DOT seeks $171.3M federal‑match, $85M discretionary match and other one‑time items in 25/27 budget presentation

The Department of Transportation told the Appropriations — Government Operations Division it is seeking multiple one‑time appropriations and amendments for the 2025–27 biennium, including state match dollars to leverage large federal grants and funding for equipment, IT projects and facility needs.

Mike Gerhardt, deputy director for administration at the Department of Transportation, presented the department's 25/27 budget overview. Gerhardt described four main budget categories—salaries and benefits; operating expenses; capital improvements (roads, bridges and equipment over $5,000); and grants passed through to local partners—and framed the department's optional one‑time requests and FTE changes on top of a base budget.

Gerhardt said the department is requesting $171,300,000 from the Strategic Investment/Capital Investment Fund (referred to in testimony as CIF/SIF) to match an anticipated $963,800,000 in federal formula dollars used to construct and preserve state highways and bridges. "The funds that we're requesting of a 171,300,000 are to match federal dollars that we that will be coming in," Gerhardt said.

He also asked for $85,000,000 to match federal discretionary grant awards the department expects to pursue and accept. Gerhardt said the department currently has $115,200,000 in awarded federal grants, of which $55,000,000 is for a Highway 85 project; the department plans an amendment to borrow from the Bank of North Dakota to match the $55,000,000 award for Highway 85 and said the $85,000,000 request would cover a remaining $61,200,000 need and leave margin for additional grants. "We currently are awarded a 115,200,000 in federal grants, but of that 115,200,000, 55,000,000 is for highway 85," Gerhardt said.

Gerhardt described a proposed pavement management van with sensors to collect road condition data on about 8,600 miles annually; the Department requested $1,100,000 for the vehicle. He also listed four additional FTE requests: one bridge load rating position, two railroad coordination operators (to meet additional miles on Highway 85 at a target of one operator per roughly 50 miles), and one local government support position to help counties, cities and transit providers with federal and state programs.

The department outlined several amendments and unexpended appropriation carryovers it will request, including:

- Section 3: One‑time SIF/CIF funding (the 171.3M federal formula match, the 85.0M discretionary match, and 1.1M for the pavement van). - Section 4: Seven unexpended appropriation carryover requests for identified balances from the prior biennium, including roughly $14.15M remaining of prior match authority for discretionary grants; $11.69M+ of COVID federal funds that must be spent by December 2026; remaining surface transportation COVID funds; and carryover authority for IT projects (including the multi‑phase RIMS project) and facility door security funds. Gerhardt said the flex (flexible transportation) fund has about $162,200,000 of previously authorized but unspent amounts that the department is seeking authority to carry into the 25/27 biennium so local projects can be completed. - Section 5: Continued appropriation authority for the rail fund program so DOT can make loans during the biennium when funds become available. - Section 6: An amendment to permit the department to purchase basic workplace appliances (refrigerators, microwaves, coffee makers) for DOT‑owned properties when needed; Gerhardt said employees currently provide these through donations and the department seeks authorization to make purchases when necessary. - Section 7: Authority to borrow up to $55,000,000 from the Bank of North Dakota to match federal funds for Highway 85 north of Highway 200 (about a 12‑mile stretch); Gerhardt said that borrowing authority would be added to capital improvement line items if approved.

Gerhardt and Director Ron Hankey described revenue streams and budget totals: the DOT expects roughly $1.3 billion in federal funds, a highway tax distribution fund of about $317.6 million, SIF funding requests totaling $257.4 million (the sum of the one‑time requests described), a flexible transportation fund of about $171.5 million (50% of motor vehicle excise tax), and a state fleet reimbursement fund of about $100.3 million (revenue neutral). The department presented a 25/27 total capital improvement figure of roughly $1.6 billion for roads and bridges (partially federal dollars and pass‑throughs to local partners), operating expenses of about $392.9 million and salary costs of about $255.9 million, for a total FTE count of about 1,005.

Gerhardt detailed planned IT investments: a $3,000,000 driver vehicle service appointment system to replace a 14‑year‑old scheduling system and a $350,000 barcoding inventory system. Deputy Director Matt Lineman described the Red River Valley Flood Study and a $2.5 million approximate expected total cost split with Minnesota and the U.S. Army Corps of Engineers; DOT testimony said remaining study carryover authority requested is $2.15M of a prior $2.5M allocation.

Committee members asked clarifying questions about which funds would match federal awards, how continued appropriations are accounted for in budget books (Brady said continued prior biennium appropriations do not show as new appropriations for 25/27), and whether the Bank of North Dakota borrowing authority had been granted previously (members indicated line of credit authority had been given in prior sessions and asked whether this was a carry forward or expansion).

No formal votes were recorded in the transcript on the DOT requests during this session; the department presented its package and committee members indicated they would continue deliberations in later committee work.