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Financial Planning

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This summary provides tribal decisionmakers and planners with a brief summary of the process for financial planning for transportation projects. It is based on the module Financial Planning, which is one of twelve modules in the series Transportation Decisionmaking: Information Tools for Tribal Governments produced by the FHWA Office of Planning to educate tribal planners and decisionmakers about the tribal transportation planning process.

What is Financial Planning?

Financial planning is the process of estimating how much money your tribe has to pay for needed transportation improvements. Financial planning involves identifying funding streams available to the tribe, estimating how much money those streams will generate, and matching the available funding to projects. The result of the process is a tribal transportation financial plan. See the Funding Resources module for more information on funding streams available to tribes.

Why is Financial Planning important?

Financial planning is important because it ensures that your tribe is spending its limited transportation dollars on the most important projects. It also helps you start working with your potential partners to secure additional transportation funding for the tribe.

How do you do Financial Planning?

The financial plan should be developed as a part of the long range transportation plan. However, the financial plan cannot be written until all needed projects have been identified and prioritized in the Tribal Transportation Improvement Plan (TTIP) (see the Project Prioritization module for more information on creating this prioritized project list). Once the project list is finalized, financial planning can begin. There are 3 basic steps to developing a financial plan:

Step 1. Identify funding streams

Identifying funding streams involves finding information about potential revenue from sources such as old documents and conversations with the local MPO, State DOT, and tribal treasury or accounting office. Once funding streams have been identified, a determination must be made about what projects are eligible for each funding stream. Finally, an investigation of the amount of money that will come from each funding stream for that year will provide the basis for the financial plan. Funding can come from:

  • Federal sources: Indian Reservation Roads (IRR), FTA’s Tribal Transit Program, other competitive grants through FHWA, BIA, ANA, EPA.
  • State, MPO, and local partners: Joint projects with nearby partners, Safe Routes to School.
  • Tribal sources: Licenses, fees, general revenue, dedicated transportation taxes
  • Innovative financing: GARVEE bonds, Private Activity Bonds (PABs),TIFIA

The “Funding Inventory Worksheet” is a useful resource for keeping track of funding streams, funding eligibility, and available funds.This worksheet is available as Appendix B of the module.

Step 2. Estimate future revenue

Estimating future revenues involves determining how much money will be available through each revenue stream. After obtaining information about funding in the near future, the person in charge of creating the financial plan can estimate how consistent the funding streams will be in the future.The revenue estimate will determine how many projects can be funded.

The “Funding Inventory Worksheet” will also be a useful resource in step 2; it can be used to keep track of the 20-year funding total for each funding stream.

Step 3. Match funding to projects

In this final step the person in charge of developing the plan will determine which projects get funding from what source. The general decisionmaking sequence for matching projects is as follows:

✔ Apply any partner funds reserved for the project.

✔ Apply any one-time grants reserved for the project.

✔ Apply any one-time grants that are “eligible uses.”

✔ Use up the largest eligible funding stream.

The “Project Matching Worksheet” is a useful tool for keeping track of the relevant information available in the prioritized project list, the eligible funding streams identified in the funding inventory worksheet, and the funding allocation from each stream. This information can be used to match eligible funds to needed projects and calculate the remaining funds available in each stream.All worksheets are found in Appendix B of the module.

What will be the outcome?

After going through the steps of financial planning, you will write a financial plan that is a component of your tribe’s long range plan. The financial plan should include:

What are the Training Modules for Tribal Transportation Decisionmaking?

The figure below shows how each of the twelve modules in the series relate to each other.

Each of the training modules is laid out in this graphic of the training module series. At the top of the image is the Introduction to Planning module. Below are three modules, Developing a Long-Range Transportation Plan, Data Collection and Use, and Public Involvement, aligned in a row labeled “planning.” Underneath these modules are two more, Tribal Consultation and Partnering and Leveraging aligned in a row labeled “Tribal Intergovernmental Relations.” Below them are four modules, Developing the Transportation Improvement Program, Funding Resources, Financial Planning, and Project Prioritization, aligned in a row labeled “programming.” In the bottom-most row, labeled “other elements,” are the remaining two modules, Safety and Asset Management. All of the modules are encompassed in a large circle with the rows labeled just outside.

Contacts:

Kenneth Petty, FHWA Office of Planning
Phone: (202) 366-6654
Email: kenneth.petty@dot.gov

Theresa Hutchins, FHWA Office of Planning
Phone: (360) 753-9402
Email: theresa.hutchins@dot.gov

Lorrie Lau, FHWA Office of Planning
Phone: (415) 744-2628
Email: lorrie.lau@dot.gov

Michelle Noch, FHWA Office of Planning
Phone: (202) 366-9206
Email: michelle.noch@dot.gov

Kyle Kitchel, FHWA Western Federal Lands High Division
Phone: (360) 619-7951
Email: kyle.kitchel@dot.gov

Ralph Rizzo, FHWA Resource Center
Phone: (401) 528-4548
Email: ralph.rizzo@dot.gov

Additional Resources

Transportation Planning Capacity Building Website: http://www.planning.dot.gov/focus_tribal.asp

FHWA Tribal Transportation Planning: www.fhwa.dot.gov/planning/processes/tribal/index.cfm

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Updated: 12/19/2013
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