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MnDOTFY 2014-15 Budget Overview

Including Governor’s Recommendations

Senate Transportation and Public Safety Committee

January 30, 2013

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State Transportation System• Highways

– 137,800 miles of state, county, city and township roadway• 11,900 miles of state trunk highways• 45,000 miles of county state aid highways and county roads• 22,300 miles of municipal state aid streets and city streets• 58,600 miles of township roads

– 56.7 billion annual vehicle miles traveled; 32.7 billion on trunk highways

• Bridges (20+ feet)– 13,054 highway bridges in Minnesota– 3,627 trunk highway bridges

• Aviation– 135 state-funded airports in Minnesota– Includes 7 Metropolitan Airports Commission airports

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State Transportation System (con’t)• Water Freight

– 60 million tons shipped via Great Lakes (2011)– 11 million tons via river (2012) – Public ports in Duluth, Winona, Red Wing, St. Paul and Minneapolis

• Rail Freight– 243 million tons shipped (2010)– 4,338 miles of railroads– 20 railroad companies

• Transit– 78 greater Minnesota counties with public transit – 11.5 million greater Minnesota transit trips in 2011– 58 transit providers in greater Minnesota

• Bicycle and pedestrian facilities throughout the state

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Workforce Overview

• In FY 2013, MnDOT is projected to have a workforce of 4,882.8 full-time equivalents (FTEs)

• Reduction in FY 2012 due mostly to 415 employees retiring through Early Retirement Incentive (ERI)

• In FY 2014, about 200 IT employees move from MnDOT to MN.IT

FTEs Change from previous year % Change

FY 2011 (actual) 4,964.2FY 2012 (actual) 4,514.2 (450.0) -9.1%FY 2013 (forecast) 4,882.8 368.6 8.2%

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Expenditures by Fund

Trunk Highway54%

County State Aid20%

Municipal State Aid6%

Federal16%

Special Revenue Funds2%

General1%

State Airports1%

Transit Assistance1%

FY 2014-15 Biennial % of Total

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Expenditures by FundFund($1,000s) FY 2012 FY 2013 Biennium

FY 2012-13 FY 2014 FY 2015 BienniumFY 2014-15

General 15,256 16,418 31,674 27,186 27,105 54,291

Special Revenue Funds 41,766 67,049 108,815 64,481 57,576 122,058

State Airports 19,229 22,591 41,820 20,202 20,202 40,404

Municipal State Aid 140,525 157,723 298,248 168,765 168,440 337,205

County State Aid 432,609 586,523 1,019,132 593,162 606,923 1,200,085

Trunk Highway 1,197,121 1,673,871 2,870,992 1,669,313 1,591,560 3,260,873

Federal 318,489 503,676 822,165 467,352 480,395 947,747

Transit Assistance 22,043 39,171 61,214 36,118 39,195 75,313

Other 1,480 2,433 3,913 2,364 2,343 4,707

Total 2,188,518 3,069,455 5,257,969 3,048,942 2,993,740 6,042,682

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Biennial Changes by FundFund($1,000s)

Biennium FY 2012-13

BienniumFY 2014-15 $ Change % Change Key Changes

General 31,674 54,291 22,617 71.4% $20M TED

Special Revenue Funds 108,815 122,058 13,243 12.2% Forecast revenue: $31M partnership for Dresbach bridge

State Airports 41,820 40,404 -1,416 -3.4% -$1M approp reduction

Municipal State Aid 298,248 337,205 38,957 13.1% $38M direct approps increase

County State Aid 1,019,132 1,200,085 180,953 17.8% $176M direct approps increase

Trunk Highway 2,870,992 3,260,873 389,881 13.6% $263M MAP-21 federal funds, $196M debt service, $75M SRC increase

Federal 822,165 947,747 125,582 15.3% $50M aeronautics, $40M transit, $17M planning & delivery

Transit Assistance 61,214 75,313 14,099 23.0% Forecast revenue: $7M MV lease, $5M MVST

Other 3,913 4,707 794 20.3%

Total 5,257,969 6,042,682 784,713 14.9%

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Expenditures by Appropriation Type

Direct79%

Statutory21%

Open0%

FY 2014-15 Biennial % of Total

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Expenditures by Appropriation Type

Type($1,000s) FY 2012 FY 2013 Biennium

FY 2012-13 FY 2014 FY 2015 BienniumFY 2014-15

Direct 1,758,331 2,398,796 4,157,127 2,427,442 2,362,754 4,790,196

Statutory 425,008 664,816 1,089,824 615,658 625,142 1,240,801

Open 5,179 5,843 11,022 5,843 5,843 11,686

Total 2,188,518 3,069,455 5,257,969 3,048,942 2,993,739 6,042,682

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Program Structure• Multimodal Systems

