MnSHIP Webinar, Aug. 27, 2012

MnSHIP Webinar ìÖThis is Patrick Weidemann, I am the Statewide
Highway Planning Unit Director at the Office of Capital Programs and Performance Measures.
I want to welcome you to our first in a series of webinars on the Minnesota State Highway
Investment Plan. We thank you for your interest, we hope that this will be informative as well
as a good exchange in the beginning of our public outreach process for turning our 20-Year
statewide plan into reality. With that, I am going to ask the presenters and the individuals
here in our office to introduce themselves and weíll get started with the webinar.î
ìMy name is John Wilson, Iím the Economic Policy Analyst with the office that put this
plan together and I lead the team that created the 20-Year revenue forecast. So, as the presentation
goes on, if there are any detailed questions on that, Iíd be happy to answer those.î
ìHi, Iím Mei-Ling Anderson, Iím with the Office of Capital Programs and Performance
Measures and Iíll be your host today. If you could just please mute your phones until
the end of this presentation, weíll have a question and answer section and weíll be
able to take all of your questions. Until then, if you do have any questions, please
enter them into the chat bar.î ìAnd then finally, this is Ryan Wilson with
the same office, Capital Programs and Performance Measures with MnDOT. My role on this project
is Project Manager reporting to Patrick here. So, we got a team of people here in our office,
plus, we are working with all the districts and there are some familiar names on the participant
list. So, we welcome you to this chat and glad to have you on board.
So briefly, we gave a chance to have some introductions here. A little bit about protocol,
just to reiterate what Mei-Ling said, please mute your phones for the duration of the actual
webinar portion here and we will have plenty of time at the end for as many questions as
you would like to have. If youíd like to get them out early you can type them into
the chat bar and weíll tabulate them. If you have some at the end, you can either ask
via the chat menu or you can actually unmute your phone and ask a question, whatever you
prefer. So, there should be in the lower right portion of the webinar, youíll also see some
of the file attachments. We have the PDF of the PowerPoint presentation; we have our overview
folio for the plan, one of many folios we are developing. Title of, ëWhat is MnSHIPí
and we have a calendar for the plan which includes key milestones and outreach dates
that weíll talk about a little bit later. And, Iím guessing if you found this webinar,
you probably know about the MnSHIP website but that link is in here as well. And I just
want to throw out there the future dates of the webinar. The three webinars prior to our
primary public outreach phase of this plan which begins in October. We have a webinar
for the next three Mondays, same time and they will all be viewable online after the
webinar. So if you are unable to attend one of the meetings, feel free to view it after
the fact as well. We will have a fourth webinar in March 2013 sometime on the actual draft
MnSHIP plan so thatís something you can look forward to in the future.
Todayís topics, weíre going to cover a number of things and various levels of detail. First
talk about a few of the key changes that are impacting the development of this 20-Year
state Highway Investment Plan. Talk a little bit about the family of plans and some of
the previous plan efforts that many of you have likely been involved in that influenced
MnSHIP. Talk about our timeline; where we have been up until now, what work do we have
left to do, how can you participate in the plan and as well as detailing our five step
process. We have a five step plan development process that we use to put together MnSHIP.
And weíll detail several of those steps here today and talk about how the future webinars
will get into greater detail on some of the additional steps.
So, today we are really going cover some of the basics of this plan and Iím going to
start with, kind of, some overview slides of some key information. I thought itíd be
worthwhile to spend a few moments discussing a few changes that have happened since 2009.
In 2009, we adopted the last version of our 20-Year Highway Investment Plan. Very recently,
in July, we had federally authorization of the Service Transportation Bill, finally happened
after many years of extensions. That bill, I think, many of you are likely familiar with,
it is Title Map-21. We have some additional State Legislative
requirements that were passed into law in 2010, weíll talk about some of those here
a little bit later. I think there is a heightened interest in transparency accountability and
collaboration. I think that extends beyond Transportation but itís certainly something
that we recognize here at MnDOT. Many of our stakeholders, over the years, have always
expressed interest in the things we are doing as both get input as well as partner with
folks on projects. And I think the interest for many is to have an increase in all those
things and we are certainly making big strides in those areas in MnSHIP here in 2012.
Inflation and, I guess, our Highway Investment needs, they continue to outpace gross and
revenue. This is a trend we saw for the first time at our last update of MnSHIP and thatís
a trend that continues today. I guess, generally speaking, perhaps this isnít a key change
since 2009 but certainly but with a greater acuteness there seems to be low appetite to
raise additional revenues. Again, I think, that is something that extends beyond Transportation
and not necessarily a value statement but certainly itís an input that influences MnSHIP.
And I thought I would mention that there are some, we kind of have pushed through the first
wave of some of our pavement and bridge bubbles. I guess you could say, and weíre kind of
quickly approaching the next bubble of interstate bridges. And so those are out there in the
later years of this plan and certainly as we get into successive MnSHIP updates, weíre
going to have to deal with the next round of those interstate as well as highway system
bubbles. Map-21, I mentioned that on a previous slide,
this is the recently signed into law Federal Service Transportation Bill. It authorizes
expenditures out of the highway trust fund for 26 months so that covers the federal fiscal
year that we are in, 2012, as well as the subsequent 2 years here, which is 2013 and
2014. So the policy provisions in this plan take effect right, actually, about when we
go out with outreach for this plan on October 1st. One of the big changes with Map-21 is
that it consolidates many of the large and small programs into what I labeled here 6
area programs. So we have the National Highway Performance Program, Service Transportation
Planning, Highway Safety Improvement Program, Congestion Mitigation, Air Quality, Transportation
Alternatives and Metropolitan Planning. Also of note, it establishes national goals for
the highway system and those national goals are kind of woven into several layers of the
Map-21 Bill. Some additional requirements on the planning
spectrum that I thought I would mention briefly. Really probably one of the most significant
impacts of Map-21 is the first bullet which it prioritizes federal investments on major
routes. And so then major routes are actually specified a national highway system. In Minnesota,
that national highway system is about 45 percent of our state highway miles. So that is about
4500 miles of the 12,000 we have, maybe just a little bit more than that. And so it does
prioritize several of those categories that I showed you on the last slide, particularly
their National Highway Performance Program to spend money on the NHS system. So that
certainly is a significant change, itís affecting not only MnSHIP but multiple things that we
do here at MnDOT. It doesnít inject some requirements really for the first time on
performance management. Performance management is, Iíll talk about
in a few slides here, is something that MnDOTís been doing since the 1990s. So weíre not,
donít feel so quite as challenged as some other state DOTs feel about some of these
requirements but certainly there are elements of Map-21 that are going to require some adjustments
from MnDOT. But weíre reasonably well prepared to make those adjustments. One item of note
is that Map-21 does set targets for interstate road pavements as well as bridges on the national
highway system. And so, thatís a national level target that is new to surface transportation
bills. One additional piece is that Map-21 requires
a risk based Asset Management Plan. Iím not going to spend too much time on that today.
