Local Grant Success in Nebraska

Overview

Decision Situation

The Context

The Infrastructure Investment and Jobs Act (IIJA) provided new funding sources for transportation, energy, broadband, water, and other critical infrastructure areas. This expansive offering of funds could mean relief for state and local governments struggling to maintain aging systems but comes with a new set of challenges for LPAs to manage the administrative requirements of federally funded projects.

While these challenges exist in all states, Nebraska has a particularly complicated history. In the early 2000s, LPAs struggled to manage federal funds for their transportation projects due to regulatory and reporting requirements. To address this, the Nebraska DOT and LPAs entered into an agreement to swap LPAsʼ federal funds for Nebraska DOT state funds. This shifted interaction

with federal regulations to the state but also has meant that most LPAs have had no engagement with federal funds for decades.

Fast-forward to the current environment of the IIJAʼs new grant opportunities, and Nebraska ranks 48th in the nation in receiving discretionary funding. The state was missing out on opportunities to address critical infrastructure needs by not having the resources needed to go after and manage more federal dollars. A new approach was needed.

The Decision

It became clear to leaders in the state that if Nebraska expected to earn close to its fair share of these competitive grant dollars, local governments were going to need more support to pursue and manage them. These leaders began talking about how to address the problem, with most conversation centering on how the Nebraska DOT could be more involved in the process to help local partners.

This is the situation in which Vicki Kramer, Director, Nebraska DOT, found herself early in her tenure leading the agency: the governor, other state leaders, and local government officials looking to the Nebraska DOT to find a solution to this problem. One of the earliest ideas was to establish a stand-alone office in the Nebraska DOT dedicated to helping LPAs win and administer transportation grants. As Kramer saw this option gathering momentum, she began to wonder whether it was really the best long-term solution and wanted to explore alternatives.

Situation Assessment

The director recognized that one issue with asking the DOT to assist LPAs directly is that it does not solve the underlying problem: that LPAs are not gaining the necessary expertise in their own organizations. In addition, the Nebraska DOT would be taking on additional risk if local governments did not comply with federal requirements. Finally, although much of the current focus was on transportation projects, the director knew that IIJA funding included water, energy, and broadband funding as well. There was concern that, if the Nebraska DOT became the go-to resource for IIJA transportation, the agency would become the default resource for all infrastructure areas.

The issue was beyond the scope of the DOT and its legislatively identified mission to manage the state-owned transportation system. There were legal considerations related to how involved the Nebraska DOT could be with nontransportation projects and concerns about how agency employees would react to more responsibilities being assigned to them when staffing and resource shortages were already making it difficult to manage the agencyʼs existing commitments. Kramer was hesitant to begin her tenure with a decision that unnecessarily strained the agency.

Rather than waiting for the decision to be put to her directly by the governor, Kramer chose to proactively expand the menu of possible alternatives by researching other solutions. She assembled a team and tasked them with exploring the range of options that could address the underlying root issue with less burden and risk to the Nebraska DOT.

Gathering Facts and Priorities

Peer Strategies

Nebraska is not alone in this challenge, and other states have begun setting up programs and investing resources to assist locals with IIJA funding. Kramer tasked her Nebraska DOT team with researching the arrangements that have been set up in other states. This included online research and conversations with officials in these states to hear directly and in more detail about how they are implementing solutions and the pros and cons of these efforts.

What they found was a range of solutions. Some states had set up offices in the DOT, while others had centralized multisector centers run through the governorʼs office. Rhode Islandʼs solution in particular stood out: a complete multisector infrastructure hub with an innovative private-sector funding arrangement with a direct connection to the governorʼs office. This single office provided support to all the stateʼs agencies with ties to IIJA, including support for writing grants that it thinks are a good fit. Kramerʼs team was inspired by these possibilities but needed more thinking to figure out the Nebraska Way.

Local Perspective: Transportation Summit

To deepen the conversation, the Nebraska DOT hosted an inaugural transportation summit to raise the awareness of counties and municipalities about the grant programs available under IIJA and to educate them on how to confidently compete for federal discretionary funding. A key purpose of the summit was to hear directly from LPA staff on the challenges they perceived to be the greatest and what kinds of support would be most helpful. They heard that locals often donʼt know whether potential projects match up with grant requirements, how to pursue grants for projects that do, or how much it will cost to go after these grants.

The summit was an unqualified success, with more than 200 locals in attendance and enthusiastic reviews. Following the summit, the Nebraska DOT received more than 75 follow-up requests for the state to provide more assistance to local governments to pursue these grants. With the enthusiasm of LPAs at their back and the knowledge of both the available options and preferences of those directly involved, the Nebraska DOT team was able to explore options that would meet the most critical LPA needs but mitigate the DOTʼs concerns. An arrangement was beginning to take shape.

Expanding the Conversation

At this point, it was becoming clear to Kramer and her team that the solution should meet the following parameters:

• Be outside the DOT,
• Cut across state agencies,
• Allow for industry-specific expertise, and
• Build local capabilities.

The precise mechanism for setting this up was still uncertain, however. Who besides the DOT could assist? How might an approach be sustainable and empower locals? Kramer had many conversations with others outside of the DOT, including the governor, state legislators, the private sector, and the University of Nebraska. These conversations resulted in increased interest in

solving the challenge among the stateʼs top leaders and revealed an openness to a solution that would not strain state transportation resources.

