1. Innovative Transportation Finance March 2, 2010 Presented by: Brad Larsen Director of Traditional & Innovative Finance Minnesota Department of Transportation 651/366-4821 or brad.larsen@state.mn.usbrad.larsen@state.mn.us Innovative Finance Website: www.dot.state.mn.us/funding/innovative www.dot.state.mn.us/funding/innovative

2. 2 What is Innovative Transportation Finance? Innovative Transportation Finance is any strategy that uses a new, emerging or existing funding source, financing technique or partnering approach to deliver transportation projects more quickly and cost-effectively. Examples of innovative finance in MN: Public Private Partner Toll Facility - TranSmart 212 Toll Road Federal Advance Construction – ROC 52 High Occupancy Toll Lanes – I-394/MnPASS Express Lanes Transportation Revolving Loan Fund – more than 20 loans Mn/DOT is currently developing a new multi- modal, multi-jurisdictional program to explore and pursue innovative finance opportunities.

3. 3 Why Consider Innovative Finance? Innovative Finance offers new approaches that can help meet transportation funding challenges Growing gap between transportation needs and available financial resources Fundamental responsibility to continually find ways to make the best use of public monies Potential future federal incentives for innovative approaches Advances Mn/DOTs Strategic Vision to foster innovation and collaborative partnerships Innovative Finance is not a silver bullet for solving all of the states transportation challenges, but it can be an important piece of the solution

4. 4 Keys to Successfully Pursuing Innovative Finance Communicating, collaborating and involving the public Being fiscally responsible and maximizing return on taxpayer investment Protecting the public interest in the states transportation system Stretching limited resources to equitably meet more transportation needs Using a wider array of funding and financing options in an integrated, transparent and accountable manner Ensuring consistency with the states overall transportation vision, goals and objectives

5. 5 Benefits of Innovative Finance Transportation Resource Expansion New revenue sources New sources/types of financing New fund management techniques Better Alignment of Use/Benefit with Cost Potential Public Private Partnership Cost Savings Life cycle, risk allocation, innovation, economies of scale, competition, tax Project Acceleration Benefits Inflation savings, advanced public benefits, economic Transportation Funding/Financing Diversification

6. 6 Mn/DOTs Innovative Finance Program Innovative Finance Program Development Activities Education, outreach and communication Innovative finance legislation Alternative Financing authority to enter into financing agreements with governmental, non-profit and private entities Federal Financial Program authority to apply for and receive TIFIA (Federal Infrastructure Bank) and other federal financial assistance Project screening and assessment Expert assistance & development Integration into planning, investment & project development processes Research Concept exploration and testing

7. 7 Innovative Finance Concepts Financing Techniques TIFIA (Federal Infrastructure Bank program) Private financing P3s (wide variety of models) Longer term, more complex approaches like Floridas I-595 HOT lane Design/Build/Finance/Operate/Maintain project. *Mn/DOT is not exploring P3 approaches like the Chicago Sky way or Indiana Toll Road Shorter term, less complex approaches like Michigans Hwy. 21 and I-69 Design/Build/Finance projects

8. 8 Innovative Finance Concepts Revenue Generating Techniques Mn/PASS expansion (HOT lanes/shoulders; bridge tolling concepts) Private contribution P3s and transportation econ. dev. Transportation improvement district approaches Asset revenue enhancement opportunities Transit oriented development & joint development Intermodal and freight facility fees Parking facility fees Mileage based user fees Toward zero death (TZD) surcharge CTS Value Capture Study strategies

9. Questions & Discussion Mn/DOT Contacts: Brad Larsen 651-366-4821 or brad.larsen@state.mn.usbrad.larsen@state.mn.us Matt Shands 651-366-4893 or matt.shands@state.mn.usmatt.shands@state.mn.us For more information about Innovative Finance visit: www.dot.state.mn.us/funding/innovative www.dot.state.mn.us/funding/innovative