Rollover funds were previously discussed in Chapter 14. It is important to understand the limitations of maintenance funding and to be aware of key important factors pertaining to maintenance funding.

Maintenance funds lapse every state fiscal year on June 30th. This deadline needs to be taken into account for all maintenance stations as it can impact their ability to fund projects, order equipment and materials. Currently, when using maintenance funds all work completed before June 30th is able to be charged to the current fiscal year. If the labor, materials, and/or equipment does not arrive or is not in place by June 30th, it will have to be placed on the next fiscal year's budget. (See UDOT Year End Expenditure Training on the UDOT Learning Portal). 

Maintenance funds are made up entirely of state funds that are very flexible and can be used for labor, equipment, and/or materials on state routes. However, there are constraints inherent to these funds; maintenance funds must be expended by June 30th of each year or they lapse at the end of the fiscal year. These funds cannot be transferred into a traditional UDOT construction project that is funded by the construction line item and set up by a PIN.

Another unique aspect of maintenance funds is that there is a limitation on what can be spent by state forces per maintenance construction projects; ie. resurfacing (labor and materials only) as determined by the Consumer Price Index (CPI). Click for Current Fiscal Year bid limit (Under the Construction and Maintenance Bid Limit Tab). There are exceptions in special cases (as described in 72-6-109 for emergencies) where you can go over the bid limit. For the exact determination of how this amount is calculated, please refer to: 72-6-109 Class B & C Roads - Construction and Maintenance - Definitions -- Estimates Lower than bids -- Accountability.

Maintenance funds can also be used for the purchase or rental of equipment (following procurement rules for small purchases). Coordinate all equipment purchases with the UDOT Equipment Division to ensure equipment has been accounted for and proper documentation is in place. Procurement rules must be followed for ALL purchases and not just for equipment. If equipment is desired to be purchased that exceeds the small purchase amount please work directly with the Equipment Division as they can assist you in making the purchase.

Another purchase that is often made by maintenance is for materials that are used to maintain the transportation system. Such as, but not limited to: hot mix asphalt, concrete, delineators, guardrails, aggregate products, fencing, signs, and signposts. When purchasing these items, please work through your region contract specialist to ensure the products are either on contract or purchased through a procurement contract. It is also important to note that these items, if purchased on inventory, will remain on inventory until they are placed, installed, or used and charged off by the maintenance station(s).

A dedicated credit is a type of estimated "loan" within the maintenance budget. As maintenance forces and vendors repair UDOT assets damaged during crashes, UDOT attempts to collect reimbursement of repair expenditures from the responsible driver or their insurance. Bills sent out by UDOT are considered "revenue" and go towards paying back the dedicated credit amount each year. Revenue typically exceeds the dedicated credit amount, and continues to reimburse repair expenditures. Dedicated credit estimates can fluctuate from year to year, and should be watched closely as part of the region's maintenance budget. If there are any questions regarding “Dedicated Credits”contact the financial manager in Central Maintenance or the comptroller's office. 

Asset damage costs caused by third parties are recoverable (referred to as Recoverable Crash Costs,7M03’s). UDOT will seek reimbursement for the damaged items (as allowed under Utah State Code 72-7-301). These crashes have an incident report (police report) that has been filled out and filed by local law enforcement. It is important to note that all costs to clean up, repair, or replace the damaged assets is recoverable. Costs such as equipment, labor, materials, and traffic control are all eligible recoverable costs.

When a crash occurs within a station boundary and an incident report is filed with local law enforcement (that crash is cross referenced to an “A number” provided by the region accounting group,  that is used to track the crash recovery process), it is important that the maintenance station track all costs associated with the response, cleanup, repair or replacement of the damaged assets. Costs associated with these crashes are filed with the UDOT region accounting groups to seek reimbursement.

It is also important to note that when these recoverable crash costs are filed by the region accounting group, the amount of the repair costs does not come out of the station's budget but rather the dedicated credit. If the region accounting group and the collection agent is unsuccessful in collecting crash costs, then the funds will come out of the region maintenance budget. This process can vary by region, so check with your region maintenance analyst.

UDOT can be reimbursed for the cost to bring the item(s) up to the current standard. If UDOT would like to install an item or make a repair that is above the current standard, the additional cost would need to be covered by UDOT.

Earlier in this chapter it was noted that station supervisors should be aware of the history and dollars amounts needed to cover non-recoverable crashes within their station boundaries and be aware of any changes that could increase or decrease this number. Crashes that are non-billable include crashes or incidents that have caused property damage with no police report or witness to provide an account of the party at fault, leaving UDOT to cover the costs of the damages (hit-and-runs) Depending upon the situation, the station supervisor may request assistance from the maintenance analyst and district engineers to cover the cost of the repairs with other maintenance funds. This information is being tracked in the maintenance management system so the data is available to back up the station supervisors information. 

Each region has an accountant that creates bills for each crash. These bills are then passed to the centralized collection agent for UDOT who then attempts to recoup all costs associated with these bills. In some cases, UDOT is unable to collect a claim or need to settle for a lesser amount than what was paid. Any expenses UDOT is unable to collect become bad debt for the region at which point the maintenance analyst will need to review and properly budget for these unexpected expenditures. 

When UDOT is unable to collect the full amount or reaches a settlement, the claim is either sent on to the Office of State Debt Collection as a write-off for further review or the delta of a settlement is reduced on our end.

UDOT uses an accrual based accounting system, this means that all expenses, revenues, debts, etc. are recognized and recorded in the year that it happens. For damage claims, there are multiple steps and processes needed in order to recognize all elements of this process in the year in which they occurred. 

