Minnesota Official Discusses Efforts to Sell the Public on Transportation Investment at Midwest Meeting

Minnesota Department of Transportation (MnDOT) Commissioner Charles Zelle has long been thinking about his state’s transportation future and is now the man in charge of making the case for additional investment to the public and policymakers. The longtime bus company executive, who was appointed commissioner by Gov. Mark Dayton last year and began work in January, is a veteran of two panels that in recent years sought to lay out a long-term transportation vision for the state (the most recent panel’s work is detailed in my recent Capitol Research brief “Transportation Funding Commissions II.”) Zelle spoke about those experiences, his new mission and the state’s transportation challenges during a public policy roundtable July 15th at the CSG Midwest Annual Conference in St. Paul. He also responded to questions from Midwestern state legislators who took part in the discussion.

Zelle served on a steering committee in 2011 that produced a 50-year vision statement for the state’s transportation system called Minnesota GO.

“Minnesota GO talks about the values that are important to all Minnesotans,” he told the roundtable. “A multi-modal system that is about the health of our environment, our health itself, and our economy—our prosperity. Ultimately this multi-modal vision is really what our agency is trying to pursue. It helps inform a lot of our planning and our capital priorities.”

In 2012, Zelle was appointed by Dayton to serve on Minnesota’s Transportation Finance Advisory Committee (TFAC).

“What was interesting in that process, which took over a year to look at a 20-year vision for the state and really put some solid arithmetic behind it and what was I thought very instructive and affirming was that as broad a representation as there was in that committee, it really came down to a fully aligned position at the end,” Zelle said. “I mean there was really not a debate as to what the need is and how critical transportation infrastructure is going forward to our prosperity.”

But upon the release of the committee’s final report, it became clear that the work of making the case for additional transportation investment had only just begun, Zelle said.

“The governor, although very pleased with the (TFAC) report, made a pretty good observation which is Minnesotans—citizens—need a little deeper and richer story than, frankly, dry spread sheets and engineering reports,” he said. “The main goals for MnDOT this year (are) to work on developing more transparency (and) more accountability but to help set the arithmetic and the story out as to what it will take to fulfill that long-term Minnesota GO vision and put a better face on the TFAC report.”

Now as commissioner, Zelle finds himself in the role of salesman-in-chief.

“The governor pretty early on after my appointment said ‘you know, really what I am looking for … is for you not to just go out and listen but help tell the story and engage with the entire state and help put together what is more of an aspirational plan (that) is meaningful to everybody’s life not just one corridor versus another corridor. … We have done well (as an agency) at focusing investments in critical areas in cost-efficient ways but sometimes that’s at the expense of some other corridors in a different part of the state. And quite frankly as we look through the TFAC report and at some of the projections, we can clearly see this isn’t a question now of choosing one project over another project. There is not enough funding for any of the worthy projects.”

Zelle said what is needed now is a comprehensive, long-term solution, rather than the three-to-four year political initiatives that have guided the state’s transportation priorities in the past. The traditional pillars of Minnesota transportation funding—the gas tax, motor vehicle sales tax and registration fees—are no longer providing the kinds of revenues the state needs to ensure its transportation vision.

“There’s probably as much as a $30 billion need over the next 20 years,” he said. “When revenue sources are not indexed, are not at least keeping pace with the increasing costs of construction and maintenance, there is a gap. There’s a gap for maintaining and replacing the existing assets. The existing roadways, bridges, systems we have (are) not sustainable, even before we talk about trying to create greater mobility, greater connections, (more) ways to meet the needs of a changing population throughout our state.”

While the 2013 legislative session in Minnesota that followed the release of the TFAC report may not have produced any long-term funding solutions, there were some positive developments, Zelle said.

“We established a joint program for public-private partnerships within the agency,” he noted. “We’re working on that now. Public-private partnerships by themselves are not a funding answer. It is not a total solution. It does help us mitigate risk. It helps us as a tool to get greater efficiency and effectiveness.”

MnDOT was also given greater flexibility in addressing public transit priorities around the state. A highway bonding program called Corridors of Commerce will put $300 million towards helping cities make investments to attract and retain businesses. And the new, $20 million Transportation Economic Development (TED) competitive grant program will direct funds to specific projects that leverage local, county and private sector investments in areas that add jobs.     