But really the idea of an Asset Management Plan is a, kind of, a new way of thinking
about a more formalized way of thinking about how you invest in pavements and how it spans
both; your capital budgets as well as your operations and maintenance budgets. So thatís
something that all states are going to be required to do. We think MnDOT is well positioned
to produce a quality asset management plan. In fact, MnSHIP, the plan we developing here
and talking about today are a lot of the criteria that MnSHIP is aiming to do or is purposing
to do are similar to those that are identified in Map-21 for the asset management plan. So
I think, again, MnDOT is well positioned to make good strides on that asset management
plan quickly. Also this is kind of related to the first
bullet that there are some possible reductions or reprioritizations of federal funds if MnDOT
does not make progress towards performance targets on the NHS system. So certainly that
bullet and the first bullet are going to change the way we do business as an agency and we
do business with our partners. Many of those issues arenít going to be worked out by October
or even worked out by the time this plan is developed but we are going to address the
issues when we can. Acknowledge them whenever possible and deal with them over the coming
years for those that we can get to by the end this MnSHIP plan.
And so really, the question, these challenges and maybe the lessons learned from the 2009
update, you know, as we develop this 20-Year plan how can we do so that reflects these
challenges. I think, again, another issue that spans transportation in many other areas
but there are expectations of our system both that we have to have our system perform at
a high level for transportation users and taxpayers but also that the public and users
of the system have of MnDOT. Transportation canít necessarily achieve with the available
funding we have. And so really a handful of years ago, MnDOT kind of retooled its planning
and programing process and we put together something that tabbed a family of plans. And
really this is a schematic way of taking our plans from vision all the way down to Ö (went
blank) Ö starting back in 2010, we undertook our
first 50 year vision for transportation titled ëMinnesota Goí. Iíll talk about each of
these in more detail. Weíve been in the middle of updating our statewide multimodal transportation
plan which is our policy plan for the next 20 years. And highlighted in red is MnSHIP
the state highway investment plan where we get into more specifics about prioritization,
revenues, how do we make trade-offs and what are our priorities and strategies to spend
money effectively and efficiently. ëMinnesota Goí I referenced is our first
long range vision that MnDOTís ever undertaken. Itís really a vision for a multimodal system
that maximizes the health of the people of Minnesota, the environment as well as the
economy of the state. This ëMinnesota Goí really set a new bar in terms of engaging
the public and, I think, itís one that, I guess, our stakeholders and the public, itís
one that the multimodal transportation plan embrace and weíre certainly trying to continue
the trend of engaging our stakeholders and interested citizens in new ways. The ëMinnesota
Goí plan undertook expert interviews of experts in the field. They did a really unique job
with scenario planning on some visionary scenarios. Reached out to student voices and other citizens
via online tools and ways that MnDOT had Ö (went blank) Ö done in the past. So, I think,
it really did a great job of getting input from people across a variety of perspectives
and opinions. The core of ëMinnesota Goí, the 50 year vision, was really 8 guiding principles.
I wonít read them here but these core guiding principles are ones that we have to weave
into the fabric of the subsequent plans, MnSHIP included. Things like leverage public investments,
insurer regional connections, strategically fixed a system so we have to acknowledge these
guiding principles and work towards them in our plans and programs.
The second in the series of family of plans was the Statewide Multimodal Transportation
Plan. The public comment period, actually, recently closed on that document so hopefully
many of you have been able to view that document. I think some of you online have been involved
in that so we thank you for your participation as well as interest in this plan which would
be the next in the series. And the Multimodal Transportation Plan organized, really, policies
and objects across 6 broad areas. And those areas are listed here such as: travelerís
safety, critical connections, asset management. And youíll see the themes of some of these
areas emerge in MnSHIP here as we get to later slides.
One other thing I wanted to mention briefly was the quarter investment management strategy.
This is, again, something that I know many of you on here have been involved in. And
in 2012, we launched an initiative, which is CIMS, to make plying and programming more
responsive to local concerns and priorities. And so we came out to many communities across
the state, I believe 19 was the number of meetings we had in May. And we reached out
to people and we talked about some of the issues and needs and things that MnDOT saw
and brought that down to a corridor level, a number of key corridors across the state.
And then we had some listening sessions and talking about some of the local concerns along
those corridors. And really got a lot of great feedback and I think the core idea here about
CIMS is that CIMS on these corridors allowed us to start thinking about and addressing
in a more formalized way those areas that donít necessarily have a system wide performance
target. This is going to come a little more clear as you, hopefully, attend the later
webinars. But we have traditional performance areas like pavement, bridge, traveler safety.
