Financial Planning

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Step 1-A
Now we will begin filling in the Funding Inventory Worksheet. Let’s say you located six streams of funding available to the tribe. In the first column, enter the name of the programs you have identified in this section. In the second column, fill in the program officer for that funding stream.

Funding Inventory Worksheet

Indian Reservation Roads—All recognized tribes receive IRR funding. The program officer at the FHWA Federal Lands Highway Division gave you information on this program.

Tribal Transit Program—All tribes are eligible to receive funding through the tribal transit program, although the tribe must meet certain criteria and make a competitive application to receive it. You learned about this program when talking with the program officer at the FTA Regional Office.

Surface Transportation Program—The Surface Transportation Program (STP) is one of the largest and most flexible pools of funding available in the United States. It is under the control of the State DOT (and in urban areas, the MPO). You have been in contact with the State DOT tribal liaison, who told you about the program. You have also seen a State DOT corridor plan that intends to improve a highway near your reservation using STP funds. The State has indicated an interest in building a connection to the highway on tribal lands.

National Scenic Byways Program—This program provides one-time grants for roads that are deemed scenic or culturally important. A road on your tribal lands is designated as scenic, so you are eligible to apply for funding.

Safe Routes to School—This program makes small grants that improve intersections, sidewalks, and bike paths near schools. The State DOT administers the funds, but allows the State Safe Routes to School Partnership (a nonprofit organization) to recommend projects for funding each year. You have spoken to the State DOT tribal liaison and the Safe Routes to School Partnership.?

Tribe General Fund—The tribal government collects taxes and fees, and has decided to spend some of that money on transportation improvements. Your tribe’s treasury office gave you information about this funding stream.

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Step 1-B

Fill in the third column with eligible project types. You can obtain this information from the program officer shown in column 2 or from written resources. Be sure to write down all eligible uses.
Funding Inventory Worksheet

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Step 1-C

In column four (Year 1) enter the revenue expected during the next upcoming year. Sometimes the figure will be zero dollars.

In some cases, you will be applying for grant funding. If you know that you have won the grant, enter the amount won into the worksheet. If you don’t win, enter zero dollars into the worksheet. If you do not know if you won the grant, you should consider winning the grant a reasonable expectation and enter it into the worksheet.

Funding Inventory Worksheet

Let’s discuss the figures entered in the worksheet above.

Indian Reservation Roads—The program officer told you to expect $920,000 in year 1. He also indicated that funding from this program will go up over the next four years, but he cannot make predictions more than four years away.

Tribal Transit—You have been notified that you will receive a grant next year. The grant will provide six years of transit funding at $150,000 per year.

Surface Transportation Program—The State DOT expects $15,000,000 will be available over the next two years. They will also supply $8 million during a third year.

National Scenic Byways Program—You applied for funding under this program, but were not awarded the grant. Feedback from the program officer and other sources suggests that your project is unlikely to ever be selected unless the roadway is paved.

Safe Routes to School—You were awarded a $100,000 grant! Your contact at the Safe Routes to School Partnership has told you that since funding is tight and there are many needs in this category, you are unlikely to be awarded another grant.
Tribe General Fund—The tribal treasury has indicated $250,000 will be available in year 1. The tribe is expecting tax revenue to decline slightly over time.

What is a Fiscal Year?

A fiscal year describes a 365 day period where a budget is in effect. Unlike a calendar year, a fiscal year does not need to begin on January 1st. For example, the Federal fiscal year begins on October 1st. Many State fiscal years begin on July 1st. A fiscal year is named for the year in which it ends. Your tribe’s treasury can provide you information on the tribal fiscal year. Many grants are offered once per fiscal year. The State fiscal year affects the optimal time for you to coordinate with the DOT and MPO.

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Step 2

Using information gained from conversations with program officers, we will complete the Funding Inventory worksheet.

Funding Inventory Worksheet

Let’s discuss each funding stream shown in the worksheet:

Indian Reservation Roads—The program officer told you that the program will continue indefinitely, and that the tribe has control over the program. This makes the IRR Program an annual funding stream. The program officer also said he expects IRR funding to increase for the next four years. When calculating the 20-year projection, you will use a rate of increase (in the example, it is 3%) for the period of time that your program officer suggests (four years). Then the program continues for the remaining sixteen years with no increase or decrease.

Tribal Transit Program—This funding stream will deliver $150,000 per year over six years. Simply multiply $150,000 by six.

