1. Charlie Zelle, Commissioner Minnesota Department of Transportation February 10, 2014

2. Health… the people the environment the economy U.S Bureau of Economics: MN ranked 5 th among nations fastest growing economies Politico: MN ranked 2 nd best state in the nation

3. 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

5. 50% state highway pavements are over 50 years old 35% of MnDOT bridges are over 50 years old MN 9 th most extreme temperature variations in the nation Interstates in MN rank 38 th in the nation 5

6. 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 states risk and responsibility

7. 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 System County 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

8. Metro Area Multimodal Vision 8

9. Loss of purchasing power, due to inflation Increased life-cycle cost Debt ceiling 9

11. Life Cycle

12. 12

13. 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 13 Source: Smart Growth America Report

14. 14 MnDOT is replacing or rehabbing 172 Bridges Large-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

15. 15 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

16. 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 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.

17. 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 17

18. 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?

19. Thank you Comments / Questions