We have some relatively mature models or statewide goals for performance. Some of the things
that we are reaching out to people to talk with via CIMS and other related efforts like
this in the future are really to get at those issues that donít necessarily have maybe
never will have a statewide performance measure or target. And I do want to acknowledge that
MnSHIP will use feedback from these May meetings and I just eluded to this that we are going
to supplement some of our performance base information thatís generally collected and
analyzed statewide with some of the more specific corridor information collected at these CIMS
meetings. So thereís a lot more to come via that and you will certainly hear more from
CIMS as we make our way through MnSHIP and get to CIMS next year as well.
My graphic of the logo of our plan isnít showing up here but I guess you can call the
white slide a transition to MnSHIP, donít let that white slide fool you. But the 20-Year
highway, state highway investment plan or as we have shortened it, MnSHIP, I think itís
worthwhile to start at a high level of what MnSHIP purpose is to do. And really at a high
level, MnSHIP, it really set the investment decisions for the state highway system. In
fact, it does that over a 20-Year period. Ultimately, it is the primary document that
communicates the departmentís highway investment priorities to the people of the state, to
the businesses of Minnesota as well as to our elected officials. I suggested this and
we certainly will incorporate the feedback from the ëMinnesota Goí visioning process,
the guiding principles as well as the feedback that we got from the multimodal transportation
plan into, I guess whatís probably missing here, is into the actual development of MnSHIP
as well as all the way down to the construction projects we deliver for the people of Minnesota.
One of the challenges the MnSHIP has, although one of the things it does do is that it brings
together the technical science of engineering. So, the technical data, the performance data,
and the information we know about our system, the models with more of the social science
of understanding mobility, the quality of life and economic competitiveness, and again,
some of the things that we donít have statewide performance information for. It also provides
the context to all of our partners and citizens of how we will manage the system and we do
face some fiscal times, I suggested our needs are growing faster than our revenue and construction
projects are becoming more challenging to deliver as inflation out paces revenue. And
so we do have some challenges ahead and this document, MnSHIP, provides the context to
understand how MnDOTís trying to move forward in these times.
Two things of note that MnSHIP will not do. MnSHIP alone canít solve the underlying future
asset condition. I mentioned the pavement and bridge bubble that is coming. Certainly,
we can prioritize the money we have given the needs that the department has on these
roads but ultimately, I will get into this in a few slides, but the money to maintain
our bridges and pavements at our current condition levels would require essential all of our
future revenue. So that future challenge is something that MnSHIP alone cannot solve.
And itís certainly not going to be easy given these difficult decisions weíve talked about
here given the fact that our needs in pavement and bridges as they currently stand are about
equivalent to our future projected revenue. And so we are going to be facing some difficult
trade off decisions in this plan and it wonít be easy. (went blank)
Ö itís something that we have been updating in the past every 4 to 6 years but now itís
required by statute to be updated every 4 years. A draft is due to the State Legislature
in early 2013 and there are three time periods in this plan that come up several points in
the future webinars as well as in the outreach meetings. The first 4 years in this plan 2013
to 2016, we call our State Transportation Improvement Program the STIP. Projects in
the STIP are program projects and the department generally, when possible, treats these as
commitments. The projects in the next 6 year period, the
planned projects 2017 to 2022, Iíll touch on it on a later slide but MnDOTís going
to be putting together a ten year work program in this plan and trying to have a greater
idea of projects out there past the STIP. Itís important to articulate, however, that
projects that are not in the STIP arenít yet considered commitments. They are still
in the planning stages, the scope timing, nature of these projects may change and so
that is a point you may hear us bring up many times over the course of these outreach efforts
and certainly in the plan document in the last ten year period, the investments by major
category. I just want to mention that at the moment, MnDOTís direction is that we are
going to provide ten year work plan and the last ten years is kind of really more of a
given our priorities laid out at MnSHIP, what will the system look like at the end of the
20-Year period. So there arenít 20 yearsí worth of projects listed in MnSHIP, itís
kind of more big bucket plan I guess you could say in the second 10 year period.
Some key components of MnSHIP. Some of these are a combination of things we did in the
past, things that we feel that we should do, things that the new 2010 state legislation
directed us to do. And I highlight only a couple here, certainly there are many more
than listed on this slide. One of the key things that the Legislature, and I think the
citizens deserve to know, is the impact of recent expenditures on performance trends
and thatís information that we put out there via our annual transportation performance
report and we are going to be weaving some of that information into MnSHIP. Ultimately,
weíre directed to provide cost and meet performance targets across our various investment categories.
Really MnSHIPís core is its officially constrained plan, thatís a requirement; itís a 20-year
fiscally-constrained plan that sets priorities for our expected anticipated revenue over
the 20-year period. Ultimately, I alluded to this on the last slide, we have a 10 year
work program of plan investments and a 20-year and a bucket planning approach. What that
allows us to do is look at where the systemís going to be and what associated outcomes do
we have on our state highway system at the end of that 20-year period based on the investments
and the priorities laid out in MnSHIP. Finally, I think an important piece is that MnSHIP
does detail an array of implementation strategies that optimize the use of our resources. You
know, how can we manage the outcomes we are getting, how can we manage some of the risks
associated with the investment direction that we have chosen and weíll get to that over
the course of the subsequent webinars after webinar number 1. Take questions at the end?î
ìYeah, for those of you that are writing in questions, thatís very helpful, but we
are going to address them all at the end. So go ahead and as you think of one, go ahead
and put it on there, weíll take note of it and weíll come back to it at the end.î
ìI wanted to point two things out from a process stand point. I think thereís, from
my perspective, thereís many things that are changing about this iteration of MnSHIP
but I think two that are worthwhile to bring up here because they are going to be evident
through the remaining slides of this presentation. One is that, weíre integrating performance
planning. So I mentioned that MnDOTís been a leader in performance management since the
1990s and weíve had a performance-based long range plan for, this will be the third iteration
of that and thatís, weíre the first in the country to do so. So weíre the first in the
country to have a third performance-based plan and really weíre trying to incorporate
risk assessment into our performance planning process. Iíll get a little more into the
details of what that means. What I have on the slide here is kind of the one slide summary
of that. In 2009, we used our performance measures to estimate one cost to essentially
meet the performance target and implement one set of strategies. And in 2013, weíre
attempting to integrate risk assessment into the process as a means to identify various
performance levels within each category. The purpose of that being is that we could meet
our objectives and goals say in pavement preservation, we could meet our objectives and goals in
safety. Once you begin to compare across these various investment categories, it becomes
impossible to meet our ultimate goals and objectives in all the categories. So we are
using risk assessment to help us break down each of these investment categories into multiple
levels. We will spend several slides on that here later in the presentation.
