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Financial Planning

II. What is Financial Planning, and how does it work?

Financial planning describes the methods and strategies used by tribes to estimate the availability of funding to pay for needed transportation improvements on tribal lands. Since transportation funding is limited, spending must be done in a strategic fashion. In order to make the best decisions, tribal transportation planners need full and accurate financial information.

When to perform financial planning

Information from financial planning is critical to the success of a tribal long-range transportation plan's development and implementation. Financial planning should occur at a specific point in the planning process. Figure 2 shows the phases of the transportation planning process. Financial planning should take place after the planner has established a list of all transportation needs, and then prioritized them (please see the Project Prioritization module for more information). Financial planning is the third step in the process. Information on funding is gathered and allocated to projects during this step.

Once financial planning is complete, the funded projects form the Cost Feasible Project List. The Cost Feasible Project List shows the projects—including descriptions and cost—that the tribe intends to build over the life of the long-range plan (usually 20 years). The list must be cost feasible, meaning all projects shown should be able to be funded with reasonably expected revenue through the final year of the plan.

Figure 2:Phases of the Tribal Transportation Planning Process

A diagram shows the phases of the tribal transportation planning process. The first step is identifying needed projects, followed by prioritizing projects, followed by engaging in financial planning, after which the planner can create a cost feasible project list. These steps all feed into the larger tribal transportation plan.

Much of the information in the financial plan is dependent on information about the expected cost of projects. The cost of a project is evaluated earlier on in the planning process, usually during the identification of needed projects phase. A preliminary cost estimate can be calculated using information like facility type, length of the roadway, and the presence of supporting infrastructure such as sidewalks and street lighting. The BIA offers helpful formulas to estimate project costs in an appendix to the Federal regulations defining the IRR Program funding.2

Several national groups publish regularly-updated handbooks and bulletins on the cost to construct transportation infrastructure, including the American Road and Transportation Builders Association (, the Institute of Transportation Engineers (, the American Public Transportation Association ( and the American Association of State Highway and Transportation Officials ( Your State DOT may also be able to help estimate the cost of projects. Even though estimates can be calculated, the true cost will be different for each project. This variation in costs can be due to:


There are four steps to the financial planning phase of the tribal transportation planning process. Each one is discussed in depth below:

  1. Identify funding streams.
  2. Estimate future revenue.
  3. Match funding to projects.
  4. Write the financial plan.

Step 1: Identify Funding Streams

Funding for transportation projects can come from several different sources. The first step in financial planning is to assemble a comprehensive list of funding streams of interest to the tribe. You can count on funding from the IRR Program, but a more time-intensive process is needed to search for other Federal, State, local, and internal tribal sources of funding. A truly complete inventory of funding streams should include coordination with representatives from agencies outside the tribe's borders, including FHWA, FTA, the State DOT, the MPO, and transit agencies. You should also discuss funding streams with your tribe's treasury, as well as major landowners or tenants on tribal lands.

Step 2: Estimate Future Revenue

Transportation planning documents look five to twenty years into the future. In order to have accurate financial information for these future years, you must take available information and make predictions. There are two tasks to estimating future levels of transportation funding:

Step 3: Match Funding to Projects

In the first two steps, you inventoried available funding streams and estimated the future value of those funding streams. The next step of financial planning is pairing available funding to needed projects.

You must have a list of projects from a long-range transportation plan and the results from the first two steps of financial planning. The process can be time-intensive, since you must manually match funding streams to eligible projects and make strategic decisions.

In this step, you line up projects in order of priority and assign a cost to construct along with a brief description of the project. Similarly, you list the funding streams, the amount you expect to receive from them, and types of projects on which that funding stream can be spent. Once your lists are created, you take the highest priority project and match it to a funding stream (or in some cases, multiple funding streams). The price to construct the project will be subtracted from available funding. Then you match the second-highest priority project to funding, and continue until funding is exhausted.

There is no requirement that the highest priority project be funded first—it is simply a commonly-accepted practice. You are free to fund projects in any order, and in any combination.

Sometimes a small amount of funding will be left over, because the amount is not large enough to pay for another project. You might choose to place this amount in "reserve" and save it for later. Another option could be to commit the leftover amount toward low-cost improvements like road signs, road markings (stripes), or landscaping.

All of the needed projects that you were unable to pay for should be placed on the tribal priority list. You will refer to the tribal priority list if additional funding becomes available. You should also supply the tribal priority list to the DOT and MPO for their consideration for funding under their control. The actual steps for pairing funding to projects are discussed in Section III (Step-by-Step).

Step 4: Write the Financial Plan

The outputs of the financial planning effort are a series of tables for inclusion in the tribal long-range transportation plan. In the plan itself, these tables should be supported by text that explains the tables to the reader. The tables that comprise a financial plan include:

  1. Funding sources and their expected amounts over the life of the plan.
  2. The list of projects and which funding streams are supporting each project.
  3. List of needed but unfunded projects and discussion on why the projects were not funded.
  4. A discussion of what will be done with any leftover, unused funding.


Updated: 12/19/2013
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