REVISED

 

AGENDA

“Blue Ribbon Task Force”

To Evaluate Nevada Department of Transportation Long Range Projects

Nevada Department of Transportation District I Training Room

123 East Washington

Las Vegas, NV

August 24, 2006 – 12:00 (noon)

 

 

1. Approval of July 27, 2006 Blue Ribbon Task Force Meeting Minutes – Action Item

 

2. Approval of the Blue Ribbon Task Force Report Outline - Action Item

 

3. Discussion and Possible Approval of Blue Ribbon Task Force Recommendations Regarding the Nevada Department of Transportation’s Planned “Super and Mega Projects,” and Revenue Sources to Address Funding Shortfalls - See NDOT Future Projects Summary and Potential Highway Fund Revenue from Various Sources Attached as Exhibit “A” - Action Item  

     

4. Discussion and Possible Approval of Blue Ribbon Task Force Findings and Policy Recommendations Regarding Nevada Department of Transportation Projects and Revenue Sources to Address Funding Shortfalls (Findings and Policy Recommendations) - See Findings and Policy Recommendations Attached as Exhibit “B” - Action Item 

 

      5.  Public Comment*

 

This agenda was posted at www.nevadadot.com and at the following locations:

 

Nevada Dept. of Transportation                       Nevada Dept. of Transportation                       Washoe County Courthouse

1263 South Stewart Street                                   123 East Washington                                          75 Court Street

Carson City, Nevada                                           Las Vegas, Nevada                                              Reno, Nevada

 

Governor’s Office                                                Nevada State Personnel                                      Nevada Dept. of Transportation

Capitol Building                                                   555 East Washington Avenue                           1951 Idaho Street

Carson City, Nevada                                           Las Vegas, Nevada                                              Elko, Nevada

 

Note:  We are pleased to make reasonable accommodations for members of the public who are disabled and wish to attend the meeting.  If special arrangements for the meeting are necessary, please notify Susan Martinovich before the meeting at the Department of Transportation at 775-888-7440.

 

Note:  This meeting is also expected to be available via video-conferencing, but is at least available via teleconferencing, at the Nevada Department of Transportation Headquarters located at 1263 South Stewart Street, Carson City, Nevada and at the District III Office located at 1951 Idaho Street, Elko, Nevada.

 

 

*  Individuals providing public comment will be limited to three minutes.

 

 

 

 

 

 

 

EXHIBIT A

NDOT Future Projects Summary

 

Southern Nevada

 

• I-15 North Corridor                                                           $ 330 million 

            Spaghetti Bowl to Apex Interchange                                                             

 

• US -95 Northwest Corridor                                                $ 100 million         

            Washington Ave. to Kyle Canyon Rd

 

• Las Vegas Beltway Interchanges                                          $ 210 million        

            US-95, I-15, Summerlin Parkway

 

• I-15                                                                                   $1,210 million        

            Tropicana Avenue to Spaghetti Bowl                                            

 

• I-515 – Foothills Road to Spaghetti Bowl                           $1,300 million       

                                                                                                             

• I-15 South Corridor                                                              $ 350 million

            Stateline to I-215 Beltway

 

• Boulder City Bypass                                                           $ 470 million         

    

                                                                                       $3,970 million

Northern Nevada

 

• I-80                                                                                       $ 460 million        

Robb Dr. to Vista Blvd

 

• US –395                                                                                $ 275 million        

            Spaghetti Bowl to Stead Blvd                                                      

 

• Pyramid Highway –                                                                $ 135 million          

            Nugget to Calle De La Plata Dr.

                                                                                          $ 870 million

 

Other - Statewide

 

• Two Lane Highways – Widening and Passing Lanes             $ 400 million

 

• Preservation Program                                                           $ 400 million

 

• Intelligent Transportation Systems/Operations                       $ 100 million

 

 

 

 

 

EXHIBIT A

Potential Highway Fund Revenue from Various Sources

 

Revenue Source                                                         Current Rate

Fuel Tax

Gasoline                                                           17.65 ¢ per gallon

Special Fuel:

                        All Vehicles                                          27 ¢ per gallon

                        Vehicles>26,000 lbs.                            27 ¢ per gallon

                        Vehicles>50,000 lbs.                            27 ¢ per gallon

 

Vehicle Fees

            Registration:

                        Vehicles<10,000 lbs.                            $33 to $48 per vehicle

                        Vehicles 10,000-26,000 lbs.                 $12 per 1,000 lbs.

