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Financial Planning

III. Step-By-Step Financial Planning

As the tribal transportation planner, your role is to draft a financial plan that: 1) identifies funding streams, 2) estimates the value from those streams over time, and 3) matches projects to funding streams for which they are eligible. To help, you will fill out two worksheets during this process:

  1. Funding Inventory Worksheet
  2. Project Matching Worksheet

The worksheets will help you produce the tables and text that will form the financial plan component of the tribal long-range plan.

This section will give step-by-step instructions for creating a financial plan. In each step, we will work through the Practice While You Learn! example described in the introduction. This section will describe the process and show you how to calculate your financial plan using a word processor program and a calculator. You may also find a spreadsheet program useful.

Step 1—Identify Funding Streams

Part A. Identify funding streams. The first step in financial planning is to gather information on which funding streams are available to the tribe. Funding can come from many different places, so it is important to inventory which pots of money the tribe might be able to obtain. As you move through the process, you can use the “Funding Inventory Worksheet” to help you organize the information you collect. Create a table in a word processing document with five columns. Label the columns “Funding Stream,” “Program Officer,” “Eligible Project Types,” “Year 1 Revenue,” and “20-year Total.” You will fill in most of the table in this step. However, you will save the “20-year Total” column for later.

Table 1. Funding Inventory Worksheet

Funding Stream Program Officer Eligible Project Types Year 1 Revenue 20-year Total
         
         
         
         

Your objective at this point is to determine the possibility of funding, not to obtain the actual dollar figure that might be available. You will likely find between two and fifteen streams of funding. Table 1 shows the agency responsible for administering specific funding programs. Each funding stream has a program officer that oversees all aspects of the funding stream. The program officer works in the office shown in the second column from the left. You should contact the program officer and explain that you are performing a financial plan for the tribe’s long-range transportation plan.

Table 2. Where to Find Financial Information

Funding Stream Decision-Maker Contact for Revenue Estimates
Indian Reservation Roads Tribal Government FLH Division
Park Roads, Public Lands Roads,
Refuge Roads
FHWA Headquarters FLH Division
FHWA Formula Programs State DOT FHWA State Division
FHWA Grant Programs FHWA Headquarters FHWA State Division
Tribal Transit Program Tribal Government FTA Region
Other FTA Programs State DOT/Transit Agency FTA Region
State or Regional Funding State DOT State DOT, MPO, RPO
Tribal General Funds Tribal Government Tribal Treasury
Fees (i.e. vehicle fees, parking, transit fares) Tribal Government Tribal Treasury

 

There are a number of places where you can learn about funding streams available to you:

1. Reference old documents. You should check the following sources for information about funding streams that have been used in the past. If a funding stream has been used in the past, it is likely available again:

2.Understand the Bureau of Indian Affairs Department of Transportation (BIA-DOT) process. Be sure you fully understand the BIA-DOT funding and project prioritization process. Many tribes obtain their IRR funds through BIA-DOT, while others sign compacts with the Federal Highway Administration’s Federal Lands Highway Division. You should work with BIA-DOT Region representatives to obtain information about the IRR Program.

3.Check with the tribal treasury. Every tribe has a person responsible for collecting and disbursing revenue collected by the tribal government (this person’s title will vary). Some types of revenue collected by the tribe may be reserved for transportation uses or be given preference for use on transportation projects. Fares collected on buses are a good example of revenue that is reserved for spending on transportation—in this case to operate the bus. Another example of revenue that might give preference to transportation projects could be money collected from parking meters or decals.

4.Inquire with the MPO, RPO, and State DOT. Although you are not required to do so, the State DOT and MPO, or RPO (if applicable) in your area may have useful information for you. Those agencies may be aware of State and local funding streams that could be used by the tribe. Further, they may have an interest in using funding streams under their control for projects on or near tribal lands. By building a long-term partnership, your tribe will be positioned to maximize its share of transportation funding.

