Program Management (ARC)

Appalachian Regional Commission Program

Funding Levels:

The amount of ARC funding depends on the level of appropriations from Congress, how these funds may be allocated among the highway program and non-highway program, and the allocation formula for each program approved by the states and the Federal Co-Chairman. Each state receives a protected allocation of funds in four areas, and does not have to compete with other states. In fiscal 2005, Tennessee's allocation of ARC funds was as follows:

Highway Program $77,023,243

Non-Highway Program $ 4,509,143

Development District Program $ 438,000

Regional Initiative Program $ 353,743

Flexi - grant $ 83,000

Total $82,407,129

FLEXIBILITY

There is more flexibility in the utilization of ARC funds than in most other federally funded program. The primary reason for this is ARC's institutional structure where the states have a meaningful role to play in establishing the priorities and implementing regulations, and are the originators of grant applications. In addition to this, it is possible to request a waiver of regulations when these prevent a particular grant from being approved. Normally regulation waivers are not difficult to get if they are justified because they do not impact the level of funding of the other states; they just allow one state to use its own allocation for a particular purpose to meet that state's need.

It is perhaps relevant that the states collectively pay 50 percent of the cost of administering the ARC program (with the federal government paying the other 50 percent). As a result, the ARC staff is very responsive and willing to find a reason to agree rather than say no.

PRIORITIES

Each state is free to establish its own priorities for the use of ARC funds in the non-highway program. Highway funds are earmarked for specific highways by congressional action, and the administrative money for the development districts is earmarked for that purpose.

Within Tennessee, the first priority for the use of ARC funds is industrial infrastructure (similar to the FTIP program) where water, wastewater, rail, etc. is being provided to a locating or expanding industry. Second priority is for the provision of basic water and wastewater service in rural areas where such services are missing or inadequate. A third "opportunity projects" priority is the ability of the Governor to respond to unique problems or opportunities that are presented by a community.

As will be seen in the section titled Emerging Issues, many of the basic tenants of the ARC program since 1981 are being discussed, and are likely to be changed. Therefore, it will be difficult at this time to explain the operation of the ARC program with any degree of certainty. Consequently, this discussion of the operation of the ARC program should be viewed more as a discussion of current conditions, and less how the program will operate in the future.

ARC PLANNING

A new strategic plan was written for ARC to cover 2005-2010.

The ARC Strategic Plan has the following goals:

Future ARC programs and ARC projects will be measured by whether they help meet these goals. The goals are broadly stated, and one might think almost anything could be funded based on them. However, as they say, "the devil is in the details" and restrictions on types of programs, projects, funding levels, length of support, etc. will be placed on them through the ARC Code.

Each state must also have a state development plan. A new plan must be submitted when a new governor is elected, and must be reconfirmed or amended annually. A state ARC plan was submitted by Governor Bredesen. The state plan was designed with maximum flexibility so as not to unduly restrict the kinds of projects which could be approved.

Each state has an annual investment program (also called "project package") which is a listing and description of the projects the state will consider for funding that year. The investment program is reviewed and approved for conformance with the regional plan, the state plan, and the ARC Code.

DISTRESSED COUNTIES/OTHER COUNTIES

Currently, the non-highway program is in two parts, with separate allocations. The area development program operates in all 50 Tennessee counties. The distressed counties program is a reservation which can only be used in the six distressed counties. The six distressed counties are Clay, Fentress, Grundy, Hancock, Johnson, and Scott.

INELIGIBLE PROJECTS

The following projects are ineligible in both the area development program and the distressed counties program.  

• Any activity (construction or otherwise) in connection with libraries, cultural centers, or day-use Recreational facilities.
• Construction of schools, hospitals, or governmental office buildings.
• Construction of community centers or social service facilities unless they are eligible under the distressed counties program.

GRANT CYCLES

Pre-applications are accepted in the Fall.

Recommended project applications are submitted to Washington by June 30. Most applications are approved during the months of July and August, and must be approved by September 30.

FUNDING LIMITATIONS

The federal legislation limits total federal funding to no more than 80 percent of the project cost. In distressed counties, this 80 percent may be all ARC or may be a combination of ARC and funding from another federal program. For non-distressed counties, ARC funding is limited to 50 percent. The remaining 30 percent may be provided by another federal program.

HIGHWAY PROGRAM

The ARC highway program is operated by the Tennessee Department of Transportation. Eligible highways are designated by the U.S. Congress, and this designation may not be altered by the states. Various highway segments are prioritized by the states and the Federal Co-Chairman, and are constructed as funds become available.

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