Economic development is also a key focus of the sales job Zelle is now tasked with, he added.

“There is a business case to be made about the interconnectivity of infrastructure investments and how critical they are toward not just commerce but for employees, for citizens. And we need to do a better job telling that story and in a way to show how you keep a state competitive, not just with our neighbors, but competitive globally with other regions that have made significant investments and whose economies are flourishing.”   

Zelle cited as one example a Polaris Industries plant in the far northern Minnesota community of Roseau that he visited recently where snowmobiles and trucks are produced.

“They’re coming out the end of this factory all shrink-wrapped and ready to be sent around the world but a lot of the parts, a lot of what comes in on the other side of the factory are coming in just in time,” he said. “If that road is not passable, if there’s a big snow event, if there’s a flood, if there’s some problem, that factory shuts down. … So you think about the lifeblood of these arteries of commerce—actually thinking of them more from a business case I think gives us a little bit better arithmetic and understanding that this is a non-partisan, non-political, more arithmetic argument that we have been facing.”

But Zelle acknowledged that convincing the public of the need for additional transportation investment often requires restoring faith in the agencies of government. The day of the CSG Midwest meeting, the commissioner announced a new organizational leadership model for MnDOT that will split some agency duties between two deputy commissioners, one overseeing engineering and construction on various projects and the other serving as chief financial officer and chief operations officer.

“We intend to have a greater emphasis on how we are able to track our costs of our various products and services,” Zelle said. “I think the arguments toward a more robust transportation system are as much about being smart about the resources we do have as well as being clear about what it takes to invest and get the performance that we all want.”

The Roundtable

Following his opening remarks, Zelle also took part in a discussion with state legislators from around the Midwest who were attending the meeting.

Iowa State Senator David Johnson noted that transportation is not only critical to business and industry but to agriculture as well.

“We’ve got to get what we grow into the marketplace,” Johnson said. “(Minnesota) is a major food processing state. … I don’t think we should ever talk about transportation improvements without talking about agriculture because it isn’t a small tractor and two small grain carts coming out of the fields to the (grain) elevator anymore. It’s coming out by semi. It’s going to ethanol plants. It’s going to the barges. It’s going to the elevators.”

Johnson said he worries that his legislature didn’t address Iowa’s transportation needs in the most recent legislative session, a development which could prompt more Iowa communities to try to fend for themselves.

“In Iowa I don’t know exactly what direction this whole conversation is going,” he said. “In our last session there was an effort late to possibly pass a gas tax increase. That fell apart at the end of the session. That would have been a bipartisan move but the votes weren’t there. In the meantime, we’ve got counties that are bonding to fix roads, repair or replace bridges. But the downside of that is that those roads are going to have to be resurfaced or those bridges maintained and repaired before those bonds are paid off. I don’t know that that’s a good practice to get into.”

Nebraska Sen. Lydia Brasch expressed concern about the condition of the nation’s bridges and asked Zelle about the 2007 collapse of the I-35 Bridge in Minneapolis and its impact at a political level.

“That is considered to be this agency’s worst moment and then rebuilding that bridge became our best moment,” Zelle said. “We built that incredible span in 14 months. … We had a lot of things in place but we also had incredible focus within the agency, within the entire community and the state and we had tremendous federal support to do it efficiently and build a bridge that has flexibility for the future. So we try to use that model to see how did it go so well there. Why can’t we do that in our other bridge projects?”

Minnesota Sen. Scott Dibble noted the bridge collapse also galvanized support for a gas tax increase in 2008 and an accelerated bridge program. But the package addressed only about a third of the state’s needs in that area.

Zelle said the state is now looking to innovative project delivery and financing models to help address Minnesota’s other bridge needs.

“We’re actually building a very major bridge across the St. Croix (River) and we are finding innovative ways to both accelerate a process, which often results in cost savings, and deploy the funding in a way that will save money,” he said. “We’ll actually have a bridge in Winona that will be a managed design-build (project), which will create more streamlining we believe. We think there are tools. There is no secret formula. I know that we talk about other tools like tolling, like value capture. There are other innovative ways to capture value and funding. But there’s no one magic solution.”