5.Learn about programs offered by FHWA, FLH, and FTA. To understand Federal funding streams, you should inquire with a number of different offices. Be sure to ask about both formula-based programs and discretionary grants. You should work with the FHWA Division in your State and the FLH Division in your region to understand the availability of grant programs.

6. Make decisions about applying for grants. Before proceeding, you should have a serious discussion about the feasibility of applying for discretionary grants. You should carefully weigh a number of factors to help decide if making an application is worth the time and effort. Some factors include:

7. Investigate innovative financing streams. As discussed earlier in this module, there are potentially a number of ways that tribes can borrow money to build needed infrastructure. However, the decision to borrow money should not be taken lightly. Some important considerations are:

Practice While You Learn!

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

Funding Stream Program Officer Eligible
Project Types
Year 1 Revenue 20-year Total
Indian Reservation Roads FHWA Federal Lands      
Tribal Transit Program FTA      
Surface Transportation Program State DOT      
National Scenic Byways Program FHWA HQ      
Safe Routes to School State DOT      
Tribe General Fund Tribe      

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.

Part B. Fill in funding eligibility. For each funding stream, write down the eligible project types for that funding stream. Funding eligibility can vary substantially. If you are unclear on eligibility, ask the program officer for more information. It is important that you understand the types of projects each funding stream can be used for, so that you can match funding to projects later in the process. Some common types of eligible projects are shown below:

Roadways—Building roads for the first time or upgrading the roadway.

Bridge—Building roads that are raised above ground level. Bridges cross bodies of water, but also can cross over other roads (an overpass), environmentally sensitive land, or culturally important land.

Maintenance—Funds used to keep roads and bridges in a state of good repair.

Safety—Money used to redesign, upgrade, or add signals on a road that is a safety hazard.

Transit—Purchasing vehicles and operating them on a set route and schedule.

Paratransit—Purchasing vehicles and operating them upon request of the passenger. Generally this service is reserved for disabled people, those needing transportation to medical appointments, or people living in sparsely populated areas.

Bicycle/Pedestrian—Infrastructure for bicyclists and pedestrians, such as bike paths and sidewalks. This project type can often include trails and equestrian facilities.

Practice While You Learn!

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

Funding Stream Program Officer Eligible
Project Types
Year 1 Revenue 20-year Total
Indian Reservation Roads FHWA Federal Lands Roadways, Bridge, Maintenance, Safety    
Tribal Transit Program FTA Transit, Paratransit    
Surface Transportation Program State DOT Roads, Safety, Transit, Maintenance, Bicycle/Pedestrian    
National Scenic Byways Program FHWA HQ Roadways, Safety    
Safe Routes to School State DOT Safety, Bicycle/Pedestrian    
Tribe General Fund Tribe Any    

Part C. Obtain financial information. For each of the funding streams in your worksheet, you will now look deeper into the amount of money each will produce. Each funding stream has a program officer who can help you understand how much funding you can expect over the next year.

Inquire with responsible agencies for next year’s expected funding. Talk with program officers at agencies that distribute transportation funding to learn about funding for the next fiscal year. Be sure you understand the steps required to obtain the funds—some programs require you to apply or meet certain criteria. It is critical that you obtain a dollar figure for funding available through each program.

Inquire about funding trends. Program officers may be able to counsel you on how much funding will be available in future fiscal years. If possible, ask the program officer how much money will be available in two, five, and ten years from now.

Practice While You Learn!

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

Funding Stream Program Officer Eligible
Project Types
Year 1 Revenue 20-year Total
Indian Reservation Roads FHWA Federal Lands Roadways, Bridge, Maintenance, Safety $920,000  
Tribal Transit Program FTA Transit, Paratransit $150,000  
Surface Transportation Program State DOT Roads, Safety, Transit, Maintenance, Bicycle/Pedestrian $15,000,000  
National Scenic Byways Program FHWA HQ Roadways, Safety $0  
Safe Routes to School State DOT Safety, Bicycle/Pedestrian $100,000  
Tribe General Fund Tribe Any $250,000  

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.

