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ANOKA COUNTY 2030 TRANSPORTATION PLAN DECEMBER 2008 8-1 8.0 Funding Analysis This section summarizes the recommendations and methodology of the funding analysis conducted to support the capital improvements included in the 2030 Transportation Plan. The recommendations identify funding needs for each of the three implementation periods: short-term (2009–2014), mid-term (2015–2019), and long-term (2020–2029). Complete documentation of this process is included in Appendix G, Financial Analysis Technical Memorandum. Estimates of capital costs and funding levels used for the Plan analysis are order-of- magnitude estimates appropriate to support long-term capital program (the Program) planning. The funding recommendations address the capital needs of the short-term and mid-term program, and are not allocated to specific projects within each program period. The assumptions used to develop these estimates are the results of workshops and discussions with county officials. The funding analysis also provides an understanding of alternative ways to fund the county transportation needs and a relative indication of funding levels from value capture mechanisms. 8.1 Summary For the 2030 Plan, the county has identified long-term capital improvements necessary to improve safety and provide additional capacity to hold congestion to the 2000 level on the county highway and road system. The Program needs have been identified at $1.088 billion in 2008$, corresponding to $1.570 billion in year of expenditure dollars (YOE$). Under baseline funding assumptions described in Section 8.5, the 2030 Plan is underfunded. Unmet capital needs amount to $680 million (YOE$), or 43 percent of the total Program escalated costs. Anoka County is responsible for a large part of highway capital expenditures and would provide close to 80 percent of the currently identified 2030 Program funds with contributions from the communities within Anoka County and the State of Minnesota of 11 percent and 10 percent, respectively. While the county is actively considering means to reduce the Program capital costs through value engineering and to reduce and manage demand on the roadway network with transit, additional new revenues must be identified to meet the long-term transportation needs of the county. The county has reviewed options for providing such new funds. Two value capture mechanisms, a local ¼-cent sales tax dedicated to highways and a Development Impact Fee (DIF) program, have the potential to provide an additional $320 million (YOE$) from 2010 to 2029. Although local option sales taxes are currently in use in Minnesota for highways and in Anoka County for transit, new legislative actions at the State level may be required to implement a DIF program. As the county moves forward with addressing the mobility needs on its road and highway network, the 2030 Plan will be implemented as funding permits, focusing on the specific corridors identified in Section 7.0, where congestion is at high levels and safety is a primary concern. ---PAGE BREAK--- ANOKA COUNTY 2030 TRANSPORTATION PLAN DECEMBER 2008 8-2 8.2 Methodology The 2030 Transportation Plan groups recommendations according to the timeframe during which improvements need to be implemented to achieve the Plan goals: short-term (2009– 2014), mid-term (2015–2019), and long-term (2020–2029). Capital costs for each project were developed in 2008 dollars and escalated in YOE$ according to this implementation plan. The county then reviewed currently-available and anticipated sources of funds as well as potential funding and financing options to implement the Plan, including the use of traditional and innovative local, regional, and state funding sources. Capital needs in YOE$ were finally compared with the currently-available and anticipated sources of funds to determine if capital program funding would be sufficient. These funding sources being insufficient, the county assessed how additional local funding mechanisms could be used to bridge the funding gap. The 2030 Plan does not include any capital costs or sources of funds for projects already included in the Anoka County Highway Department Five-Year Improvement Plan for the period 2007-2011.1 8.3 National Perspective on Local and State Highway Expenditures At the national level, the respective share of state and local government contributions to highway construction and operations varies widely. In