Initial Financial Plan
I-35W North MnPASS Project Financial Plan
Prepared by the Minnesota Department of Transportation Metro District Office of Financial Management Office of Transportation System Management
Initial Financial Plan Prepared: May 4, 2018
Federal Project Number NHPP-HSIP I35W (012) I-35W North MnPASS Project State Project Number 6284-180
Table of Contents Section 1 – Project Description ...... 3 Project Need ...... 3 Project Scope ...... 3 Section 2 – Project Schedule ...... 9 Project Schedule...... 9 Section 3 – Project Cost ...... 11 Cost Estimating Methodology ...... 11 Total Cost Estimate ...... 12 Expenditures-to-Date ...... 14 Section 4 – Project Funds ...... 14 Overall Financial Plan ...... 14 Funding Sources...... 15 Federal Funds ...... 16 State Funds ...... 16 Trunk Highway General Obligation Bonds ...... 17 Advance Construction ...... 17 Local Funds ...... 17 Section 5 – Financing Issues ...... 17 Cost of Financing ...... 17 Section 6 – Cash Flow ...... 18 Section 7 – Public-Private Partnership Assessment ...... 18 Section 8 – Risk and Response Strategies ...... 19 Key project risks and mitigation strategies ...... 19 Section 9 – Annual Update Cycle ...... 21 Section 10 – Summary of Cost Changes since Last Year’s Financial Plan ...... 21 Section 11 – Cost and Funding Trends since Initial Financial Plan ...... 21 Section 12 – Summary of Schedule Changes since Last Year’s Financial Plan ...... 22 Section 13- Schedule Trends since Initial Financial Plan ...... 22 Contacts ...... 23
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Federal Project Number NHPP-HSIP I35W (012) I-35W North MnPASS Project State Project Number 6284-180
FIGURES Figure A1. Project Location Map……………………………………………………………………………….……………………....….6 Figure A2. Project Location Map.…………….……………………………………………………………………….…………..…..….. 7 Figure A3. Logical Termini and Project Construction Limits………………………………………………………………….…8 TABLES Table 1. Bridge Construction List………………………………………………………………………………………………………...4 Table 2. Project Schedule ……………………………………………………………………………………………………………………9 Table 2A. Project Stages……………………………………………………………………………………………………………………...10 Table 3. Total Project Cost Estimate by Major Cost Elements ………..……….……………………….……….…..... 12 Table 3A. Project Expenditures by Major Cost Elements ………….…………………………………….…………...…….. 14 Table 4. Funding Sources………………………………………………………………………………………………………………….. 15 Table 4A. State and Federal Project Number………………………………………………………………………………….…… 15 Table 5. Estimate of Trunk Highway Bond Financing……………………………………………………...... 17 Table 6. Project Cash Flow Analysis by State Fiscal Year …..……...... 18 Table 8. Summary of Project Risks & Mitigation Strategies ……………………………………………….………….…...19
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Federal Project Number NHPP-HSIP I35W (012) I-35W North MnPASS Project State Project Number 6284-180
Section 1 – Project Description
Project Need The primary need for the project is to improve mobility in the I-35W north corridor from County Road C in Roseville to Lexington Avenue in Blaine. This is a major freeway connecting greater Minnesota and the growing north suburban area to downtown Minneapolis. The existing highway mobility on the I- 35W north corridor is considered deficient based on congestion levels and operational issues during peak travel periods. Traffic volumes and travel times have increased for all highway users (single- occupancy motorists, carpools, transit, and freight carriers) and a number of segments, along the corridor, experience significant (peak period) congestion each day.
The Project needs include: Replacement of pavement and some bridges, within the corridor, that have reached the end of their service life and are scheduled to be replaced in the near future. Bridge preservation activities along the I-35W north project corridor. Consistency with regional transportation plans, utilizing existing and future infrastructure investments, and fiscal considerations.
Project Scope The I-35W MnPASS project will include the construction of MnPASS express lanes on I-35W from south of County Road C in Roseville to north of Lexington Avenue in Blaine (about 11 miles). The project also includes pavement rehabilitation from County Road C to Sunset Avenue in Lino Lakes (about 12 miles), and construction of an auxiliary lane on westbound Highway 10 from I-35W to County Road J. The delivery method for I-35W North MnPASS project is Design-Build. Design-Build is a contracting process bringing designers and contractors together early in the detail design portion of a project. MnDOT uses the flexibility Design-Build offers to maximize the value received per dollar spent in a variety of situations.
MnDOT made the decision to use the Design-Build process to speed the delivery of the project as the design and construction activities can occur, simultaneously, following letting and the delivery will reduce the impacts to the traveling public.