Step 2—Estimate Future Revenue

Table 3. Example of Annual Projection of IRR Funding

Year Funding Increase
1 $920,000
2 $947,600 3%
3 $976,028 3%
4 $1,005,309 3%
5 $1,035,468 3%
6 $1,035,468 0%
7 $1,035,468 0%
8 $1,035,468 0%
9 $1,035,468 0%
10 $1,035,468 0%
11 $1,035,468 0%
12 $1,035,468 0%
13 $1,035,468 0%
14 $1,035,468 0%
15 $1,035,468 0%
16 $1,035,468 0%
17 $1,035,468 0%
18 $1,035,468 0%
19 $1,035,468 0%
20 $1,035,468 0%
Total $20,416,425  

In Step 1, you identified revenue sources and collected information about the level of funding you can expect in the immediate future. In Step 2, you will use the information collected to project how much money will be available to your tribe over the next twenty years. Since tribal long-range transportation plans must be at least twenty years in duration, we need financial information that looks at least that far into the future.
It is impossible to predict future revenue with 100% accuracy. Your goal is to use the best available information to make an educated guess about the amount of funding the tribe will have to spend on transportation. There are essentially four types of funding:

Annual funds—Annual funding programs are those that make available funding each year to the tribe. This is the most common type of funding stream. To estimate funding over a 20-year timeframe, simply multiply the figure shown for Year 1 by twenty. If your program officer has indicated the funding stream will increase over time, you can use a spreadsheet to gradually increase the level of funding (the same spreadsheet can be used to decrease the funding stream over time too). In the example shown in Table 3, the base amount is $100,000. You expect a 3% increase in funding over the next four years. Beyond that, you do not have any information about rates of increase/decrease, so you assume the revenue stream will be flat (0% change).

Using the Funding Inventory Worksheet, enter the amount of funding you expect to receive from each program in column 5.

 

 

Practice While You Learn!

Step 2

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

Funding Inventory Worksheet

Funding Stream Program Officer Eligible
Project Types
Year 1 Revenue 20-year Total
Indian Reservation Roads FHWA Federal Lands Roadways, Bridge, Maintenance, Safety $920,000 $20,416,000
Tribal Transit Program FTA Transit, Paratransit $150,000 $900,000
Surface Transportation Program State DOT Roads, Safety, Transit, Maintenance, Bicycle/Pedestrian $15,000,000 $38,000,000
National Scenic Byways Program FHWA HQ Roadways, Safety $0 $0
Safe Routes to School State DOT Safety, Bicycle/Pedestrian $100,000 $100,000
Tribe General Fund Tribe Any $250,000 $4,552,000

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.

Step 3—Match Funding to Projects

During Steps 1 and 2, you inventoried funding streams and estimated their value over the next twenty years. In Step 3, you will use this information to match projects to funding. You will need access to your completed Funding Inventory Worksheet (completed in step 2) and the Prioritized Project List (please see the Project Prioritization module).

The Project Matching Worksheet is shown below. From the Prioritized Project List, enter the project name, project type, and total cost (columns A through D). Next, copy all of the eligible funding streams from the Funding Inventory Worksheet into column E.

Now it is time to actually match funding to the project. Here is the general sequence of how to make decisions on matching:

  1. Apply any partner funds reserved for this project.
  2. Apply any one-time grants that are reserved for this project.
  3. Apply any one-time grants that are eligible uses (eligible uses are found on the Funding Inventory Worksheet) under that program.
  4. Deplete the largest eligible funding stream.
  5. Move on to the second-largest eligible funding stream.

Once you have made a decision on how to fund the project, enter the amount of money applied to the project in column F, “Funding Allocation from this Stream.”

Next, subtract the total value of the funding stream (found on the Funding Inventory Worksheet) from the amount of money shown in Column F. The result is the remaining budget for that funding stream. Show the remaining amount in Column G.

