Minnesota County Highway Accountant’s Conference April 26, 2018 State Aid 101 and Update Minnesota County Highway Accountant’s Conference April 26, 2018

About us State Aid 101 available at http://www.dot.state.mn.us/stateaid/training.html State Aid for Local Transportation (SALT) was established in 1957 The purpose of the state aid program is to provide resources, from the Highway Users Tax Distribution Fund (HUTDF), to assist local governments with the construction and maintenance of community-interest highways and streets on the state aid system. The goals of the state aid program are to provide users of secondary highways and streets with: Safe highways and streets Adequate mobility and structural capacity on highways and streets An integrated transportation network

State Aid’s organization State Aid (Central Office) Administration Project Delivery: Federal, State Aid, State Aid Programs, Emergency Relief, Safe Routes to School, and Traffic Safety County Needs Municipal Needs Information Resources District Engineers District State Aid Engineers (DSAE) District State Aid Assistant (DSAA)

Role of State Aid (Central Office) Administer the distribution of funding Distribute funds for highway maintenance and construction to counties, cities, and townships Provide technical assistance Authorize funds for bridge construction Coordinate locally funded projects Provide overall management of the state aid system

Role of District State Aid Engineers Each district has one District State Aid Engineer (DSAE) and at least one District State Aid Assistant (DSAA) Liaison to local agencies State Aid responsibilities Needs review Plan approval/processing Construction review/approval Assist in local issues as needed

Construction and Traffic Safety Online resources for construction (http://www.dot.state.mn.us/stateaid/construction.html) Pay item forms Contract administration forms Information and resources Services and resources for traffic safety Highway Safety Improvement Program

Tools and applications eAdvert (http://www.dot.state.mn.us/stateaid/eadvert.html) Tool for locals to post construction projects for bid Project Mapping Tracking (http://www.dot.state.mn.us/stateaid/project- mapping.html) Interactive map of current State Aid projects SA NEEDS 3 (https://dotapp7.dot.state.mn.us/saneeds3/) Application that is used to determine the annual apportionments State Aid Accounting System (SAAS) (http://www.dot.state.mn.us/safinance/saas.html) Generate various financial reports

State Aid’s role State agencies and federal agencies: State Aid MnDOT PCA DNR FHWA FTA Army Corp of Engineers State Aid Local agencies Counties Cities Townships

What’s included in the state aid system? County State Aid Highway (CSAH) 87 counties 8 metro counties and 79 counties in greater Minnesota Municipal State Aid Street (MSAS) 148 cities of population greater than 5,000 84 metro cities and 64 cities in greater Minnesota Town road and bridge Jurisdictional Transfers (Turnbacks)

County – state aid system The County State Aid Highway (CSAH) system is a network of key routes under the jurisdiction of Minnesota’s counties (Minnesota Statues 162.02). CSAH system covers just over 30,700 miles (2/3) of county roads. The system was established in 1957 and has remained relatively constant. There are established criteria for eligible routes.

County state aid funding – from pump to project

Highway User Tax Distribution Fund (HUTDF) Constitutionally dedicated to MnDOT, counties and state aid cities Fuel Tax License Tabs Motor Vehicle Sales Tax

County Needs – funding overview County state aid funds are collected by the state according to the constitution and law, distributed from the Highway Users Tax Distribution Funds (HUTDF). The county share of the HUDTF is 29% of the regular 95%. The County State Aid Highway Needs Unit collects and maintains data to calculate the annual distribution to the counties to maintain, improve and construct their designated county state aid highways.

County Needs – Money Needs and Screening Board “Needs” is the estimated total annual cost of constructing, over a period of 25 years, the CSAH system to standards in a county (Minnesota Statutes 162.07, Subd. 2). Annually, we collect information from counties to calculate their 25-year needs. Every October the County Screening Board submits its findings and recommendations in writing which includes each county's lane-mileage and Money Needs. The County Screening Board is made up of county representatives from the eight MnDOT districts and six urban counties.

County Needs - accounts After each county's total allocation is determined their money is further divided into regular and municipal accounts. Regular is based on all mileage outside the corporate limits of cities under 5,000 population which includes the miles inside corporate limits of cities over 5,000 population. Municipal is based on mileage inside the corporate limits of non-state aid cities (under 5000 pop.). The regular and municipal accounts are further divided into construction and maintenance Construction is 60% of the account and must have an approved plan or agreement Maintenance is 40% of the account and does not require a plan. Counties must report their expenses to the State Aid office annually

