Appendix B--Fiscal Constraint of Transportation Plans
and Programs [Revised]
``Reasonably
Available'' Future Revenues and ``Available or Committed'' Funds
Changes
in Revenues or Costs After the Metropolitan Transportation Plan, TIP, or STIP
are Adopted
System
Preservation, Operations, and Maintenance Costs
Statewide
and Metropolitan Transportation Improvement Program (STIP and TIP)
Metropolitan
Transportation Plan
Post and review comments on this section
For over 40 years, the Congress has directed that federally-
funded highway and transit projects must flow from metropolitan and
statewide transportation planning processes (pursuant to 23 U.S.C.
134-135 and 49 U.S.C. 5303-5304). The Congress further refined and
strengthened the planning process as the foundation for project
decisions when it first enacted fiscal constraint provisions for
transportation plans and programs as part of the Intermodal Surface
Transportation Efficiency Act of 1991 (ISTEA).
Fiscal constraint requires that revenues (Federal, State, local,
and private) in transportation planning and programming are
identified and ``reasonably expected to be available'' to implement
projects required to be included in the metropolitan transportation
plan, metropolitan Transportation Improvement Program (TIP), and the
Statewide Transportation Improvement Program (STIP), while providing
for the operation and maintenance of the existing highway and
transit systems. Fiscal constraint has remained a key component of
transportation plan and program development with the enactment of
the Transportation Equity Act for the 21st Century (TEA-21) in 1998
and the Safe, Accountable, Flexible, Efficient Transportation Equity
Act: A Legacy for Users (SAFETEA-LU) on August 10, 2005.
The fiscal constraint requirement is intended to ensure that
metropolitan transportation plans, TIPs, and STIPs reflect realistic
assumptions about future revenues, rather than extensive lists
including more projects than could realistically be completed with
available revenues. Importantly, for the purposes of developing the
metropolitan transportation plan and TIP, the MPO, State DOT, and
public transportation operator(s) must cooperatively develop
estimates of funds that will be available to support plan and
program implementation [23 U.S.C. 134 (i)(2)(C), 23 U.S.C.
134(j)(1)(C), 49 U.S.C. 5301(a)(1), 49 U.S.C. 5303(j)(2)(C), and 49
U.S.C. 5303(j)(2)(C)]. In addition, the Clean Air Act's
transportation conformity regulations specify that a conformity
determination can only be made on a fiscally constrained
metropolitan transportation plan and TIP [40 CFR 93.108]. Given this
intent, compliance with the fiscal constraint requirement entails an
analysis of revenues and costs to address the following fundamental
question:
``Will the revenues (Federal, State, local, and private)
identified in the TIP, STIP, or metropolitan transportation plan
cover the anticipated costs of the projects included in this TIP,
STIP, or metropolitan transportation plan, along with operation and
maintenance of the existing system?''
If the projected revenues are sufficient to cover the costs, and
the estimates of both revenues and costs are reasonable, then the
fiscal constraint requirement has been satisfied. Additionally,
projects in air quality nonattainment and maintenance areas can be
included in the first two years of the TIP and STIP only if funds
are ``available or committed.''
The FHWA and the FTA also realize the challenges associated with
forecasting project and program costs and revenues, particularly in
the ``outer years'' of a metropolitan transportation plan.
Therefore, the FHWA/FTA provide a great deal of flexibility in
demonstrating fiscal constraint. For example, in years when a
Federal transportation authorization bill is not yet enacted, State
DOTs, MPOs, and public transportation operators may project and
assume Federal revenues for the ``outer years'' based on a trend
line projection. Additional information is provided in the following
sections and the ``Questions and Answers.''
Post and view comments on this section
Revenue forecasts to support projects required to be included in
a metropolitan transportation plan, TIP, and STIP may take into
account new funding sources that are ``reasonably expected to be
available.'' New funding sources are revenues that do not currently
exist or that may require additional steps before the State DOT,
MPO, or public transportation operator can commit such funding to
transportation projects. As first required in ISTEA, these planned
new revenue sources must be clearly identified.
Future revenues may be projected based on historic trends,
including consideration of past legislative or executive actions.