You will repeat the process for the second highest priority project. When you are done allocating funds, you can view your remaining funding in the far right column for project #1. Keep subtracting allocated funding from the remaining balance.

Table 4. Project Matching Worksheet

A B C D E F G
Priority Project Name Project Type Cost Funding Stream Funding Allocation from this Stream Remaining Funding in This Stream
1 Project #1   $ Stream #1    
  Stream #2    
Stream #3    
Stream #4    
Stream #5    
2 Project #2   $ Stream #1    
  Stream #2    
Stream #3    
Stream #4    
Stream #5    


Practice While You Learn!

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:

Funding Stream Program Officer Eligible
Project Types
Year 1 Revenue 20-year Revenue
Indian Reservation Roads FHWA Federal Lands Roadways, Bridge, Maintenance, Safety $920,000 $20,416,000
Tribal Transit Program FTA Transit, Paratransit $150,000 $900,000
Surface Transportation Program State DOT Roads, Safety, Transit, Bicycle/Pedestrian $15,000,000 $38,000,000
National Scenic Byways Program FHWA HQ Roadways, Safety $0 $0
Safe Routes to School State DOT Safety, Bicycle/Pedestrian $100,000 $100,000
Tribe General Fund Tribe Any $250,000 $4,552,000

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.

Practice While You Learn!

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.

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
1 New 4-Lane Highway Road $45,000,000 Indian Reservation Roads $7,000,000 $13,416,000
  Tribal Transit Program $900,000
Surface Transportation Program $38,000,000 $0
National Scenic Byways Program $0
Safe Routes to School $100,000
Tribe General Fund $0 $4,552,000

 

Practice While You Learn!

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.
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
2 Pave 20 miles of gravel roads Road $20,000,000 Indian Reservation Roads $13,000,000 $416,000
  Tribal Transit Program $900,000
Surface Transportation Program $0 $0
National Scenic Byways Program $0 $0
Safe Routes to School $100,000
Tribe General Fund $4,000,000 $552,000

 

Practice While You Learn!

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

Practice While You Learn!

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

Practice While You Learn!

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.
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
5 Sidewalk to Tribal School Safety $50,000 Indian Reservation Roads $16,000
  Tribal Transit Program $0
Surface Transportation Program $0 $0
National Scenic Byways Program $0
Safe Routes to School $50,000 $50,000
Tribe General Fund $0 $152,000

 

Practice While You Learn!

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.

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
6 Parking and Safety on Scenic Roadway Road $1,500,000 Indian Reservation Roads $16,000
  Tribal Transit Program $0
Surface Transportation Program $0
National Scenic Byways Program $0 $0
Safe Routes to School $50,000
Tribe General Fund $0 $152,000

 

Practice While You Learn!

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.

Step 4—Write the Financial Plan

It is time to write up a summary of the decisions you have made. You don’t need to replicate all of the worksheets used in the process—although that would be perfectly acceptable. Your plan should generate tables and text discussion on:

Unfunded Projects List

Not all of the tribe’s needed projects will be able to be funded using available revenue. The projects that could not be paid for should be placed on an “Unfunded Needs List.” The Needs List serves three purposes. First, it places projects in line to receive any unexpected funding that comes in to the tribe. Second, the List should be shared with partners at local governments, the State DOT, and the MPO. Third, the List should be filed with the BIA for consideration under other funding streams.

Practice While You Learn!

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

Project Name Cost
Pave 3 miles of gravel roads $3,000,000
Transit service for years 7-20 $2,100,000
One intersection improvement $400,000

Remaining Funds

An important component of the financial plan is to discuss what you will do with funds that could not be committed to projects. There will always be remaining money, because the value of funding streams available and the price of projects you prioritize are different. Projects should not be partially funded.

Practice While You Learn!

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

Funding Stream

Amount

Disposition

Indian Reservation Roads

$16,000

Reserve

Tribe General Funds

$152,000

Safety Boxed Funds

Safe Routes to School

$50,000

Safety Boxed Funds

Updated: 12/19/2013
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