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In general, the more active SIBs share some common characteristics. Strong program support by high-level officials within the State DOT is considered to be a critical success factor. Top management leadership can build a broad base of support for the SIB, both externally and internally. This leadership was often essential in gaining the support needed to pass enabling legislation. Further, the internal recognition and interest in the SIB program expressed by management serves to validate its role and importance as a financing tool.
Internal support and coordination within the State DOT is also a factor contributing to successful SIB implementation. A coordinated implementation effort among planners, financial managers, and engineers has proven to be of particular significance in bringing about a better understanding of the associated benefits of the SIB mechanism.
An effective marketing program can enhance program implementation and have a positive impact on the level of SIB activity. Outreach through brochures and mailings, workshops, meetings with external stakeholders and potential loan applicants, and targeted presentations are among the special activities undertaken in States with more active SIBs as part of their marketing efforts.
Successful experiences in implementing other non-grant financing approaches, such as privatization and revolving loan programs, provided a certain knowledge base to facilitate SIB start-up activities and operations. In other words, applying "lessons learned" was beneficial to program initiation activities. Finally, access to existing State resources and expertise provided additional resources for the SIB, further facilitating program implementation. States sometimes borrowed talent from existing programs and were supplied critical support in areas such as accounting, information systems or legal matters.
The level of SIB loan activity differs among SIBs and in large part is linked
to capitalization factors. In some of the more active States, State contributions
to the SIB have been above the required match or additional Federal funds
were made available through TEA-21. A larger capital base then supports a
more diverse loan portfolio and can contribute to greater financial stability,
accelerating the transition to a true revolving loan fund. The following chart
demonstrates the impact of increased capitalization as well as leveraging
through bonding on SIB loan activity. Six states account for over 90 percent
of SIB loan activity through September 2001. Of the six States, South Carolina's
bank is highly leveraged based on amounts loaned through bonding; three States,
Ohio, Arizona, Florida, have all contributed additional State funds to their
respective banks; and Missouri has benefited from additional TEA-21 capitalization.
| State | Number of Agreements |
Loan Agreement Amount (thous.) |
Disbursements to Date (thous.) |
|---|---|---|---|
| South Carolina |
5
|
1,502,289
|
510,428
|
| Florida |
32
|
465,000
|
94,000
|
| Arizona |
23
|
373,192
|
156,850
|
| Ohio |
35
|
146,624
|
102,550
|
| Texas |
32
|
88,900
|
70,016
|
| Missouri |
10
|
69,251
|
66,754
|
| Subtotal |
137
|
$2,645,256
|
$1,000,598
|
| Other States |
108
|
245,931
|
179,358
|
| Total |
245
|
$2,891,187
|
$1,179,956
|
In States with less active SIBs (one or two loans), loans were generally made to an account within the State DOT, and were interest free. These States also contributed only enough State capital to match Federal funds.
Several States indicated that certain obstacles or challenges have slowed progress in implementing SIB programs. Many States lack the legislative authority to leverage their funds and thereby increase the capitalization level of the SIB. Capital-ization levels constrain the SIB maximum loan size and loan portfolio. Additional Federal and State capitalization funds could alleviate these limitations. The complexity of Federal requirements was cited as an obstacle to SIB activity and the effectiveness of the program, particularly for transit projects. Several project sponsors noted that Federal requirements for smaller projects can significantly delay construction schedules and increase overall project costs. A few States noted that insufficient demand for loans was a factor affecting program implementation. However, the lack of interest or demand in some instances may be attributed to limited marketing efforts.
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Leveraging SIBs
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