Minnesota Department of Transportation

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MnDOT Policies

Cost Participation for Cooperative Construction Projects and Maintenance Responsibilities between MnDOT and Local Units of Government

MnDOT Policy #FM011
Revised: February 25, 2026

View/print signed policy (PDF)

Please go to the MnDOT Org Chart to find specific contact information: Org Chart.

Responsible Senior Officers:

  • Deputy Commissioner/Chief Administrative Officer
  • Deputy Commissioner/Chief Engineer

Policy Owners:

  • Director, Office of Transportation System Management
  • Director, Office of Project Management and Technical Support

Policy Contact: Cooperative Agreements Engineer, Office of Project Management and Technical Support

Policy Statement

Where a mutual benefit and a demonstrated transportation need exist, the Minnesota Department of Transportation (MnDOT) may share cost and maintenance responsibilities for cooperative construction projects with local units of government. MnDOT’s financial contributions with State Road Construction funding is limited to trunk highway purposes. Cost participation and maintenance responsibilities are finalized in cooperative construction agreements and maintenance agreements between MnDOT and local units of government for each project.

Cooperative construction projects may be initiated by MnDOT requesting local participation in a trunk highway project, or by a local unit of government either:

  • Requesting improvements or otherwise indicating its willingness to share the cost of a MnDOT project; or
  • Requesting MnDOT cost participation in a locally initiated project.

This policy does not provide any claim or expectation of legal entitlement to financial participation, except where MnDOT has specifically contracted at its sole discretion for such participation. MnDOT retains the final authority to determine whether it will participate in the cost of any project.

Cost Participation and Maintenance with Local Units of Government Manual

MnDOT has developed a Cost Participation and Maintenance with Local Units of Government Manual (“Manual”). The Manual includes details for applying the policy to projects for cost participation and maintenance responsibilities, methods for computing cost shares, and relevant agreement procedures. To understand the policy and to avoid misinterpretation, the policy and Manual must be read and used together.

Exceptions to Policy

Exceptions to policy details contained in the Manual may be granted for project work that meets trunk highway purposes and is eligible for trunk highway expenditures. Districts must document requests for exceptions beyond the decision-making authority assigned to district engineers in the Manual. The district engineer must submit justification for the exception to the Cooperative Agreements Unit, which forwards the request to the Assistant Commissioner for Engineering Services Division and the Assistant Commissioner for Operations Division for concurrence, then to the Chief Financial Officer for approval. The merits of such requests will be determined on a case-by-case basis.

Reason for policy

This policy provides a framework to determine the potential expenditure of trunk highway funds as well as local responsibilities for cooperative construction projects and maintenance. The basis of this policy is to ensure that MnDOT use of the trunk highway fund is limited to trunk highway purposes.

MnDOT developed this policy in accordance with Minnesota statutes and rules and in coordination with applicable MnDOT policies. The Resources and Related Information section of this policy lists relevant references.

Applicability

Application of Policy

  • This policy applies to all trunk highway funds and, in particular, funds in the State Road Construction (SRC) account.
  • This policy applies to the determination of:
    • The extent to which local unit of government funding participation is necessary for portions of a MnDOT initiated trunk highway construction project;
    • The extent to which MnDOT may participate in a locally initiated project that affects the trunk highway system; and
    • Maintenance responsibilities resulting from the cooperative construction project.

Scope of Policy

  • MnDOT participation using trunk highway funds, in accordance with this policy, is limited to the project scope necessary to address the trunk highway purposes as determined by the district and approved as required. Unless otherwise documented in the Manual, costs for items requested by local units of government, beyond those determined as necessary by the district, will be the responsibility of the local unit of government.
  • Program documentation for MnDOT special funding programs (such as the TED program, Highway Freight program, Corridors of Commerce, etc.) may modify and/or clarify cost participation and eligibility.
  • This policy specifically applies to the use of trunk highway funds. Other MnDOT funding programs that do not use trunk highway funds are not subject to this policy.

Stakeholders

All MnDOT employees must comply with this policy. The following individuals must be aware of the policy:

  • MnDOT personnel and local agency representatives involved in determining funding sources, planning, and executing agreements for cooperative construction projects between MnDOT and local units of government.
  • Anyone involved in planning, designing, constructing, or maintaining a MnDOT or local federal-aid project, including but not limited to, MnDOT personnel, local agency representatives, and consultants.

Key stakeholders with responsibilities under this policy include:

  • Office of Transportation System Management – Funding Program Coordinator
  • Office of Transportation System Management – STIP Coordinator
  • Chief Financial Officer
  • Office of Financial Management
  • Office of Project Management and Technical Support – Cooperative Agreements Engineer
  • Office of Project Management and Technical Support – Cooperative Agreements Unit
  • MnDOT District Engineers
  • MnDOT District Project Managers

Definitions

Cooperative Construction Agreement

An agreement between MnDOT and a local unit of government pursuant to Minnesota Statutes §161.20: General Powers of Commissioner, Minnesota Statutes §161.38: Special Agreements for Highways in Municipalities,and/or Minnesota Statutes §161.45: Utility on Highway Right-of-Way; Relocation, concerning construction or maintenance in which both parties have an interest.

Cooperative Construction Project

A construction project that includes trunk highway and local road improvements in which costs or maintenance responsibilities are shared between MnDOT and local units of government.

Locally initiated Project

A project in which the need, scope, or means to accomplish the project is predominantly a determination of and priority for the local unit of government.

MnDOT-initiated Project

A project in which the need, scope, or means to accomplish the project is predominantly a determination of and priority for MnDOT.