The project includes: Construction of a MnPASS lane on I-35W in the northbound and southbound from south of County Road C in Roseville to Lexington Avenue in Blaine, Minnesota (about 11 miles in length). Construction of a concrete overly on the existing pavement from south of County Road C in Roseville to north of Sunset Avenue in Lino Lakes, Minnesota (about 12 miles in length). Construction of auxiliary lanes on westbound TH 10 from I-35W to County Road J. Construction of a buffer lane on northbound I-35W at the TH 694 interchange. Bridge construction on the project is as follows:
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Federal Project Number NHPP-HSIP I35W (012) I-35W North MnPASS Project State Project Number 6284-180
Table 1. Bridge Construction List*
Existing New Bridge Location Proposed Work Bridge No. No. 9352 62938 NB I-35W – Rosegate Replaced 9351 62939 SB I-35W – Rosegate Replaced 9354 62940 NB I-35W – CR C Replaced 9353 62941 SB I-35W – CR C Replaced 9355 N/A CR D Pier Strut 9492 N/A CR 88 Pier Strut 9357 N/A CP Railroad Bridge Pier Strut 62873 N/A CR E2 Review for Pier Strut Modifications 62890 N/A CR F Review for Pier Strut Modifications 9601 N/A WB I-694 Pier Strut 9602 N/A EB I-694 Pier Strut 62911 N/A CR 96 Review for Pier Strut Modifications 9578 N/A TC Arsenal Rail Bridge Pier Strut 91071 N/A Rice Creek Culvert Extend Box Culvert 62732 N/A CR H Review for Pier Strut Modifications 9603 62942 CR I Replaced 9605 N/A TH 10 Bridge Rehabilitation / Pier Strut 02571 N/A CR J Pier Strut 9607 N/A Lake Drive Pier Strut 02566 N/A 95th Ave Pier Strut 02550 N/A Lexington Ave Pier Strut / Paint Bridge 9831 N/A Sunset Ave Pier Strut The bridge and culvert work are listed in Table 1 as located within the I-35W North MnPASS corridor from south to north and east to west. Pier strut construction consists of constructing a concrete block around pier columns for crash protection. Pier strut review consists of evaluating existing pier struts to ensure they provide adequate crash protection.
The eastbound (Bridge 9602) and westbound (Bridge 9601) bridges on I-694 will be modified to include soil nail walls at the east abutments. The box culvert at Rice Creek (Culvert 91071) will be extended an additional 22 feet west. The bridge at County Road H (Bridge 62732) is not considered part of the I-35W North MnPASS Project. Ramsey County accounted for future MnPASS lanes when it administered the rebuilding of this bridge, completed in 2016.
For northbound I-35W, the MnPASS lane will be installed on the left side of the current freeway. The MnPASS lane will begin south of the Rosegate Bridge as an additional lane and will allow MnPASS users to move into the lane before County Road C traffic enters I-35W. This MnPASS lane will end north of 95th Avenue in Blaine. At this point, the MnPASS lane designation will end and become a third general purpose lane approximately 3000 feet south of the Lexington Avenue exit. The right general-purpose lane will exit at Lexington Avenue and the left and center general purpose lanes will continue north of Lexington Avenue as two general purpose lanes.
For southbound I-35W, the MnPASS lane will be located on the left side of the current freeway. The MnPASS lane will begin north of the Lexington Avenue Bridge in Blaine, allowing MnPASS users to move
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Federal Project Number NHPP-HSIP I35W (012) I-35W North MnPASS Project State Project Number 6284-180 into the lane before Lexington Avenue traffic enters.
The southbound I-35W MnPASS lane will end at County Road D at which point the MnPASS lane will become a fourth general purpose lane north of the County Road C exit. The four general purpose lanes will tie in with the existing four lane section, on I-35W, south of Rosegate.
At this time the substantial completion date is still being determined, however, it will be on or before October 2022.
Federal and state laws require MnDOT to complete an environmental review of the project. Preliminary engineering and the environmental review process began in October 2015. MnDOT completed the draft Environmental Assessment (EA) in February 2016, the project was fully funded in June 2016, and the EA was approved for public distribution in August of 2016. There was no Finding of Significant Impact, and a negative declaration document was signed in September 2017. The Finding of No Significant Impact was issued on January 28, 2018.
Additional background information regarding the I-35W North MnPASS Project is maintained at the following address: http://www.dot.state.mn.us/metro/projects/i35wroseville/index.html .
