MnDOT FY 2014-15 Budget Overview

Including Governors Recommendations

Senate Transportation and Public Safety Committee

January 30, 2013

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

State Transportation System (cont)

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

Workforce Overview
In FY 2013, MnDOT is projected to have a workforce of 4,882.8 full-time equivalents (FTEs)
FTEs FY 2011 (actual) FY 2012 (actual) FY 2013 (forecast) 4,964.2 4,514.2 4,882.8 (450.0) 368.6 -9.1% 8.2% Change from previous year % Change

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 4

Expenditures by Fund
FY 2014-15 Biennial % of Total
Transit Assistance 1% State Airports 1% Trunk Highway 54%

General 1% Special Revenue Funds 2% Federal 16%

Municipal State Aid 5%

County State Aid 20%

Expenditures by Fund
Fund ($1,000s) General Special Revenue Funds State Airports Municipal State Aid County State Aid Trunk Highway Federal FY 2012 15,256 41,766 19,229 140,525 432,609 1,197,121 318,489 FY 2013 16,418 67,049 22,591 157,723 586,523 1,673,871 503,676 Biennium FY 2012-13 31,674 108,815 41,820 298,248 1,019,132 2,870,992 822,165 FY 2014 27,186 64,481 20,202 168,765 593,162 1,669,313 467,352 FY 2015 27,105 57,576 20,202 168,440 606,923 1,591,560 480,395 Biennium FY 2014-15 54,291 122,058 40,404 337,205 1,200,085 3,260,873 947,747

Transit Assistance
Other Total

22,043
1,480 2,188,518

39,171
2,433 3,069,455

61,214
3,913 5,257,969

36,118
2,364 3,048,942

39,195
2,343 2,993,740

75,313
4,707 6,042,682

Biennial Changes by Fund

Fund ($1,000s) General Special Revenue Funds State Airports Municipal State Aid County State Aid Trunk Highway Federal Transit Assistance Other Total Biennium FY 2012-13 31,674 108,815 41,820 298,248 1,019,132 2,870,992 822,165 61,214 3,913 5,257,969 Biennium FY 2014-15 54,291 122,058 40,404 337,205 1,200,085 3,260,873 947,747 75,313 4,707 6,042,682 $ Change 22,617 13,243 -1,416 38,957 180,953 389,881 125,582 14,099 794 784,713 % Change 71.4% 12.2% -3.4% 13.1% 17.8% 13.6% 15.3% 23.0% 20.3% 14.9% Key Changes $20M TED Forecast revenue: $31M partnership for Dresbach bridge -$1M approp reduction $38M direct approps increase $176M direct approps increase $263M MAP-21 federal funds, $196M debt service, $75M SRC increase $50M aeronautics, $40M transit, $17M planning & delivery Forecast revenue: $7M MV lease, $5M MVST

Expenditures by Appropriation Type

FY 2014-15 Biennial % of Total
Open 0%

Statutory 21%

Direct 79%

Expenditures by Appropriation Type

Type ($1,000s) Direct Statutory

FY 2012
1,758,331 425,008

FY 2013
2,398,796 664,816

Biennium
FY 2012-13

FY 2014
2,427,442 615,658

FY 2015
2,362,754 625,142

Biennium
FY 2014-15

4,157,127 1,089,824

4,790,196 1,240,801

Open
Total

5,179
2,188,518

5,843
3,069,455

11,022
5,257,969

5,843
3,048,942

5,843
2,993,739

11,686
6,042,682

Program Structure
Multimodal Systems
Aeronautics Transit Freight Passenger Rail

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

Local Roads
County State Aid Roads Municipal State Aid Roads

Agency Management
Agency Services Buildings

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Expenditures by Program
Program ($1,000s) Multimodal Systems State Roads Local Roads Agency Management Biennial Total
FY 2014-15

% of Total
Multimodal Systems 9%
Agency Management 2%

546,437 3,329,299 2,033,131 133,815

State Roads 55%

Total

6,042,682

Local Roads 34%

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Expenditures by Program
Program ($1,000s) Multimodal Systems State Roads Local Roads Agency Management Total FY 2012 157,331 1,168,272 797,745 65,170 2,188,518 FY 2013 295,037 1,692,796 1,003,490 78,132 3,069,455 Biennium
FY 2012-13

FY 2014 273,102 1,706,591 1,002,345 66,903 3,048,941

FY 2015 273,335 1,622,708 1,030,786 66,911 2,993,740

Biennium
FY 2014-15

452,368 2,861,068 1,801,232 143,301 5,257,969

546,437 3,329,299 2,033,131 133,815 6,042,682

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State Roads Program Expenditures by Budget Activity

FY 2014-15 Biennial % of Total
Program Planning & Delivery 16% Electronic Communications 1% State Road Construction 53%

Operations & Maintenance 18%

Debt Service 12%

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State Roads Program Expenditures by Budget Activity

Budget Activity ($1,000s) Program Planning & Delivery FY 2012 204,262 626,118 80,494 242,655 14,743 1,168,272 FY 2013 298,335 927,860 129,805 318,970 17,826 1,692,796 Biennium
FY 2012-13

FY 2014 262,700 914,598 201,952 310,751 16,590 1,706,591

FY 2015 254,428 843,400 204,099 303,561 17,220 1,622,708

Biennium
FY 2014-15

502,597 1,553,978 210,299 561,625 32,569 2,861,068

517,128 1,757,998 406,051 614,312 33,810 3,329,299

State Road Construction

Debt Service Operations & Maintenance Electronic Communications Total

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Expenditures by Category
FY 2014-15 Biennial % of Total
Debt Service 6% Other 3% Payroll 12% Operating 11%

Grants 40%

Capital Outlay 28%

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Expenditures by Category
Category ($1,000s) Payroll Operating

FY 2012
345,351 280,997

FY 2013
376,170 384,107

Biennium
FY 2012-13

FY 2014
368,730 348,331

FY 2015
376,977 325,706

Biennium
FY 2014-15

721,521 665,104

745,706 674,036

Capital Outlay
Grants Other Debt Service

523,525
852,687 113,357 72,601

894,121
1,204,686 90,067 120,305

1,417,646
2,057,373 203,423 192,906

862,083
1,194,391 82,955 192,452

799,238
1,226,686 70,534 194,599

1,661,321
2,421,077 153,491 387,051

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 Uses FY 2012 (preliminary)

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Minnesota Gasoline Excise Tax

Minnesotas 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) 18

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) 23

Summary of Change Item Expenditure Impact

Fund ($1,000s)
General Trunk Highway Trunk Highway Trunk Highway Trunk Highway Federal State Airports 911 Emergency Totals

Description
TED State Road Construction Federal Funds*

FY 2014
10,000 125,400 75,000 5,000 1,000 1,000 (500) 600 217,500

FY 2015
10,000 137,600 0 5,000 1,000 1,000 (500) 1,000 155,100

Biennium 2014-15
20,000 263,000 75,000 10,000 2,000 2,000 (1,000) 1,600 372,600

State Road Construction Infrastructure Investments

Ops and Maintenance Increase Economic Recovery Funds* Economic Recovery Funds* Reduced Expenditures ARMER Maintenance* *No net fiscal impact

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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 25

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 26

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

30

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.

31

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

32

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 MnDOTs 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 36

Questions?
Tracy Hatch, Chief Financial Officer 651-366-4811 tracy.hatch@state.mn.us Scott Peterson, Director of Government Affairs 651-366-4817 scott.r.peterson@state.mn.us

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