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Presentation on Minnesota’s Transportation Needs
Charlie Zelle, CommissionerMinnesota Department of Transportation
February 10, 2014
Health… the peoplethe environmentthe economy
Transportation: A Top Tier Issue
U.S Bureau of Economics: MN ranked 5th among nation’s fastest growing economies
Politico: MN ranked 2nd best state in the nation
What we do today impacts tomorrow:
Population will increase by 1M (2030)
Population is growing and changing
Truck freight increases 30% (2030)
Customers Increasingly value and rely on transportation options
Other states are investing in transportation
Transportation & Economy
50% state highway pavements are over 50 years old
35% of MnDOT bridges are over 50 years old
MN 9th most extreme temperature variations in the nation
Interstates in MN rank 38th in the nation
Challenges: Aging infrastructure, Harsh climate, Heavy use
5
Transportation Finance Advisory Committee (TFAC) $50B in total needs over 20 years, all modes To achieve an economically competitive system
Funding Needs: Need $30B for the state highway system alone Forecasts of $18B capital revenue over 20-years
Risk: Need revenue source(s) that mitigate inflation risk Deferred preservation of roads and bridges increases life cycle costs Federal fiscal outlook increases state’s risk and responsibility
Needs Outpace Funding
20 Year Funding Needs Economically Competitive
System/Mode FUNDING GAP
State Highway System*(Includes bike and pedestrian needs)
$10.0 - 12.0$500 mil- $600 mil AFG
County State Aid SystemCounty System
$9.0$450 mil AFG
$9.0$450 mil AFG
Township Roads $0.5
Municipal State Aid System
Municipal System
$2.0$100 mil AFG
$8.0$400 mil AFG
Greater Minnesota Transit $0.9$45 mil AFG
Metropolitan Area Transit $4.2 $210 mil AFG
Passenger Rail $5.0 - 7.0 $250 mil -$350 mil AFG
Freight - Rail and Ports $0.6 $30 mil AFG
State Airports $0.8 $40 mil AFG
Metropolitan Airports Commission
$0.6$30 mil AFG
Totals $50.6 -$54.6 Source: TFAC 2012
Metro Area Multimodal Vision
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Loss of purchasing power, due to inflation Increased life-cycle cost Debt ceiling
Financial Risks
9
Timely Investments Drive Down Costs
Life Cycle
Trunk Highway Fund Debt Service Forecast - compared to MnDOT Policy
November FY2013
12
0%
5%
10%
15%
20%
25%
2012 2013 2014 2015 2016 2017 2018 2019
Debt Service Debt Limit
Additional $12B investment over 20 years, yields $31B (average) benefit ROI 2.5
Project types with the highest ROI: ◦ Active Traffic Management ◦ General Congestion Mitigation ◦ Safety Spot Improvements
Transportation is a Good Investment
Return on investment averages 2.5 times that invested
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Source: Smart Growth America Report
Progress with ‘08 Funding
14
MnDOT is replacing or rehabbing 172 BridgesLarge-Scale Bridge Projects Shown – total costs are estimated
Desoto (TH 23) in St. Cloud over the Mississippi River (complete) – $39M
Robbin-Drayton (TH 11) of the Red River (complete) – $16.5M
Hastings (US 61) over the Mississippi River (underway) – $147.8M
Lafayette (US 52) in St. Paul over the Mississippi River (underway) – $172.4M
St. Peter (TH 99) over the Minnesota River (underway) – $3.5M
Dresbach (I-90) over the Mississippi River (underway) – $212.8M
Cayuga (I-35E) in St. Paul over Cayuga Street (underway) – $194.2M
St. Croix Crossing (TH 36) over the St. Croix River (underway) – $280M to $310M
Winona (TH 43) over the Mississippi River (beings 2015) – $158.6M
Sorlie (US 2B) in East Grand Forks over the Red River (begins 2017) – $45.5M to $61.5M
Baudette (TH 72) over the Rainy River (begins 2017) – $59.8M to $79.7M
Red Wing (US 63) over the Mississippi River (beings 2017) – $160M to $240M
New Ulm (TH 14) over the Minnesota River (begins 2017) – $44.1M to $51.4M
Progress with ‘08 Funding
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MnDOT is completing other projects as well Major Projects Utilizing Chapter 152 Bonds Shown – total costs are estimated
TH 55 Pavement Improvement from near Kensington to Glenwood - $11.8M
TH 60 two-to-four-lane conversion from Bigelow to Worthington - $68.9M
TH 169/I-494 Interchange - $170.0M
I-90 Concrete Overlay East of Rochester - $16.3M
I-35 Concrete Overlay from near Sturgeon Lake to Mahtowa - $17.3M
TH 11 Pavement Improvement from Frontier to Indus - $15.1M
TH 23 Mill and Overlay from Russell to Marshall - $21.7M
I-35 Bridges in Duluth - $88.6M
I-94 Interchange at Albertville - $11.3M
I-94 Lowry Hill Tunnel to John Ireland Blvd - $28.0M
US 169 Brooklyn Park - Interchanges, Bridges, etc. - $58.6M
Better Roads Program example - I-35 Maryland to University - $111.0M
Flood Mitigation example - Realign Hwy 75; new bridge near Kent - $10.4M
Performance-based design projects (Hwy 169/494, TH100 near Hwy 7) MnPASS Lanes Innovative Construction Methods – Maryland & Hastings Bridges
Both projects benefited from ‘08 (Chapter 152) funding
Adopting new efficiency practices to wisely use state funding, saving money and motorist delays
16 Original bridge Float down the river 9/12/12 Completed bridge Lifted into place 60 hours later
HASTINGS BRIDGE: $120M. New bridge was built next to the old structure to keep the river crossing open to travelers and avoid a 47-mile detour.
Enhancing Financial Effectiveness
◦ MnDOT runs the equivalent of a multi-billion dollar project execution and services business
◦ Focused on being effective, accountable, transparent and efficient
MnDOT Strategic Priority
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Seek a sustainable, long-term solution Addresses inflation risk Upholds tenets of user pay
Discussions underway Apply general sales tax rate to wholesale gas receipts to
hedge against inflation? Restructure Tab Fees? Redirect sales tax collected on leased vehicles; auto
parts, etc. to non-trunk highway transportation needs? Next generation revenue sources?
Additional Funding Considerations
Thank you
Comments / Questions