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Federal Project Number NHPP-HSIP I35W (012) I-35W North MnPASS Project State Project Number 6284-180
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Federal Project Number NHPP-HSIP I35W (012) I-35W North MnPASS Project State Project Number 6284-180
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Federal Project Number NHPP-HSIP I35W (012) I-35W North MnPASS Project State Project Number 6284-180
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Federal Project Number NHPP-HSIP I35W (012) I-35W North MnPASS Project State Project Number 6284-180
Section 2 – Project Schedule
Project Schedule Below is a table with the current project milestones. The milestones can be measured during the award and annual updates; as they could have impacts on the scope and cost elements of the project. Additional milestones may be added following the project letting and development of this Design-Build project. The Environmental Assessment (EA) was approved for public distribution in August of 2016. The Findings of Facts and Conclusions (FOFC) has been developed and approved by MnDOT. The Finding of No Significant Impact (FONSI) was issued on January 28, 2018. A Request for Proposal will be released by June 6, 2018 with technical proposals due on August 29, 2018. The project letting will follow in September 2018. The Contract Start Date is anticipated on November 7, 2018 with the substantial completion on or before October of 2022 when the I-35W is open to traffic with functioning MnPASS lanes. Table 2. Project Schedule
Milestone Start Date End Date
Municipal Consent 5/2015 5/2017 Release of Environmental Assessment 8/2016 9/2017 Begin Project Development 7/2017 9/2018 Finding of No Significant Impact N/A 1/28/2018 PS&E Turn In to Central Office 3/30/2018 5/1/2018 Conditional FHWA Authorization 5/16/2018 5/30/2018 Release of Request for Proposals N/A 6/6/2018 Crossover Contract 06/2018 10/2018 Technical Proposals Due N/A 8/29/2018 Project Letting N/A 9/12/2018 Project Award N/A 11/7/2018 Contract Duration 11/7/2018 6/2023 Substantial Completion (Freeway open to traffic) N/A 10/2022
The procurement method for the I-35W North MnPASS project will be Design-Build. The construction staging has been developed by MnDOT and based upon the parameters provided in the Request for Proposals. Each stage must be completed before the next stage may begin. The contractor will provide a more detailed schedule and staging plan as part of their proposal. The financial plan and total project cost estimate are based on the following staging concept:
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Federal Project Number NHPP-HSIP I35W (012) I-35W North MnPASS Project State Project Number 6284-180
Preliminary: 2018 Issue Design-Build RFP Complete temporary widening project - SP 6284-185 will construct 4 crossovers and temporary widenings throughout the project to allow the contractor to begin permanent construction in spring of 2019 Receive Bids Issue NTP1
Stage 1: 2019 (Estimated March 2019 - December 2019) Move Southbound I-35W traffic onto Northbound Lanes Southbound I-35W – Un-bonded Concrete Overlay from Lexington Ave – Sunset Ave Southbound I-35W – Reconstruction from County Road C to County Road E2 Begin construction of noise walls where construction noise impacts are present Construct bridges at County Road C & Rosegate Ave on southbound I-35W Construct bridge at County Road I on southbound I-35W
Stage 2: 2020 (Estimated March 2020 – December 2020) Resume construction on southbound I-35W Southbound I-35W – Reconstruction from County Road E2 - Lexington Ave Complete construction of southbound I-35W Complete construction of all southbound I-35W Bridges
Stage 3: 2021 (Estimated March 2021 – December 2021) Move Northbound I-35W traffic onto Southbound Lanes Northbound I-35W - Un-Bonded Concrete Overlay from Lexington Ave – Sunset Ave Northbound I-35W – Reconstruction from County Road C to County Road E2 Construct bridges at County Road C & Rosegate Ave on northbound I-35W Construct bridge at County Road I on northbound I-35W
Stage 4: 2022 (Estimated March 2022 to October 2022) Resume construction on northbound I-35W Northbound I-35W – Reconstruction from County Road E2 - Lexington Ave Complete construction of northbound I-35W Substantial Completion - Open to traffic with functioning MnPASS lanes
Table 2A: Project Stages
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Federal Project Number NHPP-HSIP I35W (012) I-35W North MnPASS Project State Project Number 6284-180
Section 3 – Project Cost
Cost Estimating Methodology The project cost estimate was developed on a limited number of items under the Design-Build delivery method by MnDOT. The estimates are provided in year-of-expenditure (YOE) methodology. Year of expenditure is the projected year the expenditure will be incurred.
The project cost estimate is broken down by cost element as follows:
Construction Let Amount (Construction) – total amount of construction for MnPASS Design- Build project. Includes cost elements such as mobilization, surveying, grading, base, asphalt paving, concrete paving, bridges, pipe, local mitigation and other associated work. Includes estimate of design-builder’s risk assessment and acceleration costs. Also includes costs for items identified in Section 8 of the financial plan, these costs would be the responsibility of the design-build contractor. Construction Let Amount (Design) – estimated cost for design-build contractor to produce final design plans. Construction Let Amount (Crossover Contract) – estimated cost for preliminary contract to construct crossovers and widening on 35W, SP 6284-185. This contract will be let and constructed in 2018. Post Letting Construction Costs – Includes incentives, stipends, AGC technical review costs, and MnPASS installation contract. Other Project Costs – includes costs for other agreements that support the construction phase of the project. None were identified at this time. Preliminary engineering – Includes cost for engineering contracts, consultant work and MnDOT salary costs. This includes engineering contracts issued by MnDOT to SRF and other consultants for preliminary engineering, environmental review, contaminated material evaluations and associated work. Construction Engineering – includes costs for construction and design oversight contracts and internal MnDOT salary costs to manage the project. Right of way - necessary land acquisitions, property settlements. Internal salaries and consultants. Contingency – Includes estimated costs for items that would be the responsibility of MnDOT such as change orders, supplemental agreements and utility relocation costs. Risk/Contingency items that would be the responsibility of the design-build contractor are included in the construction let amount.
SRF Consulting Group completed an initial cost estimate for the project. This estimate included quantifying the construction items and assign a cost estimate for each item. WSB & Associates utilized SRF’s quantity take-offs and created its own independent cost estimate for the project. The two cost estimates were analyzed and compared to arrive at a Total Project Cost Estimate (TPCE) for the project.