Decision-Making Process

After gathering the relevant information, Kramer went back to her default process for making decisions: the military decision-making process (MDMP). Kramer learned this formal process for grappling with difficult and high-stakes decisions during her time as a National Guard reservist and has found it very helpful in other contexts as well. She has adapted the MDMP to better fit the government context of making decisions at the Nebraska DOT. The MDMP consists of seven steps:

1. Receipt of mission. The decision-maker alerts all relevant staff and stakeholders about the decision to be made, gathers information about the situation, defines the problem, and establishes goals and objectives. Kramer acknowledged that accurately defining a problem in this situation proved to be challenging in the beginning.
2. Mission analysis. Potential consequences, difficulties, and execution problems are identified for each course of action being considered. This step identifies coordination needs, decisions that must be made, and contingency plan requirements.
3. Course of action development. Step 3 involves generating a range of options for addressing the problem and evaluating each optionʼs feasibility, acceptability, suitability to the mission, distinguishing elements, and completeness of information.
4. Course of action analysis. Potential consequences, difficulties, and execution problems are identified for each course of action being considered. This step identifies coordination needs, decisions that must be made, and contingency plan requirements. Kramer applies decision trees in this step.
5. Course of action comparison. Each course of action is evaluated against a set of criteria predetermined by decision-makers and relevant leaders or stakeholders. This provides a sense of the strengths and weaknesses of each option to identify the course of action with the highest probability of success. Results are shared in a course of action briefing with top leaders.
6. Course of action decision/approval. After the briefing, the decision-maker selects the course of action he or she deems will best accomplish the mission. Sometimes no course of action is selected, and the process begins again. Modified courses of action are reassessed to ensure prior assumptions still hold. Approval is obtained from any authority needed to execute the selected course of action. In this decision, the governor had to approve creating a new position and office.
7. Course of action execution. The decision-maker issues guidance to implement the selected course of action and monitor its progress to ensure that it is achieving the desired outcomes. It will take a few years to evaluate this decision to see whether Nebraska is able to increase its share of competitive grants.

Making (and Adapting) the Decision

In the end, Kramer felt that a cabinet-level position outside the DOT would offer a more holistic view across multiple sectors. This would ensure that funds for other infrastructure needs, such as replacing lead pipes in water systems or upgrading electrical grids, would also be included. She worked closely with the governor and the state legislature to make this arrangement happen.

A DOTʼs processes and values are really driven by its governance structure and history. Leaders need to have a good understanding of those two elements to be successful driving change.
—Vicki Kramer
Director, Nebraska DOT

However, as with countless decisions before this, the solution evolved as it was implemented. It became clear that, despite Kramerʼs initial concerns, the Nebraska DOT was the best home for the suite of technical support needed. The director quickly adapted to the new circumstances and worked with the governor to set things up as close to the original vision as possible. The solution would be a compromise: housed within the Nebraska DOT, but functionally an intergovernmental Infrastructure Hub. She was also able to negotiate for $2 million in new state funds to support its operation. This allowed the Nebraska DOT to hire two full-time positions dedicated to the Hub, which alleviated concerns about strained staff.

While the Hub will not be focused on any one sector, the understanding is that the office will coordinate with the state agency with relevant expertise on any given grant. The Nebraska DOT will still be called on to provide technical assistance and support in competing for transportation discretionary funds but will not be solely on the hook to handle water, energy, or telecommunication projects. This solution ameliorated the risk of overextending the agencyʼs resources and causing discontent among staff.

The desire to build local capabilities led Kramer to arrange a partnership agreement between the Hub and the College of Public Administration at the University of Nebraska Omaha (UNO). Among all the players, a university was clearly the best suited to help LPAs develop new skills. Historically, the Nebraska DOT had gone to the Nebraska Transportation Center, but because of the cross-industry nature of the current need, she determined that UNOʼs program would better address all sectors of public administration. The university will directly assist state agencies with grant writing for up to 20 grants per year. To build capacity for the long-term, UNO will incorporate grant-writing into its curriculum. Since nearly 20% of Nebraskaʼs city and county managers are alumni of UNOʼs program, this will help to better equip future leaders with the skills they need to secure more federal funding in the state.

Decision Reception

This was a very recent decision, so the full impact and assessment of its success will not come for a while. Thus far, the reception has been very positive among all stakeholders. Staff at LPAs seem thrilled to have access to the office and university resources. The governor is happy that

something is happening and that it was not too much of a burden on state resources. UNO is satisfied that this work aligns with its mission and will help educate students as well as LPAs. And the Nebraska DOT is relieved to no longer face responsibility for all IIJA support for locals.

This rare alignment of satisfaction among all parties is an indication that this may well be an objectively good decision. It followed a clear process, got input from all relevant stakeholders, acknowledged the related complex history, had sufficient time to consider many alternative solutions, and is expected to deliver on the core need underlying the initial problem. Near-term success will be determined by an increase in discretionary infrastructure funds to the state, and long-term success will mean local staff with the skills to write grants and the know-how to manage them.