Presentation to

Governor’s Transportation Finance Advisory Committee

June 22, 2012

Presentation Overview

• What is CTIB’s regional vision?

• Why invest in transitways?

• What role does CTIB play?

• What does CTIB invest in?

• Where do we go from here?

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44th largest regional economy

Rank* Countries and Metro Areas GP

1 United States $8,510.975

10 Spain $552.568

20 Chicago, IL $287.410

22 Switzerland $263.656

40 Greece $119.536

44 Minneapolis-St. Paul $103.60549 Venezuela $95.023

59 Egypt $81.904

61 Ireland $77.217

93 Hungary $47.184

98 Ukraine $43.467

*World Rankings Based on Gross National and Metropolitan Product, 1998 (US$ Billions, Current)

Our Vision

A network of connected transitways fully integrated with other transportation elements

Move users efficiently & safely Mitigate congestion Enhance development & competitiveness Improve sustainability & livability

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A Shared Regional Vision

• Metropolitan Council

• Public

• Business Community

• Federal Transit Administration

• Corridors of Opportunity Policy Board

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Regional

Vision

WHY INVEST IN TRANSITWAYS?

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Why invest in transitways?

• We are growing

• We need to compete

• We want to protect and enhance our quality of life

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Business wants more transit

Regions with robust transit systems work better. Those regions are choice destinations for employers and employees, because business has wider access to labor, and workers enjoy a higher quality of life.

Our competitor regions understand this, and are increasing their investments in transit. For us to remain competitive and attain our regional economic goals, our region must continue to strengthen our transit system.

- the Chambers of Commerce

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Public wants more transit

Statewide

76% agree: “Minnesota would benefit from having an expanded and improved public transportation system, such as rail and buses.”

69% agree: “I would like to use public transportation such as rail or buses more often, but it is not convenient or available from my home or work.”

7-county metro67% say public transportation has a positive impact on our ability

to attract businesses to the Twin Cities region.73% say public transportation has a positive impact on jobs.71% say public transportation has a positive impact on the quality

of life in Minnesota.74% say public transportation has a positive impact on the amount

of traffic congestion.

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Survey conducted in January 2012 by FM3 and POS for Minneapolis and Saint Paul Chambers.

Transit lets us prosper: A day in September 2011

Twins + Vikings + “Wicked” 100,000 people

State Fair 155,000 people

Rush hour for two downtowns 200,000 workers

Central Corridor “eds & meds” 67,000 workers

522,000 people

Transit is the only way to serve these numbers!

Transit makes possible a world-class region (a region that can do more than one thing at a time)

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Transit lets us prosper.

Lack of transit capacity limits job growth in downtowns and suburbs.

Major HQs in downtowns and suburbs say:

“We need transit to add substantial jobs.”

Super Valu parking lot is full. Not cost-effective to build a ramp.

13SUPERVALU

We need transit

to compete for workers.

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Transit allows us to attract the future

Transit makes us a region that draws the future’s workers and jobs.

“Companies are recruiting and

targeting the next generation of

talented workers, the

Generation Y and millennials

who increasingly prefer urban

lifestyles with mass transit.”

– Urban Land Institute

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Source: Jeffrey Spivak, “Urban Office Momentum”, Urban Land, September 14, 2011

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Primary Contractors:Carl Bolander & Sons Co., St. PaulGraham Construction ServicesWalsh Construction, ChicagoAmes Construction Inc., BurnsvilleC.S. McCrossan, Maple GroveSiemens Mobility, Sacramento, CAAldridge Electric, Libertyville, ILColliSys, New HopePCL Construction Services Inc., Burnsville

Sub-contractors include:AirFresh Industries, StillwaterGoliath Hydro-Vac Inc., LakevillePovolny Specialties, Inc., Inver Grove HeightsAll Agape Construction Co.Gunnar Electric Inc., Eden PrairiePrecision Testing , Burnsville & Virginia, MNAll Star Rolloff Inc., Inver Grove HeightsHansen Thorpe Pellinen Olson Inc.Princess Trucking Inc., Elk RiverAm-Tec Designs Inc. , ScandiaHigh Five Erectors Inc., ShakopeeProfessional Engineering ServicesC.P. Office Products, Circle PinesMC SupplyTerron Trucking, BloomingtonCrystal Welding, Maple GroveMeyer Contracting Inc., Maple GroveTransignal, Elk River

