1. THE FUTURE OF TRANSPORTATION FUNDING AN ALDOT PERSPECTIVE December 3, 2014

2. ESTIMATED STATE FUNDS 2015$ 484,574,000 ESTIMATED FEDERAL FUNDS 2015$ 732,263,000 TOTAL $1,216,837,000 ALDOT HIGHWAY REVENUE PROJECTION - 2015

3. ProgramYears Average Funding ($ Millions) Range of Funding ($ Millions ) ISTEA92 - 97$283$240 - $368 TEA-2198 - 03$560$463 - $618 SAFETEA-LU05 - 09$731$697 - $788 MAP-2113 - 14$737$733 - $741 HISTORICAL FEDERAL FUNDING LEVELS

4. Without Stimulus $$ TOTAL STATE AND FEDERAL HIGHWAY REVENUE

5. CONSTRUCTION COSTS TRENDS

6. 19912012

7. STATE OF ALABAMA TRANSPORTATION INFRASTRUCTURE FUNDING $588 million 1991 New Diversion

8. ALDOT 2015 PROPOSED FUNDING ALLOCATION

9. ALLOCATION OF FUNDS State Funds to Others$ 87,900,000 Administrative Office of the Courts $ 35,000,000 Department of Public Safety $ 28,500,000 Department of Revenue $ 4,900,000 State Personnel Department $ 1,375,000 State Park Maintenance $ 500,000 Industrial Access Apportionment $ 11,000,000 County Engineers Salary Support $ 6,500,000 Captive County Insurance $ 125,000 Total $ 87,900,000

10. State Funds to Others$ 87,900,000 Federal Funds to Others$ 207,247,000 Large Urban Areas $ 35,652,000 Small Urban Areas $ 13,292,000 Counties (Including Off-System Bridge) $ 35,711,000 CMAQ – Birmingham Area $ 10,903,000 Transportation Alternatives $ 15,279,000 Metropolitan Planning $ 2,910,000 ATRIP/GARVEE/RAMP Payment $ 93,500,000 Total $ 207,247,000

11. State Funds to Others$ 87,900,000 Federal Funds to Others$ 207,247,000 ALDOT Overhead$ 70,350,000

12. State Funds to Others$ 87,900,000 Federal Funds to Others$ 207,247,000 ALDOT Overhead$ 70,350,000 Routine/Emergency Maintenance$ 165,500,000 Supports the 50 District, Division and Regional Offices in the performance of routine maintenance including pothole patching, sign, signals and marking maintenance, debris removal, guardrail repair, etc….

13. State Funds to Others$ 87,900,000 Federal Funds to Others$ 207,247,000 ALDOT Overhead$ 70,350,000 Routine/Emergency Maintenance$ 165,500,000 Safety$ 49,840,000

14. State Funds to Others$ 87,900,000 Federal Funds to Others$ 207,247,000 ALDOT Overhead$ 70,350,000 Routine/Emergency Maintenance$ 165,500,000 Safety$ 49,840,000 Interstate Maintenance$ 170,000,000 Based on resurfacing all of the interstate on a 12 year cycle. This requires 84 miles of interstate to be resurfaced each year.

15. State Funds to Others$ 87,900,000 Federal Funds to Others$ 207,247,000 ALDOT Overhead$ 70,350,000 Routine/Emergency Maintenance$ 165,500,000 Safety$ 49,840,000 Interstate Maintenance$ 170,000,000 Bridge Replacement$ 80,000,000 $80 m replaces about 40 bridges each year. ALDOT has been able to maintain bridges on the state system at a reasonable state of repair, however, there are 5,745 bridges on the state system.

16. State Funds to Others$ 87,900,000 Federal Funds to Others$ 207,247,000 ALDOT Overhead$ 70,350,000 Routine/Emergency Maintenance$ 165,500,000 Safety$ 49,840,000 Interstate Maintenance$ 170,000,000 Bridge Replacement$ 80,000,000 Resurfacing$ 260,000,000 Based on resurfacing all non-interstate state routes on a 12 year cycle. This requires that 850 miles be resurfaced each year.

