1. Transportation 2020 and other Funding Issues Dubuque, Iowa December 9, 2011

2. Topics Transportation 2020 Background Governor’s Transportation 2020 Citizen Advisory Commission 2011 Road Use Tax Fund (RUTF) Study Next Steps Federal Issues FFY 2012 Appropriation Reauthorization 2

3. Iowa’s Public Roadway System 3 JurisdictionLength (miles) # of Bridges State9,4034,092 County89,91119,386 City14,8041,111 Other623210 Total114,74024,799

4. Evaluation of Recent Trends 4 Iowa’s infrastructure rankings continue to drop Category 2009 Ranking (based on 2007 data) 2010 Ranking (based on 2008 data)Change Rural Interstate Condition*34th38th-4 Urban Interstate Condition*43rd 0 Rural Arterial Condition*43rd46th-3 Deficient Bridges30th34th-4 Source: Annual Report on the Performance of State Highway Systems, Reason Foundation, David T. Hartgen, Ph.D., P.E., and Ravi K. Karanam, December 2009 and September 2010 * Based on road roughness

5. 5 5

6. State Road Funding Funding Source FY 2011 (estimated) Percent of Total State Constitution Requires Funds be Used for Roads? Fuel Tax$430 million36 percentYes Annual Registration Fee $470 million39 percentYes Fee for New Registration $240 million20 percentYes Other*$70 million5 percentNo Total$1.21 billion * Driver’s license fees, title fees, trailer registration fees, and other miscellaneous fees. 6

7. History of RUTF Revenue 7

8. Challenges 8 “Perfect Storm” Large and aging system Increasing demands Flattening revenue Increasing construction cost inflation rate Impact of severe weather Immediate damage to infrastructure Deferred maintenance due to shift in operational activities to address weather impacts Unquantifiable loss of useful life due to underlying damage to infrastructure

9. Road System Studies/Initiatives 9 2002 ad hoc city/county/state initiative – identified recommendations to increase efficiency (adopted by legislature) 2006 Road Use Tax Fund (RUTF) Study 2008 TIME-21 Funding Analysis 2011 Road Use Tax Fund Study – underway

10. Actions by Individual Agencies 10 Counties – reduced staff by approximately 300 in last ten years DOT Reduced staff by 750 since 2002 Eliminated 39 field offices/garages Reduced number of vehicles in the fleet Annual savings - $45 million

11. 2011 RUTF Study 11 Code requirement that DOT do study/report to review current revenue levels and projected construction and maintenance needs may include funding level recommendations shall evaluate alternative funding mechanisms Due every five years; first due 12/31/11

12. Governor’s Transportation 2020 Citizen Advisory Commission (CAC) 12 Named by Governor Branstad 3/2011 Tasks Assist DOT in completing its study/report Seek public input conditions of Iowa’s roadway system importance of roads to Iowans Preferred funding options

13. Evaluation of Critical Needs 13 Forecast revenues will fall short of meeting needs Total annual shortfall of $1.6 billion Critical needs annual shortfall of $215 million Impacts of critical funding shortfall More bridges closed or with weight restrictions Deteriorating conditions across the system – including high-level roads critical to movement of goods and people Increased costs to transportation providers and users Potential economic losses to the state of Iowa

14. Public Input Meeting Locations 14 Storm Lake Mount Pleasant Bettendorf Des Moines Waterloo Mason City Council Bluffs

15. Public Input Summary Approximately 500 people attended meetings 138 people provided verbal comments 7 people submitted written comments 53 written comments submitted via web site 15

16. Demographics of Input 16 Unaffiliated citizens: 33% Private industry: 18% Farmers: 6% County: 23% City: 12% Other public agencies: 7% Legislators:1%

17. Summary of Input 17 Additional funding needed: 90 % 1 person said additional funding not needed Need to also invest in other modes: 11% Favor RUTF over TIME-21 formula: 6%

18. Summary of Input – Funding Mechanisms 18 Increase fuel tax: 64% Index fuel tax rate: 9% Create new funding mechanism for alternative fueled/hybrid/high mileage vehicles: 11% Create one cent per bushel fee: 7% Implement per mile driven fee: 5% Increase fee for new registration from five to six percent: 3% Increase driver’s license fee: 3%

19. Public Input Guiding Principles for Development of Recommendations Additional revenue should have Constitutional protection Jurisdictions should continue to become more efficient User fee concept should be preserved Iowa’s pay-as-you-go tradition should continue Funding mechanisms should be fair and equitable Actions should be taken now but also should begin implementing/setting the stage for long-term solutions 19

20. CAC Recommendations 1. Increase fuel tax by eight to ten cents. 2. Increase “Fee for New Registration” from five percent to six percent. 3. Iowa DOT should recommend in their legislative report a funding mechanism for alternatively fueled, hybrid and high-fuel efficiency vehicles. 4. New funding should be distributed based on existing Code requirements. 5. Iowa DOT RUTF study should be done every two years instead of every five years. 6. Iowa DOT should meet at least annually with cities and counties to identify actions to increase efficiency. 7. Iowa DOT should study by 6/30/12 whether all vehicles and equipment using public roadways pay equitable fees. 20

21. Next Step Completion of Iowa DOT study and submission to the general assembly by December 31, 2011. 21

22. Federal Highway Funding FFY 2012 Appropriation Iowa DOT had anticipated a 25 percent reduction in funding due to federal Highway Trust Fund (HTF) insolvency Full appropriation only slightly lower than FFY 2011 level FFY 2013 Program Year STP targets to RPAs/MPOs will increase about $13 million statewide FFY 2013 Appropriation HTF insolvency issue not addressed Funding level may be significantly reduced 22

23. Authorization Status Senate Environment and Public Works Committee released text of a bill draft in early November (MAP-21) House not expected to release draft until early CY 2012 23

24. Moving Ahead for Progress in the 21 st Century: MAP-21 Funding levels close to current levels (not possible absent additional revenue) Reduce federal programs from about 90 to 30 with five core programs National Highway Performance Program (Interstate, NHS and Bridge) Transportation Mobility Program (STP and eligibility for TE, SRTS, NRT,, Byways, Freight Rail, etc.) Highway Safety Improvement Program (Traffic Safety, Rail Crossing Safety) National Freight Program Congestion Mitigation and Air Quality Includes setaside based on 2009 levels for TE, NRT, SRTS) 24

25. MAP-21: MPOs Tier I: Greater than 1 million population Tier II: Population between 200,000 and 1 million MPOs with population lower than 200,000 may be designated as a Tier II MPO by the Secretary if: Governor requests designation MPO meets technical requirements Ability to produce LRTP and TIP Ability to perform modeling functions or contract with state DOT 25

26. Questions? Stuart Anderson Planning, Programming and Modal Division Iowa Department of Transportation 515-239-1661 stuart.anderson@dot.iowa.gov 26