1. 1 MAXIMIZING PUBLIC INVESTMENT Ohio Department of Transportation Highway Funding Overview Julie Ray, Deputy Director Division of Finance & Forecasting

2. 2 Overview Funding Philosophy Primary Funding Sources Department of Transportation Financial Forecast Departmental Approaches to Saving Money Assistance/Guidance from the Committee Funding and Finance Spectrums

3. 3 Funding Priorities 1.Debt Service 2.Operating 3.Pavement and Bridge Programs 4.Safety 5.Statewide Programs 6.Local Programs 7.Major New

4. 4 Ohio Department of Transportation Primary Funding Portfolio FY 07 - $3.2 Billion

5. 5 State Funding

6. 6 State Funding FY 07 - $1.26 Billion

7. 7 Revenue & Tax Rate History

8. 8 Gas Tax Rate Adjusted for CPI and Highway & Street Construction Index BHWY CCI is the highway and street construction cost index per the producer price index

9. 9 MFT Revenue Adjusted for CPI and Highway & Street Construction Index BHWY CCI is the highway and street construction cost index per the producer price index

10. 10 Ohio Motor Fuel Price History

11. 11 Revenue & Consumption History

12. 12 Gasoline & Diesel Fuel Consumption in Ohio

13. 13 Population & Fuel Consumption in Ohio

14. Annual VMT All Roads and Fuel Consumption in Ohio

15. 15 Ohio Motor Fuel Tax 28¢ 1¢ = $64 M to the State

16. 16 Federal Funding

17. 17 Federal Funding Overview 6 Year Authorization Bill provides: – Allocates Apportionment Balances for 6 years Allocation is based on a States Rate of Return Rate of Return equates to Donor/Donee Issue Ohios Rate of Return = 92% – OB limit (cash) estimate established which states use to develop a forecast – Earmarks Annual Appropriation Bill provides: – Appropriations normally mirror reauthorization numbers – Appropriators will determine the OB Limit (cash) to be received – Earmarks

18. 18 Federal Funding FY 2007

19. 19 Federal Highway - User Tax Rate 1¢ = $57 M $57 M x 92% = $52 M Last Federal Gas Tax Increase was 4.3 ¢ in 1993

20. 20 Ohio Share of Federal Highway Trust Fund Contribution * 2009 is based on preliminary FHWA statistics. Will be revised when final numbers are provided. Note: Each states percent share is based on a combination of revenue collected and motor fuel consumption. The revenue is 2 years behind and the motor fuel consumption is 3 years behind. For instance 2009 percent share is based on 2007 revenues and 2006 gallons.

21. 21 Federal Donor/Donee States - Highway

22. 22 Use of Ohios Federal Trust Fund - FY 07 $634 Million (35.0%)

23. 23 Federal Funding FY 07 - $1.4 Billion

24. 24 Ohio Share of Federal Highway Trust Fund Contribution

25. 25 Ohio Department of Transportation MPO & Large City Federal Funding Allocations

26. 26 Bonds

27. 27 Bond Background Terms – 10 years Average Interest Rate the past few years: – 3.5% to 4% Forecast – 4.5% For every $100 borrowed it costs ODOT $125 Bonds issued for Construction, not Preliminary Development or Right-of-Way

28. 28 State Bond Background Constitutional Limit: Total outstanding Principal at any one time - $1.2 b – Current principal outstanding: $837.5 m Authorization to issue: $220 m per year plus unused carry-forward – Current authorized amount not yet issued: $475 m Backed by Highway User Receipts ODOT Policy: No more than 20% of our State Revenue is dedicated to paying debt

29. 29 Federal Garvee Bond Background Grant Anticipated Revenue Vehicles - Garvee Bond Documents: Official Statement – Debt Service must be no more than 20% of the average of the last 3 years of actual federal reimbursed receipts – Debt Service of Revenue as of FY 07: 8% of 20% Future – Expanded the use of Federal Bonds in FY 08 & FY 09 to fund the Major New Program because it cost less to borrow than construction cost inflation – Future Debt Service of Revenue for FY 2011: 15.10% of 20% ODOT Policy: – No more than 20% of our Federal Revenue is dedicated to paying debt

30. % Debt Service of State Revenue

31. % Debt Service of Federal Revenue

32. % Debt Service of Federal and State Revenue

33. 33 Total Outstanding Debt

34. Ohio Department of Transportation Highway Funding and Program Forecast (in Millions)

35. 35 Approaches by ODOT in FY 2008 and FY 2009 to save Operating Savings Extended Hiring Control Process$1,150,000 Held Vacancies for further review$1,650,000 Reduction of Administrative Budgets$4,000,000 Held Non-Payroll Operating Flat – FY 2009 $4,570,000 Total Estimated Savings$11,370,000

36. 36 Approaches by ODOT in FY 2008 and FY 2009 to save Capital Change Order Process Improvements: – Redefined Districts approval authority Gain Consistency – Higher level of accountability To determine need and extent of change – Requires evaluation of the overall change order impacts relative to original scope

37. 37 Approaches by ODOT in FY 2008 and FY 2009 to save Additional Revenue Sources – LOGO Redefining this program to generate new revenues – Starting at $2m and hoping to grow to $11m – Holding Contractors and Consultants Financially Accountable – Bridge Painting settlements » $23 m collected to date out of a potential $36 m

38. 38 Assistance/Guidance from the Committee Identify new revenue sources Identify other financial tools for consideration by ODOT Opportunities to increase existing revenue sources Identify potential opportunities to maximize private investment

39. 39 Funding/Finance Spectrum