17. State Funds to Others$ 87,900,000 Federal Funds to Others$ 207,247,000 ALDOT Overhead$ 70,350,000 Routine/Emergency Maintenance$ 165,500,000 Safety$ 49,840,000 Interstate Maintenance$ 170,000,000 Bridge Replacement$ 80,000,000 Resurfacing$ 260,000,000 Capacity/System Enhancement/APD$ 90,000,000 Capacity/System Enhancement projects are new roads and projects to add lanes to existing roads or some other type of enhancement beyond maintaining the status quo, such as new interchanges, intersection improvements, access management and ITS strategies, etc….

18. State Funds to Others$ 87,900,000 Federal Funds to Others$ 207,247,000 ALDOT Overhead$ 70,350,000 Routine/Emergency Maintenance$ 165,500,000 Safety$ 49,840,000 Interstate Maintenance$ 170,000,000 Bridge Replacement$ 80,000,000 Resurfacing$ 260,000,000 Capacity/System Enhancement/APD$ 90,000,000 Unplanned Needs$ 10,000,000 Unplanned needs may includes assistance to local governments, incentives to recruit industry or other unanticipated expenditure.

19. State Funds to Others$ 87,900,000 Federal Funds to Others$ 207,247,000 ALDOT Overhead$ 70,350,000 Routine/Emergency Maintenance$ 165,500,000 Safety$ 49,840,000 Interstate Maintenance$ 170,000,000 Bridge Replacement$ 80,000,000 Resurfacing$ 260,000,000 Capacity/System Enhancement/APD$ 90,000,000 Unplanned Needs $ 10,000,000 Obligation Limitation$ 15,000,000 ALDOT is not given authority to spend all of the federal allocation given to the state. While the federal allocation for the year is $732m, ALDOT is typically only allowed to obligate about $717m.

20. State Funds to Others$ 87,900,000 Federal Funds to Others$ 207,247,000 ALDOT Overhead$ 70,350,000 Routine/Emergency Maintenance$ 165,500,000 Safety$ 49,840,000 Interstate Maintenance$ 170,000,000 Bridge Replacement$ 80,000,000 Resurfacing$ 260,000,000 Capacity/System Enhancement/APD$ 90,000,000 Unplanned Needs $ 10,000,000 Obligation Limitation$ 15,000,000 Equipment/Land & Building$ 11,000,000

21. State Funds to Others$ 87,900,000 Federal Funds to Others$ 207,247,000 ALDOT Overhead$ 70,350,000 Routine/Emergency Maintenance$ 165,500,000 Safety$ 49,840,000 Interstate Maintenance$ 170,000,000 Bridge Replacement$ 80,000,000 Resurfacing$ 260,000,000 Capacity/System Enhancement/APD$ 90,000,000 Unplanned Needs$ 10,000,000 Obligation Limitation$ 15,000,000 Equipment/Land & Building$ 11,000,000 Total Program$1, 216,837,000

22. FUNDING ALLOCATION

23. SOLVENCY OF THE FEDERAL HIGHWAY TRUST FUND ? Expenditures > Receipts

24. HIGHWAY TRUST FUND SOLUTIONS 1. Increase the gasoline tax or other fee 2. Continue to transfer $ from general fund account 3. Cut spending - live within your means 4. Devolution (or partial devolution)

25. WHAT WILL EFFECT FUNDING IN THE FUTURE?

26. Future Fuel Economy Standards

28. VEHICLE FUEL EFFICIENCY

29. WHAT DO WE DRIVE? 1994 Honda Accord, #2 Top Seller 21/27 mpg city/hwy 2013 Honda Accord, #4 Top Seller 27/36 mpg city/hwy

30. WHAT DID WE SPEND? If you drove 12,000 miles – ½ city, ½ hwy You consumed 508 gallons of gas If you drove 12,000 miles – ½ city, ½ hwy You consumed 389 gallons of gas You paid $185 in gasoline tax You paid $142 in gasoline tax

31. VEHICLE MILES OF TRAVEL

33. 1.Don’t expect the Federal Government to increase federal funding for highways. 2.Don’t be surprised if the Federal Government provides less money. 3.It will not be immediate, but over time expect less revenue due to vehicle fuel efficiency. 4.Expect a move toward a mileage based fee. 5.P3’s will have limited application. 6.Any revenue increases will most likely be done at the state or local level.