This TPCE was arrived by utilizing contractor style estimating techniques including an analysis of the construction schedule, resources required, estimated production rates, and project risk items. The goal of this estimate was to provide an analysis of the cost from a contractor’s point of view. Included in the estimate were an analysis of risk items (see Section 8), escalation costs for the duration of the project,
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Federal Project Number NHPP-HSIP I35W (012) I-35W North MnPASS Project State Project Number 6284-180 and additional costs to accelerate the project to MnDOT’s desired 3-year construction time frame. All these factors were combined to arrive at the final estimate which is the basis for this financial plan.
Notes regarding project cost:
Because the project is less than the FHWA Major Project threshold of $500 million, a FHWA Major Project Cost Estimate Review was not completed. The estimated costs for local improvements were used as a basis for the share of local funding in the finance plan. MnDOT is committed to using a reasonable and rational set of escalation rates to set the escalation factors for the project. There are numerous variables that could impact the overall price escalation trend and MnDOT acknowledges future escalation rates may be higher or lower than those assumed in this Initial Financial Plan. If economic conditions change and the assumed future escalation rates need to be adjusted, an updated year of expenditure dollar cost estimate will be included in the Financial Plan Annual Update in subsequent years to continue to accurately reflect the financial health of the project. Cost Participation and Maintenance responsibilities with Local Units of Government Manual and the Cost Participation for Cooperative Construction Projects and Maintenance Responsibilities between MnDOT and Local Units of Government guides were used to determine partnership costs.
The TPCE will be updated after the award and on an annual basis, thereafter, to account for any change in scope.
Total Cost Estimate The Total Project Cost Estimate (TPCE) for the project is broken out into Cost Elements as identified from above.
Table 3. Total Project Cost Estimate by Major Cost Elements (million)
IFP Cost Elements (Initial Financial Plan) Construction Let Amount (Construction) $ 179.0 Construction Let Amount (Design) $ 11.2 Construction Let Amount (Crossover Contract) $ 4.8 Post Letting Construction Costs $ 4.7 Other Project Costs $ 0.0 Preliminary Engineering $ 7.5 Construction Engineering $ 11.1 Right of Way $ 0.2 Contingency $ 5.1 Total Cost $ 223.6
Additional information on costs contained within each cost element:
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Federal Project Number NHPP-HSIP I35W (012) I-35W North MnPASS Project State Project Number 6284-180
Construction Let Amount (Construction) – includes all construction costs to complete construction on the project, including costs for:
Project Management – cost for the design-builders project management team Mobilization – cost for the design-builder to mobilize to the site and administer construction operations Grading – costs for excavation, borrow, and aggregate base to build grade for the roadway widening Concrete Pavement – costs for unbonded concrete overlay of 35W mainline and ramps. Asphalt Paving – costs asphalt paving on shoulders and local roadway reconstruction that is associated with the project Bridge Construction – including bridge replacement and crash strut construction on various bridges, see Table 1 for list of bridges affected Drainage Improvements – cost for improvements to the storm sewer system throughout the project Noise Walls – construction of new noise walls throughout the project corridor. These will also be used to mitigate construction noise affected the neighborhoods. Local Improvements – costs for local improvements that are part of the project including CR C pond sanitary sewer realignment, New Brighton water main realignment and New Brighton sanitary sewer repairs. Local Mitigation – costs for local mitigation include improvements and revisions to various signal systems in the project area to improvement traffic flow on local roadways affected by the construction Other Costs – including sidewalk, curb, turf establishment, and traffic control that will be part of the project
Construction Let Amount (Design) – cost for the design-builder to complete the design on the project and issue final design plans.
Construction Let Amount (Crossover Contract) – this contract will be let in 2018 to construction temporary widening and several crossovers in advance of the design-build contract. This advanced construction will allow the design-build contractor to begin permanent construction in the Spring of 2019.
Post Letting Construction Costs – these are costs that will be incurred by MnDOT after letting of the design-build contract. These costs included:
Stipends paid to the unsuccessful bidding teams Cost for the AGC proposal review committee member Cost for incentives paid for meeting concrete paving requirements Contract for MnPASS installation and set up
Preliminary Engineering – these are the costs for the projects preliminary design and to prepare the design-build documents. Includes contracts to SRF and other consulting firms for preliminary design services and to WSB for preparing the design build documents. Also included are MnDOT’s salary cost for personnel who have worked on the project to date.
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Federal Project Number NHPP-HSIP I35W (012) I-35W North MnPASS Project State Project Number 6284-180
Construction Engineering – these are the costs for MnDOT to administer the project during the construction phase. Including contracts for design oversight and construction oversight. This also includes cost for MnDOT personnel that will be working on the project.
Right of Way – costs for consultant contracts to analyze right of way needs for the project and the cost to acquire any necessary parcels for construction.
Contingency – this is a budget for any additional costs that may be incurred by MnDOT during the project. This includes a budget for project change orders and any additional utility relocations that may be necessary. These are items that are not the responsibility of the design-build contractor.
Expenditures-to-Date Expenditures for the project began in State Fiscal Year (2010).
