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MN Passenger Rail Governance & Financing Implementation
1. Transportation leadership you can trust.
presented to
presented by
Cambridge Systematics, Inc.
Minnesota Passenger Rail Governance
and Financing Implementation
Workshop Number 1
Minnesota Passenger Rail Forum
November 8, 2010
Allan Rutter
Randy Halvorson
4. Produce an implementation
strategy/legislative approach to passenger
rail governance and funding that can be
recommended by Mn/DOT to the State
Legislature for consideration during an
upcoming legislative session
Project Purpose
4
5. Project Process Overview
Mn/DOT Project
ManagementTeam
Mn/DOT Passenger
Rail Office
Passenger Rail Forum
Project Consultants
5
Actors
Best Practices
Criteria/Principles
Recommendations
Implementation
Strategy
Actions
Mn/DOT Leadership
New Administration
State Legislature
Passenger Rail
Stakeholders
Audience
7. Summary of Study Approach
7
Governance
Data
Collection
Governance
Alternatives
Screening
Principles
Governance
Recommendations
Implementation
Strategy
Financing
Data
Collection
Financing
Alternatives
Screening
Principles
Financing
Recommendations
Minnesota
Experience
State Best
Practices
First Forum
Workshop
Second Forum
Workshop
8. Governance
Find Best Practices
Look at states
Recommended by other studies
Funding state-supported Amtrak intercity services
That have been able to win large FRA capital funding grants
Neighboring Minnesota
8
9. States to be Studied
State Factors State Factors
California MS, SS, LC North Dakota NS
Florida MS, LC Ohio MS, SS, LC
Illinois MS, SS, LC, NS Oklahoma SS
Iowa NS Pennsylvania MS, SS
Indiana NS South Dakota NS
Maine SS, LC Texas SS
Manitoba NS Vermont SS
Michigan MS, SS Virginia MS
Missouri SS Washington MS, SS, LC
NewYork MS, SS Wisconsin SS, LC, NS
North Carolina MS, SS, LC
9
MS Model State SS State support for Amtrak
LC Large Capital Grants NS Neighboring State
10. Governance
Responsibility Options
Passenger rail responsibilities to be assigned/delegated
Management/oversight
Administration
Project development
Project delivery
Project operation
Project ownership
10
12. Governance Recommendations
What kinds of options are appropriate for Minnesota?
How are recommendations consistent with principles and
criteria identified by Passenger Rail Forum?
What kinds of recommendations will advance the features
of the State Rail Plan?
Recommendations feed into Implementation Strategy
12
13. Financing
Study Steps
Look at best practices of other states; how have they
succeeded? Will some of those practices fit within existing
Minnesota state laws?
Detail uses of funds
Identify financing tools
Apply tools to state passenger rail program
13
14. Financing
Uses of Funds
How funds are applied to passenger rail projects
Project development
Capital improvements
Operations and maintenance
Contracting for services
14
Not all tools can be used for all uses
15. Financing
Project Development
Planning through Environmental Clearance
After clearance
ยป Right-of-way
ยป Engineering
ยป Design
Negotiations with freight railroads for operating agreements
15
โข Usually use cash or revolving funds, not bond funds
โข Federal funds now available for planning
17. Financing
Operations and Maintenance
Subsidize operating costs not covered by passenger revenues
Maintenance of equipment and infrastructure (higher for HSR)
Extra maintenance staffing for service reliability
17
โข No federal funds available for O&M
โข FRA expects commitment to long-term operations
as condition of capital grants
18. Financing
Contracting for Services
Paying an operator for train operations, marketing,
and ticketing
Use a turn-key private builder operator through a PPP
Which contracting strategies will work within
Minnesota laws?
18
19. FinancingTools
19
Public Bond Issues
Passenger Revenues
Direct Appropriations New Revenue Sources
Federal Grants
Loans
Federal Loans and
Credit Assistance
Local Revenues
Private Activity Bonds
Innovative Finance
and PPPs
Hard Harder Hardest
21. Financing Recommendations
What kinds of options are appropriate for Minnesota?
How are recommendations consistent with principles and
criteria identified by Passenger Rail Forum?
How can financing tools be applied to passenger rail projects
identified in State Rail Plan?
Recommendations feed into Implementation Strategy
21
22. Implementation Strategy
Long-term outlook required
Short-term challenges facing study audiences (Administration
and Legislature) will be taken into consideration
Legislative and administrative steps associated with
recommendations will be outlined
Near- and long-term legislative strategy will be identified and
vetted with Mn/DOT Project Management Team and
Passenger Rail Forum
22
23. After the Break
Consideration and discussion of criteria/principles
Contributions and suggestions from forum members
Workshop close
23
26. What Do We Mean by Criteria or Principles?
WhatThey Are WhatThey Are Not
High-level Detailed
Set expectations Infer decisions
Will guide recommendations Create recommendations
Can be used to consider findings from
best practices research
Decide on outcomes rather than looking
at other statesโ experiences
Represent group consensus Depend on group unanimity
2
28. We will discuss what
these mean and get
your feedback
Possible Governance Criteria/Principles
Capability
Perspective
Legality
Accountability
Accessibility
Responsibility
4
29. Governance
Capability
How well will a structure deliver projects, manage finances,
and attract trust?