Highway Solutions Inc., StillwaterPublic Solutions Inc.B & B Diversified MaterialsIcon Services Corp., St. PaulRani Engineering Inc., MinneapolisB & L Supply Inc., St. PaulJ & L Steel Erectors, Hudson, WIRay TruckingBald Eagle Erectors Inc., EaganJ.D. Donovan Inc., RockvilleRock On Trucks Inc., Waite ParkBig G Tech Support, Brooklyn CenterJoans’ Minority Owned Supplier, Mpls. Safety SignsBig Jay’s Cleaning ServicesKang Contracting Corp., St. PaulSanders Steel Erectors, HastingsBorgert Products Inc., St. JosephLanier Steel Products Inc.CI Utilities, BlaineShaw Trucking Inc., Ham LakeCarlo Lachmansingh Sales Inc., MinneapolisLema TruckingSimplex Construction Supplies, BlaineMBE Trucking Inc., DelanoStandard Contracting Inc.COHO Enterprises, Brooklyn ParkMC ElectricStonebrook Fence Inc., Prior Lake

Astro Engineering and Manufacturing Inc., PlymouthDispatch TruckingMFRA Inc., PlymouthTwo Buffalo Construction Supplies Inc., MinneapolisE & J Rebar Inc., Oak GroveMidwest Lighting Products, Maple GroveUtility Sales & Supply Inc., LorettoEagle Land Surveying Inc., RockfordMTECH Electric Inc.Wissota Supply Co., HastingsE-Con PlacerNexpro Personnel Services, Inc., St. Louis ParkWoody’s Rebar Co. Inc., St. PaulEden Resources, Eden PrairieNorthstar Imaging Services, Inc., EaganYaw Construction Group Inc., MinneapolisElliott Contracting Corp., MinneapolisO’Malley Construction Inc., Le CenterZ Companies Inc. (dba ZAN)Environmental EnhancementsEVS Inc., Eden Prairie

Source: Minneapolis/St. Paul Business Journal, February 25, 2011 from data provided by the Metropolitan Council. Cities were not available for all contractors.

Rail Means BusinessCentral Corridor Contracts:

Development on Hiawatha

Units Forecast : 1999 Market Study, 2000 – 2020:

7,120

Open In Construction Proposed Total

7,535 252 7,513 15,300

2000 -April 2010

Highly Efficient System

2011 Legislative Auditor’s Report: Transit Governance in Twin Cities

• MN has 2nd lowest subsidy per

passenger

• MN also has higher than average

fare-box recovery rates

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Other regions know this, are ahead of us & are building faster.

19Source: Bill Rankin, c. 2006Maps to same scale.

Our Competitors Are Far Ahead

Miles

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Salt Lake City Denver Dallas Twin Cities0

20

40

60

80

100

120

140

160

BRTCOMMUTER RAILLRT

Source: Adapted from Fresh Energy, 2012

Other regions know transit matters, and

ARE INVESTING MORE:

21Adapted from TLC, 2011

Uncertainty Delays Private Development

• Uncertainty about funds– delays transit construction, – delays jobs, – delays development.

• Businesses wait to see where transitways will go before building and investing.– Southwest LRT -- Northstar Ramsey Station– Central Corridor LRT -- Hiawatha LRT

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Summary of Why CTIB Invests In Transitways

A thriving region -- the product we are making.

Transit -- an essential component.

Leave it out or put in too little -- get a different, less competitive, product.

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WHAT ROLE DOES CTIB PLAY?

Overview of Structure and Funding Sources

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CTIB: Major Investor

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Counties Invest Heavily

Capital Cost Share Pre-FFGA• Counties provide 80% of

Non-Federal share (pre-

FFGA)

• Counties assume

significant risk

– Fund PE & FD before the

FFGA commitment

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Dedicated Funding Source for Transit

Funding Source:

Total Revenue:

¼ cent sales tax

$20 motor vehicle excise tax

$97 million per year (2011)

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A County-Led Organization

• Authorization: 2008 Omnibus Transportation Finance Bill (Minn.