Minnesota, responsibility for highway expenditures is primarily borne by local governments. According to the Federal Highway Administration (FHWA), county and city government participation in highway expenditures varied in 2004 (year of the latest comprehensive national highway statistics) from a low of 5 percent in Delaware to a high of 65 percent in Minnesota. This means that local governments in Minnesota contribute more funding towards highway expenditures than any other state in the Country. The national average was 29 percent; the average for all states was 27 percent. In recent years, Minnesota has seen relatively low levels of spending for highway capital needs. In 2004, highway capital outlays per capita for the State were at $133, while the national average was at $168. With the need for capital investment in highway infrastructure increasing, the State responded with the enactment of the Transportation Finance Bill (HF 2800) providing local government with increased revenue from the state gas tax through formula allocations from the Highway User Tax Distribution Fund (HUTDF). Previously at 20 cents per gallon, the bill provided for an increase to 25 cents per gallon immediately, and an additional 3.5 cents per gallon over the next 5 years. The new measure places the State of Minnesota well above the average for all states (19.25 cents per gallon) and the federal gas tax at 18.40 cents (in 2006). HF 2800 generates additional revenues to Anoka County, described later in this chapter. 8.4 Planned Capital Needs The Program encompasses 19 major mobility-impaired areas including interchanges and intersection improvements, new connections, roads turned back from the State to the county (part of the State Turnback Program), and improvements along 17 County State Aid 1 Approved by the County Board December 19, 2007, and Amended by the County Board July 10, 2007. ---PAGE BREAK--- ANOKA COUNTY 2030 TRANSPORTATION PLAN DECEMBER 2008 8-3 Highway (CSAH) corridors. Program costs were estimated at $1.088 billion (2008$) as shown in Table 8-1, itemized for each corridor and for each planning horizon. TABLE 8-1 2030 Plan Capital Costs (dollars in thousands)1 Costs by Planning Phases in Constant $’000 Planning Horizon Corridor Short-term (2009–2014) Mid-term (2015–2019) Long-term (2020–2029) TOTAL TOTAL YOE$’000 Interchanges & Intersection Improvements $227,500 $141,500 $101,500 $470,500 $630,263 New Connections & Turnbacks $17,496 $28,535 $92,331 $138,362 $217,492 CSAH 17/Lexington Ave. $24,300 $6,000 $69,763 $100,063 $154,654 CSAH 1/Coon Rapids Blvd. (CSAH 9 to CR 3) $7,600 $6,000 $19,189 $32,789 $49,535 CSAH 1/East River Rd. (CR 3 to I- 694) $14,270 $6,000 $35,206 $55,476 $84,354 CSAH 23/Lake Dr. $2,475 $8,285 $0 $10,760 $14,200 CSAH 9/Round Lake Blvd. $16,912 $9,000 $0 $25,912 $31,753 CSAH 116/Bunker Lake Blvd. $6,000 $6,000 $0 $12,000 $15,227 CSAH 78/Hanson Blvd. $0 $5,440 $23,726 $29,166 $47,918 CSAH 10 $5,350 $29,000 $0 $34,350 $46,107 CSAH 51/University Ave. $700 $24,555 $52,125 $77,380 $123,805 CSAH Blvd. $0 $0 $12,600 $12,600 $21,604 CSAH 14/Main St. $1,620 $9,846 $6,000 $17,466 $25,555 CSAH 52/Radisson Rd. $1,000 $3,600 $9,140 $13,740 $21,631 CSAH 11/Foley Blvd. $0 $350 $6,370 $6,720 $11,380 CSAH 18/Broadway Ave. $0 $6,000 $0 $6,000 $8,257 CSAH 22/Viking Blvd. (CSAH 85 to County Line) $0 $9,000 $0 $9,000 $12,385 CSAH 22/Viking Blvd. (TH 47 to CSAH 13) $350 $16,000 $0 $16,350 $22,409 CSAH 24/Bridge St. $700 $6,000 $12,963 $19,663 $31,289 TOTAL 2030 PROGRAM COSTS $326,273.00 $321,111.00 $440,913.00 $1,088,297.00 $1,569,818.009 1—Cost estimates in 2008$ were provided by CH2M HILL and escalated to YOE$ by PB Consult. ---PAGE BREAK--- ANOKA COUNTY 2030 TRANSPORTATION PLAN DECEMBER 2008 8-4 8.4.1 Capital Cost Estimate in Year of Expenditure Dollars To determine the additional costs due to long-term inflationary pressure on capital costs, the 2030 Plan cost estimates incorporated standard escalation calculations, according to the following methodology: 1. For each mobility-impaired corridor, costs expressed in 2008$ were broken down into three planning periods: i. Short-term from 2009 to 2014 ii. Mid-term from 2015 to 2019 iii. Long-term from 2020 to the end of 2029 and three cost categories: i. Soft costs, including planning and engineering studies ii. Construction costs, including construction management costs iii. Right-of-way acquisition costs. 