Federal/State Fund Exchange
for Transportation Projects
A Presentation of
Potential Alternatives
For Nebraska
A Solution?
Current LPA Funding With Federal Aid
FHWA
$1.00 Fed
Local Public
Authorities
$1.00 Fed
Current Funding Mechanism
Nebraska
Department
Of Roads
The Exchange
FHWA
Local Public
Authorities
Nebraska
Department
Of Roads
State Nets +$0.10 Fed
$0.90 State
$1.00 Fed
Existing Exchange Programs
Oregon
California (since 1996)
Arizona
South Dakota
Minnesota
$0.94/$1.00
$1.00/$1.00
$0.90/$1.00
$0.90/$1.00
$0.90/$1.00
Developing Exchange Programs
Kansas
90/100 Exchange Funding Mechanism
$0.90/$1.00
Value of $ -- Buying Power
Based on Construction Cost Trends
$1.20
$1.00
$0.80
$0.60
Average 4.6% Loss Per Year In Construction $$ Buying Power
$0.40
$0.20
$-
Source:
FHWA www.fhwa.dot.gov/programadmin/pricetrends.cfm
Colorado & SD DOT’s
To Avoid - Less than 1.5 acres, or about 6’ each side over a mile long project
Source: Nebraska Department of Roads LPA Manual
Example Present Value Cost Comparisons
Federal Aid Process
Local Process
Difference
Preliminary Engineering Duration
NTP to Bidding
48 Months
18 Months
30 Months
Base Construction Cost
$5,000,000
$4,500,000
$500,000
Base Preliminary Engineering Cost
$400,000
$315,000
$75,000
Base Environmental Study
$150,000
$0
$150,000
Base Right of Way Cost (1.5 ac @ $5/SF)
$330,000
$330,000
$0
Base Construction Engineering Cost
$600,000
$495,000
$105,000
Actual Total Present Value Project Cost
$7,993,000
$6,325,000
$1,668,000
Aid Amount (80%)
6,395,000
5,060,000
$1,335,000
$0
$506,000
-$506,000
Local Match (20%)
$1,599,000
1,265,000
$334,000
Actual Total Present Value Local Cost
$1,599,000
$1,771,000
Add’l $172,000
Exchange Deduct (@10%)
$1,668,000 Savings to the Taxpayers
The Exchange – A Graphic Example
NDOR Project
LPA Project
Total
$ 5,000,000
Total
$ 5,000,000
Other Funds
NDOR
$ 5,000,000
FHWA
$4,000,000
NDOR
$ 1,000,000
Other NDOR Funds
Other LPA Funds
Other Funds
Other NDOR Funds
+$400,000
Other LPA Funds
-$400,000
FHWA
$ 4,000,000
LPA
$ 1,000,000
NDOR
$3,600,000
LPA
$ 1,400,000
Pros and Cons
Pros
Cons
Fewer “Hoops to Jump Through”
Reduced flexibility for allocation of Federal
$$ to specific areas
Projects constructed quicker – Safety and
congestion solutions delivered to public
sooner
May not be enough State $$ to spread
around
Local design and construction standards
Nebraska Statutory change required
Projects are less expensive overall to the
Public
LPAs have to come up with additional funds
Reduced oversight costs for NDOR and
FHWA (supported by FHWA)
Variability in cash flow
Nebraska’s
Challenges
Nebraska Department of Roads Funding
Nebraska Department Of Roads Funding (Millions)
2010
2009
2008
2007
State System State System State System State System
Federal
State
State
State $148.513 $140.000
State
Federal
Federal
Federal
$169.000 $176.623
Other
Other
Other
Other$ 7.472
$ 0.000
Total State Program
Total State Program
Total State Program
Total State
$324.985
Program$316.623
$----------$----------$----------$340.753
$----------$----------$----------$350.000
Local System Local System Local System Local System
Federal
Federal
Federal
Federal
$ 60.270
$ 49.000
$ 72.379
Highway Allocation
Highway
Fund
Allocation
Highway
Fund
Allocation
Highway
$188.030
Fund
Allocation$196.563
Fund
$169.324
Recreation Road
Recreation
& State-Aid
Road
Recreation
Bridge
& State-Aid
Road
Recreation
Bridge
&$State-Aid
4.468
RoadBridge
&$State-Aid
6.913 Bridge
$ 6.913
Total Local Program
Total Local Program
Total Local Program
Total Local
$252.768
Program$252.476 $248.616
$ 71.697
$181.015
$ 5.836
$258.548
GRAND TOTALGRAND TOTALGRAND TOTALGRAND
$577.753
TOTAL
$608.548
$569.099
Source: NDOR Surface Transportation Improvement Programs
$589.369
$55.149M
Source: State of Nebraska Department of Roads – Annual Financial Report 2008-2009
Source: State of Nebraska Department of Roads – Annual Financial Report 2008-2009
2010 NDOR State Revenue Sources
9%
3%
68%
20%
Fuel Tax
Sales Tax
Registration Fees
Misc
Source: NDOR Surface Transportation Improvement Programs
2010 NDOR State Revenue
Distribution
$8.10
$190.90
$169.00
State Highway Construction Program
Routine Maintenance, Admin., Support Services, Carrier Enforcement, Transit, Rail, and Construction Overhead
State Rec. Road, Grade Xing, and State-Aid Bridge Funds Available for Projects On or Off State Hwy System.