                        Vehicles>26,000 lbs.                            $17 per 1,000 lbs.

 

            Title Fees                                                         $20 per vehicle

 

            Drivers License:

                        Regular                                                 $20 per license

                        Commercial                                          $55 to $85 per license

 

            Overweight Permits                                          $60 per 1,000 lbs.

 

Other Sources*

 

Governmental Services Tax (Vehicle Privilege)  4¢ per $1 valuation                              

Weight-Distance Tax

            Vehicles>26,000 lbs.                                        None Currently

            Vehicles 26,000-50,000 lbs.                             None Currently

            Vehicles>50,000 lbs.                                        None Currently

 

Distance Tax

            Travel on All Routes                                         None Currently

            Travel on NDOT Routes                                  None Currently

            Urban Travel Only (CC, CL, WA)                   None Currently

 

Tolls

            Urban Interstate and Freeways                         None Currently

            Urban Freeways (non-Interstate)                      None Currently

 

Tire Tax                                                                       $1 per tire

 

Rental Car Tax (Governmental Services Fee)    6.0% of rental rate

 

Insurance Premium Tax                                     3.5% of net premium or consideration

 

Emissions Tax

            Emission Control Certificate                              $6 per certificate

            Emission Fee (Carbon Tax)                              None Currently

 

Traffic Citation Administrative Fee                                None Currently

 

State Sales Tax Options

            General Sales Tax (including vehicles)   2% of sale

            Vehicles Sales Tax                                            2% of sale

            Automotive Repair, Services & Parking            2% of sale

 

Gaming Revenue                                                           Various 3.5 to 6.75% plus other fees

 

Property Tax                                                                17¢ per $100 of assessed value**

 

Liquor Tax                                                                   Varies 9¢ to $ 2.05 per gallon

 

Live Entertainment Tax (gaming)                                   Varies 5 to 10% of sales

 

Mineral Severance

            Net Proceeds Tax                                            Varies 2 to 5% of sales

            Gross Sales                                                      None Currently

 

Real Property Transfer Tax (State Portion)                    $1.30 per $500 of value

 

Franchise Fees (electricity, telecom, gas, cable) Varies up to 5.45% of sales

 

Cigarette Tax                                                                4¢ per pack of cigarettes

 

Modified Business Tax (Gross Wages)              0.63% of gross wages

 

Clark Road Taxes – Applied Statewide

            New Development Tax                         0.75 $/square foot commercial;

                                                                                    $700/residential unit

            Room Tax                                                        0.375% of room charge

            Jet Fuel                                                            1¢/gallon

 

Washoe Road Taxes – Applied Statewide

            Developer Impact Fees                         Varies depending on traffic impact

            Inflation-Indexed Gasoline Tax              Actual Inflation with 4.5% maximum

              (Inflation assumed at 2.7% with 17.65¢ base)

            Inflation-Indexed Diesel Tax                 Actual Inflation with 4.5% maximum

              (Inflation assumed at 2.7% with 27¢ base)

 

* None of these sources are currently used to finance state highways.

** Assessed valuation (AV) is 0.35 times the taxable value.

 

EXHIBIT B

Blue Ribbon Task Force to Evaluate Nevada Department

Of Transportation Long-Range Projects

Findings

DRAFT (8/8/06)

 

The three objectives of the Blue Ribbon Task Force were to: (1) review the need for future NDOT transportation projects, including impacts to congestion relief, state highway system serviceability and safety, and the quality of life and economy of our State, (2) review project costs and revenue projections, and (3) evaluate funding options.  The Task Force has analyzed the 10-year planning period from 2006 to 2015.

 

Findings

 

Task Force Objective 1: Review the need for future NDOT transportation projects, including impacts to congestion relief, state highway system serviceability and safety, and the quality of life and economy of our State

 

·         Nevada’s population and vehicle miles traveled will continue to grow.