State Road Construction

The actual construction, reconstruction, and improvement of trunk highways, including right-of-way.

State Road Construction Account (SRC)

The biennial appropriation of funds by the legislature for state road construction purposes only. This appropriation is comprised of federal aid funds made available to MnDOT and state funds dedicated to the trunk highway fund. All funds allocated to the SRC are subject to requirements and restrictions of the account, specifically that funds are for trunk highway purposes only, regardless of the original source of the funds.

State Transportation Improvement Program (STIP)

A four-year plan that identifies the schedule and funding of transportation projects by state fiscal year (July 1 through June 30). It includes all state and local transportation projects with federal highway and/or federal transit funding along with 100% state funded transportation projects. 

Trunk Highway Fund

MnDOT’s primary operating fund which consists of:

  • 62 percent of the net highway user tax distribution fund, as provided in Article 14 of the Constitution of the State of Minnesota;
  • Proceeds of any bond sale authorized by Article 14 of the Constitution;
  • Monetary aid from the federal government for the construction and maintenance of trunk highways; and
  • Any other money otherwise allotted, appropriated, or legislated.

Trunk Highway System

All roads established or to be established under the provisions of Constitution of the State of Minnesota, Article XIV, section 2. This system includes highways that are constructed, improved, and maintained as public highways under the jurisdiction of the Commissioner of Transportation, including highways on the Interstate system.

Responsibilities

Office of Transportation System Management (Central Office)

  • Funding Program Coordinator - Serve as a liaison and ensure compliance and oversight for application of this policy.
  • STIP Coordinator - Work with districts to ensure that cost estimates for MnDOT and local shares of projects are correctly identified in the State Transportation Improvement Program (STIP) and that appropriate anticipated funding sources are identified for each participating agency share.

Chief Financial Officer and the Office of Financial Management (Central Office)

  • Provide financial oversight and help determine trunk highway purpose where there is no precedence or clarity.
  • The Chief Financial Officer, in consultation with the Chief Counsel, is ultimately responsible for interpreting trunk highway purpose as stated in the Constitution and state law and ensuring MnDOT is compliant.

Office of Project Management and Technical Support (Central Office)

  • Cooperative Agreements Engineer 
    • Serve as a liaison and ensure compliance and oversight for application of this policy.
    • Ensure that construction plan information and cooperative agreement documents are consistent with the STIP, with the cost participation responsibilities developed during project development, and with this policy.
  • Cooperative Agreements Unit 
    • Assist with application of this policy during project development, as requested by the districts.
    • Review documentation of project cost responsibilities and notify the districts of cost participation responsibilities that may be inconsistent with this policy.
    • Facilitate the review and approval of requests for exceptions to the application of this policy.
    • Make the final determination of cost participation eligibility, in cooperation with the district and policy owners, during the agreement development process.

MnDOT District Engineers and Project Managers

  • Work with the MnDOT Cooperative Agreements Unit and local units of government to apply this policy to projects.
  • Request and document exceptions to the policy, as appropriate
  • Maintain copies of maintenance agreements.

Policy Owners (Office of Transportation System Management Director and Office of Project Management and Technical Support Director)

  • Review the policy every two years, or sooner as necessary, to ensure the policy remains up to date.
  • Review the Cost Participation and Maintenance with Local Units of Government Manual every five years, or sooner as necessary, and other documents and training associated with the policy to ensure they remain current.
  • Monitor state, federal, enterprise, agency, or other requirements that apply to the policy or procedures.
  • Consult with the Office of Chief Counsel and Office of Financial Management to ensure the policy and procedures remain compliant with all state, federal, enterprise, agency, or other requirements.
  • Facilitate cross-division review of internal disagreements on interpretation or concerns regarding consistency of implementation of this policy or the Cost Participation and Maintenance with Local Units of Government Manual.
  • Work with the Policy Coordinator to revise the policy and/or confirm its accuracy.
  • Communicate policy revisions, reviews, and retirements to stakeholders.

Resources and related information

Processes, Procedures, and Instructions

Resources

This policy's procedures and requirements were developed in accordance with the following:

  • 2025 Minnesota Laws, 1st Special Session, Chapter 8, including:
    • Article 1, Section 2, Subdivision 3 (c), which limits the State Road Construction Account to “…the actual construction, reconstruction, and improvement of trunk highways, including design-build contracts, internal department costs associated with delivering the construction program, consultant usage to support these activities, and the cost of actual payments to landowners for lands acquired for highway rights-of-way, payment to lessees, interest subsidies, and relocation expenses...” This limitation is subject to change with each appropriation but remains substantially constant over time.
    • Article 2, Section 113, Subdivision 2, which states “The [Cost Participation Policy] may consider a local unit of government’s ability to pay as a factor in determining the amount of local contribution, if any.”

History and updates

Adopted

February 14, 2014
Comments: Policy #FM011 adopted
Superseded:

  • Policy #6.1 – Administration No. 85-1, Cooperative Construction Projects with Local Units of Government
    • Effective: 8-7-1985
    • Revised: June 2001 and April 2004
  • Guideline #6.1-G-1 – Cooperative Construction Projects with Local Units of Government Procedures (revised 2004)
  • Policy #6.84-2 – Cooperative Bridge Widening Projects
    • Effective 12-5-1984
  • Guideline #6.84-2G1 – Cooperative Bridge Widening Projects Division of Costs
    • Effective 12-5-1984

Revised

  • First Revision: February 24, 2016
  • Second Revision: February 25, 2026

Policy review

This policy's next scheduled review is due February 2028. The next scheduled review of the Cost Participation and Maintenance Responsibilities with Local Units of Government Manual is February 2031.