The level of uncertainty in projections based on historical trends
is generally greatest for revenues in the ``outer years'' of a
metropolitan transportation plan (i.e., those beyond the first 10
years of the metropolitan transportation plan). Additionally, for
purposes of developing the financial plan to support the
metropolitan transportation plan, the FHWA and the FTA encourage the
use of aggregate ``cost ranges/cost bands'' to define costs in the
outer years of the metropolitan transportation plan, with the caveat
that the future funding sources must be ``reasonably available.''
To support air quality planning under the 1990 Clean Air Act
Amendments, a special requirement has been placed on air quality
nonattainment and maintenance areas, as designated by the U. S.
Environmental Protection Agency (EPA). Specifically, projects in air
quality nonattainment and maintenance areas can be included in the
first two years of the TIP and STIP only if funds are ``available or
committed.'' Additionally, EPA's transportation conformity
regulations specify that an air quality conformity determination can
only be made on a fiscally constrained metropolitan transportation
plan and TIP [40 CFR 93.108]. Therefore, nonattainment and
maintenance areas may not rely upon proposed new taxes or other new
revenue sources for the first two years of the TIP and STIP. Thus,
new funding from a proposed gas tax increase, a proposed regional
sales tax, or a major funding increase still under debate would not
qualify as``available or committed'' until it has been enacted by legislation
or referendum.
Post and view comments on this section
In cases that the FHWA and the FTA find a metropolitan
transportation plan or TIP/STIP to be fiscally constrained and a
revenue source is subsequently removed (i.e., by legislative or
administrative actions), the FHWA and the FTA will not withdraw the
original determination of fiscal constraint. In such cases, the FHWA
and the FTA will require the State DOT or MPO to identify
alternative sources of revenue as soon as possible. Importantly, the
FHWA and FTA will not act on new or amended metropolitan
transportation plan, TIP, or STIP unless they reflect the changed
revenue situation.
The same policy applies if project costs or operations/
maintenance cost estimates change after a metropolitan
transportation plan, TIP, or STIP are adopted. Such a change in cost
estimates does not invalidate the adopted transportation plan or
program. However, the revised costs must be provided in new or
amended metropolitan transportation plan, TIP, or STIP. The FHWA and
the FTA will not approve new or amended STIPs that are based on
outdated or invalid cost estimates.
Post and view comments on this section
Since the enactment of ISTEA in 1991, fiscal constraint has
encompassed operation and maintenance (O&M) of the system, as well
as capital projects. On one hand, O&M activities typically do not
involve Federal funds and are not listed individually in a
metropolitan transportation plan, TIP, or STIP. However, the
financial plans that support the metropolitan and statewide
transportation planning processes must assess the adequacy of all
sources of capital and O&M investment necessary to ensure the
preservation of the existing transportation system, including
provisions for operational improvements, resurfacing, restoration,
and rehabilitation of existing and future major roadways, as well as
operations, maintenance, modernization, and rehabilitation of
existing and future transit facilities. To support this assessment,
the FHWA and the FTA expect that the State DOT, MPO, and public
transportation operator(s) will provide credible cost estimates.
However, the FHWA and FTA largely defer to State and local
governments and public transportation operators to define the
specific level of systems O&M that is appropriate, since the FHWA
and the FTA do not mandate a particular, specific level of O&M.
Instead, the Federal government accepts that State and local
governments, MPOs, and public transportation operators will adjust
their O&M from year-to-year and decade-to-decade, based on community
desires and requirements established through an open transportation
planning process.
Outside the transportation planning process, there also is a
longstanding Federal requirement that States properly maintain, or
cause to be maintained, any projects constructed under the Federal-
aid Highway Program [23 U.S.C. 116]. However, beyond this basic
requirement of proper maintenance, the FHWA and the FTA do not
question State and local government, MPO, or public transportation
operator decisions on specific uses of funding or question State and
local priorities that balance the operation and maintenance of the
existing transportation system with needs for transportation system
expansion. Instead, the FHWA and the FTA ensure that the process
used by the State DOT, MPO, and public transportation operator(s) to
establish priorities is consistent with the transportation planning
statute and regulations and that the funding sources identified to
address these priorities are ``reasonably expected to be
available.'' In addition, consistent with regulations implementing
the Clean Air Act, the FHWA and the FTA will also continue to assure
that priority is given to the timely implementation of
transportation control measures in the air quality State
Implementation Plan [40 CFR 93.103 and 40 CFR 93.116].
