1. The Transportation Funding Gap This is what you have heard.

2. Twenty Year Funding Needs to Achieve Desired Outcomes System/Mode Anticipated Transportation Revenue Expected Over the Next 20 Years Maintain Current Performance Economically Competitive/ World Class System State Highway System (State Roads and Bridges) $18 billion$5.0 billion$10-12.0 billion County State Aid System $5 billion Municipal State Aid System $1.6 billion Greater Minnesota Transit $1.9 billion$0.02 billion$0.09 billion Metropolitan Area Transit (thru 2030) $8.5 billion $1.6 billion$3.2 billion - $4.8 billion Passenger Rail $0.1 billion─ $5-7.0 billion Freight - Rail and Ports $0.3 billion $0.6 billion Airports (Not MAC System) $1.4 billion$0.6 billion$0.8 billion Totals $36.9 billion$7.2 billion$20.6-$26.2 billion Annual Funding Gap $0$300 million$1.1 billion

3. An Illustration of Various Transportation Funding Mechanisms and Projected Revenue Generating Capacity

4. Motor Fuels Tax Funding Mechanism Current Rate Incremental Yield Annual Yield FY 2012 Illustrative Rate and Annual Yield 20 year Yield Motor Fuels Taxes Gas tax Diesel tax $0.285 per gal. $0.01 yields $32.0 million annually to HUTDF $912 million x 95% = $866.4 million  62% TH = $537.2 million  29% Counties = $251.3 million  9% Municipal State Aid = $78.0 million $0.25 per gal. increase = $800 million to HUTDF x 95% = $760 million ($40.0 million is allocated under statute to counties and townships)  62% TH = $471.2 million  29% Counties = $220.4 million  9% Municipal State Aid = $68.4 million ($0.8 billion to Counties and Townships)  $9.42 billion to TH Fund  $4.41 billion to Counties State Aid Fund  $1.37 billion to Municipal State Aid Fund

5. Motor Vehicle Registration Fees Funding Mechanism Current Rate Incremental Yield Annual Yield FY 2012 Illustrative Rate and Annual Yield 20 year Yield Registration Fees $35 base rate + 1.25% of value +$10 (Depreciates by 10%/year) 0.10% = $46.2 million to Highways Users Tax Distribution Fund (HUTDF) $577.24 million to HUTDF x 95% = $548.38  62% to TH Fund = $340.0 million  29% to CSAH = $159.0 million  9% to MSA = $49.4 million 0.25% increase = $115.45 to HUTDF x 95 % = $109.67 ($28.9 million is allocated under statute to counties and townships)  62% TH = $67.9 million  29% Counties = $31.8 million  9% Municipal State Aid = $9.9 million ($0.58 billion to Counties and Townships)  $1.36 billion to TH Fund  $0.63 billion to Counties  $0.20 billion to Municipal State Aid Fund

6. Motor Vehicle Sales Tax Funding Mechanism Current Rate Incremental Yield Annual Yield FY 2012 Illustrative Rate and Annual Yield 20 year Yield Motor Vehicle Sales Tax 6.5% of vehicle costs 60% HUTD 40% Transit Assistance Fund 1% yields $30 million to TH fund 1% yields $22 million to County and Municipal 1% yield 35 million to Transit Assistance Fund $336 million to HUTDF x 95% = $319.2 million ($225 million to Transit Assistance Fund)  62% to TH Fund = $197.9 million  29% to CSAH = $92.6 million  9% to MSA = $28.7 million 0.50% increase = $43.15 million x 60% = $25.89 HUTDF (40% to Transit Assistance Fund = $17.26 million) ($16.8 million is allocated under statute to counties and townships)  62% TH =$16.1 million  29% Counties = $7.1 million  9% Municipal State Aid = $2.6 million  $17.26 to Transit Assistance Fund ($336 million to Counties and Townships)  $321 million to TH Fund  $141.6 million to Counties  $52.0 million to Municipal State Aid Fund  $345.2 million to Transit Assistance Fund

7. Sales Tax Funding Mechanism Current Rate Incremental Yield Annual Yield FY 2012 Illustrative Rate and Annual Yield 20 year Yield Statewide Sales Tax 6.875% of select purchases 1.0 percent generates $670 million Annual yield to the state is $4.6 billion 0.50% increase = $335 million $6.7 billion Metropolitan Area Sales Tax (5 counties).25% of purchases in five counties (Anoka, Dakota, Hennepin, Ramsey, Washington).25% generates $100 million Annual yield to CTIB is $100 million.50% increase = $200 million $3.6 billion (thru 2030)

