TxDOT Public-Private Partnerships Lessons Learned. OMW: Market, Communication, and Policy Trends in Tolling

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1 OMW: Market, Communication, and Policy Trends in Tolling International Bridge, Tunnel and Turnpike Association Monday, June 18, 2012

2 Edward P. Pensock, Jr., P.E. Director, Strategic Projects Division Texas Department of Transportation 125 E. 11 th Street Austin, TX Office: (512)

3 AGENDA Where we have been What we have learned Where we are going

4 Previous and Current Projects I-35 Corridor Advisory Committee Four I-35 Corridor Segment Committees Project Capital Cost* Delivery Method Type of Project SH 130 Segments 1 4 (awarded 2002) $1.51 billion Design-Build Toll road SH 130 Segments 5 & 6 (awarded 2007) $1.34 billion Concession Toll road North Tarrant Express (awarded 2009) $2.05 billion Concession Managed Lanes DFW Connector (awarded 2009) $1.02 billion Design-Build Managed Lanes LBJ / IH 635 (awarded 2009) $2.7 billion Concession Managed Lanes

5 AGENDA Where we have been What we have learned Where we are going

6 Ensure Project Readiness Early definition of project Technical Elements Financial Strategy Obtain environmental clearance Establish stakeholder support Increases public trust Reduces risk to proposers

7 Funding & Project Readiness Appropriate Traffic & Revenue Forecasts (if needed) Value Engineering and Project Scope Good Costs Estimates Design & Construction ROW & Utilities (if appropriate) Life Cycle (if applicable) Financing Good Feasibility Analysis

8 Financing & Project Readiness Early Coordination and Identification of: Public Funds Available Private Funds Anticipated Public Bond Issuance Innovative Funding Mechanisms TIFIA PABs Reinvestment Zones & Districts

9 Improve Technical Requirements Submittal requirements Align deliverables with progress of work Streamline as much as possible Design criteria and performance standards Tailor documents to procurement approach Nail down details

10 Enable Process Improvement Performance Standard Evolution Aesthetic Guidelines Right-of-Way & Utilities Prescriptive vs. Performance Process Consider Electronic Approvals

11 Oversight and Transparency Attorney General Review Legislative Budget Board State Comptroller Concession Cash Flow Profile Public Hearing Equity Return Lifecycle O&M Debt Service Construction Revenue Financial Disclosure

12 Stakeholder Involvement

13 Considerations on any PPP Project: Agency Goals Stakeholder Goals Project Goals Project Related Risks Market Conditions Size (Generally under $2B) Delivery Method

14 AGENDA Where we have been What we have learned Where we are going

15 Requests for Information Not all PPP s are the Same Public Sector Public Private Partnership Private Sector Risk Transfer DBB DB DBOM Availability Payment The Industry has strong opinions Revenue-Based Concession Collaboration Fosters Better Results

16 Senate Bill 1420 Provides TxDOT authority for following projects: Grand Parkway (Houston) IH 35E (Dallas) North Tarrant Express (Fort Worth) SH 183 (Dallas) SH 249 (Houston) SH 288 (Houston) US 290 (Houston)

17 Senate Bill 1420 TxDOT or Regional Mobility Authority for PPPs Loop 1 (Austin) US 183 (Austin) Outer Parkway and South Padre Second Access (Cameron County) Design-Build Authority Three Projects per Year ($50 million minimum project size)

18 Edward P. Pensock, Jr., P.E. Director, Strategic Projects Division Texas Department of Transportation 125 E. 11 th Street Austin, TX Office: (512)