or 
lines to the right of the URL bar at the top of your browser
MnDOT Releases Draft Policy Reducing City Cost Shares on Trunk Highway Projects
If adopted, the policy would apply to trunk highway projects awarded after July 1, 2026, and establish new limits on how much cities must contribute.
The Minnesota Department of Transportation (MnDOT) recently released a legislatively mandated draft update to its Cost Participation Policy. MnDOT staff presented the proposal to the Senate Transportation Committee on the day of its release. The League and other stakeholders testified in support.
If adopted by the agency, the policy would apply to trunk highway projects approved after July 1, 2026, and would significantly reduce cost-share requirements for cities.
View the Cost Participation Policy draft update (pdf).
Cost Participation Policy background
MnDOT’s current Cost Participation Policy provides a framework for determining cooperative construction costs and maintenance responsibilities on projects that affect trunk highways. The policy was first adopted in 1985 and last revised in 2016.
The legislatively mandated draft update stems from concerns raised by local government advocates, including the League, about the high cost-share burden tied to MnDOT projects.
Senate Transportation Committee Chair Sen. Scott Dibble (DFL-Minneapolis) and Minority Lead Sen. John Jasinski (R-Faribault) collaborated in 2025 to advance the legislative directive, but work on the update has been underway since May 2024. A steering committee and subcommittees guided the effort. Members included MnDOT staff and local government officials, including city engineers from Albert Lea, Bloomington, Minnetonka, Minneapolis, Moorhead, Plymouth, Richfield, St. Louis Park, St. Michael, and St. Paul.
Draft updates
The 150-page draft includes the steering committee’s recommendations on the following:
- Ability to pay
- Aesthetics
- Bridges and interchanges
- De minimis thresholds
- Drainage and stormwater management
- Frontage roads
- Green infrastructure
- Lighting
- Maintenance
- Parking
- Rectangular rapid flashing beacons
- Roundabouts
- Sidewalks, shared-use paths, and bikeways
- Pedestrian bridges
- Traffic signals
Key provisions affecting cities, counties, and townships include:
- Establishing a project-specific maximum that limits local responsibility for trunk-highway-eligible costs on MnDOT-initiated projects to 0.8% of a community’s five-year average adjusted net tax capacity.
- Clarifying that non-trunk-highway-eligible items and optional additions requested by a city, county, or township would not count toward that maximum.
- Proposing legislation requiring MnDOT to pay, from the Trunk Highway Fund, for the remaining service life of a local government-owned utility that is relocated due to the construction of a project on the trunk highway system.
Next steps
The policy is currently in the final stages of review and approval. MnDOT is expected to adopt it in the coming months.
MnDOT will host a webinar on March 23 to provide an overview of the updated Cost Participation Policy, including key changes such as the new ability-to-pay provision. The session is intended as a high-level overview, with more detailed training planned later in 2026. Learn more and register for the Cost Participation Policy webinar.
View additional documents related to the Cost Participation Policy draft update: