Chapter 3: Investment Needs
Substantial capital investments are needed to keep Minnesota’s 12,000-mile state highway system in a condition that supports a strong economy and a high quality of life for Minnesotans. Chapter 3 provides a cost analysis of the investments needed on the state highway system through the year 2037 in five investment areas: System Stewardship, Transportation Safety, Critical Connections, Healthy Communities, and Other. Each investment area contains a breakdown of the investment need by MnSHIP investment category and explains how MnDOT developed its needs assumptions.
This chapter includes an estimate of the amount of funding needed to achieve performance targets and other key objectives in each investment category through the next 20 years.
The key messages of Chapter 3 are:
- MnDOT estimated its 20-year investment needs for the state highway system by aiming to achieve both performance targets and other key system goals consistent with the Minnesota GO Vision in 14 investment categories.
- Approximately $39 billion is needed over the next 20 years to achieve performance targets and other key system goals.
- Available revenue is estimated at $21 billion. As a result, the funding shortfall is estimated at $18 billion to meet all targets and key goals.
Definition of Needs in MnSHIP
Transportation needs are defined as either the costs necessary to meet performance-based targets or the costs related to achieving key system goals. Satisfying both sets of transportation needs would allow MnDOT to align outcomes on the state highway system with the objectives outlined in the Minnesota GO Vision and the Statewide Multimodal Transportation Plan and/or manage the largest risks in its investment categories. MnDOT calculated the needs of each investment category based on this definition.
To arrive at the costs associated with meeting performance-based targets and other key goals for the state highway system, technical work groups used both performance measures and risk assessment to define performance levels in each investment category. Each performance level outlines a different amount of potential investment along with the improvements, outcomes, risks and strategies associated with it. The highest performance level for each investment category typically corresponds to the total need described in this chapter. The total need for the state highway system is estimated to be $39 billion over 20 years, compared to $21 billion in available revenue.
Appendix I: Investment Category Folios provides more detail regarding the performance levels for each category.
Needs Associated with Achieving Performance Targets
As described in Chapter 2: Key Assumptions and Factors, MnDOT has used performance measures to help guide capital investment and operational decisions since the 1990s. The process of tracking, reviewing and reporting on conditions on the state highway system helps MnDOT and the public evaluate the impact and effectiveness of MnDOT programs.
Every year since 2008, MnDOT has published the Annual Minnesota Transportation Performance Report, which contains detailed information on the areas in which MnDOT tracks performance. The report includes a description of historical trends, current conditions, how MnDOT makes progress toward achieving targets, and anticipated outcomes based on planned investments through the four-year State Transportation Improvement Program.
Historically, MnDOT has set targets designed to achieve optimal or desired performance levels in particular investment categories. These targets have typically been based on lowest life-cycle costs, customer expectations or a policy priority. Others have been trend-based – set by looking at trends and outcomes associated with historical spending levels. More recently, MnDOT has also established performance targets that it determines to be an acceptable risk.
MnDOT used performance measures and costs associated with implementing performance-related strategies to develop its needs estimates in the following MnSHIP categories:
- Pavement Condition
- Bridge Condition
- Roadside Infrastructure Condition
- Traveler Safety
- Twin Cities Mobility
- Greater Minnesota Mobility
- Accessible Pedestrian Infrastructure
Needs Associated with Other Key System Goals
State highway system needs also include investments that are important for delivering an efficient and diversified program of capital improvements that achieve multiple benefits. While the categories listed below do not currently have established performance measures or targets, they are critical in helping MnDOT to make progress toward the Minnesota GO Vision:
- Jurisdictional Transfer
- Facilities
- Freight
- Bicycle Infrastructure
- Regional and Community Investment Priorities
- Project Delivery
- Small Programs
Without current performance measures or targets, MnDOT used alternative methods to estimate the needs in these categories. These needs were based on the following:
- The cost to achieve multimodal transportation objectives.The investment needs for Bicycle infrastructure, and a portion of the needs for Accessible Pedestrian Infrastructure improvements—those unrelated to 1990 Americans with Disabilities Act compliance—are based on advancing current levels of investment to more adequately promote a multimodal transportation network, as described in the Minnesota GO Vision, Statewide Multimodal Transportation Plan, and the ADA Transition Plan.
- The cost to manage greatest risks. MnDOT calculated needs for the RCIP category by determining the amount needed to manage the greatest risks in this category.