One additional change that I think is worth mentioning, this will become clear as we walk
through later slides as well, that I think we are having a much greater emphasis on stakeholder
involvement and evaluating the trade-offs. In the 2009 plan, we came out to the public
a couple times and got input on kind of the state of the system and where weíre at as
well as the draft plan. We didnít ask stakeholders and the citizens as much about evaluating
trade-offs. Weíve made a good effort internally to prepare and really a wide array of information
for our stakeholders and the public to consider and trying to prepare Ö (went blank) Ö abstract.
We will be bringing this information out via these webinars, via some online tools that
we will develop on our website as well as the October meetings in the districts. And
so we will be involving the stakeholders and evaluating some of these trade-offs as we
move forward. The timeline for this plan, and again this
is available on the web as well as one of the handouts there in the lower right corner
so Iím not going to detail everything. The key point to note here is that weíre kind
of at the hinge point of our plan. Weíve got a lot of background work up to this point
and weíve prepared some of the revenue forecast, weíve prepared work across all of these investment
categories, we began our public involvement phase with having our website launched on
June 26th, weíve had website, Facebook and Twitter updates going on since that time in
June. This is the first in a series of three or four webinars, if you include the spring
and weíre at that point of engaging the stakeholders here in October. After that we begin ultimately
begin to develop our fiscally-constrained plan and again take that plan out in spring,
late winter/spring for public review and a public hearing.
What you see on the page here is our heavily revised from the 2009 plan five step process
and there is a lot of information on this slide and I will get into more specifics in
future slides. But the core five steps which are listed across the top there and I will
save the information below for subsequent slides. Ultimately, we developed a revenue
forecast of expected revenue over the 20-year period. We determined investment outcomes,
and I mentioned that on a previous slide, there were identifying multiple performance
levels across all of our investment categories. We then go to step three which is about where
we are at now in the plan where we evaluate these investment approaches across all the
categories. After the outreach phase here in September and October, we will set our
investment direction and develop our draft fiscally-constrained 20-year plan. Ultimately
bring out that for review and comment from the public and kind of concurrent with step
four, we identify priorities for what we would do with more or less revenue which is kind
of the fifth step on this plan. And so Iíll save description of the two graphics for the
next slides. So step one, a little bit about the revenue
forecast and the work that John Wilson, who is sitting here, helped us put together. Hopefully
I can do Johnís excellent work justice here in the few slides that Iím going to talk
about revenue forecast. The money that we have in the state trunk highway fund is really,
John likes to describe it as ëthirdsí, about a third of the revenue comes from the Federal
Aid Highway Program which is our Federal Fuel Tax. That makes up 31 percent of our revenue,
as you seen on the slide there. Another third comes from the State Motor Fuel Excise Tax,
relatively speaking. And then we have about a third that comes from the Motor Vehicle
Sales Tax combined with the Vehicle Registration Tax. Throw in a little bit of money for the
State Trunk Highway Bonds and you have the totality of revenue that makes up the State
Highway Investment Plan. A little bit about the some of the major assumptions,
this is simplifying many meetings and monthsí worth of work into a few slides. MnDOT doesnít
expect, and in fact, anticipates limited growth in revenue over the next 20 years. Certainly,
one of the key components of that is that we are seeing a changing set of travel patterns
across the entire the U.S., itís not just in Minnesota here. That coupled with more
fuel efficient vehicles, weíre really seeing a slowing if not a decrease in revenue growth
based on the fuel taxes and thatís both state and federal fuel taxes. So two of the three
components of the, I guess the tripod, if you will, are seeing flat or no growth.
Another point that is worth bringing up is that MnDOT does have an internally set limit
on bonding capacity and you may recall there is a bonding program passed in 2008 after
the bridge collapsed and weíve been able to make a lot of great progress in bridges
following with that money. Of course, with bonds you do have to pay off the debt service
on those bonds. So for a number of years here weíre going to be getting close to where
MnDOT like to have its bonding capacity. So weíre not going to have a lot of ease in
being able to issue new bonds in the near future anyways. I do just want to note, one
of the reasons that is important is that the first thing that we have to do with our state
trunk highway dollars is to pay off the debt service on those bonds. The more debt you
have to pay off that reduces the amount of money we can fund for other priorities, not
to say that the bonding projects are important it just changes the way that you are able
to spend your money. A few key assumptions on the federal revenue
side of things. The new Federal Transportation Bill, Map-21, we did see a small increase
in Federal Aid. I do want to point out that we assume a modest 1.4 percent inflationary
maintained beyond Map-21. I guess the thinking here is that recent history, in fact longer
than recent history, has suggested that the federal government continues to find unique
and clever ways to provide some increases in federal revenue. For the moment, some might
think that this is a strong assumption that weíre going to see a small increase in federal
revenue. Others, I guess recent history suggests that they continue to find ways to make that
happen so it is just important to note that is a small assumption, that we do have an
increase. This is much less than the assumptions weíve used in prior plans for the federal
revenue. So certainly, this has an impact on our long term revenue
I do also want to point out that there is a continued disconnect, I guess I would say,
between the federal gas tax revenue and the actual appropriations for money being spent
on federal transportation projects. So essentially, the federal government is wanting to spend
more money than they are taking in via fuel tax receipts and in the past that has been
fixed via general fund transfers. I guess one distinction in Map-21 thatís different
in previous fixes is that they did identify a one-time fix of money to flow into the highway
trust fund. I guess that one time fix didnít necessarily fix the underlying problem of
this disconnect. Thatís something that they are going to have to address again when they
get to the future reauthorization of the next bill here in a couple of years.
