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2013 Legislative Report Template 2016 Report on the MnDOT Cost Participation Policy DRAFT – 12/11/15 1 Prepared by The Minnesota Department of Transportation 395 John Ireland Boulevard Saint Paul, Minnesota 55155-1899 Phone: 651-296-3000 Toll-Free: 1-800-657-3774 TTY, Voice or ASCII: 1-800-627-3529 2 Contents Contents .............................................................................................................................................................. 3 Legislative request .............................................................................................................................................. 4 Summary .............................................................................................................................................................. 5 Interpretation ...................................................................................................................................................... 6 Interpreting the Law ..................................................................................................................................... 6 Policy Principles ............................................................................................................................................. 7 Consulting Representatives of Local Units of Government ....................................................................... 8 Policy Recommendations ................................................................................................................................. 9 Non-Policy Recommendations ...................................................................................................................... 11 Financial Resources ..................................................................................................................................... 11 Communication ........................................................................................................................................... 12 Training ......................................................................................................................................................... 12 Design Manuals ............................................................................................................................................ 12 Recommendations for Further Study ........................................................................................................... 14 Attachment 1 Side-by-Side Comparison ...................................................................................................... 15 3 Legislative request This report has been prepared to accompany the update to the MnDOT policy on Cost Participation for Cooperative Construction Projects and Maintenance Responsibilities between MnDOT and Local Units of Government. The update was performed at the request of the Minnesota Legislature in Minnesota Laws 2015, Chapter 75, Article 2, Section 52. Sec. 52. COST PARTICIPATION POLICY. The commissioner of transportation, in consultation with representatives of local units of government, shall create and adopt a policy concerning cost participation for cooperative construction projects and maintenance responsibilities between the Department of Transportation and local units of government. The policy must minimize the share of cooperative project costs to be funded by the local units of government, while complying in all respects with the state constitutional requirements concerning allowable uses of the trunk highway fund. The policy should provide and include sufficient flexibility for unique projects and locations if doing so results in a lower total project cost. The policy must be completed and adopted by the commissioner no later than March 1, 2016. The legislature did not request a report to the legislature, but this report has been prepared to document the efforts made to consult with representatives of local government, the philosophy for minimizing costs while complying with the constitution, and the rationale for changes that were made to the policy in response. The contents of this report were recommended by the Cost Participation Policy Steering Team and accepted by MnDOT’s Governance Council. 4 Summary Coming Soon! 5 Interpretation Interpreting the Law As with any law, there is room for interpretation. Following are the key points for how MnDOT and the Steering Team interpreted the direction of the law about cost participation with local agencies. A. “Complying in all respects with the state constitutional requirements concerning allowable uses of the trunk highway fund.” The constitution says that there is hereby created a trunk highway fund which shall be used solely for the purposes of constructing, improving and maintaining a trunk highway system as public highways by the state. MnDOT interprets this to mean that costs paid by the Trunk Highway fund must be reasonably associated with constructing, improving, and maintaining trunk highways. The constitution does not further define “constructed, improved and maintained as public highways,” however guidance on the definition can be taken from case law and related statutes. B. “In consultation with representatives of local units of government.” MnDOT interpreted this to mean that it should engage local agencies in the development of the new policy, asking for their input, and seeking their support. MnDOT’s Commissioner retains final authority on what to include in the new policy however. C. “Cost participation for cooperative construction projects and maintenance responsibilities.” MnDOT interpreted this to mean that the policy should consider the total cost of ownership of infrastructure, including both construction costs and ongoing maintenance costs. This may also include costs for right-of- way and project delivery. D. “Minimize the share of cooperative project costs to be funded by the local units of government.” MnDOT interpreted this to mean that the policy must minimize total costs passed on to the local agency as explained above. Minimizing costs was viewed through the lens of the constitutional direction on the use of Trunk Highway funds to "construct, improve, and maintain the TH system". Minimize does not mean eliminate unless the constitution would so indicate. It also means that division of costs need not be done equally on construction and maintenance. It may be done unequally, in other words one agency pay more for construction and the other pay more for maintenance. 6 E. “The policy should provide and include sufficient flexibility for unique projects and locations if doing so results in a lower total project cost.” MnDOT interpreted this to mean that poor economic decisions should not be made for the sake of policy compliance. It means that both MnDOT and local agencies should seek to minimize costs for the taxpayer, which may not always minimize the cost for the local agency or MnDOT. Policy Principles Based upon input from the local agencies involved in the process and the Steering Team, the following principles were agreed upon to guide the decisions about how to determine a minimized local cost share. 1. The cost participation policy incorporates the intention of Complete Streets law and policy, which is to plan, scope, design, implement, operate, and maintain Trunk Highways in consideration of the needs of motorists, pedestrians, transit users and vehicles, bicyclists, and commercial and emergency vehicles moving along and across Trunk Highways. Even so, the policy must always follow the constitution. 2. Trunk Highways serve different purposes in different settings (urban, rural, etc.) and what is needed to construct, improve, and maintain a trunk highway may differ also. 3. Costs for local agencies should be minimized through clearly understood and uniformly applied methods based in law or engineering principles. 4. “Minimize” does not mean “eliminate”. Some shared infrastructure elements produce shared benefits and justly have shared costs. 5. Retaining some local cost share helps to control the demand from local agencies for added features and it facilitates equitable funds distribution by ascribing costs with mostly local community benefits to the local taxpayers. 6. Costs should be viewed as total life cycle costs, allowing the option for MnDOT to pay more for construction in exchange for or to reduce maintenance costs. 7. MnDOT needs to have the ability to direct its spending of Trunk Highway dollars to its publicly adopted investment priorities. Everything eligible cannot be afforded. 8. Maintenance costs should be reviewed for each infrastructure element. A one-size fits-all policy of delegating maintenance responsibilities to local agencies is not reasonable. 9. The goal should be to do what is most efficient and achieves the lowest life cycle cost for taxpayers. 7 Consulting Representatives of Local Units of Government MnDOT employed the following methods to consult with the local units of government with whom it cooperates with on trunk highway construction projects. 1. Cost Participation Policy Steering Team. MnDOT asked for participation from representatives of its local agency transportation partners. Team members assisted with addressing comments and developing policy recommendations. 2. Local Agency Survey. MnDOT solicited opinions from local agency partners through a survey. The survey was widely distributed using MnDOT’s State Aid distribution list to reach county and state-aid city engineers. The League of Minnesota Cities and
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