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15 years of its existence. This makes absolutely no sense because he does not also <br />recommend adding an additional 15 years of benefits to total benefits. He wants to compare <br />15 years of benefits to 30 years of costs. <br /> <br />Discount rates. The Anton, Lubov analysis used a discount rate of 2V2 percent because <br />discount rates measure the current dollar value of future benefits and should be determined <br />with the prevailing rates at the time of analysis. A 7 percent discount rate was applicable in <br />the early 1990's, but is not appropriate in the current low interest rate market. In a separate <br />review of the Anton, Lubov study, Abigail McKenzie of MnDOT argued that, because <br />interest rates are near record low levels, she would have preferred to use a rate of around 3 <br />percent. O'Toole's recommendation of 7 percent is far outside the reasonable range of <br />discount rates for 2003. <br /> <br />Return for Minnesota. O'Toole lacks knowledge of current federal funding alternatives. <br />The State of Minnesota's practice is to maximize federal highway or federal transit dollars <br />according to the most appropriate use for a specific corridor. The federal funding for <br />Northstar Commuter Rail cannot be used for highway construction; therefore it does not <br />make sense to reject the Northstar project under the premise that the state could capture <br />federal dollars for other road projects. <br /> <br />Governor, I urge you to reject Representative Krink_ie's request to further delay this project. As <br />you know, the studies comparing the transportation alternatives in the Northstar corridor have <br />undergone rigorous review by MnDOT, the Met Council, local governments and the FTA. We <br />do not believe additional studies are necessary, and continued delays will result in increased <br />project costs for Northstar Commuter Rail. <br /> <br />I hope this information clarifies some of the main issues raised by Representative Krinkie and <br />the O'Toole/Thoreau report. If you would like more information or have questions, please feel <br />free to contact me. We appreciate the time you continue to put into reviewing the Northstar <br />project. <br /> Sincerely, <br /> <br />Tim Yantos <br />Project Manager, NCDA <br /> <br />/sky <br /> <br /> <br />