8. Alternative Transportation Financing ApplicationPublic-Private Partnerships Tolling/Direct User Fees Value Capture Sponsorships Existing State Hwys New Capacity on State Highways New Capacity on State Bridges Local Roads and Bridges Metropolitan Transit Transit (Greater MN) Passenger Rail Ports and Waterways Airports (state)

9. Transportation Improvement Districts ApplicationLocal Option Sales Tax Wheelage Tax Public- Private Partnerships TollingValue Capture Sponsor- ships Assessment Examples Area 1: New Capacity on State Highways Area 2: New Capacity on Local Roads Area 3: Street Improve- ment Districts

10. Anticipated Outcomes for Status Quo Scenario: State Highways  Interstates maintained at MAP-21 target  Principal arterials become 16% poor (1,300 miles)  Minor arterials become 42% poor (2,800 miles) by 2032  Bridge condition is well under performance targets with 76% of bridges in good or satisfactory condition and 20% of bridges (647 bridges) in poor condition  Safety investments remain at current levels, traffic fatalities continue to decline  Metro congestion increases and reliability decreases systemwide, reliability and throughput increase at spot locations  Inter-regional corridors have limited delays, performance on a handful of major corridors continues to decline  Little money available for expansion, regional and local priorities, economic development, etc

11. Anticipated Outcomes for Maintaining Current Performance Scenario: State Highways  Interstates maintained at MAP-21 target  Principal arterials become 6% poor by 2032 (454 miles)  Minor arterials become 11% poor by 2032 (741 miles)  Bridges at or near current performance targets  Traffic fatalities continue to decrease  Metro congestion increases slightly systemwide, reliability improves on future MnPASS corridors and at congestion management and safety HROI project locations  IRCs continue to meet performance target  Modest amount available for expansion, regional and local priorities, economic development, etc

12. World Class/Economically Competitive System Scenario: State Highways  Interstates maintained at MAP-21 target  Principal arterials improve to less than 2% poor by 2032 (151 miles in poor condition)  Minor arterials improve to less than 3% poor by 2032 (202 miles in poor condition)  Bridge conditions meet targets of less than 2% poor and greater than 84% good and satisfactory  Safety investments remain at current levels, MnDOT meets Toward Zero Deaths fatality targets in future years  With capacity investments, metro congestion remains stable, reliability improves on MnPASS corridors and at HROI locations  Modest amount available for expansion, regional and local priorities, economic development, etc

13. Greater Minnesota Transit Anticipated Outcomes  Maintaining current performance  Annual hours of service remain at projected 2013 level of 1.23 million hours  Some revenue is reserved from 2013 to 2022, then spent to maintain service as inflationary costs exceed revenue  Economically competitive/World class  Minnesota Statutes §174.24  Meet 80% of transit needs by July 1, 2015  Meet 90% of transit needs by July 1, 2025

14. Freight Rail Anticipated Outcomes Rail Grade Crossing Improvement – Public cost share is 25% – Performance goal of 50% crossings with gates & signals = 2250 of 4500 crossings vs. 1500 (33%) currently – Assumes $250K per crossing for gates & signals – Assumes useful life of signal system is 25 years Selected needs as identified in 2010 MN Statewide Rail Plan. – Statewide short line railroad track and structure upgrades to handle Class 1 286,000 lb. rail cars – Economic development projects include rail-served business parks, intermodal container, transload, etc

15. Ports and Waterways Anticipated Outcomes Port upgrades include reconstructing dock walls, warehouse rehabilitation, improving road and rail access, limited dredging, loading equipment, etc. Appropriations over past five years have totaled $7.5 million = $1.5 million/year Assumes twenty year needs of $90 million based on average annual needs as identified by the state’s port authorities

16. Statewide Airport Anticipated Outcomes Current System Maintained Eliminates runway and taxiway extensions No new airports Funding priorities: safety, mobility, financial, operations, preservation No new navigation (NextGEN) deployment Economically Competitive/World Class

