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Section 6: Cost Assumption Plan

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Introduction

National Highway Traffic Safety Administration (NHTSA) traffic safety funds are to be used to reduce the number of traffic crashes, injuries, and fatalities through a data-driven application of limited federal funds. Texas Traffic Safety Program project grant agreements supported with “non-dedicated” federal funds are limited to the length of the grant period. The majority of traffic safety grants are for a period of one year, with the need established annually.

If both the Texas Department of Transportation (TxDOT) and the subgrantee agree that the project has demonstrated great merit or has potential long-range benefits, the subgrantee may apply for funding assistance beyond the three-year limit. To ensure that projects continue beyond the availability of federal funding, each project is required to have a Cost Assumption Plan (CAP) describing how the cost of the project will gradually be taken over by the subgrantee. Grant managers should explain and thoroughly discuss the CAP requirement with the potential subgrantee during project negotiations (See Chapter 4, Section 2 of this manual).

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CAP Submission Requirements

Subgrantees who anticipate that their projects are likely to exceed the three-year limit must submit a CAP with their proposals for a second or subsequent year of funding and for all multi-year proposals.

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Content of the CAP

The CAP includes as a minimum the following information:

  • a multi-year budget (schedule) showing when match increases will occur
  • a narrative explaining the source or sources of the matching funds (state, local, private, etc.).
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Schedule

The heart of the CAP is the schedule for phasing in funding from local or other sources and phasing out federal funding support from TxDOT. The schedule must show the federal-non-federal funding split for each year of the program.

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Maximum Allowable Federal Support and Required Match

In order to preserve the seed-money concept, ensure that the matching requirements of federal 402 funds are met, and ensure subgrantee investment (i.e., cost sharing) from the start of a project, the following is required for each 402-funded grant:

  • A Cost Assumption Plan (CAP) must be submitted with a proposal request for funding for a second or subsequent year of funding and for all multi-year proposals.
  • A minimum 10 percent match is required for the first year of a grant award.
  • If a project extends beyond the third year, federal funding must not exceed 65 percent in the fourth year and 50 percent in the fifth and subsequent years.

Proposals that exceed the minimum match requirement will be appropriately credited during proposal review.

The required matching schedule for 402-funded grants is presented in the table below:

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Project Year

Federal 402 Funds

Non-Federal (Match) Funds

1

90%

10%

2

90%

10%

3

90%

10%

4

65%

35%

5

50%

50%

Beyond 5

50%

50%



EXAMPLE: Safety City wishes to request a fourth year of funding. The city can contribute a total of $18,000 toward the project. Therefore, the most the city can request in federal funds is $33,429 for a total of $51,429 as follows:

EXAMPLE: $18,000 (35%) + $33,429 (65%) = $51,429

Grants funded with monies other than federal 402 funds may be required to follow a schedule other than that described above, depending on NHTSA requirements.

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Plan Approval

In addition to the matching requirement, any project being considered for extension beyond three years must:

  • be based on exceptional project performance
  • document a continued need for the project
  • receive specific approval from TxDOT.
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Form

The Cost Assumption Plan (CAP) is located in the eGrants Proposal Pages and must be completed for all proposals.

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