A report performed by the University of Minnesota evaluated the impact of federal and state funding on local spending on highways, and issued recommendations to smooth the process.
The Humphrey School of Public affairs at The University of Minnesota recently completed a report for the Minnesota Department of Transportation (MnDOT) on contributions to State and regional transportation facilities in Minnesota. The report sought to analyze how changing amounts of federal and state funding towards maintaining highways affect the amount of local spending. In some cases, federal and state governments may have difficulty maintaining sufficient funding to meet transportation needs, though there is not much research on the ultimate impact on the share of local government spending. In order to perform the analysis, the researchers examined trends in transportation funding in Minnesota, comparing the impacts on different strata of counties. They also developed and administered a survey to city and county engineers, receiving a responses from a total of 37 counties and 41 cities.
The report found that local government contributions for the Minnesota roadway system have increased in recent years, including spending on trunk highways through cooperative agreements between MnDOT and local governments. These agreements, while often beneficial, may create the risk of unexpected cost increases for local governments, particularly in cases where state funding totals are capped and local governments must cover any overruns.
The researchers made a series of recommendations to improve communication and coordination between state and local governments:
- Disclose project requirements during the planning phase. The researchers suggested that MnDOT should specify project requirements, such as the use of specific materials, project timelines, and other key items, and provide it to local governments to permit the creation of more accurate and comprehensive budgets.
- Discuss funding conditions of state funds or grants. The state and local governments should both understand funding caps, local match requirements, and other funding limitations that may apply to the project. This would allow both parties to budget and plan for costs more responsibly.
- Include the distribution of unexpected costs in the contract. The report suggests that cooperative agreement project contracts should include a clause discussing guidelines for the allocation of unexpected costs that are experienced during the lifetime of a project. This would inform decision-making on joining or implementing projects and handling contingencies.
- Maintain regular communication between the state DOT and local governments. If MnDOT and local governments maintained regular communications, it would permit more timely follow-up on the project process through the planning and construction stages. Additionally, it would assist in planning and coordination regarding unforeseen events.
- Enable the use of state contingency funds to share in unexpected cost overruns. The researchers note that if MnDOT were to permit the use of state contingency funds to cover unexpected overruns in cooperative agreement projects, it would help to even out the fluctuations of capital outlay due to such charges.
- Track local spending on the trunk highway system. Finally, the report suggests that MnDOT should track local money spent on the trunk highway systems and disclose the information on an annual basis, as well as conducting research to review what effects local efforts have on regional highways.