2. For each corridor, costs were allocated to each planning horizon so as to meet the transportation goals of the Plan. 3. At the current stage of the planning effort, a precise schedule of expenditures could not be established. It was assumed instead that capital costs are expected to be distributed evenly within each planning period. 4. For each cost category expressed in 2008$, the year expenditures will commence was identified based on the schedule of expenditure assumed in item above. 5. Escalation rates were estimated for each cost category identified in item above. 6. The cumulative escalation rates from the year expenditures commence were identified and cumulative escalation factors derived. 7. For each cost category expressed in 2008$, the cost items in each category were multiplied by the appropriate cumulative escalation factor according to the assumed schedule of expenditures (see item above) to calculate the year-of-expenditure cost estimate. The resulting program costs in YOE$, estimated at $1.570 billion (YOE$), are summarized in Table 8-1, per corridor and for each planning horizon. 8.4.2 Escalation Rates For the period from 2009 to 2012, the county used the highway construction cost escalation forecasted at the national level by the consulting team and published in the Economic Forecasting Review (EFR).2 Average highway and bridge escalation rates for the US have been projected, starting with preliminary 2007 full year data and extending to 2012. The forecast methodology entails derivation of a “blended” escalation rate reflecting major 2 http://www.pbconsult.com/news/default.asp ---PAGE BREAK--- ANOKA COUNTY 2030 TRANSPORTATION PLAN DECEMBER 2008 8-5 underlying factor inputs to highway and bridge construction and is presented in more details in Appendix G. The forecast yields a highway construction cost escalation rate between 3.5 percent and 4.5 percent annually from 2008 to 2012. After 2012, the county used the long-term trend for the national Construction Cost Index forecasted by ENR at 2.9 percent annually. Soft costs were assumed to follow closely the ENR Construction Cost Index for the entire forecast period, with rates varying from 2.8 percent in 2008, to 2.7 percent in 2009 and 2010, and 2.9 percent annually thereafter. Right-of-way acquisition cost escalation rates were estimated to follow the trend for the national Median Sales Price Existing Single-Family Homes forecasted by Economy.com. This trend was adjusted to zero in 2008 and 2009 (instead of −12.93 percent and −1.78 percent, respectively) to be more conservative. The annual escalation rate is anticipated to decline steadily from 4.4 percent in 2010 to 3.3 percent in 2029. 8.4.3 Sensitivity to Escalation Assumptions With the capital needs for the 2030 Plan spread over a 22-year period, and approximately 40 percent of the costs incurred after 2020, escalated capital costs are very sensitive to escalation assumptions: 1 percent higher escalation increases Program cost by approximately 11 percent to $1.742 billion (YOE$) 2 percent higher escalation increases Program cost by approximately 24 percent to $1.941 billion (YOE$) 8.5 Anticipated Program Sources of Funds The county anticipates receiving funds for the 2030 Plan from four primary sources: county’s levied taxes, county’s share of the HUTDF, State and Federal programs, and local community contributions. Funds from these sources are briefly described below. Table 8-2 summarizes the currently-identified sources of funds anticipated to be available to fund the long-term capital needs of the Plan. Total identified and available funding for the Plan is $889.6 million (YOE$). ---PAGE BREAK--- ANOKA COUNTY 2030 TRANSPORTATION PLAN DECEMBER 2008 8-6 TABLE 8-2: 2030 Plan Anticipated Sources of Funds (YOE$) Sources of Funds 2009–2029 Total YOE$’000 Total HUTDF Anticipated Funds Allocated to 2030 Program 278,496 Anticipated County Property Tax Levy Allocated to 2030 Program 231,407 Anticipated GO Bonds Allocated to 2030 Program 154,425 Anticipated Wheelage Tax Allocated to 2030 Program 32,107 Total Anticipated County Sources of Funds Allocated to 2030 Program 696,435 Funds Anticipated from State Turnback Projects 44,656 Anticipated Hazard Safety Improvement Program (HSIP) 31,500 Anticipated Local Bridge Replacement Program 10,500 Anticipated State Roads of Regional Significance Funds 4,125 Anticipated Safe-Route-To-School Grant Program 1,050 Total Anticipated State and Federal Sources of Funds Allocated to 2030 Program 1,484,701 Total Anticipated Matching Communities Sources of Funds 101,332 Total Anticipated Sources of Funds for the 2030 Program (YOE$) 889,598 Under this baseline funding scenario, the county would contribute 79 percent of the Program funds, while the Federal/ State and the communities of Anoka County would contribute 10 percent and 11 percent of total Program funds respectively. General Obligation bonds from the county represent 17 percent of the total anticipated sources of funds. 