Monthly, the comptroller's office prepares a forecast for the potential accrual amount for the Damage Claim Dedicated Credit and shares it with the maintenance analysts (example of the accrual forecast). This forecast consists of a few different calculated items. These items are the unbilled, pending write-offs, and receivables 120 days past due. All of these items are then formulated together and are then applied against the revenue to determine the total year end budget impacts. In some cases, this will boost current year revenue or could potentially decrease as well. 

The Unbilled are all expenses paid out for a claim that have yet to become a bill. This could be a claim that takes a few months in order to repair. For example, some expenses have already been posted for payroll, but the contractor invoice is a few months out. These expenses need to be recognized in the year in which they occurred. The unbilled are monitored through reports searching for charges against 7M03 & 7M07. 

When UDOT is unable to collect the claim for whatever reason, UDOT is obligated to then create a Write-Off (WO) and send the claim over to OSDC (State Office of Debt Collection) so they can try other methods to collect on UDOT claims for a fee. 

These WO’s have two paths: either OSDC immediately approves the WO which then creates bad debt to the region budget (this would normally include claims under $10K) or, if the claim is greater than $10K, then OSDC will keep the claim pending approval until they are satisfied they have exhausted all options to collect on it. Claims can sit in WO status for up to 18 months in some circumstances.

After a bill is created, the UDOT collection agent has 120 days to collect on this by policy (UDOT Policy 02-61). When the initial bill is created, artificial revenue is generated and posted to region budgets. If the claim is 120 days past due, UDOT needs to consider these claims as potentially bad debt, imaginably becoming write-offs in the next few weeks. Until then, UDOT needs to manually adjust it out of revenue. There are some exceptions to this–payment plans to UDOT can span years, or the claim may be deep in litigation which can take a few years to settle and collect on. In those circumstances, we do not yet consider those bad debts.

With these three categories (Unbilled, Pending Write-Offs, Over 120 Days), an amount is calculated for total effect to the current year budget.

Every year, UDOT uses federal dollars  to construct, rehabilitate, or preserve our transportation system. When working on federally funded construction projects, UDOT gets reimbursed for the hours charged against these projects by UDOT employees. Much like recoverable crashes, the comptroller’s office–along with input from the region accounting and program management group–propose an amount to the state legislature that each region should achieve by staffing federally funded construction projects. Currently, the use of consultants is not an eligible charge that counts towards the dedicated credit on these projects.

The district engineers, resident engineers, and project managers must work together to determine a staffing plan that provides UDOT with the best opportunity to adequately staff all the construction projects while achieving the Federal Fund Earned Revenue amount. Similar to the recoverable crashes, if the region(s) fall short of reaching their allotted goal then 1) other regions who have exceeded their limit may transfer dollars to cover the shortage or 2) the region’s maintenance funds will need to be used to cover the shortfall. When a region is short of reaching the Federal Fund Earned Revenue, it is important to coordinate with Central Maintenance and the comptroller’s office to determine the appropriate action for years-end. 

The 125% limit applies to the Federal Fund Earned Revenue as well: any earned credit above that amount can be used to assist other regions or goes back into the general transportation fund.

Every year materials and items are purchased by various divisions and departments.

There is a gray area in regards to when something should be run through inventory;  within financial policy, there isn't a hard and fast rule. When working with region offices, there are however some guiding principles that should be followed: 

• Things like paper towels, toilet paper, hard hats, safety vests, etc. are inventoried items at the central and regional warehouses, but do not need to be inventoried at the shed level. These are standard overhead purchases–there's no need to track/report that usage beyond overhead. An expenditure is created at the time of purchase.

• Considering when the item will be used might be the most important distinction, especially if it’s been determined the item is not a consumable.  If a case of windshield washer fluid or a stop sign from the warehouse are purchased and put on the road within a couple of weeks, they can be expensed at the shed level and not inventoried. However, if 500 flexible delineator posts are purchased with the idea that they will be used sometime over the next four to five months,  those should be inventoried. Another way of putting this is anything that is not consumable and could be in the shed when counting inventory in April should be placed into inventory.

• To figure out if items need to be reported beyond being overhead,  put the items into FINET inventory and then charge all usage through the Maintenance Management System (ATOM) to the correct piece of equipment. 

• Providing a dollar amount of the items really doesn't necessarily determine whether to inventory or not. Relatively inexpensive items may require additional reporting beyond being put into inventory.

Understanding how equipment costs can impact and affect a maintenance station budget is critical in being able to balance the overall maintenance station budget. There are two main terms used when discussing equipment costs:

• Fixed Costs: Fixed costs can be thought of as the monthly payment to own these vehicles. These are costs that are charged to the maintenance station for the equipment that resides within their maintenance station (org/unit). These costs can vary by the piece of equipment and by the year depending upon the age and the type of equipment. The fixed rate can be adjusted through the comptroller’s office depending on vehicle usage and repair costs. 

• Usage Costs: The usage cost per vehicle rarely fluctuates during the fiscal year–this allows the maintenance station to calculate the total cost for the usage they have on a piece of equipment per project or activity. Even though the usage costs rarely change per vehicle, the fixed rate can be adjusted and must be taken into account throughout the year. This ensures that changes to the  fixed rate will not have a negative impact on the maintenance stations or region’s maintenance budget.

The goal of fixed and usage costs combined is to fund equipment operations (depreciation, new purchases, repairs, shop labor, licensing, etc.). The fixed and usage costs function both independently to cover the specific costs in each category and  together to cover equipment recovery. They are both revaluated each fiscal year based on expenditure projections, and both can change during the fiscal year.