There is a subtle yet important distinction between projects or
project phases listed in the TIP/STIP and the financial plan/
financial information that supports the TIP/STIP. It is not required
that all highway and transit O&M projects be included in the TIP/
STIP, per se. However, these systems-level O&M costs and revenues
must be reflected in the financial plan that accompanies and
supports the TIP/STIP. Similarly, the O&M costs reflected in the
financial plan for the first two years of the TIP/STIP in
nonattainment and maintenance areas are not subject to the
``available or committed'' requirement. Rather, they must be
``reasonably expected to be available.''
Post and view comments on ‘Funding Gaps’
Substantial investments have been made in highway and transit
infrastructure. The short- and long-term needs for system
preservation, operation, and maintenance can be enormous. Simply
maintaining the existing system in a State or large metropolitan
area can demand billions of dollars in investments, while system
expansion demands investments of a similar scale. At times, the
combination of these competing demands can cause temporary
shortfalls in a State's or MPO's budget. To the extent there appear
to be shortfalls, the MPO or State DOT must identify a strategy to
address these funding gaps prior to the adoption of an updated
metropolitan transportation plan, TIP, or STIP (or the amendment of
an existing metropolitan transportation plan, TIP or STIP). The
strategy should include a plan of action that describes the steps
that will be taken to make funding available within the timeframe
shown in the financial plan needed to implement the projects in the
metropolitan transportation plan. The strategy may rely upon the
past history of the State, MPO, or public transportation operator(s)
to obtain funding. If the strategy relies on new funding sources,
the MPO, State, public transportation operator(s) must demonstrate
that these funds are ``reasonably expected to be available.''
Post and view comments on this section
1. How should Federal and State funding be reflected in the TIP
and STIP?
The Federal funding reflected in the TIP and STIP may be based
on authorization levels for each year of the TIP and/or STIP,
although obligation authority limitations could be utilized as a
more conservative approach. In addition, for federally-funded
projects, the TIP and/or STIP must identify the appropriate
``matched funds,'' by source. Importantly, because the State DOT
will be involved in the development of all TIPs (as well as the
STIP), the cumulative total of the State/Federal funds in the TIPs
and STIP must not exceed, on an annual basis, the total State/
Federal funds reasonably available to the State.
Financial forecasts (for revenues and costs) to develop TIPs and
STIPs (as well as for metropolitan transportation plans) must
utilize an inflation rate to reflect ``year of expenditure dollars''
to account for the time-based value of money. The inflation rate(s)
should be based on sound, reasonable financial principles and
information, developed cooperatively by the State DOT, MPOs, and
public transportation operators. To ensure consistency, similar
financial forecasting approaches should be utilized for all TIPs and
STIPs in a given State. In addition, the financial forecast
approaches, assumptions, and results should be clear and well-
documented.
2. How should transit O&M activities and costs be treated in the
TIP and STIP and their supporting financial plans?
Post and view comments on this section
With the exception of federally-supported transit operating
costs in urbanized areas with populations less than 200,000, transit
O&M activities are not required to be listed individually in the
TIP, STIP, and metropolitan transportation plan. However, the
supporting financial plans for the TIP, STIP, and metropolitan
transportation plan must demonstrate the ability of operators to
adequately operate and maintain their existing systems, as well as
the new projects and strategies listed in the TIP, STIP, and
metropolitan transportation plan. ``Adequate'' levels of transit
service and associated O&M costs are determined by local officials,
who may decide to defer maintenance and/or increase operating
revenues as a means of balancing their budgets.
3. How exact should the funding estimates for O&M be for the
financial plans/information that support the TIP and STIP?