Table 3A. Project Expenditures by Major Cost Elements (million) Through January 31, 2018
IFP Cost Elements (Initial Financial Plan) Construction Let Amount (Construction) $ 0.0 Construction Let Amount (Design Work) $ 0.0 Post Letting Construction Costs $ 0.0 Other Project Costs $ 0.0 Preliminary Engineering $ 7.0 Construction Engineering $ 0.0 Right of Way $ 0.0 Contingency $ 0.0 Total Cost $ 7.0
Preliminary Engineering expenditures to date include MnDOT salary costs and consultant contracts. These funds were used for preliminary design, project evaluation and project scoping to narrow project design alternatives and to develop the Request for Proposals for the project. Section 4 – Project Funds
Overall Financial Plan The project will be financed with a combination of federal, state and local funding sources. The National Highway Performance Program (NHPP) and Highway Safety Improvement Program (HSIP) funds will be used to partially fund the I-35W North MnPASS Project. The project is identified in the State of Minnesota 2018-2021 State Transportation Plan (STIP) which was approved on November 9, 2017. The total funding package of $223.6 million is comprised of a combination of the following federal, state and local sources.
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Federal Project Number NHPP-HSIP I35W (012) I-35W North MnPASS Project State Project Number 6284-180
Table 4. Funding Sources (million)
Funding Sources IFP Federal Formula Funds (NHPP) $ 169.6 Federal Formula Funds (IMD) $ 0.9 Federal Formula Funds (HSIP)* $ 0.2 State Trunk Highway Bonds $ 24.0 State Trunk Highway Funds $ 28.3 Local Funds $ 0.6 Total Funding Sources $ 223.6 *HSIP funds are for roadway lighting on US 10 Funding Sources The construction major cost element funding sources for the I-35W North MnPASS Project are included in the State of Minnesota 2018-2021 State Transportation Improvement Plan (STIP). Table 4A provides details on where the project is located in the FY 2018-2021 fiscally constrained STIP.
Table 4A. State and Federal Project Number
State Year STIP Federal Project Reported Sequence Project Purpose Project Number STIP Number Number I35W FROM CO RD B2 N ROSEVILLE TO 0.1 MI N N/A SUNSET AVE (ANOKA CR 53) IN LINO LAKES, 6284-185 2018 3175A CONSTRUCT CROSS OVERS AND TEMPORARY WIDENING IN PREPARATION FOR SP 6284-180 I35W, FROM CO RD B2 IN ROSEVILLE TO N/A 6284-180UT 2019 1611 0.1 MI N SUNSET AVE (ANOKA CR 53) IN LINO LAKES - I35E N MNPASS PROJECT UTILITY AND RAILROAD AGREEMENT **AC**PODI**SPP** I35W, FROM CO RD B2 IN ROSEVILLE TO 0.1 MI N SUNSET AVE (ANOKA CR 53) IN LINO LAKES, CONSTRUCT MNPASS LANE FROM CR C TO LEXINGTON AVE (ANOKA CSAH 17), CONC OVLY FROM CR C TO CR 53, MISC PAVEMENT
RECONSTRUCT & BIT M&O, REHAB 17 BRIDGES AND NHPP-HSIP
REPLACE 5 BRIDGES, ADD AUXILIARY LANES AT I35W(012) 6284-180 2019 1610A MULTIPLE LOCATIONS, NOISE WALLS AND ON US 10, FROM N JCT I35W TO 0.7 MI E CSAH J, CONSTRUCT WB AUXILIARY LANE, EB CONC OVLY, NOISE WALL (ASSOCIATED TO SP 6243-18) (AC PROJECT, PAYBACKS IN FY20, FY21, FY22) **AC**PODI**SPP** I35W, FROM CO RD B2 IN ROSEVILLE TO 0.1 MI N SUNSET AVE (ANOKA CR 53) 6284-180AC1 2020 3173A IN LINO LAKES, CONSTRUCT MNPASS LANE FROM CR C TO LEXINGTON AVE (ANOKA CSAH 17), CONC
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Federal Project Number NHPP-HSIP I35W (012) I-35W North MnPASS Project State Project Number 6284-180
OVLY FROM CR C TO CR 53, MISC PAVEMENT RECONSTRUCT & BIT M&O, REHAB 17 BRIDGES AND REPLACE 5 BRIDGES, ADD AUXILIARY LANES AT MULTIPLE LOCATIONS, NOISE WALLS AND ON US 10, FROM N JCT I35W TO 0.7 MI E CSAH J, CONSTRUCT WB AUXILIARY LANE, EB CONC OVLY, NOISE WALL (ASSOCIATED TO SP 6243-18) (AC PAYBACKS 1 OF 3) **AC**PODI**SPP** I35W, FROM CO RD B2 IN ROSEVILLE TO 0.1 MI N SUNSET AVE (ANOKA CR 53) IN LINO LAKES, CONSTRUCT MNPASS LANE FROM CR C TO LEXINGTON AVE (ANOKA CSAH 17), CONC OVLY FROM CR C TO CR 53, MISC PAVEMENT RECONSTRUCT & BIT M&O, REHAB 17 BRIDGES AND 6284-180AC2 2021 3174A REPLACE 5 BRIDGES, ADD AUXILIARY LANES AT MULTIPLE LOCATIONS, NOISE WALLS AND ON US 10, FROM N JCT I35W TO 0.7 MI E CSAH J, CONSTRUCT WB AUXILIARY LANE, EB CONC OVLY, NOISE WALL (ASSOCIATED TO SP 6243-18) (AC PAYBACKS 2 OF 3) **AC**PODI**SPP** I35W, FROM CO RD B2 IN ROSEVILLE TO 0.1 MI N SUNSET AVE (ANOKA CR 53) IN LINO LAKES, CONSTRUCT MNPASS LANE FROM CR C TO LEXINGTON AVE (ANOKA CSAH 17), CONC OVLY FROM CR C TO CR 53, MISC PAVEMENT RECONSTRUCT & BIT M&O, REHAB 17 BRIDGES AND 6284-180AC3 2022 3175A REPLACE 5 BRIDGES, ADD AUXILIARY LANES AT MULTIPLE LOCATIONS, NOISE WALLS AND ON US 10, FROM N JCT I35W TO 0.7 MI E CSAH J, CONSTRUCT WB AUXILIARY LANE, EB CONC OVLY, NOISE WALL (ASSOCIATED TO SP 6243-18) (AC PAYBACKS 3 OF 3)
Federal Funds MnDOT receives federal funding for roadways that are on the federal-aid road system from the Federal Highway Administration and will utilize funds from the National Highway Performance Program (NHPP) Apportionment on the eligible portions at 90% federal/10% state match. The Highway Safety Improvement Program (HSIP) apportionment will also be utilize on the eligible portion at 90% federal/10% State match. The Interstate Maintenance Discretionary (IMD) Program apportionment was utilized in the earlier stage of the project for preliminary engineering at 90% federal/10% state match.
