When a state or municipality receives new federal funding, agencies under pressure to quickly launch or break ground can get trapped thinking short-term instead of maximizing long-term impact. But taking the time up front to choose the right projects to fund is critical to harnessing the maximum benefit your community, in both the short and long term.

The first step is of course developing a comprehensive understanding of the regulatory requirements and federal rules governing your primary sources of funding.

• If using multiple sources of funds, integrate the requirements from each source into a master requirements document, and take care to deconflict any entangled or competing requirements. This includes requirements that come from leveraging private capital, in addition to your own state, local, and Tribal frameworks.
• If funding is released before a complete set of regulations and oversight frameworks is available, be proactive on compliance: Develop interim policies and procedures based on existing regulations and similar programs, then adjust as new regulations are finalized.

Once you have your understanding of the regulatory environment, you can move on to the project level, of choosing those that will best align with funding objectives and benefit your communities. Consider the following factors when evaluating which projects to support.

• Community need: How impactful is the project to addressing constituent challenges and improving their quality of life – both today and over the next few decades?
• Economic benefit: Evaluate the project’s ability to:
           o Support job creation
           o Increase productivity
           o Attract business investment
           o Enhance trade
           o Provide a foundation for future economic growth
• Ability to attract private capital and alternative funding: This consideration is too often overlooked. Evaluate public-private partnerships (P3s) and other private investment opportunities against the portfolio of project opportunities to maximize impact.
• Impact on the environment and social fabric of the community: Consider the impact on energy resiliency, community displacement, and other factors.
• Regulatory applicability: Perhaps this is obvious, but not all projects are created equal when it comes to meeting the above-discussed funding requirements and relevant federal, state, and local regulations.
• Length of investment benefit: Consider the project’s ability to provide functional benefits to the community for the lifespan of the project, factoring in operations and maintenance costs.
• Risk mitigation: Evaluate the financial and technical risks of the project relative to other potential projects in the portfolio.

Finally, assess your capabilities against what the selected projects require. To what extent is your agency ready to manage these undertakings – or, in the case of larger funding, a program that might include dozens if not hundreds of projects? Start by evaluating three primary areas: 

• Competencies and capacity of the project/program staff to deliver on-time, on-budget, and safe from fraud, waste, and abuse
• Stability of existing policies and procedures around execution, compliance, and accountability
• Technological foundation for efficiency, accuracy, security, and collaboration

When new funding becomes available, it’s important to take the time up front to evaluate and prioritize projects, to make sure you’re moving forward in a way that will best benefit your community for years to come. Critical analyses lead to stronger operational plans that optimize the likelihood of lasting impact.