 

Nevada's population is projected to grow to 2.8 million people by 2010 and to 3.4 million by 2020.   Despite increases in transit use, carpooling and other transportation alternatives in Las Vegas and Reno, highway travel in Nevada is expected to increase 80 percent by 2020.  

 

·        An increase in freight movement will further impact the State highway system.

 

Nevada is a “bridge state.” Commercial tucks comprise up to 40 percent of the traffic on rural

I-15 and I-80, and 80 percent of these trucks have an origin and destination outside of the State.  A large increase in truck traffic related to expansion of the ports in Oakland and Long Beach, as well as just-in-time delivery, will occur on Nevada’s Interstate and National Highway System routes. 

            

·        The State highway system is essential to Nevada’s economy and quality of life.

 

A well-functioning State highway system is vital to Nevada’s economy.  Improvements to the State highway system are needed to support Nevada’s economic development and diversification efforts. This is true in the urban areas of Las Vegas and Reno as well as the rural areas of the State.  While comprising only 21 percent of all improved roads in the Nevada, the State highway system carries 59 percent of all traffic and 89 percent of the heavy truck traffic. Most out-of-state tourists arrive via automobile or otherwise travel on Nevada’s highways during their stay.  Commerce and industry also depend heavily on the State highway system.  Nevada residents use the State highway system to make work, educational, social, and leisure trips.  Mobility and access is an important quality-of-life issue and consistently ranks as a priority for Nevada residents. 

 

·        The Nevada Department of Transportation’s policy that it budget to preserve the State’s highway and bridge system so as not to increase the backlog of maintenance needs is a cost-effective and prudent strategy.  

 

On the Interstate highways and principal arterials, Nevada’s pavement and bridges are in very good condition.  The remaining State roads have average pavement condition and also very good bridges.  NDOT’s proactive pavement management approach is innovative and results in higher quality service to the public.  NDOT has a good bridge program in place and should not vary in a significant way from the course it is on.  The resulting higher quality of service to the public, when funded, results in measurable savings over years. 

 

·        The Nevada Department of Transportation’s proposed “Super and Mega Projects” are needed to address congestion and safety.

 

Traffic engineers gauge congestion using level of service (LOS), with level of service A being free-flow conditions and LOS F representing a typical traffic jam.  Portions of I-15 and I-515 in Las Vegas are already at LOS F during peak hours.    Without improvements, by 2015, additional Las Vegas area freeway segments will descend to LOS F, including I-15 from Cheyenne Avenue to Craig Road; I-515 from Eastern Avenue to Russell Road; US 95 from Rainbow to Centennial; and portions of the Bruce Woodbury Beltway.  By 2030, with the exception of a short segment of the northeastern Beltway, all other freeways in Las Vegas will fall to LOS F.  Furthermore, the Boulder City Bypass will be needed to address truck traffic on US 93 with the 2009 completion of the Hoover Dam Bypass.  In the Reno area, the LOS on I-80 and US 395 in the Reno area will deteriorate significantly without improvements.   Also, Pyramid Highway corridor improvements are needed to address worsening congestion and safety issues on State Route 445 which serves the growing north valleys of Sparks and Washoe County. 

 

·        The Nevada Department of Transportation’s proposed “Super and Mega” Projects are being planned to maintain an acceptable level of service for 20 years.

 

NDOT has established LOS D (little driver freedom at tolerable operating speeds, approaching unstable flow) as its minimum objective for planned improvements.  This is a common minimum standard used by many state departments of transportation and reflects a realistic expectation that better LOS’s are not economically feasible for designing 20 years into the future.  

 

·        A number of roads are no longer appropriate for inclusion on the State highway system.

 

The State Transportation Board of Directors has determined that the State’s highway system should consist of high-volume and high-speed, controlled- and limited-access highways, such as Interstate highways, National Highway System routes, and super-arterials that are strategic to the State’s defense and economy, as well as state routes that connect the NHS routes, population centers, state and national parks, and airports.  The Board has also expressed concerns that the Department should not be in the business of deciding local development by virtue of its control of access along local streets.  NDOT currently maintains 5,449 centerline miles of roads in Nevada, of which perhaps 840 miles no longer warrant being on the State’s highway system because they serve low traffic volumes, or are local streets, or otherwise do not provide regional mobility or connectivity. The Department spends about $23 million annually to maintain these 840 miles of roads. 