Post and view comments on this section
Revenue and cost estimates for O&M will be more general than
estimates for individual projects. For the financial plan that must
accompany the TIP, the MPO may rely on the information contained in
the financial plan that supports the metropolitan transportation
plan to develop four-year ``snapshot'' estimates of O&M funding
sources and costs. Similarly for the STIP, the State DOT may utilize
other documents (e.g., the long-range statewide transportation plan
and/or State DOT budget information) to demonstrate sufficient
resources for the operations and maintenance of the State surface
transportation system for at least the time period covered by the
STIP. O&M involving local and/or State funds may be shown as a
``grouped line item'' in the financial plans for the TIP and STIP.
The FHWA and the FTA generally rely on the overall O&M
information and analysis provided in support of the metropolitan and
statewide transportation plans, including information on substantial
changes to revenue streams for short-term (i.e., programming-level)
operations and maintenance expenditures. It is also reasonable to
rely on supplemental State DOT information for non-metropolitan
areas if similar information and/or analysis are not contained in a
financial plan for the long-range statewide transportation plan or
the TIP and STIP. Additionally, knowledge of local and/or State
funding levels and previous year expenditures related to operations
and maintenance compared to systems-level performance measures
(e.g., pavement and/or bridge conditions) can provide insightful
information on the reasonableness of future local and/or State
investments on highway and transit O&M.
Possible sources of data for O&M revenues and costs for States
and MPOs to use in collecting this information for the State and
local highway systems include the Highway Statistics
publication, capital improvement programs or budgets, and pavement
management systems. For transit O&M costs, the best data sources
likely are the public transportation operators and/or the units of
government that are responsible for the public transit system(s), as
well as the information contained in FTA's financial capacity
reviews conducted for its Section 5307 (Urbanized Formula) and
Section 5309 (New Starts, Bus, and Rail Modernization) programs.
The key is for State DOTs, MPOs, and public transportation operators
(via the ``3-C'' planning process) to coordinate with the various
local agencies to determine the best sources of these data.
As a condition for applying for grants under FTA's Section 5307
and Section 5309 programs, public transportation operators are
required to self-certify their financial capacity to pay current
costs from existing revenues and to meet expansion costs in addition
to their existing operations from projected revenues. The FTA
assesses the adequacy of financial capacity self-certifications at
the TIP/STIP approval stage and for any capital grant approval
(FTA's Capital Investment Grant program in 49 U.S.C. 5309 includes
additional financial assessment requirements). Similar to the joint
FHWA/FTA certification of the metropolitan panning processes in
Transportation Management Areas, deficiencies are recorded for
grantees that do not meet financial capacity requirements. The
requirements, set forth in FTA Circular 7800.1A (Financial Capacity
Policy),\3\ call for public transportation operators to ``* *
*maintain and operate current assets, and to operate and maintain
the new assets on the same basis, providing at least the same level
of service for at least one replacement cycle, or 20 years, as
appropriate.'' Public transportation operators could attach their
financial capacity self-certifications, with appropriate supporting
information, to the financial plan supporting the TIP/STIP.
4. Must innovative finance mechanisms be reflected in the TIP/
STIP? To what extent must Advance Construction (AC) be shown in the
TIP/STIP?
Post and view comments on this section
Yes, innovative financing techniques (e.g., tolls, Grant
Anticipated Revenue Vehicles (GARVEE bonds), State Infrastructure
Banks (SIBs), and Transportation Infrastructure Finance and
Innovation Act (TIFIA)) must be reflected in the TIP and/or STIP.
Additional information on innovative finance can be obtained via the
Internet at the following FHWA and FTA Web sites:
FHWA Innovative Finance Guidance http://www.fhwa.dot.gov/innovativefinance/ifguidnc.htm
FTA Innovative Finance Guidance http://www.fta.dot.gov/1263--ENG--HTML.htm
FTA Flexible Funds Guidance http://www.fta.dot.gov/1254_ENG_HTML.htm
Advance Construction (AC) and partial conversion of advanced
construction (PCAC) are cash flow management tools that allow States
to begin projects with their own funds and only later convert these
projects to Federal assistance. AC allows a State to request and
receive approval to construct Federal-aid projects in advance of the
apportionment of authorized Federal-aid funds. Typically, States (at
their discretion) ``convert'' AC projects to Federal-aid at any time
sufficient Federal-aid funds and obligation authority are available
at one time. Under PCAC, a State (at its discretion) partially
``converts'' AC projects to Federal-aid funds in stages.
