financial plan · 2020. 3. 25. · 114 | moving forward 2045 ° the rtp project list totals...

108 | MOVING FORWARD 2045

Achieving the transportation vision identified in this plan will require new revenues (or enhanced existing ones) for maintenance, operating, and capital from as-yet-unidentified revenue sources. This financial plan attempts to prepare an approximate but realistic estimate of both the total funds that can be reasonably expected to be available and total program costs.

This chapter describes the anticipated revenues and estimated costs to maintain, operate, and improve the Pikes Peak region’s transportation system from 2020 until 2045. The intent of this financial plan is to prepare a “reasonably expected” estimate of both the total funds available and total program costs. The financial analysis presented in this chapter meets the federal requirements detailed in Federal Highways’ Fixing America’s Surface Transportation Act (FAST) Act.

REQUIREMENTS FOR A FINANCIAL PLANThe Code of Federal Regulations (CFR 450.324(11)) outlines the elements required to develop a transportation financial plan. The FAST Act requires a financial plan that includes revenues and costs necessary to operate and maintain the roads and associated systems (signals, signage, snow removal, etc.) These costs enable a Metropolitan Planning Organization like PPACG to estimate future transportation conditions and resources to make the fullest use of existing infrastructure. The FAST Act also requires the financial plan include recommendations on the development of new financing strategies.

FINANCIAL PLAN

CHAPTER 6

FINANCIAL PLAN | 109


fuel excise taxes, vehicle license fees, sales taxes, and transit fare box revenues. Although dedicated to use within the Pikes Peak region, state and federal funding for all but the STP Metro, Transportation Alternatives, Congestion Mitigation/Air Quality and Transit funding categories is programmed by CDOT.

FEDERAL FUNDING SOURCESFederal funding is derived primarily from the federal gas tax, which is currently 18.4¢ per gallon for gas and 24.4¢ for diesel. Federal Highway Administration funds may be used to reimburse project costs for general transportation planning, preliminary engineering, right-of-way acquisition, construction, and audit. Federal Highway Administration funds may only be spent after authorization by CDOT through Federal Highway Administration.

Federal Highway Administration Funding Programs:

• National Highway Performance Program (NHPP)• Surface Transportation Block Group Program

(STBG, formerly STP)• Congestion Mitigation and Air Quality (CMAQ)• Highway Safety Improvement Program (HSIP)• Railway Highway Crossing • Transportation Alternatives Program/STBG Set aside (TAP)• Ferry Boat Program• Emergency Relief Program

Federal Transit Authority Funding Programs:

• 5310: Enhanced Mobility of Seniors and Individuals with Disabilities

• 5307: Urbanized Area Formula Program• 5309: Capital Investment Program• 5339: Capital Investment Program• 5314: Capital Investment Program

Additionally, the estimated cost of the projects identified in the plan cannot exceed the total revenue estimated over the life of the plan, this is referred to as fiscal constraint.

FEDERAL FUNDING ELIGIBILITYFederal Highway Administration eligible roadways are:

• The National Highway System• The Interstate System• Non-National Highway System routes which include all other

functionally-classified routes (except rural minor collector and local access).

The National Highway System provides an interconnected system of principal arterials and other highways serving major population centers, international border crossings, ports, airports, public and intermodal transportation facilities, and other major travel destinations. The system meets national defense needs and serves interstate and interregional travel. Routes that must be included on the National Highway System are principal arterials, interstate highways, highways on the Strategic Highway Network, major Strategic Highway Network connectors, and congressional high-priority routes.

The FAST Act allows up to 15 percent of Surface Transportation Program rural dollars to be used on rural minor collectors. All of the National Highway Performance Program funds are for use on all of the National Highway System, including those under jurisdiction of local governments. These funds make up over half of the federal funds available to the Colorado Department of Transportation.

REVENUE SOURCESTransportation has traditionally been funded by user fees. Today, the major tax sources to fund transportation are state and federal



• A safety program• Dedicated funds for transit

The FASTER Bridge Fund is used to repair or replace a specific list of poorly rated bridges on the state highway system. FASTER funds 80 percent of each project, with the local entity supplying the remaining 20 percent. FASTER transit funds are granted to local governments and transit agencies for projects such as new bus stops, maintenance facilities, or multimodal transportation centers. These funds cannot be used for operations.

LOCAL FUNDING SOURCESLocal revenue comes from a variety of sources such as property and sales taxes for highway and transit projects. Other revenues include money from street-use permits, utility permits, and impact fees. There is also an allocation of state Highway Users Tax Funds directly to each entity.

In 2004, citizens of El Paso County, Colorado Springs, Manitou Springs, and Green Mountain Falls voted to approve the Pikes Peak Regional (previously rural) Transportation Authority (PPRTA) sales tax of 1 percent on goods sold within their respective jurisdictions. In 2012, the capital portion of this tax was renewed for 10 years with 80 percent approval. Residents in the City of Fountain also approved a ¾ cent sales tax for transportation improvements.