On the state side one of our key assumptions is that we really rely on the Office of Financial
Management and their transportation funds forecast for the near term years to, kind
of, set the tone of how we are going to expect revenues to change over the 20-Year life of
this plan. Some of the more specific assumptions that come following those practices, on the
Motor Fuel Tax, we see a small growth rate for light duty vehicle VMT. Then itís important
to note with vehicle efficiency improvements, vehicles gain higher MPG per gallon that weíre
going to see maybe a net flat or to decline on the actual gas consumption.
So weíre predicting, you know, some slight increases in VMT, you know, partially due
to continued increases in population but of course once you factor in increased fuel efficiency
that really negates to next to no increase if no increase at all. The one part that is
growing a little bit is the Registration Tax and Motor Vehicle Sales Tax which you see
about a 2 percent growth on each of those particular items. When you drop all four of
these trends on chart, this is the graph that you see. I guess this chart is showing you,
the blue line would be our state Motor Fuel Tax, the red line is the Federal Tax. So you
kind of see that we got a small bump here in 2013 from Map-21. That number is kind of
constant for the years of Map-21 and then you see that red line increasing which is
the 1.4 percent projected increase in federal revenue. Then again thereís that relatively
modest 2 percent gain on the gold line which is the Motor Vehicle Sales Tax as well as
the green line which is the Vehicle Registration Tax. So ultimately, these four sources combine
to a 20-year total for MnSHIP of about $18 billion. So that $18 billion does include
money that is currently programmed in our 4-year STIP. That number, I donít have that
broken out in the slide here but itís about $13.8 billion so that leaves us with about
$14.3 billion or so to be spent in the 16 years after the STIP.
I wanted to talk briefly about how revenue has changed since 2009. Many of you are familiar
names and will recognize in 2009 the plan put forward a revenue project of $15 billion
dollars. So you will say well thatís true that revenue has gone up $3 billion, I guess,
in total since 2009. But itís important to look at the broader trends and take that number
in context. So we saw some revenue increase due to the fuel tax increase that the state
legislature passed back in 2008 as part of the Chapter 152 Bond Program. We saw that
slight bump up from Map-21 but then we also saw some decrease in revenue due to that sustained
trend in gas tax consumption that I have been talking about for a few slides here, coupled
with improved vehicle efficiency. I think it is important to note that while the revenue
has gone up by $3 billion, the inflation forecast, 5 percent, which is what weíre taking over
the life of this plan. You know, projects are going to cost more to construct and inflation
plus the growth and our needs, I talked about that next bubble of payments and bridges,
those two combined are certainly outpacing the relatively modest gains that weíve seen
via the Map-21 and some of the other sources. So we do have a greater revenue number, I
suppose you would say, of $18 billion but itís important to understand that in the
context of the greater transportation world that MnSHIP has to operate.
Here I want to point two slides out about the inflation trends. Whatís interesting
about this slide to me is the green line itís a year indices of what inflation is at the
construction cost. And so, the green line represents essentially construction costs.
Red line represents, kind of, a general inflation number and the purple bar chart on the bottom
essentially is the various between those two. The point of this chart is suggesting that
in about 2005/2006, we saw a separation of general inflation trends which the red line
represents from construction costs inflation. That number has maintained relatively constant
over the last number of years. Most people in the economy side of things, John included,
donít believe that trend is going to close anytime soon. So that is one of the big changes
thatís impacting the revenue projection of this plan.
Similarly, I talked about that inflation number of 5 percent, which is a number we are holding
relatively constant throughout the life of this plan and it reflects that chart that
I showed you on the previous slide about how the general inflation number has separated
from the construction cost inflation number. Essentially, the point of this chart is this,
our total revenue that we can spend on the capital and maintenance side of MnDOTís activities
is going to roughly half in 20 years due to inflation. So I think thatís a pretty powerful
statement as to how quickly inflation can eat into your revenue.
And on that happy note, weíre going to talk about step two which is identifying our investment
outcomes. So we took a few slides here to paint a picture of the revenue side of things.
Now weíre actually going to look at our investment categories. Now the purpose of todayís webinar
is really to tell you, kind of, about some of the work that went into these various topical
areas and details a few of the, kind of, changes and trends and processes. The subsequent two
webinars, webinars 2 and 3, are going to get into much greater detail on each of the investment
categories. So if you are interested in greater detail, weíre not going to be giving that,
donít expect it in these following slides but youíll certainly be getting plenty of
it in subsequent webinars and youíll be able to find it online as well in our folios.
What is performance plan? I mentioned at the beginning of the presentation that MnDOTís
been a leader of performance management since the 1990s and again we had the first performance
based plan in the nation and so this will be the third of MnDOTís iterations of long
range performance based plan. And really the idea of performance planning is that you use
quantitative measures to determine how well a plan, so how well MnSHIP contributes its
stated goals. So this go around, the state goals are those that are identified as part
of Minnesota Go, the 50-year vision Ö (went blank) Ö we use this performance data, we
use performance data and the measurements and the outcomes of our performance measures
to guide our capital. And MnSHIP being the capital plan as well as our operations and
maintenance decisions, which MnSHIP doesnít directly cover, we use performance data to
guide both those things on an annual and continual basis. The cycle really, I think MnDOT really
does stress and work toward a plan to measure act circular plan. You really got to plan
for how you are going to use performance measurements across the entire agency. We are continually
evolving that. We need to track our performance measures, which we have a unit in our Office
of Capitol Programs that does that full time. When you look at the results, you got to identify
whether you are going to change any actions, youíre going to do something differently
and really then you got to adjust the plans. I think thatís one thing that MnDOTís tried
to focus hard on is making adjustments based on our performance measurements which is a
step beyond what Iíve seen from a lot of other states. So I think that is something
that MnDOT can take a lot of pride in and will continue evolve here over the next couple
years as we respond to the new items identified in Map-21.