Title 23, U.S.C., section 115(c) specifies that an AC project
application may be approved ``* * * only if the project is included
in the STIP.'' Because AC does not constitute a commitment of
Federal funds to a project, the financial plan and/or funding
information for the TIP and STIP, respectively, need to demonstrate
sufficient non-Federal revenues to provide 100 percent funding for
the projects listed as ``AC'' in the TIP and/or STIP. The total
amount of allowable AC in the TIP and/or STIP is determined by: (a)
The State's current unobligated balance of apportionments; and (b)
the amount of Federal funds anticipated in the subsequent fiscal
years of an approved STIP.
In practice, an AC project/project phase essentially is included
in the TIP and/or STIP at two different points in time: (a) As State
or local funds prior to the initial authorization of the AC project
(including an assurance from the State that adequate State funds are
available to ``front'' the cost of the project/project phase); and
(b) prior to the authorization of the project/project phase to
``convert'' it from AC to a Federal-aid funding program (including a
demonstration from the State that this ``conversion'' maintains
fiscal constraint with other Federal-aid projects). Therefore, in
the year of an AC project's ``conversion,'' the project is
considered as both a State revenue source and a Federal-aid debit.
Similarly, Federal funding utilized to make payments on debt
instruments such as GARVEE bonds must be deducted from the amounts
of Federal funds available for new federally-funded projects. In
either case, the TIP and/or STIP should show the obligation of
Federal-aid category funds and the resultant increase in available
non-Federal funds.
5. To what extent can future Federal program funds be assumed
for developing TIPs and STIPs, particularly beyond the current
authorization or appropriations period?
Post and view comments on this section
When the TIP or STIP period extends beyond the current
authorization period for Federal program funds, ``available'' funds
may include an extrapolation based on historic authorizations of
Federal funds that are distributed by formula. For Federal funds
that are distributed on a discretionary basis (including FTA Section
5309, earmarks, and congressionally-designated funding), any funding
beyond that currently authorized and targeted to the area may be
considered as reasonably available, if past history supports such
funding levels.
Therefore, when determining future year authorizations/
apportionments, the growth rate as determined through the previous
authorizations can be used to approximate the future annual growth
rate of Federal authorizations. For example, since the TEA-21 was a
six-year bill, the growth rate could be determined over the entire
authorization period (fiscal year (FY) 1998-FY 2003), but excluding
the Revenue Aligned Budget Authority from the calculations.
Upon the enactment of new authorizing legislation, State DOTs
(in conjunction with MPOs and public transportation operators) must
utilize the actual authorization levels and individual discretionary
project funding amounts in the development of any updated TIP/STIP
or amendment of an existing TIP/STIP.
Post and view comments on ‘Metropolitan Transportation Plan’
6. How should revenues from ``public-private partnerships'' be
treated?
``Public-private partnerships'' (PPP) are an emerging area
related to transportation finance that refer to contractual
agreements formed between a public agency and private sector entity
that allow for greater private sector participation in the delivery
of transportation projects. Traditionally, private sector
participation has been limited to separate planning, design, or
construction contracts as a fee-for-service arrangement, based on
the public agency's specifications.
Expanding the private sector role allows the public agencies to tap
private sector technical, management, and financial resources in new
ways to achieve certain public agency objectives (e.g., greater cost
and schedule certainty, supplementing in-house staff, innovative
technology applications, specialized expertise, or access to private
capital). The private partner can expand its business opportunities
in return for assuming these new or expanded responsibilities and
risks. Additional information on new PPP approaches to project
delivery can be obtained via the Internet at http://www.fhwa.dot.gov/ppp/index.htm
The PPP projects often are undertaken to supplement conventional
procurement practices by taking additional revenue sources and
mixing a variety of funding sources, thereby reducing demands on
constrained public budgets. Some of the revenue sources used to
support PPPs include: (a) Shareholder equity; (b) grant anticipation
bonds (GARVEEs and Grant Anticipation Notes); (c) general obligation
bonds; (d) SIB loans; (e) direct user charges (tolls and transit
fares) leveraged to obtain bonds; and (f) other public agency
dedicated revenue streams made available to a private franchisee or
concessionaire (e.g., leases, direct user charges from other tolled
facilities, and shadow tolls). Additional information on these
financing approaches and tools is available online from the American
Association of State and Transportation Officials at http://www.InnovativeFinance.org. Within the financial plan that supports the metropolitan
transportation plan, a prospective PPP should be addressed on a
case-by-case basis, reflected as a source that is ``reasonably
expected to be available.''