8.5.1 County Sources of Funds and Anticipated Timing through 2030 In total, for the period from 2009 to 2029, the county anticipates contributing $696.4 million (YOE$) to the 2030 Plan from the sources discussed throughout the remainder of Section 8.5.1. Timing of receipt of these sources of funds is presented in Figure 8-1. ---PAGE BREAK--- ANOKA COUNTY 2030 TRANSPORTATION PLAN DECEMBER 2008 8-7 Highway User Tax Distribution Fund / County State Aid Highway Fund The county receives a portion of its funds for highway capital projects from HUTDF. These funds are collected through the State’s gas tax, license plate registration, and State Motor Vehicle Sales Tax (MVST). Funds from the HUTDF are allocated to the CSAH Fund by formula, detailed in Appendix G. In addition, the Transportation Finance Bill (HF 2800) included provisions changing the gas tax and tab fees allocated through the HUTDF. The bill also created a new leasing sales tax and allocated new revenues to the county from the Flex Account. Total funds from HUTDF allocation for the period from 2009 to 2029 are anticipated to amount to $278.5 million (YOE$). County Property Tax Levy One of the primary sources of funds for the county is the property tax levied by the County Board of Commissioners after careful consideration and balancing of the overall needs of its citizens. A blended growth rate for property tax collection was calculated based on the Metropolitan Council’s projected household and job growth rates combined with inflation.3 The rate of growth of households and jobs is blended based on the proportion each source (households and employment) accounts for in the total assessed value in the county. In each of the financial years between 2004 and 2006, residential properties accounted for approximately 85 percent of the assessed value while non-residential properties accounted for about 15 percent. The resulted bended rate varies from 3.6 percent to 4.2 percent per year from 2009 to 2020 and from 3.4 percent to 3.2 percent per year thereafter. 3 Household, population, and job growth rates are per the Metropolitan Council’s 2030 Regional Development Framework - Revised Forecasts as of January 9, 2008. CPI forecasted by Economy.com for the Minneapolis-St. Paul-Bloomington, MN-WI, varies from 1.71 percent to 2.71 percent over the forecast period, corresponding to an average compounded annual growth rate of 2.5 percent. - 100 200 300 400 500 600 700 800 900 1,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Financial Year Cumulative Sources of Funds . [YOE$ in millions] Cumulative Anticipated City Sources of Funds Cumulative Anticipated State Funds Cumulative Anticipated County Sources of Funds Figure 8-1 Timing of 2030 Plan Anticipated Sources of Funds (Cumulative, YOE$) ---PAGE BREAK--- ANOKA COUNTY 2030 TRANSPORTATION PLAN DECEMBER 2008 8-8 Of the total County Property Tax Levy, the county anticipates to allocate16 percent to the Road and Bridge Levy, and 40 percent of that amount is anticipated to be allocated to fund the 2030 Plan. Total funds from County Property Tax Levy allocated to the Plan for the period from 2009 to 2029 are anticipated to amount $231.4 million (YOE$). General Obligation Bonds Whenever possible, the County Board leverages the property taxes to accelerate project implementation. From 2009 to 2029, the county anticipates that it will allocate $154.4 million (YOE$) in General Obligation bonds to the Program. Wheelage Tax Beginning in 2007, Anoka County began collecting a wheelage tax corresponding to an additional $5 fee per vehicle when residents renew their license plate tabs. The fee provides funding for transportation needs within the county and is deposited directly to the Anoka County Road and Bridge account. Revenues from the wheelage tax are anticipated to grow at the same pace as the Metropolitan Council’s projected household growth rate.4 The amount collected from the wheelage tax will be allocated to the 2030 Plan for the period from 2009 to 2029 for a total of $32.1 million (YOE$), as listed in Table 8-2.5 8.5.2 Federal and State Sources of Funds Funds allocated to the county from the State of Minnesota, either directly or as part of larger federal programs, come from a variety of programs including the State Turnback Program, funds for State Roads of Regional Significance, Local Bridge Replacement Program, Safe- Route-To-School Grant Program, and Hazard Safety Improvement Program (HSIP). In total, State funds made available to the 2030 Plan for the period from 2009 to 2029 are anticipated to amount to $91.8 million (YOE$), as listed in Table 8-2. 