The Reconnecting Communities Program — and Its Backdoor into Other Federal Funding

When USDOT unveiled the Reconnecting Communities Program (RCP) NOFO, it did more than launch a new grant — it built in a rarely-seen accelerant. The program funds planning and capital-construction projects that reconnect communities divided by infrastructure, with economic development as a central scoring criterion. The clever part: an RCP application can serve as a springboard, giving a project “Highly Recommended” status in later RAISE and Multimodal (MPDG) rounds. For the right project, applying to RCP is a way to potentially vault the line for other USDOT money.

Key takeaways

• Two components. RCP has a planning track and a capital-construction track, each with related but distinct requirements.
• Real capital. The capital-construction component offered $150M/year for five years, with a $5M floor and $100M ceiling (we expected Year 1 awards capped nearer $35M/project). Grants cover up to 50% of capex — up to 80% for certain projects in certain locations.
• The usual strings. It’s a reimbursement program (you’re paid back after you spend), subject to Buy America, Davis-Bacon, and a ~9–15 month post-award timeline to obligation.
• The backdoor is the story. A funded-but-underfunded RCP project earns a “Reconnecting Extra” designation; if it then applies to FY2023–FY2026 RAISE or MPDG and is eligible, USDOT deems it “Highly Recommended.”
• Equity-forward. The NOFO reshaped the program toward economically disadvantaged communities and invited private operators (e.g., pipeline owners) to partner with the localities burdened by their assets.

The program

USDOT unveiled the RCP NOFO along with revised guidance that provides a couple of adjustments and a really nice backdoor to other program funding. The NOFO reshaped the program to focus more directly on projects serving economically disadvantaged communities while reducing the emphasis on rural-specific carve-outs. It also updated inducements for private operators to partner with localities burdened by their assets — think pipelines and the like — and economic development remains a scoring focus likely to “wag the dog” of requirements.

The program has two major components — planning and capital construction — each with different but related requirements. Focusing on capital construction: the program affords $150M per year for five years, with a floor of $5M and a ceiling of $100M. For a number of reasons — program nuances, past USDOT practices — we’d expect Year 1 projects to be funded at no more than $35M each. As always, it’s a reimbursement program — you get the money back from USDOT after you spend it — and it still requires adherence to Buy America, Davis-Bacon, and the rest, with a likely 9–15 month timeline after award to obligation. But those strings come with grant funding of up to 50% of capex (and, for certain projects in certain locations with certain bells and whistles, up to 80%).

The really interesting part

On page 4 of the NOFO, USDOT dropped a gem. If a Capital Construction Grant recipient doesn’t receive the full funds requested, the funded RCP project earns a “Reconnecting Extra” designation. If a “Reconnecting Extra” project then applies for funding under the FY2023–FY2026 RAISE or Multimodal Projects Discretionary Grant (MPDG) programs and is determined eligible, USDOT will deem the application “Highly Recommended,” subject to that program’s merit criteria.

As we read it, applying for the RC Program may let you access other programs’ funds if the RC grant isn’t enough to fully support an awarded project — and it does so by vaulting your application to advanced placement in the other program’s review. We also believe USDOT could use this carve-out to let projects not funded under RCP “cut in line” for other program funding (RAISE, INFRA, MPDG, PIDP). The net-net: it can be in your interest to get your project into an RC round as a way to springboard into or secure additional funding from other USDOT programs.

Related reading

• Newly-Unveiled USDOT Programs Fund Rural Development
• 2023 RAISE & PIDP Results
• It’s Always Government Finance Season

If you have a project that could capture 50–80% of capex in reimbursement — and potentially a preferred lane into other federal programs — Prosody maps every applicable federal, state, and local program, flags the hurdles, and shows you the cash flow. Talk to us about your project →