In addition, Zelle was asked about the alternative revenue mechanisms that were considered by the Transportation Finance Advisory Committee on which he served.

“I think the concept behind TFAC was to use as many of the tools as possible and gradually increase them,” he said. “There’s limited options in terms of revenue. If you borrow funds, you have to pay them back from future revenue so it’s a great tool to advance projects, to save costs, but by itself isn’t the solution. We’ve looked at local fees for counties and wheelage taxes … as well as offering to do sales taxes without referendums. We try to drive as many tools as possible to a local level. Having value capture, (tax increment financing-type) programs are certainly helpful for certain transportation projects. We know that tolling, frankly, depends on the project and depends on where it is. Certainly many states have embraced that. It has not been so common in Minnesota maybe as it is in other places in the Midwest but we think it’s something that has to be considered long term.”

But Zelle also said his agency’s job is not simply about finding new revenues to build new roads.

“Part of it too is how we drive efficiency from the existing roadways we have,” he said. “We know in our metro (Twin Cities) area, we’re not looking toward expanding a lot of general use lanes. However, we think managed lanes—we call them MnPASS lanes—where we use market pricing to help incent high-density vehicles and more capacity out of our existing footprint of our road system.”

MnDOT is also investing in intelligent transportation system technologies to better manage traffic and seeking to coordinate with transit partners to create a more interconnected system that can provide transportation options and better serve this generation of transit-savvy Minnesotans, Zelle noted.

Indiana State Rep. Ed Soliday agreed that finding funding for public transit should be a key focus for many in the Midwest.

“We just did 45-witness hearings on mass transit in Indianapolis, which was enlightening for me because most of the people who testified were under the age of 40—professionals who said ‘we don’t want to own a car. We want to live in a cool place and we want mass transportation,’” he said. “At their age, I wanted a Corvette. They don’t.”

The Pitch to the Public

Zelle said MnDOT’s efforts to sell the idea of transportation investment to the public are manifold. A slickly produced multi-media presentation is used at meetings around the state to describe the interconnectivity of the transportation system. The department is using surveys, focus groups and an online community to test ideas and messaging and to determine how well Minnesotans understand the basics of transportation financing in the state.

“People don’t understand,” he said. “It’s either good news or bad news depending on how you look at it. I wake up in the morning and feel charged up about it because I see it as an opportunity. … The marketing is not just telling the facts but to kind of bring it into their lives and to try to get the notion that this small impact to their pocketbook relative to what they’re already paying in gas or what they’re paying in congestion (costs) or bad experiences or that long route to avoid the bottleneck, that it’s a small price for a huge benefit.”

That marketing approach means that not only are Zelle and his MnDOT colleagues taking on unfamiliar roles, they are relying on some unusual partners to help shape the message.

“I’m not a Hollywood director but I know from a marketing (perspective) that we need to kind of be beyond what government is often used to,” he said. “That’s in part why we’re reaching to a broader coalition of storytellers and experts in making marketing appeals to help make those connections and get the direct connection between a user fee and a consumer benefit. I talk to General Mills marketing department and Target and Best Buy. We’re very fortunate. We have consumer-facing large businesses here (in Minnesota) and they have expressed interest in helping. There are ways we know how to sell Yoplait. This isn’t Yoplait but it’s a consumer process and we need to be more sophisticated in how we tell that story.”

Additional Related Reading
“Road to Minnesota transportation funds is not a smooth one,” Twin Cities.com/The Pioneer Press, July 6, 2013

“Transportation department’s newest job: Sell public on value of more spending,” Mankato Free Press, April 24, 2013.

“Working together to solve transportation challenges: Minnesota’s rebuilt I-35 Bridge just one example of what we can accomplish,” Fast Lane: The Official Blog of the U.S. Department of Transportation, July 23, 2013.

“Finally, a Plan to Pay for Public Transit With Highway Tolls,” The Atlantic Cities, July 23, 2013

“America’s transport infrastructure: Life in the slow lane,” The Economist, April 28, 2011 (This article was mentioned by Rep. Ed Soliday during the discussion. It compares infrastructure investment levels in the United States to that of other countries based on a percentage of GDP).