- The cost to support delivery of the capital program. Project Delivery needs were calculated as the costs necessary to bring projects from conception to completion based on historical expenditures in this area.
- The cost to implement programs. Investment need for the Small Programs and Freight categories is the expected amount of money available for those programs. The Freight category includes funding from the National Highway Freight Program which is a new federal program created by the Fixing America’s Surface Transportation Act.
Please note: Needs below are listed by objective category. The order does not reflect priority.
Summary of Needs
In developing its assumptions for MnSHIP, MnDOT projected the investments necessary to meet state highway transportation needs through 2037. As discussed above, the need was determined by the costs required to meet performance-based targets and other key system goals, such as advancing the state’s economic vitality and supporting Minnesotans’ quality of life. The total need for the Minnesota state highway system is calculated to be approximately $39 billion over 20 years. Figure 3-1 shows a comparison between available revenue and total need. Figure 3-2 shows the distribution of need by investment category. This level of investment would ensure that the state highway system meets all federal and state performance requirements and makes substantial progress toward realizing the Minnesota Go Vision. It would also allow MnDOT to effectively manage its greatest risks in each investment category. Figure 3-3 summarizes what MnDOT would be able to accomplish in each investment category under a program with no fiscal constraints.
Figure 3-1: Comparison of Investment Need and Available Revenue
Figure 3-2: 20-Year Capital Highway Transportation Needs (by Investment Category)
Figure 3-3: 20-Year Capital Highway Transportation Needs and Projected Outcomes (by Investment Category)
| Investment Category | Objective Area | 20-Year Outcomes Based on Performance Targets or Other Key System Goals | Estimated 20-Year Need | Total (%) of MnSHIP |
|---|---|---|---|---|
| Pavement Condition | System Stewardship | Meet pavement performance target of 2.0% Poor condition on Interstates, 4.0% percent poor condition on non-Interstate NHS, 10.0% poor condition on non-NHS. | $13.44 billion | 34.5% |
| Bridge Condition | System Stewardship | Meet bridge performance target of 2.0% poor condition on NHS bridges, 8.0% poor condition on non-NHS bridges. | $2.65 billion | 6.8% |
| Roadside Infrastructure Condition | System Stewardship | Meet performance target of 10.0% poor condition for culverts and tunnels, 6.0% poor condition for signals, lighting, signs/sign structures, and ITS, 2.0% poor condition for noise walls. | $3.35 billion | 8.6% |
| Jurisdictional Transfer | System Stewardship | Fully implement the 2014 Minnesota Jurisdictional Realignment Report by repairing and transferring approximately 1,200 miles of roadway (centerline). | $1.14 billion | 2.9% |
| Facilities | System Stewardship | No rest areas or weigh stations beyond service life. | $390 million | 1.0% |
| Traveler Safety | Transportation Safety | Meet an aggressive traffic fatalities target by implementing District Safety Plans at an increased rate, investing at most sustained crash locations. | $1.37 billion | 3.5% |
| Twin Cities Mobility | Critical Connections | Build out the majority of MnPASS Express Lane and increase investments in strategic mobility. | $4.58 billion | 11.7% |
| Greater Minnesota Mobility | Critical Connections | Invest in all operational and capital improvements at locations experiencing high travel time delay in Greater Minnesota. | $1.39 billion | 3.6% |
| Bicycle Infrastructure | Critical Connections | Maintain existing bicycle facilities in good condition, complete stand-alone bikeway projects, and designate eight state bikeways. | $580 million | 1.5% |
| Accessible Pedestrian Infrastructure | Critical Connections | Bring all sidewalks, curb ramps and signalized intersections to total ADA-compliance by 2037, double non-ADA pedestrian projects. | $680 million | 1.7% |
| Regional and Community Improvement Priorities | Healthy Communities | Expand partnerships with stakeholders, cooperative agreements, regional priorities, proactive flood mitigation, main street reconstructions, and increased landscaping. | $2.62 billion | 6.7% |
| Project Delivery | Other | Efficiently deliver projects through adequate consultant services, supplemental agreements, construction incentives, and right of way acquisition. | $6.18 billion | 16.0% |
| Small Programs | Other | Continue to fund unforeseen issues and historic property improvements. | $630 million | 1.6% |
| TOTAL | $39 BILLION | 100% |
System Stewardship Needs
MnDOT estimates that it would cost $20.98 billion to meet performance targets and other key objectives for System Stewardship through 2037.