• Aeronautics• Transit• Freight• Passenger Rail

• Local Roads• County State Aid Roads• Municipal State Aid Roads

• State Roads• Program Planning and Delivery• Operations and Maintenance• Electronic Communications• Debt Service• State Road Construction

• Agency Management• Agency Services• Buildings

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Expenditures by Program

Program($1,000s)

Biennial TotalFY 2014-15

Multimodal Systems 546,437

State Roads 3,329,299

Local Roads 2,033,131

Agency Management 133,815

Total 6,042,682

Multimodal Systems

9%State

Roads55%

Local Roads34%

Agency Management

2%

% of Total

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Expenditures by Program

Program($1,000s) FY 2012 FY 2013 Biennium

FY 2012-13 FY 2014 FY 2015 BienniumFY 2014-15

Multimodal Systems 157,331 295,037 452,368 273,102 273,335 546,437

State Roads 1,168,272 1,692,796 2,861,068 1,706,591 1,622,708 3,329,299

Local Roads 797,745 1,003,490 1,801,232 1,002,345 1,030,786 2,033,131

Agency Management 65,170 78,132 143,301 66,903 66,911 133,815

Total 2,188,518 3,069,455 5,257,969 3,048,941 2,993,740 6,042,682

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State Roads ProgramExpenditures by Budget Activity

Program Planning & De-livery16%

State Road Construc-tion53%

Debt Service12%

Operations & Main-tenance

18%

Electronic Communica-tions1%

FY 2014-15 Biennial % of Total

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State Roads ProgramExpenditures by Budget Activity

Budget Activity($1,000s) FY 2012 FY 2013 Biennium

FY 2012-13 FY 2014 FY 2015 BienniumFY 2014-15

Program Planning & Delivery 204,262 298,335 502,597 262,700 254,428 517,128

State Road Construction 626,118 927,860 1,553,978 914,598 843,400 1,757,998

Debt Service 80,494 129,805 210,299 201,952 204,099 406,051Operations & Maintenance 242,655 318,970 561,625 310,751 303,561 614,312

Electronic Communications 14,743 17,826 32,569 16,590 17,220 33,810

Total 1,168,272 1,692,796 2,861,068 1,706,591 1,622,708 3,329,299

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Expenditures by Category

Payroll12%

Operating11%

Capital Outlay27%Grants

40%

Other3%

Debt Service6%

FY 2014-15 Biennial % of Total

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Expenditures by Category

Category($1,000s) FY 2012 FY 2013 Biennium

FY 2012-13 FY 2014 FY 2015 BienniumFY 2014-15

Payroll 345,351 376,170 721,521 368,730 376,977 745,706

Operating 280,997 384,107 665,104 348,331 325,706 674,036

Capital Outlay 523,525 894,121 1,417,646 862,083 799,238 1,661,321

Grants 852,687 1,204,686 2,057,373 1,194,391 1,226,686 2,421,077

Other 113,357 90,067 203,423 82,955 70,534 153,491

Debt Service 72,601 120,305 192,906 192,452 194,599 387,051

Total 2,188,518 3,069,455 5,257,969 3,048,942 2,993,740 6,042,682

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HUTD Sources and UsesFY 2012 (preliminary)

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Minnesota Gasoline Excise Tax• Minnesota’s gasoline excise tax is currently 28.5

cents/gallon (increased 0.5 cents on July 1, 2012)– 25 cent excise tax– 3.5 cent debt service surcharge

• As of October 2012, Minnesota has 8th highest tax (per American Petroleum Institute)

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Transportation Bonding• General Obligation (GO) Bonds:

– Used to fund non-trunk highway transportation projects, such as passenger rail, commuter rail, local bridges and local roads, and greater Minnesota transit facilities

– Debt Service Paid by General Fund

– FY2008 - 2012: Authorized $353 million Committed: $239 million

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Transportation Bonding• Trunk Highway Bonds:

– Proceeds only used for “trunk highway purposes”

– Debt Service Paid by Trunk Highway Fund as a transfer to MMB

– FY2008 - 2012: Authorized $2.0 billion Programmed $2.0 billion Committed $1.1 billion

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Trunk Highway Debt Service Transfer Projections(in millions of dollars)

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Debt Management Policy

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Change Items

• Transportation Economic Development (TED) Program• State Road Construction Appropriation• State Road Construction Infrastructure Investments• Operations and Maintenance Increase• Economic Recovery Funds - Trunk Highway and Federal • State Airports Fund Revenue/Expenditure Alignment• Increase Funding to Regional Development Commission

(RDC) State Planning Grants • Grade Crossing Safety Account• ARMER Maintenance (via DPS)

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Summary of Change Item Expenditure Impact