Stat. Section 297A.992) -- Counties voted for sales tax

• Five-County Joint Powers Board: Anoka, Dakota, Hennepin,

Ramsey and Washington

• Met Council has representative on Board

• Scott and Carver Counties: non-voting members

Basis for Weighted Voting System

Sales Tax Population

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Voting Distribution P= Population

S= Sales Tax

COUNTY % Population

% Sales Tax VOTES:50% P + 50% S

Anoka 12.6% 8.4% 10

Dakota 15.0% 12.8% 13

Hennepin 44.1% 55.0% 47

Ramsey 19.7% 18.2% 18

Washington 8.7% 5.5% 7

Met Council N/A N/A 5

Legislative / Stakeholder Expectations

• Property Tax Relief

– Operating Costs (398A.10 subd. 2) & Capital investment reduction

• Maximize Use of Federal Funds (297A.992 subd.5)

• Reduce the Reliance on State Bonding

– 33% state project share down to 10%

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Legislative / Stakeholder Expectations

• Expansion of the System

– “Supplement not Supplant” (297A.992 subd. 12)

• Construction, not Studies*

• Minimal administrative expenses

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*Exception: Washington County Guaranteed Grants

Lean Administrative Structure

¾ of 1% (297A.992 subd. 4)

Executive

CommitteeBoard

Senior Staff

Legal

Finance

Communications

GEARS

• No employees

• No buildings

• Use county staff

• Work closely with Met

Council staff

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Leveraging ~$1.5B in Federal Funds

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Grant Funding: Sales Tax Receipts and Historic Comparison

2008 2009 2010 2011 2012Jan 7,000$ 6,832$ 6,538$ 7,432$ Feb 6,989 7,107 8,416 8,468 Mar 8,761 8,152 9,786 10,200 Apr 6,326 6,627 6,458 7,067 May 7,371 7,175 7,272 7,058 Jun 7,042 7,726 7,926 - Jul 7,344 7,194 7,823 - Aug 7,111 7,749 8,412 - Sep 7,000 7,071 7,328 7,537 - Oct 5,368 8,745 9,017 8,945 - Nov 8,574 7,206 8,073 9,322 - Dec 7,757 7,748 8,348 8,813 -

28,698$ 88,713$ 91,328$ 97,246$ 40,225$

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Grant Funding: Bonds

• $110 million in bonds issued in Dec. 2010

• Issued by Hennepin County: $3 million savings

• Capital Grants for Central Corridor: 2011-2012

• May not be used for operating grants

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Annual Grant Process Overview

Evaluate Grant Applications

Local/ Regional

Governments

CTIB

Grant Evaluation and Ranking

System Committee

(GEARS)

Metropolitan Council

Legislature Grant

Applicant

CTIB

Develops Criteria /

Issues Applications

Prepare Applications

Award Grants

Completes Project

Consistency Review

Reviews Annual Report from CTIB

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WHAT DOES CTIB INVEST IN?Projects and Corridors Supported by CTIB

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Focused on Transitway Expansion

CTIB invests in:•Engineering, construction and operations•BRT, Commuter Rail, and LRT

CTIB does not fund:•Studies*•Passenger rail, regular route buses, arterial BRT

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*Exception: Washington County Guaranteed Grants

Project Development Process

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Operations and

Maintenance

ConstructionFinal Design - final plans,

specifications and bid

documents

Preliminary Engineering

(PE, 30% plans) and final NEPA

environmental review

System and early corridor planning

Alternatives Analysis (AA),

Conceptual Engineering (10% plans), and initial

NEPA environmental

review

Varies On-going3 - 4 years1 year2 years2 - ? Years

Progression of example project development process

Locally Preferred Alternative

Eligible for CTIB GrantsLocally Funded

CTIB Grants Awarded to Date

 Grants Awarded^ Capital Operating Washington

2008 / 2009: $30.23 m $42.14 m* $0.95 m

2009 / 2010: $78.02 m $13.29 m $2.55 m

2010 / 2011: $132.77 m $16.87 m $2.66 m

2011 / 2012: $122.24 m $22.59 m~ $2.70 m

TOTAL $363.26 m $94.89 m $8.86 m

^Grants awarded in November of each year are payable in the next Calendar Year.

*Includes statutorily required one-time grant to Metropolitan Council of $30.78 Million.