| System stewardship | Investment Need |
|---|---|
| Pavement Condition | $13.44 billion |
| Bridge Condition | $2.65 billion |
| Roadside Infrastructure Condition | $3.35 billion |
| Jurisdictional Transfer | $1.14 billion |
| Facilities | $390 million |
| Total | $20.98 billion |
Pavement Condition Needs
Using the Pavement Management System model, MnDOT projected its future pavement needs for MnSHIP by calculating the 20-year investment needed to fulfill its performance goals. MnDOT used the following targets for the Interstate system, non-Interstate NHS, and non-NHS roadway pavement miles:
- Interstate pavements: 2.0 percent (or less) in poor condition
- Other NHS pavements: 4.0 percent (or less) in poor condition
- Non-NHS pavements: 10.0 percent (or less) in poor condition.
These are targets that would best position MnDOT to meet its federal and state requirements while also meeting customers’ ride quality expectations.
Pavement Condition need is estimated to be $13.43 billion. At this level of investment in Pavement Condition, MnDOT would be able to:
- Invest in NHS and non-NHS roads to meet all pavement condition targets by 2037
Bridge Condition Needs
MnDOT measures its bridge performance based on structural condition, and has established targets for bridges on NHS and non-NHS highways:
- NHS bridges: 2.0 percent (or less) in poor condition (by deck area)
- Non-NHS bridges: 8.0 percent (or less) in poor condition (by deck area)
MnDOT uses the Bridge Replacement and Improvement Management prioritization tool to identify its bridge investments. The total need amount in Bridge Condition is based on investing in all state highway bridges at optimal points in their life-cycles over the next 20 years. BRIM also accounts for other factors in ranking priority for bridge projects, such as traffic volume, highway classification, and special vulnerabilities.
Bridge Condition need is estimated to be $2.65 billion. At this level of investment in Bridge Condition, MnDOT would be able to:
- Meet all performance-based bridge needs including bridge culverts, tunnels, pedestrian bridges and MnDOT-owned railroad bridges
Roadside Infrastructure Condition Needs
MnDOT measures its Roadside Infrastructure Condition performance based on structural condition, and has established targets for some assets in the investment category. As part of the Transportation Asset Management Plan process, MnDOT developed goals or outcomes used to set targets for culverts, deep storm water tunnels and overhead sign structures. MnDOT used the following targets for estimating need:
- Culverts: 10.0 percent (or less) in poor condition
- Deep storm water tunnels: 10.0 percent (or less) in poor condition
- Overhead sign structures: 6.0 percent (or less) in poor condition
MnDOT used targets for estimating need for other Roadside Infrastructure Condition assets, including ITS infrastructure, lighting, noise walls, signs and traffic signals. However, these targets have yet to be officially adopted.
Roadside Infrastructure Condition need is estimated to be $3.32 billion. At this level of investment in Roadside Infrastructure Condition, MnDOT would be able to:
- Meet performance targets (for those assets with accepted targets)
- Allocate a sizeable amount of funding to replace and repair assets at the end of their service life
MnDOT will continue to refine its approach to estimating needs in this category by improving its tracking of maintenance and capital investments, as well as inventories.
Facilities Needs
MnDOT completed an assessment of all MnDOT-owned facilities in 2015 to better understand the level of investment necessary to maintain these buildings in an acceptable condition. MnSHIP guides capital investments only in buildings and facilities along the state highway, which includes all rest areas and weigh stations (weigh scales and buildings).
Facilities need is estimated to be $390 million. At this level of investment in Facilities, MnDOT would be able to:
- Invest to maintain at least 50 percent of rest areas in good condition
- Expand weight enforcement activities and improve technologies
Jurisdictional Transfer Needs
MnDOT calculated the need for jurisdictional transfer based on an analysis of the alignment, or ownership, of Minnesota’s roads as outlined in the 2014 Minnesota Jurisdictional Realignment Project report. The identified needs are capital improvements to roads needed in order to bring them up to performance standards and transfer them from MnDOT to county or local governments or vice versa over the next 20 years.