 

·        Projects in the Nevada Department of Transportation’s proposed ten-year 2006-2015 work program are needed to preserve the existing highway system.

 

Of the $8.6 billion proposed for Nevada Department of Transportation projects, $6.2 billion is for congestion relief and safety, and $2.4 billion for preservation of the highway and bridge infrastructure.  This allocation of funding strikes a good balance between addressing the needs to expand system capacity while managing one the State’s most important assets.    

 

·        Highway Safety is an important issue that must be addressed.

 

Last year over 400 motorists, motorcyclists, pedestrians and bicyclists were killed on Nevada’s streets and highways.  Nevada has the seventh worst highway fatality rate in the nation at2.04 fatalities per 100 million vehicle miles traveled, versus the national average of 1.44.  Engineering, education, enforcement, and emergency response are the four key elements in reducing fatalities and serious injuries related to motor vehicles.  Additional funding will allow NDOT to design and maintain highways to the highest safety standards possible.    

 

 

Task Force Objective 2: Review project costs and revenue projections

 

·        State highway system needs by 2015 are $11 billion, with a projected shortfall of $3.8 billion, without fully accounting for inflation. 

 

Funding needs for preservation of the existing highway system infrastructure, and projects to improve safety and relieve congestion by 2015 will be $11 billion.  This includes ten “Super and Mega Projects” which are preliminarily estimated to cost $4.8 billion, but will need further analysis to refine their costs.  Project costs are based on 2006 estimates and do not consider inflation.  In     

addition to NDOT’s highway needs, other State Highway Fund agencies, the Department of Motor Vehicles and Nevada Highway Patrol, will need $2 billion for their operations.  With $9.2 billion in revenues projected for the State Highway Fund by 2015, there will be a $3.8 billion shortfall. 

 

·        Nevada’s current highway revenue structure will not meet the pressing funding needs.

 

The State’s 17.65 cent per gallon fuel tax has not increased since 1992.  Meanwhile, highway construction prices rose 99.7 percent nationally.  Registration fees ($33 per auto) and driver’s license fees ($19.50) have not increased since 1991.  Furthermore, Nevada’s per-capita highway travel has increased 6.8 percent and per-capita fuel use has declined 8.3 percent since the State’s fuel taxes were last raised in 1992.  Ultimately, Nevada’s highways are being traveled more heavily, using less fuel per capita, and at a tax rate that does not account for 14 years of inflation.

 

Recently, highway-construction inflation has greatly exceeded general inflation. From 2003 to 2005, the Consumer Price Index increased just 6.1 percent, while the Federal-Aid Highway Construction Price Index rose 40.2 percent.  At the federal level, the Highway Trust Fund is projected to go into deficit by 2010 if current spending levels continue.  Future reliance on federal funding to address Nevada’s shortfall is not realistic.

 

·        Right-of-way will increase project costs.

 

Right-of-way costs, especially in Las Vegas and Reno, are escalating much greater than general inflation.  Preliminary estimates are that 20 percent of  “Super and Mega Project” costs are for right-of-way.  Right-of-way may ultimately become too expensive, resulting in a reduced scope for certain projects or making some infeasible to complete.  

 

·        The Tax and Spending Control (TASC) and Property Owner’s Bill of Rights (POBR) petition initiatives will negatively impact the cost and schedule of future highway projects.

 

Even though Highway trust fund moneys are excluded from the Tax and Spending Control (TASC) initiative’s definition of total state revenue and hence excluded from the spending limit, NDOT would be required to seek voter approval of any increase in taxation that exceeds the previous year’s taxation.  NDOT would also be required to seek voter approval to issue bonds, even though no tax increase is being proposed to fund the bonds.  Currently, the Legislature, State Transportation Board, and State Board of Finance authorize the sale of highway construction bonds.

 

The Property Owner’s Bill of Rights (POBR) initiative addresses perceived government abuses in the taking of private property, including takings for redevelopment, such as the subject property in the recent U.S. Supreme Court ruling in Kelo vs New London, which upheld the City of New London, Connecticut’s controversial condemnation of private property for redevelopment.  However, NDOT is not in the redevelopment business.  The State Transportation Board, which is chaired by the Governor and includes the Lieutenant Governor, Attorney General and State Controller, recommends condemnation of private property for the uses and purposes set forth in NRS 408.487, which are directly related to highways.  The Transportation Board must also comply with pertinent federal law governing property acquisition for highway purposes.