7. How should future costs be estimated and documented?
Post and view comments on ‘Metropolitan Transportation Plan’
Financial forecasts (for revenues and costs) to support the
metropolitan transportation plan (as well as the TIP and STIP) must
utilize an inflation rate to reflect ``year of expenditure dollars''
to account for the time-based value of money. The inflation rate(s)
should be based on sound, reasonable financial principles and
information, developed cooperatively by the MPO, State DOT, and
public transportation operator(s). To ensure consistency, similar
financial forecasting approaches should be utilized for the
metropolitan transportation plan and TIP in a given MPO.
Cost forecasts can be established in a number of ways. For
example, O&M can be based on historic data applied on a per-lane
mile and functional classification basis or an annual lump sum
basis. Capital costs can be based on historic costs for: (a) An
interchange; (b) new construction on new rights-of-way; (c)
structure (number, type, and deck square footage (area) for various
structure types); (d) transit vehicles for rolling stock
procurement; or (e) widening and/or reconstruction, based on the
extent of the project. In addition, capital cost estimates can be
based on project-specific estimates contained in planning,
environmental, or engineering studies, and updated as new
information is prepared as part of project development.
Transit operating costs can be estimated by general mode type on
a revenue-mile or passenger-mile basis, in accordance with the
following principles: (a) Reflect historic operations; (b)
anticipate future operations; (c) address all functional
responsibilities of the transit property; (d) focus on major cost
components; (e) apply consistent level of service data: (f) apply
peer transit property experience; (g) apply readily available
information; (h) provide fully-allocated costs for use in cost-
effectiveness analysis; (i) structure for sensitivity analyses; and
(j) document model theory and application [for additional
information, see ``Chapter 2: Principles of Operating and
Maintenance Cost Modeling'' in Estimation of Operating and
Maintenance Costs for Transit Systems, available on the FTA Web site
At http://www.fta.dot.gov/transit_data_info/reports_publications/publications/finance/estimation_operating/1210_2455_ENG_HTML.htm. Transit system capital costs involve the estimation of projection of future construction. Special consideration should be
given to factors such as design changes, component upgrades,
lengthened construction schedules, and the effects of general price
inflation.
Revenues and related cost estimates for O&M should be based on a
reasonable, documented process. Some accepted practices include:
Trend analysis (a functional analysis based on
expenditures over a given duration, in which costs or revenues are
increased by inflation, as well as a growth percentage based on
historic levels). This analysis could be linear or exponential. When
using this approach, however, it is important to be aware of new
facilities or improvements to existing facilities. Transit
operations and maintenance costs will vary with the average age of
the bus or rail car fleet.
Cost per unit of service (e.g., lane-mile costs,
centerline mile costs, traffic signal cost, transit peak vehicles by
vehicle type, revenue hours, and vehicle-miles by vehicle type).
Regardless of the methodology employed, the assumptions should
be adequately documented by the State DOT, the MPO, and the public
transportation operator, ideally reflected in the State DOT and the
MPO self-certification statements on the statewide and metropolitan
transportation planning processes.
The FHWA and the FTA recognize that estimating current and
reasonably available new revenues and required operations and
maintenance costs over a 20-year planning horizon is not an ``exact
science.'' To provide discipline and rigor, public agencies should
attempt to be as realistic as possible, as well as ensure that all
costs assumptions are publicly documented.
