The SIB review has revealed considerable information, insights, and suggestions for future action to enhance SIB operations. Further, the interviews have provided a perspective on the challenges States encountered in implementing the SIB and on developing strategies for the future. The consensus among the States interviewed during the SIB review was that the SIB financing mechanism is an effective tool, but there are opportunities to improve its effectiveness.

Many States indicated that initiating and managing a revolving loan program was more complicated than first anticipated and suggested more Federal assistance in this area. It is expected that SIB program activity will continue to increase, as States gain experience in program delivery, although the pace of activity will be impacted by capitalization levels.

Although some SIBs may attain a sufficient capital level to sustain and expand operations, SIBs that cannot access additional resources are likely to experience program stagnation. The more active SIB States today have increased the capitalization of their banks by issuing bonds or committing additional State funds.

Based on the SIB review, the following recommendations are provided to enhance SIB effectiveness:

Federal

• Provide more extensive business expertise, technical support, and training. FHWA should serve as a clearinghouse for sharing successful SIB business practices and should improve communication links among the SIBs.
  
  
• Work with agencies such as the Council of Infrastructure Financing Authorities and the Environmental Protection Agency to identify revolving fund practices that could be "transferred" to the SIB program to improve program management.
  
  
• Expand SIB information on the Innovative Finance web site to include up-to-date information on SIB financial activity and case studies.
  
  
• Develop an Annual SIB Report template to facilitate report preparation and ensure greater consistency at the State level.

State Level

• Expand program outreach and marketing. Marketing is one of the most effective strategies of the SIB. While potential applicants for SIB assistance exist in most States, it is important to inform project sponsors about the program and to determine how best to overcome any barriers to participation in the SIB. Outreach will also increase support for any needed legislative action.
  
  
• Implement more formal application processes. A well-documented process facilitates program management and can help identify future applicants and financing gaps.
  
  
• Consider establishing shorter terms for loan repayments. Accelerated repayment of SIB assistance will enable the SIB to provide assistance to more projects at an earlier date and will also reduce interest costs to the project sponsor. However, it is recognized that each project assisted by a SIB will be unique and repayment terms should be structured to meet the needs of the project without sacrificing the stability of the SIB.
  
  
• Develop overall program strategies and coordinate efforts with MPO planning offices to maximize program benefits.
  
  
• Explore the potential for assisting revenue-generating projects, such as traffic management, parking management, or Intelligent Transportation System projects.
  
  
• Improve financial reporting and the timeliness of financial reports. State SIB managers should work closely with the FHWA Division Financial Manager in providing up-to-date information on projects and financial activity. Reporting should be at least quarterly.