LOCAL TRANSIT FUNDINGFARE AND ADVERTISING REVENUESFare and advertising revenues are important funding sources for transit operations. In 2015, these revenues provided approximately 20 percent of Mountain Metro Transit’s operating funds. Fare and advertising revenues are projected to grow at 3 percent per year. This revenue growth is based on historical information and with a moderate growth in ridership on the transit system. No fare increase is included in this assumption.

STATE OF COLORADO FUNDING SOURCESCOLORADO HIGHWAY USERS TAX FUNDThe primary source of revenue in Colorado is the Highway Users Tax Fund: $0.22 per gallon for gasoline and $0.205 per gallon for diesel. This dedicated revenue source is supplemented by car registration fees and other miscellaneous revenue. There are two levels of funding to the Highway Users Tax Fund: a basic and an additional funding level. All fuel taxes up to 7¢ per gallon are considered basic funding. A portion of the basic funding is allocated off the top to the Department of Public Safety for the State Patrol and Department of Revenue for the Ports of Entry. The State Treasury distributes the remaining basic funding in the following manner:

• 65 percent to CDOT• 26 percent to Colorado counties• 9 percent to Colorado cities

The amount over 7¢ per gallon is considered additional funding. Additional funding is distributed:

• 60 percent to CDOT• 22 percent to Colorado counties• 18 percent to Colorado cities

FASTER (SENATE BILL 09-108)In 2009, the enactment of Colorado Senate Bill 09-108 created the Funding Advancements for Surface Transportation and Economic Recovery program. FASTER provides CDOT and local governments with a new funding source separate from the General Fund that is stable and predictable. The funds derive from modest increases to vehicle registration fees and other funding mechanisms and are dedicated to specific programs.

These funds are split into several categories for distribution:

• Statewide Bridge Enterprise• High-Performance Transportation Enterprise to encourage

innovative financing strategies



° The RTP project list totals approximately $3.6 billion. $2.17 billion is capital projects and the other $1.5 billion would be classified as maintenance and operations.

• The matrix below shows that over the life of the plan, after being adjusted for inflation, there is approximately $2.0 billion available in unrestricted funding for capital projects.

MAINTENANCE AND OPERATIONS • MMT provided an estimate of $186,564,507 of funding that’s

eligibility is restricted to transit only.• When you add the unrestricted ($2.0 billion) and the restricted

($0.18 billion) you get a rounded total of $2.18 billion. This total is greater than the $2.17 listed in the proposed RTP project list to show fiscal constraint.

• When calculating M & O revenues for the region, the following assumptions were made. ° Teller County was “zeroed” out for M&O calculations because

a significant majority of the roads within the MPO boundary that are within Teller County are included in the numbers for Woodland Park, Green Mountain Falls and CDOT.

° Colorado Springs 2C — ½ cent sales tax for maintenance was not included in the analysis as it is unclear if that measure, even if extended, would be reasonably expected for most of the life of the plan.

° Jurisdictional HUTF Distributions came from the State of Colorado Treasurer’s web site.

ASSUMPTIONS AND APPROACH TO FISCAL CONSTRAINTMoving Forward 2045 identifies regional transportation projects and needs beginning in 2020 and extending through 2045. Revenue and expenditures rely on historical revenues from local, state, and federal sources, and assumptions regarding future economic, social, and behavioral conditions. PPACG followed the following basic principles in plan development:

REVENUE• Estimates for federal funding sources (STP- metro (STBG),

CMAQ, TAP and CPG) came from the State of Colorado’s Transportation Commission’s adopted 2040 program distribution. The 2045 program distribution was not available during document development. ° 2020 estimates were used as a base year and 3% growth

was assumed for the first 15 years. The 3% was applied to the total and NOT compounded.

° The last ten years of the plan had no growth factor applied to account for inflation/YOE.

• Estimates of PPRTA funds came from the expected continuation of PPRTA.

• Estimates of reasonable expected transit state and local transit funding came from Mountain Metro Transit (MMT).

CAPITAL INVESTMENTS • The funded project list in Chapter 8 of this plan, includes

transit capital, unrestricted capital projects and maintenance and operations. M & O projects that were specifically listed in the RTP are regional in nature while the local projects, while not specifically listed, are included in the overall M & O estimate for the RTP.

2020 BASE YEAR

FIRST 15 YEARS (3% GROWTH)

LAST 10 YEARS (YOE)

CAPITAL INVESTMENTS

TOTAL REVENUELocal $57,200,00 $883,740,000 $572,000,000

State $12,000,000 $185,400,000 $120,000,000

Federal $12,300,000 $190,035,000 $123,000,000

Totals $81,500,00 $1,259,175,000 $815,000,000 $2,074,175,000



° PPRTA Maintenance came from PPRTA financial records. ° City of Fountain Sales Tax information came from the expected

continuation of the City of Fountain revenues provided by city staff and their website.