And then what is risk assessment? This is something that is relatively new for MnSHIP.
Enterprise risk management is the idea, itís a MnDOT initiative, really, incorporating
risk management, risk assessment across the agency. Thatís the, kind of, idea of enterprise.
So the idea of risk assessment is a new, in fact, MnDOTís used risk assessment on the
project level for many years, this is a more formalized way to think about risk at an agency
and planning level. Our steps for risk assessment generally are to identify risks, you prioritize
risk and you develop an action plan to manage those risks and essentially you monitor the
results. I mean thatís the ideal way to perform risk management. So, guys weíre in a relatively
early stage of maturity on risk assessment in MnSHIP but certainly as we progress forward
and we develop the risk base asset management plan, thatís identified in Map-21, I think,
weíll be well positioned to do that even better in the future by taking these initial
steps as part of this MnSHIP update. So the idea of how we are incorporating performance
planning and risk, Iím going to bring you back to the component of that five step process
chart that I showed you a handful of slides ago. You may recall under step two in an earlier
slide that suggested in the last plan, 2009, we developed one cost and made one performance
target. Thatís okay because with any individual investment category, say pavement preservation,
we could meet our targets and pavement preservation alone. But once you actually add up the targets
across all these investment categories, you quickly realize those needs exceed the available
revenue we have, the $18 billion. And so the idea of the graphic here is showing you that
across any one of these categories, here you see the area category, so you see asset management,
traveler safety, and critical connections. You may recall that those are encompassing
many of the areas that were identified in multimodal transportation plan. So we are
trying to connect MnSHIP to the policy plan here. We also have our regional and community
improvement priorities which are those things that donít necessarily have state-wide performance
criteria. With any individual category here, we could spend the highest bubble which is
the greatest investment and you can manage the most risk but you canít do that across
all the categories. So with any of the individual category we could manage the most risk by
spending a lot of money or making a lot of investments but once you add the categories
together, you are unable to make that kind of investment.
So we are using risk to help identify various performance levels in each of these categories
and Iím going to spend a few slides here talking about how we are actually doing that.
And again, we have these four/five, kind of, major buckets and then we have individual
investment categories within each of them. Again this is going to be about the last of
the individual investment categories and the subsequent webinars will get into these in
more detail. So under asset management we have pavements, bridges, we have our road
side infrastructure; so things to keep vehicles on the road and move water away from the road
by culverts and drainage; noise and retaining walls; things that are adjacent to road within
our right of way; traveler safety, critical connections. We have four areas; we have our
regional corridor and mobility, so more of a corridor based target, we have mobility
issues in the Twin Cities area and then we also have two new investment categories, well
not new in terms of MnDOT thinking about but new as investment categories of bicycle infrastructure
and pedestrian infrastructure. We have that regional community improvement priorities
pot, the RCIP pot that I mentioned and then we have Project support which is for planning
purposes, a fixed number that helps MnDOT deliver its projects, construction projects
from planning all the way to through construction to completion.
Hereís where I will stop and I think hereís where I will stop with the individual categories
and talk a little bit about how we actually put this information together. I think we
will be revisiting this information at the next webinar as well.
So really the ideas within each performance level, we identify our overarching goal and
our key objectives. I wanted to put this slide in here because this is an important spot
where we connect the MnSHIP plan to the Minnesota Go vision and the State-wide multimodal plan.
Weíve tried to have the goals and objectives in each of these investment categories reflect
the information and reflect all the hard work that went into both those plans. So, these
kind of really set the, lay the ground work for what investment in pavement, what investment
in other roadside infrastructure, what investment in safety aims to accomplish. So we list these
goals and objectives for each of our investment categories. Then the idea is we build these
investment performance levels and so I have been suggesting this on a couple slides that
we have multiple performance levels across each of these categories.
At one end of the spectrum you could spend very little money in a particular category
and not get very ideal outcomes and so the impact of that money on system condition would
be pretty severe. Taken the case of payments, we spend very little money, the lowest performance
level; you would have very poor payment system wide and statewide even. You would have a
lot of risks that youíve been unable to manage. Conversely, if you spent the highest level
of investment within each category, essentially, we would be able to meet our performance targets
within that investment category. Then I have been suggesting this kind of sets
the spectrum of about how we could invest across Ö I should say within any individual
category we created these multiple levels. So how does risk actually get incorporated
into this? Thatís a question we have been wrestling with for a number of months here.
The concept that you see in front of you is our first stab of weaving risk assessment
into the plan and programming process. So the ideas that we have a number of key
risk statements, these risk statements make up something that has trend a risk register.
So we put together a risk register and you see a line there that reads, ëthe risks of
not achieving goals and objectives at performance level 0í. So what does that actually mean?
Performance level 0 is what I suggested was kind of a minimum level of investment within
any individual category. The way we have done our risk assessment is that we have built
our risk register; here I have 5 example risks. We built our risk register on what are the
risks to not achieving our goals and objectives by investing at that minimum level 0 performance
level. So we built our risk register and essentially we ask ourselves a question of, you know,
how well are we able to manage or accept that risk at any subsequent performance level?
