Chapter 2.6: The Appendix - Summary of Other Documents

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Many components of the financial plan require additional documentation to support the assumptions and forecasts in the plan. The financial plan summarizes, in an appendix, the results of the critical external analyses that directly support the financial plan. The critical analyses include the regional economic forecasts, the financial condition of the sponsor, and the fleet management plans. Additional supporting documents are provided with the submission of the financial plan. These supporting documents are listed in Section 2.7.

2.6.1 Summary of Regional Economic Conditions

Historical data and forecasts of local economic and demographic changes are developed to substantiate the reasonableness of revenue yield and cost estimates. These forecasts provide a check on growth rate assumptions for ridership, local tax revenues, regional inflation and other key variables. Forecasts from independent institutions, such as universities, state agencies and private forecasting firms, are preferred sources of these data. These forecasts include:

  • Population and employment growth estimates;
  • Inflation and interest rate forecasts consistent with assumption in cash flow projections;
  • Economic and land development projections; and
  • The regional demographic or business trends to support 20-year revenue forecasts.
The appendix to the financial plan summarizes the results of the regional economic forecasts including the historical and projected economic condition of the region. It provides tables that summarize, at a minimum, population, employment, personal income and inflation forecasts 20 years into the future. The financial plan is supported by a current regional economic forecast report.

2.6.2 Summary of Financial Condition of the Project Sponsor

Documentation of the financial condition of the sponsoring transit agency and other non-federal financial partners are reported. Documentation of such evidence includes three years of audited financial statements, cash account balances, bond or liquidity test ratios, debt ratings and reports by debt rating agencies, the historical reaction to unexpected financial conditions, the extent of the ongoing capital rehabilitation and replacement program, and the condition of the agency's existing asset base. In addition, evidence of the timely match, obligation, and draw-down of FTA formula resources over the past five to 10 years should be provided.

The appendix provides a short summary of the financial condition of the project sponsor and major funding partners. The summary is substantiated and referenced to other reports and documents related to agency financial condition including at least three years of audited financial statements.

2.6.3 Summary of Fleet Management Plans

FTA requires sponsors of projects in PE and final design to prepare and submit bus and rail fleet management plans apart from the financial plan. The bus fleet management plan is intended to ensure that existing bus service is not degraded during the design, construction, and operation of the proposed investment. This plan is a critical indicator of the project sponsor's financial capacity to implement a major transit capital investment, and is evaluated as part of the financial assessment of each project. The purpose of the rail fleet management plan is to ensure that the transit operator plans procure and maintain vehicles adequate to provide planned service. These plans document fleet replacement, vehicle age, additional purchases, and plans for fleet rehabilitation and maintenance costs.

The appendix to the financial plan contains a summary of the bus and rail fleet management plans to substantiate the vehicle purchases and rehabilitation expenses referenced in the capital plan and the maintenance costs in the operating plan. The full fleet management plans are referenced and submitted as supporting documentation.

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