MoDOT Update – Director Patrick McKenna and deputy director/chief engineer Ed Hassinger

Federal Funding

  • Director McKenna reported good news out of Washington D.C. the night prior to the teleconference, with senate approval of a 5,600 page COVID relief act which appears to provide needed relief for state departments of transportation.
  • The action removes the transportation funding from the cycle of continuing budget resolutions offering some more short-term stability with a full one-year extension of the FAST Act thru September 30, 2021.
  • Director McKenna praised the efforts of AASHTO and the state DOTs that worked to get surface transportation funding back into the bill, an effort that was only accomplished in the final 72 hours leading up to the passage.
  • After initially requesting a $15 billion federal “backstop” to help offset lost revenues related to COVID in 2020, the groups refined those initial targets after recovery from the initial downturn helped trim the target to just $10 billion.
  • McKenna noted this was one of the biggest accomplishments in AASHTO history. “It is nice to get a win in such a tough year,” he said. Director McKenna praised the work done by Rep. Sam Graves and Sen. Roy Blunt.

COVID Impacts

  • Director McKenna reported final estimates of lost fuel tax revenues between 7-10%, with concerns the traffic volumes will not immediately return to pre-COVID levels, a process that is being projected to take as long as 4-5 years. “It may take several years for revenues to bounce back, for travel numbers to bounce back,” he said.
  • The federal COVID relief funds are taking that into consideration, with the “backstop” money allocated thru September 30, 2024.
  • McKenna noted the “new” funding will follow the FAST Act formula for allocation.
  • He indicated initial projections are for Missouri to receive roughly $230 million over the five-year period, which coincides with the projected 430-40 million annual fuel tax revenue losses related to COVID in 2020.
  • “We are cautiously optimistic, and feel we are now on solid enough footing to move forward with planning the new STIP,” he said. “This has provided us a degree of certainty that funding will be there to cover our existing levels of spending.”

Missouri Highways & Transportation Commission

  • The state governing board will meet January 6, 2021 and McKenna noted a pair of workshops will be held prior to the meeting to discuss asset management and unfunded needs as well as financial outlook.
  • The director indicated a need to focus on the unfunded needs list with projections that the new presidential administration is targeting a potential infrastructure stimulus package that could provide additional funding for transportation improvements.

Low Volume Roads

  • The director also announced that the commission has requested a potential scenario for additional funding for the state’s low volume roads.
  • Director McKenna indicated the commission is very dissatisfied with MoDOT’s efforts related to low volume roads and pavement conditions, requesting a funding scenario that diverted an additional $15 million in funding to them.
  • “We are looking at the spending side of things, outside of TSIP, to allocate more funds to these troubled spots across the state,” he said.

Construction Program

  • Deputy Director Hassinger reported MoDOT is expected to complete 548 construction projects in 2020 and despite the pandemic was able to close out nearly $1 billion in projects, the highest construction total since 2010.

Questions and Answers

  • A question was asked about the federal backstop money in the COVID relief bill if it would be allocated all at once or over an extended obligation period. McKenna indicated that MoDOT would meter the money out over the length of the five-year period, with funding to offset lost revenues from 2020 and the next four years. He noted the funding is a backstop for revenue lost during and as a result of the pandemic, to keep us at the current pre-COVID funding levels.
  • Director McKenna was asked about the influx of funding to offset the 2020 losses and how that would be used, specifically if it would impact the Governor’s Cost Share program which originally had funded $50 million in projects before the general assembly reduced the funding to $25 million because of COVID revenue loses. “It looks like we will be able to reinstate that program,” he said.
  • As part of the previous question, McKenna also added that MoDOT will be looking to get the top projects from the state’s unfunded needs list moved into the STIP as a result of the backstop funds.