Local Bridge/Road Bond Language – aka Earmarks There is a difference between Trunk Highway (TH) bonds and General Obligation (GO) bonds TH – utilized for trunk highway purposes GO – utilized for local roadways/bridges Earmarks – The words you use matter and dictate how you are able to utilize the funds. Do not assume intent. Project readiness is key Recommended to not ask for $ if project is not ready for construction in 3-4 years Legislature likes to see $ that they have appropriated get out the door as quickly as possible Having a pot of $ sitting there looking unused does not help with future requests for funding Projects tend to go smoother when local agencies are the lead agency on a cooperative agreement project with MnDOT

Local Bridge/Road Bond Language – aka Earmarks No specific earmark Construction only on local road/bridge* Right of way**, engineering, construction, administration All are eligible items for local road/bridge elements. Must show project is fully funded to use for any element. Road/bridge improvements Construction only on local road/bridge* Interchange with a Trunk Highway Only local road/bridge elements are eligible. Typically determined on case by case with MMB. Road/bridge realignment Construction only on local road/bridge* *For bridge projects, the funding can only be used for eligible items included in the State Aid Manual. **Use of GO bonds for ROW is discouraged

Local Bridge Replacement Program (LBRP)

Local Bridge Replacement Program (LBRP)

Local Bridge Replacement Program History Year Bond $ # Projects 2006 $54.7m 228 2008 $51.5m 133 Total: $335.5 million in bond funds 982 bridges replaced Avg - $342,000 per bridge 2009 $10m 6 2017 Legislative Bonding: Total - $49,212,000 Competitive - $16,537,000 All funding has been allocated/encumbered on projects. No funding remaining. 2010 $66m 232 2012 $62.7m 256 2014 $33m 49 2015 $7.4 4 2017 $49.2 67

Local Road Improvement Program (LRIP)

Local Road Improvement Program (LRIP)

Local Road Improvement Program History Year Bond $ # Projects 2005 $10m 46 2006 $16m 75 2008 $10m 81 Total: $235.2 million in bond funds 289 roads improved Avg - $815,000 per project 2012 $20m 34 2017 Legislative Bonding: Total - $115,932,000 Competitive - $25,366,000 2014 $54.4m 43 2015 $8.9m 9 2016 $3.2m 1 2017 $112.7 47

LBRP and LRIP Status Local Bridge Replacement Program Local Road Improvement Program Master Local Bridge Priority List (5 year priority: 2018-2022) Bridges identified by local agencies as priority for replacement within their 5-year capital improvement program 958 bridges requesting $261 million in bond funds Local Bridge Waiting List (as of April 2018) Bridges that have been designed and approved or are in the process of design 134 bridges requesting $64 million in bond funds Agency # Projects Funded Bond $ Awarded Total Project Cost County 16 $87.35M $339.02M State Aid City 13 $18.89M $54.78M Small City 11 $5.22M $19.52M Township 7 $4.38M $5.86M Total 36 $115.84M $419.18M

State Aid partners State Aid partners State Aid Bridge State Aid Finance

State Aid Bridge Process state and/or federally funded local bridges and structures Local bridge information resource Annual Local Bridge Cost Reporting Liaison with MnDOT Bridge Office

State Aid Finance State Aid Finance provides accounting and financial support to Minnesota’s cities and counties. Accountant training through on-site visits Provide financial support and training for engineers through on-site visits Federal Aid and State Aid payments Commissioner’s Order for HUTDF apportionment Bridge bond and other grant requisitions, encumbrances and payments Answer finance questions State Aid Finance works with the State Aid Office, District State Aid Engineers, Federal Highway Administration, Legislative Audit, and city and county engineers and accountants.

State Aid Finance (continued) Provide technical assistance: Advances Local Agency Bonds State Aid Payment Requests Delegated Contract Process (DCP) Payment Requests Agency Agreements and Payment Requests CSAH Regular and Municipal Construction Funds State Transportation Funds Town Bridge and Special Town Bridge State Park Road Account Federal Fund Exchanges Turnbacks FHWA Form Disaster and emergency relief View a full chart of the roles and responsibilities by employee at http://www.dot.state.mn.us/safinance/contact/saf-roles-responsibilities-external.pdf

State Aid Finance – Changes State Aid Finance – Changes in Roles and Responsibilities Candy Harding Mike Kilanowski Cindy Degener John Fox Acting State Aid Finance Supervisor Training & Scheduling Task Force Member Training Task Force Member Fed Aid Agreements Commissioner’s Order Disaster and ER Task Force Member State Aid Maintenance Schedule Changes Annual Report Submittals Bond Schedules

State Aid Finance Changes State Aid Finance Roles and Responsibilities

Questions? Mitch Rasmussen Cindy Degener State Aid Engineer Acting State Aid Finance Supervisor 651-366-4831 651-366-4877 mitch.rasmussen@state.mn.us cindy.degner@state.mn.us Kristine Elwood Deputy State Aid Engineer 651-366-3804 kristine.elwood@state.mn.us