Surface Transportation Program—This is a partner funding stream. Upon communicating with the State DOT and the BIA-DOT, you learn about the years when you will receive funding, and the amount of funding each year. The tribe will receive $15,000,000 in Year 1, $15,000,000 in Year 2, and $8,000,000 in Year 3.

National Scenic Byways Program—This is a one-time grant. You will not receive any funding under this program, so enter a zero for the 20-year estimate.

Safe Routes to School Program—This is a one-time grant. You will receive a one-time grant of $100,000. Since this is a one-time grant, an amount appears only once over the 20-year estimation period.

Tribal General Revenue—This is an annual funding stream. The tribal treasury indicated that this revenue stream is likely to decrease slightly over time. You reduce the income by 1% per year to arrive at the total for the 20-year program.

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Step 3

To reiterate, our goal is to build the following projects from the Project Prioritization List:

1. Build a new 4-lane road to connect a major highway that runs through the reservation to another major highway ($45,000,000)
2. Pave 20 miles of gravel roads on the reservation, built in 1-mile increments at a cost of $1 million ($20,000,000)
3. Begin offering bus service on a single route on the reservation ($150,000 per year)
4. Make safety improvements to three intersections on tribal roads ($400,000 each)
5. Build sidewalks to allow safer access to the tribal school ($50,000)
6. Add vehicle parking areas and safety improvements to a scenic roadway ($1,500,000)

You will place each of these projects into the Project Matching Worksheet. First, you need a copy of the Funding Inventory Worksheet to refer to:

In this example, we used the following steps to complete the Project Matching Worksheet:

1. Copy the Spreadsheet six times, because we have six projects on our prioritization list.
2. Enter the Priority Number, Project Name, Project Type, and Cost in columns A through D.
3. Copy the names of all six funding streams into the Project Matching Worksheet and place them in column E. Do this for all six projects.
4. For the first project, locate funding:
   1. See if there are any one-time grants intended for the project (there are none).
   2. See if there are any partner funds intended for the project. There is $38 million in Surface Transportation Funds from the State DOT that are reserved for this project. In column F, enter “$38,000,000.”
   3. The full $45,000,000 cost is not yet paid for. We must make strategic decisions on which funding streams to use to make up the difference. Tribal Transit, National Scenic Byways, and Safe Routes to School are funding streams that are not eligible for road building—so we can exclude those from consideration. The Tribe General Fund would be depleted if it was applied to this project, so instead we choose to commit $7 million from the IRR program.

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Step 3, continued

5. Calculate the balance for each funding program. To do this, subtract the value in column F from the value in the far right column of the Funding Inventory. The Surface Transportation Program now has a zero balance. The IRR Program now has a balance of $13,416,000.

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Step 3, continued

6. Continue on to the second highest priority project, the paving of 20 miles of gravel roads. Again, follow the order:

1. There are no one-time grants available for this project.
2. There are no partner funds available for this project.
3. Paving roads is an ineligible expense under the Tribal Transit, National Scenic Byways, and the Safe Routes to School programs.
4. Apply $13,000,000 from the IRR Program. Since the gravel roads must be built in $1 million increments, the left over $416,000 is not spent on paving these roads. There is still $416,000 remaining in the IRR Program.
5. Apply $4,000,000 from the Tribe General Fund. Since the gravel roads must be built in $1 million increments, the left over $552,000 is not spent paving roads. There is $552,000 remaining in the Tribe General Fund funding stream.
6. Examine combinations of funding. It is possible to combine funding streams. Unfortunately, $416,000 plus $552,000 does not reach the $1 million threshold needed to build one more mile of paved roadway.
7. Three miles of gravel roads cannot be paved under this financial plan. Use data, your judgment, and public involvement to select which road segments should not be paved.

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Step 3, continued

7. Continue on to the third highest priority, which is establishing a bus service that will cost $150,000 per year. Again, follow the order of analysis:

1. There are no one-time grants.
2. There are no partner funds.
3. Transit service is an ineligible expense under all programs except Tribal Transit, Surface Transportation Program, National Scenic Byways program, and Tribe General Fund. The Surface Transportation Program is depleted, and the General Fund nearly so.
4. Apply all of the Tribal Transit Program funding to this project. The available funding will pay for six years of transit service.