Fund($1,000s) Description FY 2014 FY 2015 Biennium

2014-15

General TED 10,000 10,000 20,000

Trunk Highway State Road Construction Federal Funds* 125,400 137,600 263,000

Trunk Highway State Road Construction Infrastructure Investments 75,000 0 75,000

Trunk Highway Ops and Maintenance Increase 5,000 5,000 10,000

Trunk Highway Economic Recovery Funds* 1,000 1,000 2,000Federal Economic Recovery Funds* 1,000 1,000 2,000State Airports Reduced Expenditures (500) (500) (1,000)911 Emergency ARMER Maintenance* 600 1,000 1,600Totals *No net fiscal impact 217,500 155,100 372,600

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Transportation Economic Development (TED) Overview

• Collaboration between MnDOT and DEED for transportation infrastructure improvement projects that support economic development

• Competitive project selection process to identify and support projects that assist development of a new or expanding business. – Target industries: manufacturing, technology, warehousing and

distribution, research and development, agricultural processing, bioscience, tourism/recreation, industrial park development

• Projects must also improve the statewide transportation network

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TED Program Goals

• To address both economic and transportation system objectives of the state

• To create and preserve “head-of-household” jobs

• To leverage private and local investment in public infrastructure improvements

• To promote collaborative and innovative partnerships among public and private sector stakeholders

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TED Program History

• Two solicitations so far: (2010 and 2012)• Selected 24 projects – of 70 applications• Provided $59 million in TED grants• Leveraged over $100 million in other public and private

financing• Supported an estimated 10,000 permanent, well-paying

jobs

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State Road Construction Change Requests

• $338 million in total spending in FY 2014-15

– $263 million of federal funds from new federal authorization, MAP- 21• No net fiscal impact – reflects both additional federal revenue

and expenditures

– $75 million in additional state funds in FY 2014• One-time appropriation from existing Trunk Highway Fund

balance

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State Road Construction Appropriation

• $125.4 million in FY 2014 and $137.6 million in FY 2015 (biennial total of $263 million)

• Increases state road construction appropriation to make available federal funds from MAP-21

• No net fiscal impact - reflects both additional federal funds and additional expenditures

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State Road Construction Infrastructure Investments

• $75 million one-time appropriation in FY 2014• Funds would be used for:

– Better Roads program– Other infrastructure needs (e.g. drainage structures)– Americans with Disabilities Act (ADA) investments – Corridor Investment Management Strategy (CIMS)

• Funded from existing available fund balance in Trunk Highway Fund

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Operations and Maintenance Increase

• $5 million annual increase to operations and maintenance budget activity, or 2%.

• To help offset inflation in commodities like salt, sand, bituminous and gasoline.

• Inflation has been over 3% per year since 2005, and that trend is projected to continue.

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Economic Recovery Funds

• Extends authority to spend existing or new American Recovery and Reinvestment Act (ARRA) funds to the end of FY 2016

• Currently anticipate $1 million of additional Trunk Highway Funds and $1 million of Federal Funds related to passenger rail activities

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State Airports Fund Decrease

• Reduces appropriations by $500,000 in both FY 2014 and 2015 (biennial total of $1 million)

• Eliminates negative fund balance currently forecast (as of November 2012)

• Reductions in grants to local airports

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Regional Development Commission (RDC) State Planning Grants Increase• 12 Regional Development Commissions (RDCs) in

Minnesota

• Partners in the Area Transportation Partnership (ATP) process– Involved in soliciting and evaluating projects– Seek to integrate regional priorities in planning and project

selection– Key partners in supporting MnDOT’s planning efforts

through public involvement activities

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Regional Development Commission (RDC) State Planning Grants Increase• $600,000 is currently appropriated annually to RDCs,

from Program Planning and Delivery budget activity– Since 1997, each RDC has received $50,000 annually

• Change item would increase these grants to $900,000 annually, or $75,000 per RDC (50% increase)– In recent years, RDCs have assumed additional

responsibilities in supporting multimodal and interdisciplinary planning at the regional and state levels

– $50,000 in 1997 is equal to roughly $72,000 in 2012 due to inflation

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• Grade Crossing Safety Account– Remaining balance in account is transferred to Trunk

Highway Fund at the end of each biennium. Currently this is done annually.

• ARMER Maintenance (via DPS)– Increases the maintenance budget for ARMER by

$600,000 in FY 2014, and by $1,000,000 in FY 2015 and beyond

– Would cover increased level of service through software subscription agreement with Motorola

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Questions?

Tracy Hatch, Chief Financial Officer651-366-4811

tracy.hatch@state.mn.us

Scott Peterson, Director of Government Affairs651-366-4817

scott.r.peterson@state.mn.us