8.5.3 City Sources of Funds Over the past ten years, the communities of Anoka County have participated in road and highway capital expenditures at an average rate of 18 percent of the cost of construction. The county anticipates a similar level of contribution to continue in the future. For the purpose of revenue planning for the 2030 Plan, the county assumed that the communities would contribute 18 percent of actual construction costs for those projects that have sufficient funds to be implemented. The matching contributions of the communities of Anoka County to the Plan are anticipated to amount $101.3 million (YOE$) from 2009 to 2029, as listed in Table 8-2. 8.6 Program Sources and Uses of Funds Under the baseline assumptions, the 2030 Plan is underfunded. Unmet capital needs amount to $680.2 million (YOE$), or 43 percent of the total Program escalated costs. Figure 8-2 presents the Program sources and uses of funds for the entire forecast period. New 4 Ibid. 5 Currently, the wheelage tax is a per-vehicle tax. If the tax were to be changed to a per-wheel tax, considering that 94 percent of the vehicle fleet registered in the county are personal cars and 6 percent are commercial trucks, the total revenues from the wheelage tax could be increased to approximately $136 million ($32.1 million (4 x 94% + 8 x ---PAGE BREAK--- ANOKA COUNTY 2030 TRANSPORTATION PLAN DECEMBER 2008 8-9 revenues needed to fund the Program amount to: $228.0 million by the end of 2014, $440.7 million by the end of 2019, and $680.2 million by the end of 2029. 8.7 Options to Meet the Program Funding Needs Recognizing that with currently identified funding sources only 57 percent of the 2030 Plan could be implemented, the county reviewed other potential options to meet the Program needs. While increasing revenues from existing sources was analyzed, such increases could not be reasonably implemented to meet the Program funding needs. The county therefore reviewed other local options. Special local funding mechanisms are associated with increasing real estate values as a result of improved transportation access in Anoka County. Comparisons to extending a new sales tax across the seven-county Metropolitan Planning Organization’s region were also developed; they are discussed in Appendix G. Some of these mechanisms, referred to as value capture techniques, include tax increment finance, development impact fees or a special local sales tax collection. Given the vast shortage of traditional, gasoline tax-based revenues available to fund infrastructure needs, these mechanisms provide additional Figure 8-2 2030 Plan Anticipated Sources and Uses of Funds (Cumulative, YOE$) ---PAGE BREAK--- ANOKA COUNTY 2030 TRANSPORTATION PLAN DECEMBER 2008 8-10 funding options for policy makers to consider.6 The county is also actively considering means to reduce the Program capital costs through value engineering and to reduce and manage demand on the road and highway network with transit. 8.7.1 Value Capture Mechanisms Three value capture mechanisms were evaluated: local option sales tax, development impact fees, and tax increment finance. A detailed description of the analysis is provided in Appendix G. Local Option Special Sales Tax—Used widely in Minnesota to fund various types of projects. In five Twin Cities Metro Area counties, including Anoka County, a ¼-cent sales tax was recently instituted to fund transit projects. Other counties in Minnesota also benefit from sales tax to help fund their highway and road capital needs. Development Impact Fees (DIF)—A value capture mechanism most successfully implemented in areas with little or no existing development. DIFs are generally one-time fees paid when a landowner or a developer pulls a permit to build within the area of benefit (AOB). DIFs can be charged for new projects or expansions of existing buildings. The