Jurisdictional Transfer need is estimated to be $1.14 billion. At this level of investment in Jurisdictional Transfer, MnDOT would be able to:
- Leverage other state funding to repair and transfer 1,200 (centerline) miles of roads
Transportation Safety Needs
MnDOT estimates that it would cost approximately $1.37 billion to meet its Transportation Safety needs through 2037.
| Transportation safety | Investment Need |
|---|---|
| Traveler Safety | $1.37 billion |
MnDOT estimated needs in Transportation Safety over the next 20 years by calculating the cost of implementing projects similar to those found in the District Safety Plans more quickly than the current rate. This would enable MnDOT to address many sustained crash locations while also continuing its support of the Toward Zero Deaths initiative.
Transportation Safety need is estimated to be $1.37 billion. At this level of investment, MnDOT would be able to:
- Implement identified low cost, proactive projects more quickly than at the current rate
- Invest at most sustained crash locations
Critical Connections Needs
MnDOT estimates that it would cost approximately $7.33 billion to meet its targets and key objectives for Critical Connections through 2037.
| Critical connections | Investment Need |
|---|---|
| Twin Cities Mobility | $4.58 billion |
| Greater Minnesota Mobility | $1.39 billion |
| Bicycle Infrastructure | $580 million |
| Accessible Pedestrian Infrastructure | $680 million |
| Total | $7.23 billion |
Twin Cities Mobility Needs
MnDOT calculated its 20-year needs for Twin Cities Mobility by projecting the costs associated with implementing mobility strategies listed in the Metropolitan Council’s 2040 Transportation Policy Plan. In doing so, MnDOT would build out a majority of planned MnPASS express lanes and double major capacity improvements within the next 20 years while continuing to invest in Active Traffic Management and spot mobility improvements. With new Federal Highway Administration performance measures expected for Twin Cities area NHS reliability or congestion, MnDOT and the Metropolitan Council may need to adjust these mobility strategies within the 20-year timeframe of MnSHIP.
Twin Cities Mobility need is estimated to be $4.58 billion. At this level of investment in Twin Cities Mobility, MnDOT would be able to:
- Continue expanding the Active Traffic Management system
- Invest in spot mobility improvements at an increased rate
- Build out a majority of planned MnPASS express lanes
- Substantially increase investment in major capacity projects
Greater Minnesota Mobility
MnDOT calculated its 20-year needs for Greater Minnesota Mobility by analyzing highway corridors experiencing high travel time delay. Needs were calculated by estimating costs necessary to invest in all operational and capital improvements at these locations. With new FHWA performance measures expected for NHS reliability or congestion, MnDOT may need to adjust these mobility strategies within the 20-year timeframe of MnSHIP.
Greater Minnesota Mobility need is estimated to be $1.39 billion. At this level of investment in Greater Minnesota Mobility, MnDOT would be able to:
- Invest in both low-cost operational improvements and high-cost capital improvements at locations experiencing high travel time delay in Greater Minnesota
Freight Needs
At this time, MnDOT has not estimated its 20-year needs for freight on the state highway system. The investment in the Freight category identified in MnSHIP reflects the amount provided for the National Highway Freight Program as part of the FAST Act. Needs related to freight movement have been identified in other investment categories so there is no separate need category for freight in this MnSHIP update. The forthcoming Minnesota Freight Investment Plan will identify priorities for spending money for freight improvements.
Bicycle Infrastructure Needs
To estimate its 20-year needs, MnDOT calculated the costs required to continue to invest in bicycle facilities concurrently with bridge and pavement improvements and make enhancements to bicycle infrastructure through standalone projects. MnDOT has completed its Statewide Bicycle System Plan which provides direction on how to support bicycling on Minnesota state highways through partnerships with locals, the establishment of a priority bicycle network and traditional investments. This planning effort helped identify the public’s preference for more local routes and separated bike lanes. MnDOT will continue to work with regional and local partners to identify priority routes for investments.
Bicycle Infrastructure need is estimated to be $580 million. At this level of investment in Bicycle Infrastructure, MnDOT would be able to:
- Keep existing bicycle facilities in good condition
- Make enhancements such as separated bike lanes on yet-to-be-determined local priority networks
- Designate and sign eight state bikeways
- Continue to invest in the bicycle network concurrent with pavement and bridge projects
Accessible Pedestrian Infrastructure Needs
MnDOT calculated the 20-year need for Accessible Pedestrian Infrastructure by determining the investment needed to bring all sidewalks and curb ramps into total compliance with ADA standards by 2037. MnDOT would also install accessible pedestrian signals at all signalized intersections, and undertake strategic stand-alone projects to fill gaps in the sidewalk network or as part of complete streets projects.