   A	B	C	D	E	F	G
   Priority	Project Name	Project Type	Cost	Funding Stream	Funding Allocation from this Program	Remaining Funding in This Program
   3	Bus Service	Transit	$3,000,000	Indian Reservation Roads	–	$416,000
   				Tribal Transit Program	$900,000	$0
   				Surface Transportation Program	$0	$0
   				National Scenic Byways Program	–	$0
   				Safe Routes to School	–	$100,000
   				Tribe General Fund	$0	$552,000

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Step 3, continued

8. Continue to the fourth highest priority, which is performing safety upgrades at three intersections. Each upgrade costs $400,000.

1. There are no one-time grants.
2. There are no partner funds.
3. Safety is an eligible expense under the IRR, Surface Transportation Program, Tribe General Fund, and Safe Routes to School.
4. The IRR Program has $416,000 remaining in it. You decide to pay for one safety improvement using IRR funds. The IRR Program now has $16,000 remaining in it.
5. The Tribe General Fund has $552,000 remaining in it. Decide to pay for one safety improvement using the Tribe General Fund. The General Fund now has $152,000 remaining in it.
6. One safety improvement cannot be funded. You must use your judgment and public input to decide which one has the lowest priority.

   A	B	C	D	E	F	G
   Priority	Project Name	Project Type	Cost	Funding Stream	Funding Allocation from this Program	Remaining Funding in This Program
   4	Safety Improvements	Safety	$1,200,000	Indian Reservation Roads	$400,000	$16,000
   				Tribal Transit Program	–	$0
   				Surface Transportation Program	$0	$0
   				National Scenic Byways Program	–	$0
   				Safe Routes to School	–	$100,000
   				Tribe General Fund	$400,000	$152,000

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Step 3, continued

9. Move on to the next project on your list, which is to build sidewalks to the tribal school at a cost of $50,000.

1. There is a one-time grant available for this project. Allocate the entire $50,000 cost to the grant.
2. Note that the project could have also been paid for using the IRR Program. However, it is in the tribe’s best interest to pay for this project using the one-time grant and retain the IRR funds for later.

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Step 3, continued

10. The lowest priority project on your list is to add parking areas and other safety improvements to a designated scenic roadway on your tribal lands. You submitted an application to the National Scenic Byways Program, but your application was not accepted. Therefore, there is no money available to build this improvement. It is still important to show this project in your long-range plan and explain that no funding is available. By doing so, you indicate that this project remains important to your tribe. Your partners, BIA-DOT, and FHWA will look to your Unfunded Projects List if money becomes available.

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Answer

Using information collected during this hypothetical example, you were able to pay for most of the projects identified during earlier phases of the planning process.
You were able to fund:

1. The major 4-lane highway using $38 million from the Surface Transportation Program (in partnership with the State DOT) and $7 million from the IRR Program.
2. Paving 20 miles of gravel roads using $13 million from the IRR Program and $4 million from the Tribe General Fund. Three miles of gravel roads could not be paved.
3. Bus service for six years using a $900,000 grant from the Tribal Transit program. Transit service after the sixth year is currently not funded.
4. Two intersection redesigns using $400,000 from the IRR Program and $400,000 from the Tribe General Fund. One needed intersection redesign went unfunded.
5. Sidewalks near the tribal school using $50,000 from the Safe Routes to School Program.

You were unable to fund:

1. Three miles of road paving.
2. Transit funding in years seven through twenty.
3. One intersection improvement.

It is important to note that the results of this exercise are influenced by choices made during the planning process. For example, if intersection improvements were made the highest priority, all three would be funded.

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Unfunded Projects

In our hypothetical example, three projects went unfunded. The first is paving of three miles of gravel road. The second is funding for transit service in years seven through twenty of the plan. The third is an intersection improvement. We could discuss possible partnering opportunities with the State DOT to fund intersection improvements. Also, we could discuss the possibility of applying for grants.

Unfunded Project List

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Reserve

In our example, there was remaining revenue from four funding streams. None of the funding streams is large enough to pay for one of the needed projects. However, there is a substantial amount of money remaining. Remaining funds will be disposed in one of two ways. The reserve is a pool of money that is essentially a “rainy day fund.” The reserve is used to pay for cost overruns or emergency projects. The IRR Program remainder will be in a reserve fund to pay for road projects.

The Tribe General Funds and Safe Routes to School funds will be deposited into a boxed funds account. A boxed funds account commits to spending the money, but defers decision-making on which projects to a later time. Often, boxed funds are used for quick response to projects of important need, or to make low-cost improvements. In this case, the Safety Boxed Fund could pay for low-cost safety improvements like road signs or striping.

Reserve