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Innovative Transportation FinanceMarch 2, 2010
Presented by:
Brad LarsenDirector of Traditional & Innovative Finance Minnesota Department of Transportation651/366-4821 or [email protected]
Innovative Finance Website: www.dot.state.mn.us/funding/innovative
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What is Innovative Transportation Finance?
Innovative Transportation Finance is any strategy that uses a new, emerging or existing funding source, financing technique or partnering approach to deliver transportation projects more quickly and cost-effectively.
Examples of innovative finance in MN: Public Private Partner Toll Facility - TranSmart 212 Toll Road
Federal Advance Construction – ROC 52
High Occupancy Toll Lanes – I-394/MnPASS Express Lanes
Transportation Revolving Loan Fund – more than 20 loans
Mn/DOT is currently developing a new multi- modal, multi-jurisdictional program to explore and pursue innovative finance opportunities.
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Why Consider Innovative Finance?
Innovative Finance offers new approaches that can help meet transportation funding challenges
Growing gap between transportation needs and available financial resources
Fundamental responsibility to continually find ways to make the best use of public monies
Potential future federal incentives for innovative approaches
Advances Mn/DOT’s Strategic Vision to foster innovation and collaborative partnerships
Innovative Finance is not a “silver bullet” for solving all of the state’s transportation challenges, but it can be an important piece of the solution
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Keys to Successfully Pursuing Innovative Finance
Communicating, collaborating and involving the public
Being fiscally responsible and maximizing return on taxpayer investment
Protecting the public interest in the state’s transportation system
Stretching limited resources to equitably meet more transportation needs
Using a wider array of funding and financing options in an integrated, transparent and accountable manner
Ensuring consistency with the state’s overall transportation vision, goals and objectives
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Benefits of Innovative Finance
Transportation Resource Expansion New revenue sources New sources/types of financing New fund management techniques
Better Alignment of Use/Benefit with Cost
Potential Public Private Partnership Cost Savings Life cycle, risk allocation, innovation, economies of scale,
competition, tax
Project Acceleration Benefits Inflation savings, advanced public benefits, economic
Transportation Funding/Financing Diversification
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Mn/DOT’s Innovative Finance Program
Innovative Finance Program Development Activities
Education, outreach and communication
Innovative finance legislation
Alternative Financing authority to enter into financing agreements with governmental, non-profit and private entities
Federal Financial Program authority to apply for and receive TIFIA (Federal Infrastructure Bank) and other federal financial assistance
Project screening and assessment
Expert assistance & development
Integration into planning, investment & project development processes
Research
Concept exploration and testing
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Innovative Finance Concepts
Financing Techniques
TIFIA (Federal Infrastructure Bank program)
Private financing P3s (wide variety of models) Longer term, more complex approaches like Florida’s I-595
HOT lane Design/Build/Finance/Operate/Maintain project. *Mn/DOT is not exploring P3 approaches like the Chicago Sky way or Indiana Toll Road
Shorter term, less complex approaches like Michigan’s Hwy. 21 and I-69 Design/Build/Finance projects
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Innovative Finance Concepts
Revenue Generating Techniques Mn/PASS expansion (HOT lanes/shoulders; bridge tolling
concepts)
Private contribution P3s and transportation econ. dev.
Transportation improvement district approaches
Asset revenue enhancement opportunities
Transit oriented development & joint development
Intermodal and freight facility fees
Parking facility fees
Mileage based user fees
Toward zero death (TZD) surcharge
CTS Value Capture Study strategies
Questions & DiscussionMn/DOT Contacts:
Brad Larsen 651-366-4821 or [email protected]
Matt Shands 651-366-4893 or [email protected]
For more information about Innovative Finance visit: www.dot.state.mn.us/funding/innovative