State Funds MnDOT receives state transportation funding through a state constitutionally dedicated funding source. The state collects a motor fuel tax, a motor vehicle tax, and vehicle registration fees, which feed the Highway User Tax Distribution Fund (HUTDF). Sixty-two percent (62%) of the HUTDF is constitutionally dedicated for use in funding state trunk highway projects. These funds can only be spent on transportation projects within state trunk highway rights-of-way and must be appropriated biennially by the Legislature.
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Federal Project Number NHPP-HSIP I35W (012) I-35W North MnPASS Project State Project Number 6284-180
Trunk Highway General Obligation Bonds Trunk Highway General Obligation Bonds have been identified for use on the I-35W North MnPASS Project.
Advance Construction This project will also utilize Advance Construction that will be converted between 2020 and 2022 as identified in the 2018-2021 STIP.
Local Funds The City of Roseville and Ramsey County will be partnering with MnDOT for approximately $0.3 million for utilities and a pond near County Road C. The City of New Brighton will provide about $0.3 million for utility betterments which will be completed at the same time as the I-35W North MnPASS Project.
Section 5 – Financing Issues
Cost of Financing A portion of the I-35W North MnPASS Project costs are financed using Minnesota’s Trunk Highway General Obligation Bonds. The total project amount financed with bonds will total $24.0 million, which is 10.7% of the total project costs of $223.6 million. The State of Minnesota sells trunk highway bonds once or twice each year. The bonds are sold based on a group of projects anticipated cash needs and are 20-year bonds.
MnDOT financing costs are incurred on bonds issued for system-wide purposes, not specific to a particular project, and are therefore not applied to the total cost of an individual project. Total financing for all state bonds are part of the ongoing capital program.
Table 5. Estimate of Trunk Highway Bond Financing
Estimate of Trunk Highway Bond Financing Costs (million) Bond Amount for Debt Financing Costs Project Cost of Debt Amortization Total Cost of Debt Fiscal Financial Actual (Principal + Financing Issuance Schedule (Financing Costs + Year Plan Spend(2) Interest, Net Costs Costs (2) Ratio (1) Issuance Costs) of Premiums) 2019 7.20 7.20 1.39 10.00 2.80 0.01 2.81 2020 12.00 12.00 1.39 16.67 4.67 0.01 4.69 2021 4.80 4.80 1.39 6.67 1.87 0.00 1.87 Total 24.00 24.00 33.35 9.35 0.02 9.37 Notes: All calculations are using the Financial Plan amounts and rough estimates based on project schedule. (1) Actuals shown for comparison purposes only - calculations are based on amounts in "Financial Plan" column based on actual and estimated bond sales (2)From Minnesota Management and Budget (MMB), based on amortization schedule for actual bond sale that year. Ratio of total cost per $1 in bond proceeds, including interest and premium impacts (3)Estimated at 0.1% of bonds, similar to all bonding bills authorized through MN Legislature
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Federal Project Number NHPP-HSIP I35W (012) I-35W North MnPASS Project State Project Number 6284-180
Section 6 – Cash Flow
Through January 31, 2018, a total of $7.0 million has been encumbered and expended. An estimated additional amount of $0.6 million will likely be encumbered and expended for the remainder of State Fiscal Year 2018. The remaining project costs will be expended from SFY19 through SFY23. Revenue projections for the project are sufficient to fund the current estimated TPCE. Minnesota uses encumbrance accounting which reserves the funding for expenditures before they occur to avoid overspending the budget. The majority of the funding for this project is encumbered at the time of award. Table 6 details the project’s total revenues and expenditures to date as well as the forecasted amounts into the future.