8. Does the financial plan need to include O&M costs for the
entire transportation system or simply the portion for which the
State is responsible? How should operations and maintenance be
reflected in the financial plan?
Post and view comments on ‘Metropolitan Transportation Plan’
Titles 23, U.S.C., Section 134(i)(2)(D) and 49, U.S.C., Section
5303(i)(2)(D) require development of a metropolitan transportation
plan that includes capital investment and other strategies to
preserve the existing and projected future infrastructure needs. It
also requires operational and management strategies [23 U.S.C.
134(i)(2)(E) and 49 U.S.C. 5303(i)(2)(E)] to improve the performance
of existing transportation facilities. The metropolitan
transportation plan also must contain a financial plan that
demonstrates how the adopted transportation plan can be implemented,
indicating resources from public and private sources that are
reasonable expected to be made available to carry out the
transportation plan [23 U.S.C. 134(i)(2)(C) and 49 U.S.C.
5303(i)(2)(C)]. Therefore, the financial plan that supports the
metropolitan transportation plan must reflect the estimated costs of
constructing, operating, and maintaining the total (existing plus
planned) transportation system, including portions of the system
owned and operated by local governments.
Post and view comments on ‘Other Issues’
9. What are some examples of ``reasonable'' and ``not
reasonable'' revenue forecasting assumptions?
Whether or not a funding source is reasonable may require a
judgment call. Illustrative (but not all-inclusive) examples of
``reasonable'' and ``not reasonable'' assumptions are highlighted in
the following table. Please note, however, that those described as
``reasonable'' do not necessarily meet the special test of
``available or committed'' funds.
Reasonable....................... A new toll with funds to be dedicated
to a particular project or program
may be reasonable, if supported by
the Governor and there are
indications of other support needed
to enact or institute the toll.
Reasonable....................... A new local gas or sales tax
requiring State legislation is
reasonable if there are indications
of sufficient support to enact the
new tax.
Not reasonable................... Funds from an upcoming ballot
initiative would not be reasonable
if polls indicate strong likelihood
of defeat or there is a history of
repeated defeat of similar ballot
initiatives in recent years.
Not reasonable................... A 25 percent increase in gas tax
revenues over five years is not
reasonable if the increase in the
previous five years was only 15
percent, unless there are special
circumstances to justify and support
a significantly higher increase than
the historic rate.
Not reasonable................... An assumption that the metropolitan
area will receive 30 percent of a
Federal discretionary program (e.g.,
FTA New Starts) is not reasonable if
the area has never received more
than 10 percent in the past, unless
there are special circumstances to
justify and support such an
assumption.
10. What is the connection (if any) between financial plans that
support Statewide and metropolitan transportation plans and programs
and financial/funding information for FHWA major projects and FTA
Capital Investment Grant projects?
In general, the financial plans that support statewide and
metropolitan transportation plans and programs do not need to
contain the specific cash flow schedule information that typically
is included for FHWA major projects (projects with an estimated
total cost of $500 million or more, pursuant to Section 1904 of the
SAFETEA-LU) or FTA Capital Investment Grant program projects.
However, because a large-scale transportation project likely will
have a substantial effect on a Statewide or metropolitan
transportation plan and program, this project-specific cash flow
schedule information can serve as a valuable resource on annual
levels and sources of revenues for developing the financial plans
that support Statewide and metropolitan transportation plans and
programs.
Additional information on financial planning for FHWA major
projects and FTA New Starts projects can be obtained via the
Internet at:
FHWA Financial Plan Guidance (May 23, 2000) http://www.fhwa.dot.gov/programadmin/mega/fplans.htm#fpgmemo
FHWA Major Project Program Cost Estimating Guidance
(June 4, 2004) http://www.fhwa .dot.gov/programadmin/mega/cefinal.htm
Guidance for Transit Financial Plans (June 2000) http://www.fta.dot.gov/documents/gftfp.pdf
``Financial Planning for Transit'' in Procedures and
Technical Methods for Transit Project Planning
Estimation of Operating and Maintenance Costs for
Transit Systems (December 1992) http://www.fta. dot.gov/transit--data--info/reports--publications/publications/finance/1210--ENG--HTML.htm