fees themselves, generally structured per dwelling unit or square foot of non- residential space, are based on the relative benefit the infrastructure asset provides to the property owner and may be escalated over time to keep up with inflation. Roadway impact fees are a variation of DIFs, whereby the fee is calculated using a travel demand model to assess the number of new trips on the roadway network that will be generated by the project. Roadway impact fees were not calculated as part of this analysis but are noted because they are gaining popularity and are viewed in some areas as a more equitable allocation of the fees. Tax Increment Finance (TIF)—Involves reallocating future property tax collections so that a predetermined proportion of expected collections are dedicated to a specific use, which in this case is the repayment of roadway improvement debt. The most important aspect of TIF is that the tax rates charged to residents and business owners do not change. Rather, future property tax collections above the current levels (based on the current tax rates) are reallocated away from the levying jurisdiction to a specific project and leveraged to issue debt to pay for project costs. The amount of property tax growth allocated to the project, in theory, equals the amount the infrastructure asset adds to the value of the real estate located in the AOB. TIF is most often used in small areas for redevelopment projects and has had limited success for infrastructure projects over a larger area. Special sales taxes are usually the safest of the three revenue sources outlined, as they begin at healthy levels the first year implemented and grow slowly over time with relatively little fluctuation, even during poor economic times. DIF revenues vary from year to year based on fluctuations in real estate market growth. Generally, DIF revenues decline over time as vacant developable land is absorbed and only redevelopment remains. This trend 6 This conceptual analysis is meant to provide Anoka County with an understanding of some alternative ways to fund the county transportation needs, a relative indication of funding levels from value capture mechanisms, and an outline of potential legislative shortcomings that need further evaluation prior to instituting any of these mechanisms. It is important to recognize that the findings presented herein are conceptual, not intended for project funding or financing, and could substantially change based on more refined review of legislative factors and market analyses. ---PAGE BREAK--- ANOKA COUNTY 2030 TRANSPORTATION PLAN DECEMBER 2008 8-11 can be somewhat counterbalanced by rising DIFs, which generally escalate with inflation. Generally, the TIF revenue stream is very small in the early years and grows quickly as development occurs and assessed values increase. Because most of the revenue is generated in the later years, TIF has a relatively lower net present value, decreasing the debt capacity of the cash flow. While a sales tax could be implemented at the county level and a DIF program could be implemented to a large AOB such as the county, TIF techniques generally require much smaller AOBs with clearly defined direct benefits. Therefore, a TIF is not considered for implementation at the Program level, although the technique may still prove useful to generate funds for projects within the Program with smaller and well-defined AOBs. Cash Flow The conceptual value capture analysis estimated annual revenues net of costs and calculated the cash flow available. Cash flow can either be used directly to fund project costs (“pay-as-you-go”) or for the repayment of debt used to pay for project costs. For the 2030 Plan, capital costs of specific projects were not matched with revenues associated with specific AOBs. Therefore the analysis results speak to the magnitude of potential funding amounts, regardless of the project or parts of projects it would fund. Figure 8-3 provides annual gross revenues calculated from each value capture mechanism cumulatively in a graphical format. It is assumed that any revenue from a value capture mechanism would start in 2010 to leave time for implementation. With the assumptions described in Appendix F, an additional ¼-cent sales tax dedicated to highways could generate revenues on the order of $165 million from 2010 to 2029, while a DIF program could generate revenues on the order of $155 million. Revenue from a TIF program could generate