Table 6. Project Cash Flow Analysis by State Fiscal Year (million)
Thru Cash Flow 2019 2020 2021 2022 2023 Total 2018 MnDOT Federal* $0.9 $69.2 $66.8 $30.0 $3.8 $0.0 $170.7 MnDOT Trunk Highway $0.0 $7.2 $12.0 $4.8 $0.0 $0.0 $24.0 Bonds MnDOT State Trunk $6.7 $21.6 $0.0 $0.0 $0.0 $0.0 $28.3 Highway Local $0.0 $0.6 $0.0 $0.0 $0.0 $0.0 $0.6 Total Revenue $7.6 $98.6 $78.8 $34.8 $3.8 $0.0 $223.6 Carry Over $0.0 $0.0 $57.9 $80.3 $58.7 $2.5 Total Available $7.6 $98.6 $136.7 $115.1 $62.5 $2.5 Expenditures $7.6 $40.7 $56.4 $56.4 $60.0 $2.5 $223.6 Balance $0.0 $57.9 $80.3 $58.7 $2.5 $0.0
*Includes Advance Construction amount. Section 7 – Public-Private Partnership Assessment
Because the estimated total cost for this financial plan is under the $500 million threshold, a public- private partnership assessment was not conducted. A high-level assessment concludes the following:
There exists uncertainty regarding the value to the public and stakeholders of an effectively developed P3 in the Minnesota state legislature, MnDOT, and the overall Minnesota transportation industry. Any attempt to assess and deliver a P3 would likely create a variety of stakeholder engagement requirements and delay delivery of the project. The current statutory environment does not include strong delineated language to ensure a transparent and competitive P3 proposal process for private investors to consider. MnDOT does not have a dedicated team or structure for P3 project or programs to oversee the conception, negotiation, or execution of a P3 agreement. There is no unsolicited capital investment being offered by the private sector. MnDOT does not have the ability to create or assess a dedicated revenue stream (availability payments or MnPASS fees) that is sufficient to retire a non-existent amount.
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Federal Project Number NHPP-HSIP I35W (012) I-35W North MnPASS Project State Project Number 6284-180
Section 8 – Risk and Response Strategies
There are several key risks identified for the I-35W North MnPASS Project which could potentially impact various aspects of the project such as schedule, cost, or funding availability. The total project cost estimate included in Section 3 has been developed with appropriate contingencies in place to manage these risks. In addition, several mitigation strategies have been developed to offset potential risks.
The items listed in Table 8 are project risks that were identified and would need to be addressed during project procurement. Risks that are the responsibility of the contractor were analyzed and any cost impacts were included in the TPCE and listed as part of the Construction Let Amount in the Financial Plan. Risks that are the responsibility of MnDOT were analyzed and any cost impacts were included in the Contingency Item in the financial plan.
As the project continues to advance through construction, the contingency budget will be periodically reviewed to ensure the budget has sufficient resources to successfully manage the project through completion.
Key project risks and mitigation strategies
Table 8. Summary of Project Risks & Mitigation Strategies
Risk Type / Mitigation Risk Element Status Milestone Strategy
1 If replacement of the bridges causes This risk has been vibration around the water main, Utilities / discussed regularly, and Ongoing then this results in a damaged water Completion of vibration will be
line and disconnection of service for Bridge Const. monitored. the city. 2 If projects in the area are moving Include access forward at the same time, then this Schedule / Project maintenance into RFP. Ongoing creates potential delays due to Completion additional traffic mitigation issues. 3 If drainage or other unforeseen Crossovers Adding additional design issues occur on the Completion and drainage structures. Ongoing crossovers, then this results in Drainage / Included in RFP. redesign and reconstruction impacts. Preliminary Design 4 If we find unknown contamination Boring investigations areas, that result in issues in material Schedule and Cost / completed. Known Ongoing storage and additional management Project Completion contaminations scenarios/schedule delay. identified.
5 High Infra data does not match what Schedule and Cost / Exhibit being developed is in the field. No validations of Project Completion that identifies Ongoing conditions or structures in the substandard cross
corridor creates various questions culverts. and changes.
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Federal Project Number NHPP-HSIP I35W (012) I-35W North MnPASS Project State Project Number 6284-180
Risk Type / Mitigation Risk Element Status Milestone Strategy 6 If excessive or contaminated Utilize local materials groundwater is found for a large for select granular quantity of unsuitable foundation, Water / Project embankment and find a Ongoing that results in requiring excavation Completion waste/borrow site work and backfill not included in the closer to the project. baseline estimate. 7 If there are multiple challenges Develop Public coordinating public engagement and Engagement Plan that Public Trust / communications, that results in not addresses EJ Ongoing Project Completion providing information and timely populations and noise updates. wall construction. 8 If railroad agreements are required Develop Rail Railroad / for the bridges in Railroad ROW, this Communication Plan Completion of Ongoing can cause delays and ineffective and Agreement. Construction in communication with Railroad. Provide rail required relation to RR time for agreement. 9 If structural rehab discoveries Biddable quantities are (delaminated concrete and steel Structures / used to avoid corrosion), that results in Completion of uncertainty. Ongoing redevelopment of plans or redesign, Construction and repairing discoveries. 10 Overhead transmission line is over Structures and Provide alternatives for two bridges, which limit crane Utility / Completion the substructure. Ongoing operations and results in safety issue of Construction in and delay. Area 11 Overall system operations become Contractor required to more congested, as shown by current install MnPASS studies, and this result in reduced Public Trust / None immediately in Ongoing public trust and confidence in the partnership with MnPASS policy. operations contractor. 12 Lanes are being narrowed to save Increase use of safety money, and this adds additional technology in system. Public Trust / None Ongoing crashes over the life of the structure. Deviation from the standard lane. 13 TMP diversion traffic strategies have Temporary been developed on the local network Traffic / Project signalizations to be used Ongoing (temporary signals, etc.), that results Completion by contractor to in a big spike in the local network. mitigate local impacts. 14 Overhead signage and traffic not Develop clearly defined clearly defined in scope and this Traffic / None scope in RFP. Ongoing result in common traffic change. 15 Lighting units will be salvaged re- Contingency in case Lighting / Project used, there is a risk that the existing new units are required. Ongoing units are not salvageable. Completion 16 Coordination with power companies MnPASS / Coordinate with utilities to connect to MnPASS system. Completion of throughout project. Ongoing MnPASS construction 17 Revised bridge manual and Review applicable Structures / standards. standards and Completion of Final Ongoing incorporate as Design necessary.