Source: NDOR Surface Transportation Improvement Programs
NDOR Cash Flow
Source: State of Nebraska Department of Roads – Annual Financial Report 2008-2009
NDOR Cash Flow
Source: State of Nebraska Department of Roads – Annual Financial Report 2007-2008
Current Nebraska State Law
66-4,100. Highway Cash Fund; Roads Operations Cash Fund; created; use; investment.
The Highway Cash Fund and the Roads Operations Cash Fund are hereby created. If bonds are issued pursuant to subsection (2) of
section 39-2223, the balance of the share of the Highway Trust Fund allocated to the Department of Roads and deposited into the
Highway Restoration and Improvement Bond Fund as provided in subsection (6) of section 39-2215 and the balance of the money
deposited in the Highway Restoration and Improvement Bond Fund as provided in section 39-2215.01 shall be transferred by the State
Treasurer, on or before the last day of each month, to the Highway Cash Fund. If no bonds are issued pursuant to subsection (2) of
section 39-2223, the share of the Highway Trust Fund allocated to the Department of Roads shall be transferred by the State Treasurer
Legislature
direct
State
Treasurer
onThe
or before
the last daymay
of each
monththe
to the
Highway
Cash Fund.to transfer funds from the Highway Cash Fund to
Legislature
may directCash
the State
Treasurer
transfershall
funds from
the Highway Cash
Funddepartment
to the Roads Operations
Cash Fund.
the The
Roads
Operations
Fund.
Bothtofunds
be expended
by the
(1) for acquiring
Both funds shall be expended by the department (1) for acquiring real estate, road materials, equipment, and supplies to be used in
real
estate, road
materials,
equipment,
and supplies
to be
used (2)
in for
thetheconstruction,
reconstruction,
the construction,
reconstruction,
improvement,
and maintenance
of state
highways,
construction, reconstruction,
improvement,
maintenance
of state
highways,
for the
construction,
reconstruction,
improvement, and and
maintenance
of state highways,
including
grading,(2)
drainage,
structures,
surfacing, roadside
development,
landscaping,
and
other
incidentals
necessary
for
proper
completion
and
protection
of
state
highways
as
the
department
improvement, and maintenance of state highways, including grading, drainage, structures,shall, after
investigation, find and determine shall be for the best interests of the highway system of the state, either independent of or in
surfacing,
roadside
development,
landscaping,
and
necessary
proper of state aid
conjunction with
federal-aid
money for highway
purposes, (3) for
theother
share ofincidentals
the department
of the cost offor
maintenance
completion
protection
of state with
highways
as thefunds
department
shall,
after investigation,
find
and
bridges, (4) for and
planning
studies in conjunction
federal highway
for the purpose
of analyzing
traffic problems and
financial
conditions andshall
problems
relating
state,interests
county, township,
federal,
and allof
other
in the
state and
for incidental costs
determine
be for
thetobest
of themunicipal,
highway
system
theroads
state,
either
independent
of
in connection with the federal-aid grade crossing program for roads not on state highways, (5) for tests and research by the
or
in
department
or proportionate costs of membership, tests, and research of highway organizations when participated in by the highway
departments of other states, (6) for the payment of expenses and costs of the Board of Examiners for County Highway and City Street
Superintendents as set forth in section 39-2310, and (7) for support of the public transportation assistance program established under
section 13-1209 and the intercity bus system assistance program established under section 13-1213.
Any money in the Highway Cash Fund and the Roads Operations Cash Fund not needed for current operations of the department
shall, as directed by the Director-State Engineer to the State Treasurer, be invested by the state investment officer pursuant to the
Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act, subject to approval by the board of each investment. All
income received as a result of such investment shall be placed in the Highway Cash Fund.
Potential Solutions to Nebraska
Exchange Challenges
•
•
•
•
Modify State Law to Allow Exchanges
Cap Total Annual Exchange Amount
NDOR Pays When Paid
Identify Supplemental Revenue Source to Help Fund
Program
• Establish Guidelines for Prioritization of Projects
Thank You!
Randall J. Kaster, PE, PTOE
Olsson Associates
2111 S. 67th Street, Suite 200
Omaha, NE 68106
(402) 341-1116
rkaster@oaconsulting.com