revenues on the order of $55 million. However, as opposed to a sales tax or a DIF program, it must be emphasized that revenue generated under a TIF mechanism could not be combined with the projections for anticipated revenue for the future property tax levy and for the General Obligation bonds, as these three sources of funds rely on the same tax base. ---PAGE BREAK--- ANOKA COUNTY 2030 TRANSPORTATION PLAN DECEMBER 2008 8-12 8.8 Financing Once revenue projections were prepared, standard municipal financing assumptions were used to estimate the amount of funds that could be made available for construction under a financing scenario. Capitalizing a revenue stream consists of four major elements: 1) required debt service coverage ratio, 2) discount rate, 3) term of the borrowing, and 4) issuance costs. The capitalization of the revenue streams considered yields a range of potential capital contributions for Anoka County on the order of $58 to $64 million each with revenue from a ¼-cent sales tax or from a DIF program, and on the order of $16 to $19 million for TIF, depending on the interest rate used.7 7 Given the long-term nature of the investment plan contemplated in the Plan, a pay-as-you-go funding mechanism may be more appropriate in matching sources and uses of funds for the Program. Use of debt financing should be considered when the benefit of accelerating projects outweighs the cost of financing. - 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 180.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Financial Year Cumulative Revenues [YOE$ millions] . Sales Tax Revenue TIF Revenue DIF Revenue Total TIF Revenue 2010 to 2030 $55 M Total DIF Revenue 2010 to 2030 $155 M Total Special Sales Tax Revenue 2010 to 2030 $165 M Figure 8-3 Order-of-Magnitude Value Capture Revenues (Cumulative YOE$) ---PAGE BREAK--- ANOKA COUNTY 2030 TRANSPORTATION PLAN DECEMBER 2008 8-13 8.9 Program Sources and Uses of Funds Including Value Capture Mechanisms Local option sales taxes are currently in use in Minnesota for highway and in Anoka County for transit. Similarly, enabling legislation is in place in the State to implement TIF. While many states have used DIFs to support roadway improvement projects, there is no enabling legislation in Minnesota to create DIF districts for any project, roadway, or otherwise.8 A local ¼-cent sales tax and a DIF program together have the potential to generate funds on the order of $320 million (YOE$), corresponding to almost half of the anticipated unfunded needs for the Program. Figure 8-4 presents the Program sources and uses of funds for the entire forecast period with the potential additional revenues generated from an additional local ¼-cent sales tax and a DIF program. With these two additional sources, additional new revenues needed to fund the Program would amount to $148 million by the end of 2014, $227 million by the end of 2019, and $361 million by the end of 2029. 8 See Appendix G for an overview of the State legislative framework. Figure 8-4 2030 Plan Sources and Uses of Funds with Potential Additional Revenues from ¼-cent Sales Tax and a DIF Program (Cumulative, YOE$) ---PAGE BREAK--- ANOKA COUNTY 2030 TRANSPORTATION PLAN DECEMBER 2008 8-14 8.10 Other Options While the county is actively considering local options to achieve long-term mobility for its citizens, congestion on the county road and highway network is a regional problem that requires a regional solution, for which further regional, state, and federal support will be required. Implementing previously-identified improvements to high-volume interregional corridors (IRCs, Interstate35 and US 10, would significantly alleviate conditions on the county system and lessen county funding needs. Other options, including rail transit in the Northern Lights Express and Rush Line corridors should continue to be developed. The possibility of tolling in high-volume IRCs also has the potential to provide, simultaneously, new revenue and congestion relief. A detailed technical memorandum describing the financial analysis is provided in Appendix G. The technical memorandum also provides information on how various value capture techniques can be implemented and the capital funding potential of these mechanisms with regard to proposed roadway improvements. Data sources included the State of Minnesota, the Metropolitan Council Association of Governments, Anoka County, and other private sources, for assumptions built into the analysis.