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Federal Project Number NHPP-HSIP I35W (012) I-35W North MnPASS Project State Project Number 6284-180
Risk Type / Mitigation Risk Element Status Milestone Strategy
18 Timber noise walls are incorporated, Noise Walls / Will review and revise new standard is concrete. Design Completion of Final as necessary. Ongoing may need revisions. Design 19 Field condition of pipes do not reflect Will inspect in field and Storm Sewer / current rating and requires additional adjust scope as Ongoing work. Project Completion necessary. 20 Railroad flagging is responsibility of RFP will be written to the contractor. Railroad / Included direct the contractor to in Contractor’s include the cost of Ongoing Proposal railroad flagging in their bid. 21 Design changes to profile change Design reviews will be Design / Completion scope of work. incorporated Ongoing of Final Design throughout process. 22 ATC proposals will affect the scope All ATCs must be and design of the project. ATC / Included in approved by MnDOT Contractor’s prior to being Ongoing Proposal incorporated into the project. 23 Groundwater conditions may Soil conditions will be necessitate additional construction. Groundwater / tested and reviewed Ongoing Project Completion during the design process. 24 Because of the size and schedule of RFP will be written to the project it may create capacity allow the contractor Industry / Project issues within the local industry, come flexibility in Ongoing Completion particularly for concrete paving. staging and completion date.
Section 9 – Annual Update Cycle
Adjustments and revisions to the Initial Financial Plan will be made consistent with the procedures and methodology established herein. The Award Update will be provided to FHWA within 90 days following the award of the construction project. The Award Update, for the I-35W North MnPASS Project, is anticipated to be submitted in January 2019. The Financial Plan Annual Updates for this project will be presented to FHWA by January 31st in future years, with expenditures through October 31st of each year.
Section 10 – Summary of Cost Changes since Last Year’s Financial Plan
This section will be added with future annual updates of the Financial Plan.
Section 11 – Cost and Funding Trends since Initial Financial Plan
This section will be added with future annual updates of the Financial Plan.
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Federal Project Number NHPP-HSIP I35W (012) I-35W North MnPASS Project State Project Number 6284-180
Section 12 – Summary of Schedule Changes since Last Year’s Financial Plan
This section will be added with future annual updates of the Financial Plan.
Section 13- Schedule Trends since Initial Financial Plan
This section will be added with future annual updates of the Financial Plan.
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Federal Project Number NHPP-HSIP I35W (012) I-35W North MnPASS Project State Project Number 6284-180
Contacts
Minnesota Department of Transportation Federal Highway Administration – Minnesota Division
Jerome Adams Ryan Hixson, P.E. Metro District Project Manager Area Engineer Minnesota Department of Transportation Minnesota Division FHWA 1500 W Co Rd B2 380 Jackson Street, Suite 500 Roseville, MN 55113 St. Paul, MN 55101 Email: [email protected] Email: [email protected] Phone: 651-234-7611 Phone: 651-291-6125
Robin Sylvester Sheri Koch Financial Controller/Director Financial Manager Office of Financial Management Minnesota Division FHWA Minnesota Department of Transportation 380 Jackson Street, Suite 500 395 John Ireland Boulevard St. Paul, MN 55101 St. Paul, MN 55155-1899 Email: [email protected] Email: [email protected] Phone: 651-291-6113 Phone: 651-366-3165
Duane Leurquin
Capital Highway Program Budget Director Office of Financial Management Minnesota Department of Transportation 395 John Ireland Boulevard St. Paul, MN 55155-1899 Email: [email protected] Phone: 651-366-3685
John Wilson, PH.D Economic Policy Analyst Office of Transportation System Management Minnesota Department of Transportation 395 John Ireland Boulevard St. Paul, MN 55155-1899 Email: [email protected] Phone: 651-366-3732
Janelle Collier Financial Plan Coordinator Office of Financial Management Minnesota Department of Transportation 395 John Ireland Boulevard St. Paul, MN 55155-1899 Email: [email protected] Phone: 651-366-3949
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