 

·        Nevada Department of Transportation administrative costs and salaries appear reasonable. 

 

NDOT’s administrative costs are 5 percent of its overall budget for State Fiscal Year 2005.  The most recent State Department of Personnel salary survey conducted in 2004 indicated that significant disparity existed when comparing certain classifications of Nevada Department of Transportation employees to similar jobs with other Nevada employers.  NDOT is one of the largest employers of engineers in the State, and often has difficulty filling vacant engineering positions.  Engineers, transportation planners, and right-of-way agents are paid significantly less than their counterparts in Las Vegas and Reno.  NDOT utilizes the private sector to perform much of its work.  Highway construction contractors perform over 90 percent of the construction work performed on highways.  In addition, NDOT utilizes consulting engineers to augment its design and inspection services.  Consultants perform about half of the project designs.  NDOT also utilizes contractors for right-of-way appraisals, and more recently for right-of-way acquisitions.      

 

Task Force Objective 3: Evaluate funding options

 

• Increased highway funding must be addressed now.

 

Given the staggering needs identified for State highway projects, the shortfall is a challenge that cannot be left to the future.  The “Super and Mega Projects” will require many years to complete, and funding decisions must be in place before the Department of Transportation can move forward on right-of-way acquisition, design and construction.  If the Legislature takes decisive action in 2007, additional revenue sources will be available in fiscal year 2008 that could be used for bonding part of the shortfall and NDOT will have the ability to consider additional construction options (i.e. public-private-partnerships, etc.)  By then, there will have been a period of 15 years whereby revenue from fuel taxes and highway user fees have not kept pace with increased needs or increased construction costs due to inflation that is considerably greater than the Consumer Price Index.

·        Solutions to Nevada’s highway funding challenge will require non-traditional highway revenue sources. 

 

The State of Nevada has for many years relied on traditional fuel taxes and motor vehicle fees to fund its highway needs.  But, as demands and needs increase and circumstances change, it is apparent that non-traditional solutions can and should contribute in a large way to fill the looming transportation funding gap. 

 

 

EXHIBIT B

Blue Ribbon Task Force to Evaluate Nevada Department

of Transportation Long-Range Projects

Policy Recommendations

DRAFT (8/8/06)

 

1.      The Nevada Department of Transportation should be given the authority to enter into public-private partnerships for the financing, design, construction,

      maintenance and operation of transportation facilities.

 

2. The Nevada Department of Transportation should be given the authority to implement user fees including toll roads, high occupancy toll (HOT) lanes, and congestion pricing.

 

3.      The Nevada Department of Transportation should pursue advance right-of-way acquisitions for projects, including “Super and Mega Projects,” as soon as possible, contingent on funding.

 

4. The State of Nevada should utilize general fund surpluses to fund highway projects and consider redirecting existing revenue sources for one-time expenses including advance right-of-way and highway construction contracts.

 

5.      An assessment for State highways should be authorized for future land sales through the Southern Nevada Public Land Management Act.

 

6.      The State of Nevada should provide non-traditional highway revenue sources for highways.  However, sound fiscal policy dictates that taxes and fees that have the greatest nexus to highway maintenance and construction should be given priority consideration. 

 

7.      Highway fund revenue sources should respond to inflation.

 

8.      The Nevada Department of Transportation should continue to work in a cooperative manner with counties and cities to transfer the responsibility for maintenance on roads that are no longer appropriate for inclusion on the State’s highway system. 

 

9.      Individuals and businesses from within and without Nevada rely on our State highway system.  Any new taxes for highway maintenance and improvements should be fairly allocated to those who benefit from the use of the highways, whenever possible. 

 

10.  Preservation of the existing highway system is important and should not be reduced, even temporarily, to free up money for new projects.

 

11.  Highway investments should be based on prioritizing projects, while recognizing the importance of equity in providing services throughout the State.

 

12. The Nevada Department of Transportation should recognize the importance of the tourism and gaming industry to the State’s economy in implementing projects.