So, here you might see say at performance level 1 we could actually manage a lot of
risk but maybe there is some risk like here you see with statement 4, we might not be
able to manage that risk as well. Essentially, we analyze the risks across each of the performance
levels. Iím actually going to skip this slide and
go to this slide instead. This is the high level concept of how we put this information
together. You are going to see some of this information realized, the folios as well as
the subsequent webinars. So on the left side of the screen you see the idea of performance
level 0, so this would be, kind of, the minimum level of investment within this particular
category. As you build your way to the right, as you build your way across what we have
here. We have four levels, level 0, 1, 2 and 3. The pie piece suggests weíre continuing
to spend some additional resources, whether it be money or person power or something of
that nature towards this investment category. As we make greater investment, we are going
to be able to accomplish more. You can kind of see in the third set of information there;
we might be able to achieve more in terms of our performance targets. Generally speaking,
as we make greater investment in each of these levels, we are going to be able to manage
our risks better. Which is, it holds pretty well across all of the individual investment
categories. (went blank) Ö closer up as to what this looks like for each of our individual
categories. The third step is the step that weíre beginning
right now which is the evaluation of our, some alternatives or approaches. The idea
really, for simple terms, really the idea of what we are doing here is scenario playing.
Itís, kind of, continuing the Minnesota Go vision theme. Really allowing people, and
peopleís not just necessarily stakeholders and the public, it the department as well,
itís within MnDOT. It allows us to look at a range of options and understand the implications
of each approach. And really the way that MnDOTís moving forward in MnSHIP and the
information that we are going to be taking out to the public here in a couple weeks is
really centered around the idea of three approaches. One is, as an example, Approach B on here
would be what weíre doing currently. What is our current set of priorities get us in
terms of outcomes? Weíve developed some alternative approaches, Approach A and C which spend,
kind of, the money a subset of the money in a much different way. Approach A here, for
example, spends a lot more money on asset management to maintain roads and bridges in
a better statement repair versus Approach C, spending a greater portion of our resources
on traveler safety, making critical connections and the regional community priorities. I think
one point thatís important to note here, and weíll certainly will be making this point
when we go out to the public is weíre not necessarily saying that, you know, Approach
C or A is what weíre going to choose for our next investment direction. Itís really
about how the department is going to move the needle from what we are doing today. So
the publicís opinion, your opinion, plus the feedback we get from the Legislature,
plus our own technical analysis, kind of, shift the needle from Approach B towards maybe
one of the other Approaches. Or do we keep our investment priorities similar to what
they are today? This kind of gets into the third, revisiting
that five step diagram here, the three pie pieces here kind of suggest to you how this
information is going to look as we prepare it for the outreach meetings in October. So
for example, under Approach A, I suggested that asset management sees a relatively moderate
to high level of investment across some of the categories. But then as we make our way
to some of the other categories; CC is critical connections, TS is traveler safety, RC regional
community priorities; those are going to have to be invested at a lower level. So we are
going to see a unique set of outcomes with Approach C, Approach A, excuse me.
Then Approach C, we see that we are spending a relatively low or making a low investment
on asset management but weíre able to achieve a great deal more across our other investment
categories. So really this is a conversation we always have internally when we update this
plan and now we are bringing this conversation out to the public to get their feedback on
priorities as well. So I think this is a really unique and different thing for MnDOT, I guess,
itís really more formalized than something weíve, kind of, done in the past and really
bringing information out and really having a conversation with people about some of the
difficult decisions that we face on our transportation system at the state level.
So step 4, set the investment direction and develop the fiscally-constrained plan. These
slides are pretty brief here. Really the idea is we move past the outreach phase of this
plan is that we blend the stakeholder feedback as I been discussing in step three with our
own work, the work that you are going to see in subsequent webinars, the technical data.
We actually finalize our draft investment direction which sets the priorities for the
projected revenue, the $18 billion. Sometime between after October and when we release
the draft plan, the 8 MnDOT Districts in consultation with our expert offices and the Office of
Capital Programs here are going to assemble a 10-year project specific work plan and weíre
going to identify major outcomes in that second 10-year period. And ultimately, weíll be
rolling that out for public review in early 2013.
One thing that I want to mention, also, is step 5 which is the identification of alternative
priorities. And I think this is, we did this in the last plan, we had a step 5 but it was
kind of an add-on towards the end of the plan; a mainly internal add-on. Now I think weíre
weaving it in holistically and comprehensively into the planning process. And really what
this means in step 5 is that, you know, again, MnSHIP identifies what we can do and accomplish
within our fiscally-constrained budget. So what can we accomplish with $18 billion? Now
we are going to be getting feedback from the public in this outreach phase here in September
and October as well as on the draft plan. I supposed it possible and maybe you might
say quite likely that many of the publicís priorities might not line up with MnDOTís
so maybe we meet something in the middle. Maybe we have a set of priorities that the
publicís not, would like us to go a different route or maybe we have to blend different
way and it has to be ideas, depending on the priorities that you set in the plan.
In step 5, the priorities of what we would do with more money are going to likely look
a little bit different. So for example, if MnDOT chose a set of priorities that were
more focused on asset management with additional resources, MnDOT would likely put greater
emphasis on critical connections, traveler safety, the regional community priorities.
Conversely, if we took something more similar to what we have today which is a balanced
program trying to make investments across all the categories or in fact if we put some
additional resources in critical connections or regional community priorities with additional
money, MnDOT would likely prioritize that money on our roads and bridges. So, again,
the mix of priorities would change in step 5 depending on the input we receive throughout
this entire MnSHIP plan. That will be a dynamic thing that kind of gets completed towards
the end of this plan after a lot of the input has been received both here in October as
well as on the draft plan. I want to close with a couple slides before
we open it up to questions about how to participate in MnSHIP. Obviously, if you are listening
to this webinar, youíre interested. Again, we thank you for that. These webinars are
really one of many ways that we are seeking your involvement in MnSHIP. First we have
launched our website, I mentioned this earlier, on June 25, 2012. In 2009, we really didnít
have a particularly comprehensive planning website. I think we have really made great
strides in trying to get information up on the web and we have ways to receive comment
on the web and weíre going to actually have an online scenario type tool thatís going
to be part of our outreach phase in the end of September and October. Thatís going to
be a pretty exciting way to get input from people that either want to provide additional
input beyond the October meetings or if they are unable to attend the October meetings
then we can give them another means to provide input on the investment priorities.