17. Passenger Rail Anticipated Outcomes Full build out of Phase 1 projects as a statewide system over twenty-year timeframe: – Twin Cities to Chicago -110 mph service – Twin Cities to Duluth -110 mph service – Twin Cities to Rochester -150 plus mph service – Twin Cities to St. Cloud, Moorhead -up to 90mph service – Twin Cities to Mankato -up to 90mph service – Twin Cities to Eau Claire -up to 90 mph service 20-year capital cost estimate $4B - $5.1B for priority passenger and share freight rail improvements if built as a system, built as a series of individual unrelated projects the 20-yr. estimate is $4.5B - $5.7B. Outcomes: – Between 4.1 to 6 million annual riders. – Annual operating subsidies of $41m - $95m are based on a farebox recovery of approximately 71% -49%. – Shared freight and passenger rail improvements – Best case scenario in terms of operations cost – Interstate/intrastate Pass. rail connection to economic centers – 2009 $26m in State G.O. Bonds – Phase 1 State Rail Plan projects implemented

18. Metropolitan Area Transit Scenario 1 – Status Quo 18 Continue to operate the transit system that exists today and finish Central LRT and Cedar Stage 1 System includes: – Existing bus and Metro Mobility service levels – Mandatory Metro Mobility (ADA) service increases – Hiawatha LRT – Northstar Commuter Rail – Central LRT starting in 2014 – Cedar Ave BRT Stage 1 starting in 2013

19. Metropolitan Area Transit Anticipated Outcomes for Status Quo Scenario 19 Increased fares Reduced service Reduced ridership Does not address growing demand Service quality and customer satisfaction reduced

20. Metropolitan Area Transit Scenario 2 – Maintain Current Performance 20 Regional growth requires more transit investments to maintain current mobility levels System includes: – Scenario 1 service levels – Bus service expansion (0.5% growth / year) – Southwest LRT (SWLRT) – I-35W South BRT – Cedar Ave BRT Stage 2 – Three Arterial BRT corridors

21. 21 Expected Outcomes: + Positive results for residents + Addresses growing transit demand and makes progress toward doubling ridership by 2030 + New connections between home, school, work and entertainment + Positive results for businesses + Transit spurs economic development + Solid infrastructure attracts jobs & development Metropolitan Area Transit Anticipated Outcomes for Maintaining Performance Scenario

22. Metropolitan Area Transit Scenario 3 – Economic Competitiveness 22 Improved mobility levels for residents and businesses and enhanced regional economic competitiveness System includes (conceptual example): – Scenario 1 and 2 service levels – Bus service expansion (1.0% total growth/year over status quo) – Two additional LRT (after SWLRT) – Six additional Arterial BRT corridors – Three additional Highway BRT/Managed Lane corridors Scenario 3 based on the transit vision in the Council's 2030 Transportation Policy Plan and the Program of Projects

23. 23 Positive results for residents – Addresses more growth in demand and doubling of ridership by 2030 – Significantly better connections between home, school, work and entertainment – Faster, cheaper transportation options that are safe and environmentally-friendly Positive results for business – Additional 500,000 employees will have access to jobs via transit – Freight and logistics savings – Investments compete well with similar investments in peer regions Positive result for all taxpayers: A return on investment (ROI) between $6.6 and $10.1 billion to 2030 Metropolitan Area Transit Anticipated Outcomes for Economic Competitiveness Scenario

24. Metropolitan Area Transit Scenario 4 – World Class 24 Accelerated transit investment program, sustained beyond 2030 A more robust, balanced and comprehensive regional transit system System includes (conceptual example): – Scenario 1, 2, and 3 service levels – Bus service expansion (1.5% total growth/year over status quo) – Three additional Arterial BRT corridors – Two additional rail lines – Two additional Highway BRT/Managed Lane corridors – Six streetcar lines

25. 25 Positive results for residents – Significantly address growth in demand and more than double ridership by 2030 – Extensive connections between home, school, work and entertainment – Additional faster, cheaper transportation options that are safe and environmentally- friendly Positive results for business – Additional employees will have access to jobs via transit – Additional freight and logistics savings – Position the region to surpass investments in peer regions and further enhance regional competitiveness Positive result for all taxpayers: an ROI between $10.7 and $16.5 billion in 2030 Metropolitan Area Transit Anticipated Outcomes for World Class Scenario

26. Metropolitan Area Transit Summary 26 Scenario 1: results in service cuts and less mobility and leaves this region falling behind peers and losing competitiveness Scenario 2: brings the region in line with existing conditions of competing peer regions Scenarios 3 and 4: make the region competitive with peers and provide opportunities to attract additional investment