Financial Plans

Financial Plans:

In light of current State Highway Account cash flow difficulties and the expectation that revenues will be significantly lower in future STIP cycles than earlier anticipated, each project sponsor is being asked to prepare a financial plan for every on-system project with un-funded components. With over ten billion of un-funded need in the 2002 STIP, it is unlikely that many projects will be fully STIP funded for a long time. You should assume that there would be no capacity in the 2004 STIP for additional funding, and that new capacity in the 2006 STIP will be for fiscal years 2009/10 and 2010/11.

The financial plan should include:

Expected amount needed to complete the project, by project component.
Fiscal year of delivery.
Source(s) of funding. Consideration needs to be given as to the realistic availability of identified funding. For example, the ITIP currently has an advance of nearly $160 million. The ITIP will have to pay the entire advance back prior to adding new programming. At this time it is unlikely the ITIP will be able to add new programming in the 2004 STIP. If there is capacity for new programming or a proposed project trade, proposed STIP policy will require the new project be placed in fiscal year 2008/09.
Letter of commitment, or intent, from the regional agency for future RIP funding.

The draft STIP Project Financial Plan format identifies committed and planned funding along with regional agency letters of intent where appropriate. Consideration should be given to scope options that fit a usable project within funding that can be secured within two STIP cycles. Please forward updated financial plans to HQ Programming by December 15, 2003.

STIP Project Financial Plan Template

Frequently Asked Questions about Financial Plans:

Is the Project Financial Plan required for all STIP projects or only those "on-system" with un-funded components? What about those with "underfunded" components?

We are asking that you prepare Project Financial Plans only for "on-system" projects with un-funded components. Regarding "underfunded" components, I assume this means components with cost increases since CTC Guidelines disallow partial programming of project components. Projects falling into this category will generally need a PCR followed by STIP Amendment or augmentation of programming in the 2004 STIP.

Is there an expectation that completed Financial Plans can be forwarded to HQ Programming by 12/15 if we don't have fund estimate figure until November 24th? Or do we just assume a "zero STIP" with no new money?

Assume that there will be little to no additional capacity available for the 2004 STIP. Counties with large share advances may even need to delete some programming, while other counties with large unprogrammed balances may be able to add a small amount of programming. Assume that every STIP project, not deleted from the STIP, will need to be delayed from one to three years for financial constraint reasons.

On partnership projects (ITIP/RTIP combined) should the District take lead on completing the form? What about pure RIP projects?

Since these are "on-system" projects where Caltrans is doing the work, you should take the lead to complete the form, even if pure RIP funded. Of course, consultation with regional agency staff will be needed to produce the best plans.

How do we portray possible future funding from sales tax measures when they won't be voted on until November 2004?

If the sales tax is an essential element of future project funding, then you should include that in the plan. Because revenues from a future sales tax are speculative, you should also include a "fallback" option that address possible failure of those future tax measures.

Since the RTPA Board Chairs are being asked to sign the Financial Plans, couldn't that be considered a commitment?

Yes, to a degree it is. When that project was programmed for support, there were expectations that somebody would eventually fund the rest. Since the ITIP only gets 25% of STIP resources and currently has a very large advance, its not realistic to assume that the ITIP will be able to do anything in 2004, and probably little in 2006. The question is: To what degree are the locals committed to the project and are they willing to plan to set aside the funding necessary from future STIPs to get the project through construction.