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Government Finance Officers of Arizona February 19, 2010

ADOT Financial Overview. Government Finance Officers of Arizona February 19, 2010. SOURCES AND USES OF FUNDS. Federal Aid Interstate Maintenance National Hwy System Surface Trans Program Bridge Program CMAQ Program Other. FUNDS SOURCES & USES: HIGHWAY PROGRAM.

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Government Finance Officers of Arizona February 19, 2010

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  1. ADOT Financial Overview Government Finance Officers of Arizona February 19, 2010

  2. SOURCES AND USES OF FUNDS

  3. Federal Aid • Interstate Maintenance • National Hwy System • Surface Trans Program • Bridge Program • CMAQ Program • Other FUNDS SOURCES & USES: HIGHWAY PROGRAM • ADOT Operating Budget • Maintenance • Motor Vehicle • Highway Operations • Support Functions • Highway User Revenue Funds (HURF) • Fuel Taxes • VLT • Registration Fees • Motor Carrier • Other • State Five-year Construction Program • Statewide Construction Program • Preservation • Management • Improvement • MAG Regional Transportation Plan AVAILABLE FUNDING • Maricopa Transportation Excise Taxes (RARF)* • 1/2 cent Sales Tax • Financing Tools • Bonds – HURF, RARF • Grant Anticipation Notes • Board Funding Obligations • State Infrastructure Bank (HELP) • Other • Debt Service • Land, Buildings, and Infrastructure *Regional Area Road Fund

  4. STATE HIGHWAY FUND LOW CASH BALANCE FY 2007 – FY 2010

  5. FEDERAL AID FUNDING

  6. FEDERAL AID FUNDING Apportionments 2005 2006 2007 2008 2009 Source: Arizona Department of Transportation

  7. FEDERAL HIGHWAY PROGRAM OBLIGATIONS ($ Billions) Sources : AASHTO and U.S. DOT FHWA Notices for 2008-10. 6

  8. FEDERAL HIGHWAY TRUST FUND

  9. Rescissions of federal highway funds In 2009, Arizona lost nearly $235 million Carryover Impact: ADOT operating under a reduced level of federal funding Continuing Resolutions Congress has not reauthorized the federal highway program FEDERAL IMPACTS ON ARIZONA

  10. HIGHWAY USER REVENUE FUND(HURF)

  11. HIGHWAY USER REVENUE FUND Revenue Performance Highway User Revenue Fund Percentage Change by Fiscal Year FY 2001 – 2010 NOTE: FY 2010 through Jan 2010.

  12. HIGHWAY USER REVENUE FUND September 2009 Official Forecast and January 2010 Planning Forecast($ Millions) * Compound Annual Growth Rate 2010 - 2015 15

  13. REGIONAL AREA ROAD FUND (RARF)

  14. REGIONAL AREA ROAD FUND Percentage Change by Fiscal Year FY 2001 – 2010 NOTE: FY 2010 through November 2009.

  15. GAS TAX - 12-MONTH MOVING AVERAGE NOTE: FY 2010 through December 2009.

  16. VEHICLE LICENSE TAX - 12-MONTH MOVING AVERAGE NOTE: FY 2010 through December 2009.

  17. Primary factors influencing VLT revenues: Replacement of older vehicles Population growth “New to Arizona” registrations Depreciation of existing fleet To maintain stable or growing VLT revenues, growth factors must be sufficient to offset depreciation VEHICLE LICENSE TAX

  18. HURF PORTION OF VEHICLE LICENSE TAXFY 2000 – 2010 ($ Millions) NOTE: /1 FY 2010 through December 2009.

  19. U.S. UNIT SALES OF NEW LIGHT VEHICLES(Millions of Vehicles, Annualized) We are here Source: Global Insight

  20. POPULATION GROWTH IS SLOWING • In 2009, several Arizona cities and counties actually LOST population (see table). • Arizona’s growth rate was LESS than 1% in 2009, at 0.7%. • Over the period 1970-2000, Arizona’s population growth averaged 3.6% annually; not expected to recover to this level soon, if ever. • Believed to be attributable to the national economy and declining birth rates.

  21. Projected state budget deficit for FY 2011 is $3.4 billion: Represents 51% of anticipated General Fund revenues in FY 2011. Continuing structural deficits anticipated through entire FY 2011 – 2015 program period. Pressures to transfer from HURF and SHF to DPS, and VLT sweeps are likely to continue for several more years. Unlikely that Board will be able to issue Board Funding Obligations (BFOs) to State Treasurer for the foreseeable future. STATE BUDGET DEFICIT

  22. IMPLICATIONS FOR THE FUTURE OF TRANSPORTATION INFRASTRUCTURE

  23. 12 MVD Office Closures Employee Reductions Snow Removal Freeway Maintenance (litter, debris, graffiti) Rest Area Closures FY2010 SERVICE IMPACTS

  24. Federal Funding: Arizona is now virtually dependent on federal transportation funding resulting in: No more HURF swaps More Stringent Requirements Environmental, ROW and Utility Clearances Federal design standards Longer time horizons Lead time for planning Increased costs   Local match required (usually 5.7%) FUNDING AND DESIGN IMPACTS

  25. 59 Recovery Act projects (57 original projects, plus 2 added in Maricopa County from cost savings) 24 projects completed $117 Million in cost savings allowed for additional ARRA projects statewide ADOT expected to create or sustain 6,000 direct construction jobs statewide through the Recovery Act ARRA - 1

  26. Anticipate approximately $520 million in funding to AZ Half of funding under contract within 90 days Second half under contract within 1 year Project readiness criteria: Design completed EIS completed Utility clearances approved (including railroad) ADOT will work with local jurisdictions through COGS/MPO ARRA - 2

  27. Engage residents Educate your community Engage local and state representatives Let Congress know the rescission issue must be dealt with before we lose REAL money! HOW YOU CAN HELP

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