° CDOT Maintenance was obtained from CDOT data, taking a 5 year average from 2014–2018.

° Transit data was provided by MMT.• For a given year, either 2018 actuals or 2020 estimates, the

region spent $151.37 million on M&O. Assuming that level of investment holds constant and fund increase keep up with inflation, the region would invest $3.784 billion in M&O over the 25-year life of the plan.

2018 — HIGH-WAY USER TAX FUND (HUTF)

DISTRIBUTION

PPRTA MAINTENANCE

(2020 ESTIMATE)

2018 — FOUNTAIN .75

CENT SALES TAX

CDOT MAINTENANCE (STATE SYSTEM) 5 YEAR

AVG. (14–18)

TRANSIT FUNDING (STATE, FTA,

PPRTA, FAIRBOX) 2020 ESTIMATE

TOTALS

Colorado Springs $18,257,792 $25,792,544 – – – $44,050,336

Colorado Springs—MMT – – – – $23,870,250 $23,870,250

Fountain $709,136 – $924,280 – – $1,633,416

Green Mountain Falls $14,409 $39,640 – – – $54,049

Manitou Springs $149,660 $309,193 – – – $458,853

Monument $230,679 – – – – $230,679

Palmer Lake $95,163 – – – – $95,163

Woodland Park $284,729 – – – – $284,729

El Paso $12,967,648 $10,251,004 – – – $23,218,652

CDOT (MPO Boundary) – – – $57,478,694 – $57,478,694

Teller – – – – – –

Totals $32,709,216 $36,392,381 $2,310,700 $57,478,694 $23,870,250 $151,374,821



were initially inflated through the year 2045, then the revenues in the final ten years of the plan were deflated.

Projects in the plan were not assigned a specific funding source, however, fiscal constraint was maintained by ensuring that there were sufficient projects to address funding that has restricted eligibility.

62.2% of the available funding in the plan goes toward operations and maintenance with the remaining 37.8% going towards capacity projects.

Assuming a conservative 3% growth (total not compounded), the PPRTA will provide $2.678 billion toward the plan (capital, maintenance and transit) OR 44.3% of the total plan (maintenance and capacity).

FUTURE TRANSPORTATION FUNDING GAPThe costs of maintaining, operating, and expanding the transportation system have risen dramatically, while the revenues created to maintain and operate the existing system have remained flat. Demands on the system have increased from a growing population and aging infrastructure that is approaching the end of its life cycle. The average age of roads and bridges means that there is an upcoming wave of replacement and rehabilitation that must be funded.

Federal- and state-generated fuel taxes are the primary revenue sources for roadway maintenance, construction and operations. The federal gas tax has been 18.4 cents per gallon since 1993. Colorado’s state fuel tax has remained at 22 cents per gallon since 1991. Fuel taxes are not indexed to inflation and have not been increased since they were implemented, in 1992. Furthermore, due to the steady increase in fuel-efficiency standards, drivers pay less in gas taxes per vehicle mile traveled than they did in 1992. With the increasing popularity of electric vehicles, additional revenue will be lost. Furthermore, revenues have flattened while costs, expressed both as the Colorado Construction Cost Index and price of gasoline, have risen. This has led to a corresponding reduction

TOTAL FUNDING REVENUESThe 2045 RTP contains just over $6 billion in funding.

EXPENDITURESJurisdictions were asked to update project costs for projects submitted for consideration to be included in the 2045 RTP.

Year of Expenditure (YOE). YOE is used to account for inflation over time to help provide a more realistic expectation of what projects or programs can be reasonably delivered over the life of the plan.

Given exact timeframes of projects delivery was unknown, jurisdictions were asked to develop their project cost estimates in 2019 dollars.

To account for YOE expenditure, it was assumed that inflation will grow faster than revenue growth. Thus, expenditures and revenues

34.3%

62.6% 3.1%

$2,074,175,000UNRESTRICTED

Federal, state and local for capital improvements

$186,564,507TRANSIT RESTRICTED

CAPITAL Federal, state and local for capital improvements for transit

$3,784,370,525MAINTENANCE &

OPERATIONS (INCLUDING TRANSIT) Federal, state and local

$6,045,110,032 TOTAL



in purchasing power from the revenues generated. This level of funding is now 70 percent of the level of funding from when the tax increases was initially approved. Absent new state or federal legislation, it is expected that this trend will continue, widening the gap between revenues and costs. For the 2045 plan, we have identified a total of $10,615,700,641 in transportation improvement needs. However, we are only able to fund just over $6 billion or 57% of those needs.

FUNDING CHALLENGES

$10,615,700,641 is the total cost identified for transportation improvement needs

$6,045,110,032 is the amount we are able to fund, leaving a need of $4,570,590,609 and creating a gap of 43%


financial plan · 2020. 3. 25. · 114 | moving forward 2045 ° the rtp project list totals...

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