Division of Budgets

Caltrans July PresentationCaltrans July PresentationState Highway Account State Highway Account

BalanceBalancePresented to thePresented to the

California Transportation California Transportation CommissionCommission

July 22, 2003July 22, 2003

ContentsContents

Review of June ForecastImpact of Budget delaysOptions for dealing with low cash

balances

Review of June ForecastReview of June Forecast

At the June CTC meeting the Department presented the following: The forecast projected a June 2004 shortfall of $52

million if the Department continued with the current allocation plan and a balance in June 2005 of $749 million.

The Department assumed borrowing from other Departmental funds and borrowing from the General Fund in the first quarter of FY 2003-04.

The Department believes the planned SHOPP allocations for FY 2003-04 can be made. The timing of the allocations will be depend upon the State and Federal budget issues and revenue levels that are not yet resolved.

Review of June ForecastReview of June Forecast

Since the June meeting, the Department has determined that the revised June 2004 forecast balance considering the June vote will be $123 million.

The Department will continue to monitor resources and expenditures and will report to the Commission monthly. The next cash update will be presented in September.

No reliable forecast can be made until the State Budget is passed.

Review of June ForecastReview of June Forecast

SHA Forecast includes negative balances: As presented in June, the current SHA forecast

shows three months with month-end balances dropping into the negative (see attached graph).

Previous forecast also had periods in the first and second quarters with monthly balances dropping into the negative.

In addition, there are days within these months in which the balance will drop into the negative by as much as $400 million.

The Department intended to manage by internal borrowing, and when needed, a General Fund loan.

24-Month State Highway Account24-Month State Highway Account2003-04 Cash Forecast2003-04 Cash Forecast

($ in millions)($ in millions)

- $ 200

$ 0

$ 200

$ 400

$ 600

$ 800

$ 1, 000

02-03 Actuals 908 787 739 699 499 703 236 236 407 538 205

J une Fcst 538. 492 205. 483 144. 835 188. 571 -90. 799 105. 92 239. 139 -23. 853 103. 955 214. 796 5. 38071 -13. 851 147. 13 186. 467 123. 158

J ul-02 Aug Sep Oct Nov Dec J an Feb Mar Apr May J un J ul-03 Aug Sep Oct Nov Dec J an Feb Mar Apr May J un-04

Impact of Budget Delays Impact of Budget Delays in the First Quarterin the First Quarter

No HUTA revenues will be transferred Without a budget, HUTA (excise tax revenue)

transfer will be delayed. This amounts to approximately $175 million per month.

The significant impact of this delay will be in September when two payments are due.

Weight Fees will be received The State budget does not impact weight fees and

the Department is projected to receive $156 million in weight fees and $23 million in other revenues.

No General Fund loan will be available Without a State budget, the DOF has informed the

Department that no loan can be made without a budget.

Federal Issues in the first half of FY Federal Issues in the first half of FY 2003-042003-04

Federal reimbursement in this quarter will be lower than the previous quarters due to accelerated collections of Federal Funds in the 2002-03 fiscal year.

Federal revenue levels for FY 2003-04 remain uncertain because of no consensus on the Federal Budget.

Without a Federal reauthorization, there may be a delay in claiming prior year federal obligations.

If continuing resolutions are passed in lieu of a budget act, full-year federal allocations will not be available. This is a significant impediment to annual cash management.

Status for FY 2003-04Status for FY 2003-04

There is continuing uncertainty concerning FY 2003-04 allocations at this time. There needs to be a State budget passed to

determine program and revenue levels for FY 2003-04.

Short-term cash issues need to be worked out.

Uncertainty about Federal revenue levels for FY 2003-04 make it impossible to accurately forecast cash levels.

Options to address SHA cash issuesOptions to address SHA cash issuesDepartmental actions to ease cash shortfall as

outlined in the July 18, 2003 letter to the CTC: Delay awarding contracts until budget is passed. Suspension of 30 recently awarded contracts Work with contractors to continue work on projects

and accept delayed payments. Some Cities and counties will advance funds in the

form of payments to contractors for projects partially funded by the local agencies.

Utilize Local Assistance Federal Obligation Authority to provide cash for existing projects.

Several Self-Help Counties have agreed to provide temporary funds to continue projects in their counties.

Suspend additional projects if the budget impasse lasts for several months and other actions are not found to generate necessary cash.