And certainly, if you want to or are interested in following the plan on Facebook or Twitter,
you can do so there. Thereís a link on the participate page to receive e-mail updates
of this plan. So itís periodic updates with key information. Iíve mentioned Facebook
and Twitter, we have some weekly updates that go out, weekly or close to bi-weekly updates.
Really what this webinar is doing is beginning the critical outreach phase of this plan.
Really about getting information and input on our investment priorities.
So we have a series of webinars, obviously. Weíre going to be creating some folios for
each of these investment categories. These will be up on the website if you look in the
lower right hand corner of your screen, youíll see the, ëWhat is MnSHIPí PDF. Thatís our
first folio which is the overview folio and it talks a little bit about some of the information
youíve seen here as well as the revenue. So certainly, you can grab a copy of that
here or on the web. Weíre going to have that online scenario
tool which I mentioned, hopefully have that up and running a little bit before the outreach
meetings, ideally towards the end of September. Then we do have nine, currently scheduled,
nine stakeholder engagement meetings across the state. That information with tentative
times and relative firm dates is on the participate page on the website. Again, you can keep abreast
of the key information dates and the CIMS and you can do that by signing up on the participate
page on the website. The next webinar, weíll be getting into more
specifics about some of these investment categories and these range of performance levels and
what outcomes are associated with them. So it will be a little bit really about the introduction
of scenario playing as we get into the details of asset management, traveler safety and project
support. As we move to the third webinar on the 24th,
weíll talk about critical connections and RCIPs and ultimately, there will be another
webinar and who knows there maybe there will be a fifth one if we can come up with a good
reason and we continue to have good participation. At the moment we have four scheduled and those
are the dates and you will always be able to access them from the MnSHIP page and get
information related to the webinar at the MnSHIP page. If for some reason some other
form of contact information doesnít suit your needs, you can get in touch with me and
Iíd be happy to answer your question. If for some reason Iím unable to answer it,
Iíd be sure to get you in touch with the right person.
So with that Iím going to finally cease to talk and see what kind of questions we have
here. And certainly, we will start with Nancyís questions here. Then if you have additional
questions you can either type them into the chat or you can certainly speak up on your
phone and weíll take them as we get them.î ìAlright, Iím going to address Nancyís
question. Her question was related to how does MnSHIP address the principle arterials
that are not on the state highway system. MnSHIP is the state highway investment plan.
The issue of the PAís not being on the state highway system but eligible under Map-21 is
going to be addressed by a different group. It is a both internal and external coordinating
group called The Programming Work Group and they are subsequently beginning meetings,
I believe, next week to begin to break down some of these more policy level issues on
Map-21 that I know a lot of you have issues and concerns about.
Also, Iíll put a plug in on for September 17th, weíre going to have a very large Map-21
workshop that will also begin to divulge at some of these high level policy issues.î
ìOther questions?î ìNot hearing a whole lot out there, weíll
take just a couple minutes here. Again, feel free, you can either type the question or
just chime in on the phone.î ìWeíre getting one in here.î
ìWhat will the NPOs play in the process in terms of updating their own long range transportation
plan? We are working with a partnership advisory committee or PAC that is involved the NPOs
and RDCs. It is our intent to, kind of, have them be a working bounce off idea group as
we go through this process. It is obviously a cooperative effort but we do ultimately
at the department need to make a decision as an agency. So we are interested in trying
to keep a very hands-on type relationship. But thatís part of what we will resolve here
in the public involvement phase as we go out into the districts. I should probably add
to that too, as Map-21 has unfolded the NPOs will have additional requirements that are
similar to the states in terms of performance planning.
Next question here. The question is, ëare there going to be performance measures for
bicycle and ped. systems and facilities?í We are working towards a performance based
system; however, we are under a pretty tight deadline. It is our intent when we complete
MnSHIP to launch into a rather exhaustive update of our entire performance measuring
system. Basically, redo MnSHIP again in about 2 and a half years that will have given us
time to have soaked in a little bit of Map-21 as well as create some new performance measures.
So it is our goal in the future to bring bicycle and pedestrian facilities into the fray with
performance. We also intend to update some of our metro mobility performance measures
and congestion measures as well as of course any alignment or adjustment we to our asset
performance measures as a result of Map-21. This go around for MnSHIP we just donít have
the time to do that because of the requirement to turn this into the Legislature, so we are
going to go with what we have today.î ìI think we are, as you will see in webinar
3, weíre making a pretty good first step to prepare ourselves with that conversation
by weaving bicycle and infrastructure investments, kind of into the mix. Maybe they are not quite
as mature from a performance management side and some of our more established categories
but certainly by connecting them with the Minnesota Go vision and the multimodal plan,
we are really making, I think weíre, again, weíre just positioning ourselves well for
that revisiting of some of these things as Patrick had just suggested. Thereís definitely
much more in the mix than they were in the 2009 plan and I think weíll just continue
to develop them and let that process mature here over the next couple of years.î
ìMore question?î ìI guess the last thing I will mention here,
is if for some reason out there because itís impossible for us to know for sure if you
had some issues with the Adobe Connect or any issues connecting or whatever reason.
Let me know or for some reason somethingís not working, Iíd/weíd be delighted to have
some feedback on some of those issues if for some reason there was a challenge out there
with getting this information or downloading this information. So feel free to pass that
information on to me via e-mail, weíll do our best to correct that next time. Otherwise,
hopefully everything worked out well and this was a good way to receive some information.î
ìIím going to offer it again one more time for any questions? Donít see anybody writing
in here and nobody online so I think with that we are going to close the webinar down.
On behalf of the Minnesota Department of Transportation, I want to thank you for sitting in with us
today. We look forward to the future webinars. We are going to get into a lot more detail
as Ryan stated as we proceed through the process. Also, please check out our website, it will
have the dates of the upcoming public meetings in the districts and we will again appreciate
your input and just your support for this process and we look forward to serving you
in the future. Thank you.î