~2011 Special Session Law mandated an increase in the CTIB operating subsidy to 75% for the 2011-2013 biennium. 41

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$467 million

invested by CTIB since 2008

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Status of Corridors

Operational

Hiawatha

Northstar

135W S BRT

Cedar BRT

Construction

Cedar BRT

Central LRT

Final Design

35W S BRT

Preliminary Engineering

Southwest LRT

Feasibility

35W N BRT

North Central

Robert St.

Riverview

AA or EIS

Bottineau

Gateway

Red Rock

Rush Line

Varies On-going3 - 4 years1 year2 years2 - ? Years

Progression of example project development process

Locally Preferred Alternative

Eligible for CTIB GrantsLocally Funded

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WHERE DO WE GO FROM HERE?

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Current Regional Initiatives

Program of Projects Corridors of Opportunity

HUD Sustainable Communities Grant

Living Cities Integration Initiative

Corridors

of Opportunity

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Program of Projects (PoP) Study

Purpose of Study

Determine the feasibility of accelerating the development

of multiple transitway corridors (a Program of Projects) to

serve the region.

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Main Questions for Program of Projects

1. Is it possible:– To complete our shared vision given current

funding practices and policy?

– To build our vision more quickly given current funding practices?

Sneak peak at the answers: No

2. How have other cities accelerated their building?

3. What might work in our region? What are our options?

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PoP Work Tasks

• Develop 3 Scenarios

• Analyze alternative PoPs using current funding practice

• Explore what Peer Cities have done

• Apply lessons learned and develop options for Twin Cities metro area

• Propose an approach to fund and accelerate a PoP

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We are here

Six Core Projects in All Scenarios

• Hiawatha LRT

• Northstar Commuter Rail

• Cedar Avenue BRT (all phases)

• Central Corridor LRT

• Southwest LRT

• I-35W South BRT (all phases)

Core Projects have approved alignments and modes (LPAs) and are in Preliminary Engineering , construction or operation.

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Three PoP Scenarios w/ Nine Expansion Projects

Mode BRT BRT plus 1 Rail BRT plus 3 Rail

LRTBRT – Exclusive

None2 projects

1 line1 project

2 linesNone

BRT – HighwayCommuter Rail

4 projectsNone

4 projectsNone

3 projects1 line

Arterial BRT 3 lines 3 lines 3 lines

Number of additional Expansion Projects

9 9 9

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Peer Cities Summary

City Program Total

Program Cost

Base Sales Tax

Sales TaxIncrease

Total Sales Tax

ModesCapital vs

O&MState Funds

Dallas DART Rail Expansion

$1.6 billion 1 cent No, bonding only

1 cent Transit only Both No

Denver FasTracks $6.8 billion 0.6 cent 0.4 cent 1 cent Transit only Both Yes

Houston METRO Solutions

$6 billion 1 cent No, bonding only

1 cent Transit only Both No

Los Angeles

LA 30/10 Initiative

$17.5 billion

0.0 cent 1.5 cent 1.5 cent Transit and roadway projects

Both Yes

Phoenix Future High Speed Transit Corridors

$3 billion 0.5 cent Tempe0.4 cent Phoenix

0.5 cent regional

1.0 & 0.9 cent respect-ively

Cities for transit only

Regional for transit and roadways

Cities BothRegional for rail capitalRegional for bus capital and O&M

No

Seattle ST2 $17.8 billion

0.4 cent 0.5 cent 0.9 cent Transit only Both No

Salt Lake

FrontLines 2015

$2.3 billion 0.50 cent

0.25 cent 0.75 cent Transit only Both No

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“Transitway corridors will guide our region’s growth, vitality and competitiveness. Development along transitways will create distinctive places and strengthen local assets while increasing ridership and expanding access to jobs, affordable housing, and essential services for residents of all incomes and backgrounds.” 52

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Peer Cities Findings1. All cities defined and developed a specific program of projects.

2. All cities use sales taxes as the primary local funding source.

3. All cities use sales taxes for transit and transitway capital and operations.

4. All cities use FTA New Starts funding

5. Several of the cities are implementing projects using all non-federal funds.

6. Most of the cities had to raise their sales tax rate to fund a Program of

Projects.

7. Only two of the seven cities receive state funding.

Further Information

Commissioner Peter McLaughlin, Chair

Counties Transit Improvement Board&

Hennepin County Regional Rail Authoritypeter.mclaughlin@co.hennepin.mn.us

(612) 348-7884

www.mnrides.org

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