How will this capability be judged by FRA in grant decisions?
5
โข What are ways to mitigate weaknesses?
โข Are there ways to demonstrate competence
for organizations with limited rail or project
experience?
โข Do you want to put any constraints on
possible recommendations?
Decision Points
30. Governance
Perspective
Who maintains a statewide perspective if projects are
delivered by project-specific entities?
How is funding allocated among projects and by whom?
How can recommendations fit within and complement
regional efforts through the MWRRI?
6
โข How can statewide outlook be built in?
โข Who sets project priorities and funding โ
Agency, Legislature, or both?
โข Do you want to put any constraints on
possible recommendations?
Decision Points
31. Governance
Legality
How many legislative/administrative changes will be necessary
for any given recommendation?
Which approaches would be prohibited by constitutional
restrictions or other regulatory provisions?
7
โข Should recommendations fit within existing
constitutional constraints?
โข Are some kinds of legislative changes a
โheavier liftโ than others?
โข Do you want to put any constraints on
possible recommendations?
Decision Points
32. Governance
Accountability
How transparent will the governance structure be?
Who is ultimately responsible for project accomplishment?
What will the Legislature want/expect from project owners?
8
โข How can clarity of ownership be encouraged?
โข Is accountability a combination of transparency
(letting people find information) and
communication (pushing information out to
people)?
โข Do you want to put any constraints on
possible recommendations?
Decision Points
33. Governance
Accessibility
Do some governance models lead to more public involvement
than others?
Can stakeholder involvement increase project enthusiasm and
ownership?
9
โข Is increased public involvement a benefit to be
sought?
โข Do you want to put any constraints on
possible recommendations?
Decision Points
34. Governance
Responsibility
Should one entity be responsible for all Minnesota passenger
rail projects?
Are certain functions best performed by a particular entity?
How can economies of scale be gained within a distributed
network of providers/owners?
10
โข Can economies of scale be fostered among
different project entities?
โข Do you want to put any constraints on
possible recommendations?
Decision Points
38. Financing
Viability
How difficult will the financing method be to administer?
What are the relative costs of collection? Are some funding
methods more cost-effective?
Will the funding option require legislative/administrative changes?
14
โข Do you want to preclude revenue generation
options?
โข Some funding methods will fall in the jurisdiction of
other committees. Should options attempt to limit
the number of committees affected?
โข Do you want to put any constraints on possible
recommendations?
Decision Points
39. Financing
Productivity
What is the potential for funding generated by a given
method?
How does possible funding compare to needs identified in the
State Rail Plan?
15
โข Will more than one funding method be required?
โข Can some funding mechanisms be phased in as
projects are developed?
โข Do you want to put any constraints on possible
recommendations?
Decision Points
40. Financing
Equity
Is a statewide funding mechanism the best way to finance a
project that may not affect or benefit the entire state?
Should regions that benefit from projects contribute some or
most of the non-Federal project funding?
Should train fares be set to maximize revenues so that project
users pay for their benefits?
16
โข How can financing match user benefits?
โข Can statewide benefits of passenger rail justify
statewide funding mechanisms?
โข Do you want to put any constraints on
possible recommendations?
Decision Points
41. Financing
Resilience
How susceptible is a funding mechanism to economic cycles?
How sustainable will the funding be over time?
How will the dependability of funding streams affect prospects
for Federal capital grants?
17
โข Are dedicated funding sources more desirable
than discretionary?
โข Do you want to put any constraints on
possible recommendations?
Decision Points
42. Financing
Feasibility
How likely will the funding mechanism be accepted by the
public?
Can the funding method garner political support?
Can existing methods be modified to assist passenger rail
projects?
18
โข Do you support modifications to existing
methods over creation of new funding sources?
โข Do you want to put any constraints on possible
recommendations?
Decision Points
43. Financing
Practicality
How dependable are some Federal-funding programs, which
may be subject to authorization cycles?
How realistic are Minnesotaโs chances for discretionary
Federal-funding awards?
What is the financial capacity of state/regional/local
governments to contribute to passenger rail projects?
19
โข Should passenger rail plans be financially
constrained in the same way that road and
transit projects are?
โข Do you want to put any constraints on
possible recommendations?
Decision Points
45. What Happens Now?
Immediate โ discussions/contributions will be collected,
collated and summarized as screening principles/criteria
Governance and Financing options from other states will be
completed and recommendations identified
Implementation Strategies will follow
Governance and Financing recommendations and
Implementation Strategy will be vetted with Mn/DOT Project
ManagementTeam
Workshop No. 2 โ December 13, 2011 โ will discuss
recommendations and strategy
21