2.  M.S. 162.08, Subd 5, 6 & 7 provides for counties to make advances from future year’s allocations to expedite construction  Threshold is determined by looking at  Current construction cash balance  Expenditure trends  Repayments  Threshold may be administratively adjusted by MnDOT’s Chief Financial Officer

3.  RED – SEVERE  Construction cash balance too low. NO MORE ADVANCES – NO EXCEPTIONS  YELLOW - GUARDED  Construction cash balance low; balances reviewed monthly. Advancing money may not meet the anticipated needs. Resolution required. Reserve option is available only prior to bid advertisement.  GREEN - LOW  Construction cash balance at acceptable level. Advances approved on 1 st come, 1 st serve basis while funds are available. Resolution required. High priority projects are reserved.

4.  Submit an Advance Resolution  Earmarks the funding, but will NOT hold the funds  Advances paid out on a 1 st come 1 st serve basis  Requests are good for only the year requested (cannot summit for multiple years) – void 12/31  Not limited to the projects listed on the resolution  Payments are processed in the order received by SAF until the maximum advance amount is reached  Advances are repaid with next year’s allocation(s) until fully repaid.  Advance funding is not guaranteed

5.  Use if County needs a guarantee that the funds will be held for them  Once approved, a signed copy will be returned to the County  Requests are good for only the year requested (cannot summit for multiple years) – void 12/31

6.  Advance Resolution  Advance Resolution – Federal Project  Advance Resolution – Townbridge  Advance Resolution – Turnback  Advance Resolution – Request to Reserve Funds http://www.dot.state.mn.us/safinance/forms andresolutions.html

7.  Required if the construction cash balance drops below an acceptable level – Code Yellow  Process starts in early October  Each county is required to submit projects to their DSAE for prioritization within the district  DSAE submits the prioritized list to SALT for final prioritization  Requests should include a negative impact statement if project had to be delayed or advance funding not available plus the significance of the project

8.  Projects where agreements have mandated the county’s participation  Projects with advanced federal aid  Small over-runs and funding shortfalls may be funded, but require State Aid approval.

9.  Counties last “construction” allotment  Advance amount is reduced by any similar outstanding obligations &/or bond principal due  Limit can be administratively adjusted by MnDOT’s Chief Financial Officer

10.  For federal aid advance construction projects programmed by the ATP in the STIP where State Aid funds are used in lieu of federal funds.  Repayment is made when federal funds are converted  Should federal funds fail to be programmed, or the project (or a portion of it) be declared federally ineligible, the county is required to pay back the advance.

12. Accounting Entry – for 95% of State Aid obligation only (up to approved advance amount) Debit: Cash Credit: State Aid Receivable NOTE: The “Encumbrance Balance” on the Status Report will not include any projects that have been paid to the county with a State Aid Advance.

13. The entries for recognizing expenses and earned revenues are the same as for a regular project. NOTE: Excess revenue from State Aid Advances will be backed out at year end.

14.  Transfers from Maintenance to Construction when final maintenance underruns. Debit: State Aid Construction - Allotment Credit: State Aid Construction – Deferred Revenue  Construction project underruns – unused encumbrance is put back into the Allotment Debit: State Aid Construction – Allotment Credit: State Aid Construction - Receivable

15. The negative “Available Balance” from your report is the net amount of all State Aid Advances that have occurred for that funding type. Accounting Entry – Recognize State Aid Advance Debit: State Aid – Advance (revenue) Credit: State Aid – Advance Payable (liability)

16. The current year revenues must be reduced by the amount of the Deferred Revenue debit balance. Accounting Entry – Reduce revenue for the amount of the State Aid Advances Debit: State Aid Construction – Revenue Credit: State Aid Constr – Deferred Revenue NOTE: If the debit amount of the Deferred Revenue is more than the Advance amount another entry needs to be made to Reduce Revenue based on Deferred Revenue Balance.

17. Reverse prior year State Aid Advances (repaid) Accounting Entry – Debit: State Aid – Advance Payable Credit: State Aid – Advance

18. Revenue not recognized in previous year due to State Aid Advance. Accounting Entry – Debit: State Aid Constr – Deferred Revenue Credit: State Aid Constr – Revenue NOTE: An entry should be made for both of the reversing revenue entries that were made at year end.