Accessible Pedestrian Infrastructure need is estimated to be $670 million. At this level of investment in Accessible Pedestrian Infrastructure, MnDOT would be able to:
- Meet full ADA compliance of its existing pedestrian network by 2037
- Double the current level of investment in sidewalk and pedestrian enhancement and expansion projects as a part of pavement and bridge project
Healthy Communities
Regional and Community Improvement Priorities Needs
MnDOT estimates that it would cost approximately $2.62 billion to meet its key objectives for Regional and Community Improvement Priorities or RCIPs through 2037.
| Regional and community improvement priorities | Investment Need |
|---|---|
| Regional and Community Improvement Priorities | $2.62 billion |
RCIPs cover a range of improvements for which MnDOT does not have performance-based goals. The investment need associated with this objective is based on MnDOT’s recent efforts and historical expenditures in this area. Investment at this level will allow MnDOT to continue to address local and regional concerns, such as economic development, proactive flood mitigation, urban reconstruction and landscaping. MnDOT recognizes that the current level of spending likely does not capture the full array of non-performance-based needs and opportunities across the state.
RCIP need is estimated to be $2.56 billion. At this level of investment in RCIPs, MnDOT would be able to:
- Invest in 3-7 transportation economic development projects per year
- Implement 5-6 urban reconstruction or Main Street projects per year
- Address high priority flood mitigation projects
- Expand landscaping investments in projects
- Expand opportunities to participate in local initiatives
Other Needs
MnDOT estimates that it would cost approximately $6.81 billion for Project Delivery and Small Programs through 2037.
| Other | Investment Need |
|---|---|
| Small Programs | $630 million |
| Project Delivery | $6.18 billion |
| Total | $6.81 billion |
Small Programs Needs
MnSHIP assumes MnDOT will continue to need a fixed amount of funds throughout the 20-year timeframe to respond to short-term, unforeseen issues and continuing commitments. MnDOT currently plans approximately $32 million per year or 3 percent of its total projected revenue to cover investments in Small Programs.
Assuming that the current investment level is held constant throughout the next 20 years, approximately $630 million is needed to fund Small Programs. This MnSHIP update has reduced the size of Small Programs as rest area, weigh station and economic development investments have been incorporated into other MnSHIP investment categories.[1]
If MnDOT does not fully spend its annual allocation for Small Programs in a given year, it directs the funds toward its highest unaddressed risks in the capital program.
Project Delivery Needs
MnDOT estimates that achieving its targets and key objectives in the areas of System Stewardship, Transportation Safety, Critical Connections and Healthy Communities would require approximately $6.18 billion in Project Delivery through 2037.
MnDOT analyzed the amount historically spent in this category to establish the proportion of the overall investment that would be required to design, engineer and construct projects over the next 20 years. Approximately 16 percent of MnDOT’s annual capital investment typically goes to supporting the delivery of projects. The percentage of spending in project delivery has changed significantly since 2013 MnSHIP as a result of more thorough analysis of actual expenditures and increased requirements for MnDOT projects.
Comparison to the Needs in 2013 MnSHIP
MnDOT’s previous 20-year state highway investment plan, completed in 2013, identified a total need of $30 billion. The plan projected $18 billion in revenue, which resulted in a $12 billion funding gap. This MnSHIP update projected revenue of $21 billion and a total need of $39 billion which resulted in an $18 billion funding gap. Between 2013 and 2016, the estimated unmet need grew by $6 billion. The primary reasons for growth in need include:
- Investments not keeping pace with need over the last four years resulting in increased costs for deferred maintenance
- The inclusion of two new categories (Jurisdictional Transfer and Facilities) which identify capital investment need not previously included in MnSHIP
- Better understanding of roadside infrastructure investment need due to asset management planning efforts
- Increased impacts of inflation as the years change from 2014-2033 to 2018-2037
- Increased Project Delivery investment as a result of the larger overall program as well as better estimation of need
However, not all needs have increased since 2013. The needs for Bridge Condition have decreased due to greater accuracy of the deterioration model and forecasted condition.
1See Facilities and Regional and Community Improvement Priorities investment categories.