deductions.
(l) User-side subsidies, except as authorized by sub. (2).
(m) Payments to members of advisory committees, transit commissions or transit boards.
(n) Federal, state and local income taxes.
(o) Charter-related expenses. Such expenses shall be considered to be equal to the revenue received directly from the provision of charter service, except when charter revenues exceed 10% of the total annual operating revenues of the mass transit system. When charter revenues exceed 10% of the total annual operating revenues of the mass transit system, charter-related expenses shall be determined in accordance with a cost allocation plan approved by the department.
(p) Expenses related to contractual agreements for special planning studies.
(q) Expenses for general public administration functions or activities of regional or local entities that are not related to the provision of mass transit service.
(r) Expenses for contingencies or capital acquisitions, including contributions to a capital reserve account or fund. The cost of materials and supplies utilized in facility or vehicle repairs, regardless of cost, shall be considered eligible project costs so long as such repairs involve replacement of existing items.
(s) For mass transit systems operated under contract by a private provider, the wages and fringe benefits of any public employees, except those employees involved in administration of the contract or in monitoring the performance of the provider.
(t) Fees imposed upon a contracted service provider by the recipient public body, such as taxicab license fees.
(u) Return on investment, except as authorized by sub. (1). Return on investment shall be a fixed amount and may not exceed an amount calculated by applying the interest rate the secretary of the treasury specifies under 50 USC App. 1215 (b) (2) as applicable to the period ending on December 31 of the year prior to the project year to the net book value of the private provider's equipment and facilities used in providing the contracted for transportation service.
(v) Expenses that are directly offset by revenues that may include, but are not limited to, expenses related to hauling freight or package delivery, cash discounts or refunds, tax rebates including fuel tax rebates, insurance proceeds and resale proceeds. Such expenses shall be considered to be equal to the revenue derived directly from their incurrence.
(w) Franchise fees paid by the recipient public body to a private provider.
(x) Expenses for the direct operation of private or public van pools, except administrative and marketing expenses associated with the public van pool program.
(y) Expenses that are paid for with federal transit administration capital funds authorized under 49 CFR 53.
(z) For mass transit systems providing services outside of their jurisdictional boundaries, expenses related to services which duplicate those provided by another mass transit system in terms of geographic area served, hours operated, frequency of service and passenger boarding and alighting locations. Decisions on duplication of service shall be made by the department, after consultation with the affected public bodies.

Notes

Wis. Admin. Code Department of Transportation § Trans 4.04
Cr. Register, November, 1978, No. 275, eff. 12-1-78; r. and recr. (1), am. (2), (3) and (4), Register, May, 1982, No. 317, eff. 6-1-82; emerg. r. and recr. eff. 11-18-83; r. and recr. Register, April, 1984, No. 340, eff. 5-1-84; am. (1), renum. (2) to be (5) and am. (2) (a), (d) and (l), cr. (2) to (4), Register, October, 1986, No. 370, eff. 11-1-86; am. (5) (f) and (o), renum. (4), (5) (q), (r), (s) and (t) to be (4) (a), (5) (p), (q), (r) and (s) and am. (4) (a), cr. (4) (b) and (c) and (5) (t), (u), (v) and (w) and r. (5) (p), Register, August, 1989, No. 404, eff. 9-1-89; am. (2), (4) (b) 1. and (5) (r), cr. (5) (x), Register, April, 1993, No. 448, eff. 5-1-93; am. (1), (5) (a), (c), (d), (f), (L), (s) and (t), r. (3), renum. (4) (b) 4. and 5. to be (4) (b) 5. and 7. and cr. (4) (b) 4., 6. and (5) (y) and (z), Register, November, 2000, No. 539, eff. 12-1-00. Amended by, CR 18-065: am. (1), (2), cr. (3), r. and recr. (4) (a), am. (4) (b) 1. to 3., 4. (intro.), a., r. (4) (b) 5., am. (4) (b) 6., 7., (c), cr. (5) (aa), am. (5) (f), (g), (o), (q) to (u), (w), (x), (z) Register October 2020 No. 778, eff. 11/1/2020

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