ADOT and Public Private Partnerships - Update John McGee, Executive - - PowerPoint PPT Presentation

ADOT and Public Private Partnerships - Update

John McGee, Executive Director of Planning and Policy Gail Lewis, Director, Office of P3 Initiatives and International Affairs Deb Sydenham, AICP, Deputy Director, Office of P3 Initiatives

Federal & State Funding Picture – the Perfect Storm

National and state gas tax collections

far below previous years.

Obama Administration opposed to gas

tax increase.

Second year in a row that the

Highway Trust Fund had to be rescued.

State transportation revenues way

down due to reduced gas tax and VLT

Diversion of funds by the Legislature

to shore up the General Fund

Transportation Revenues Percentage Change by Fiscal Year - HURF

NOTE: FY 2010 through June 2010

• 15.0%
• 10.0%
• 5.0%

0.0% 5.0% 10.0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

FISCAL YEAR GROWTH

Transportation Revenue Grow th 1 2 Month Moving Average Gas Tax and VLT

NOTE: FY 2010 through June 2010 NOTE: FY 2010 through June 2010

• More fuel efficient vehicles = less gas tax
• Less driving = less gas tax
• More moderately priced vehicles = less VLT

GAS TAX VLT

$440,000 $450,000 $460,000 $470,000 $480,000 $490,000 $500,000 $510,000

Jun 0 3 Oct 0 3 Feb 0 4 Jun 0 4 Oct 0 4 Feb 0 5 Jun 0 5 Oct 0 5 Feb 0 6 Jun 0 6 Oct 0 6 Feb 0 7 Jun 0 7 Oct 0 7 Feb 0 8 Jun 0 8 Oct 0 8 Feb 0 9 Jun 0 9 Oct 0 9 Feb 10 Jun 10

FISCAL YEAR 1 2 M o n th R o llin g T o ta l

$310,000 $320,000 $330,000 $340,000 $350,000 $360,000 $370,000 $380,000 $390,000 $400,000 Jun 05 Sep 05 Dec 05 Mar 06 Jun 06 Sep 06 Dec 06 Mar 07 Jun 07 Sep 07 Dec 07 Mar 08 Jun 08 Sep 08 Dec 08 Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10

FISCAL YEAR 1 2 M o n th R o llin g T o ta l

Effects On ADOT Activities

Little or No New Construction in Greater Arizona Reduce, Defer or Eliminate Maintenance Reduce or Eliminate ADOT Operations Reduce or Eliminate ADOT Service Levels Severe Limitations of Bonding Capacity

What Are P3s?

Infrastructure project where significant design, construction, financial, and

• perational risk

is transferred from the public sector to the private sector

Arizona’s Law - 2009

Third year of attempting to get legislation passed Eligibility: enhanced, upgraded or new facilities including

roads, rail, transit and rest areas.

Types of partnerships: design/build all the way to design /

build / finance / operate. Very flexible.

Can use a number of revenue sources as repayment,

including revenue bonds, Grant Anticipation Notes, and tolls and fees.

Allows for ADOT to solicit projects,

but also receive unsolicited projects.

Gives ADOT significant authority

to enter into negotiations and agreements.

• Legislation details on P3 website . . .

The Perils of P3s

Public opposition to “selling” public assets Inadequate public debate – closed door deals Randolph-Sheppard Act Uncertainty about existing investment climate Extended negotiations

with no results

Opposition to tolls:

Public Trucking companies

ADOT’s P3 Principles

Develop a program based on

national Best Practices

Develop a transparent process for

the evaluation and implementation of P3 projects

Integrate P3 projects into statewide

transportation plans

Use P3 projects to better leverage

the State’s limited resources

Create P3 projects that are

financially viable over the long-term

Create P3 projects that will enhance

mobility and improve safety

P3 Program Framework

Very complex and outside normal course of

ADOT business

Take advantage of being relative late-comers by

using best approaches proven by others

Coach, quarterback and team

P3 Program Foundation

Consultant assisted in development of:

Articulating ADOT’s primary objectives in using public

private partnerships (P3s).

Developing RFPs for long term advisory services in

finance, legal affairs, engineering, and communications.

Rules, policies and procedures that ADOT will need to

implement the law (project procurement, for example).

Developing a website to inform the

public and potential private partners of P3 program progress.

Internal ADOT resources and

expertise necessary to manage P3 projects.

Current Efforts

Program Managers actively engaged – HDR and Jacobs. Hired

Nossaman as P3 legal advisor and PFM as P3 financial advisor. Will also hire a technical/engineering advisor.

Consultations with COGs, MPOs, local governments, developers,

etc.

Developing screening criteria for a combination of solicited

projects put forward by ADOT and unsolicited projects from private partners.

Interested in exploring P3s for rest areas, maintenance and

exploring renewables / solar aspects of each.

Interested in exploring P3s for other modes of transportation (rail,

transit). If successful in transportation, will be of interest for other government services (water, vertical construction, facilities, etc.).

Advisory Committee

ADOT P3 OFFICE

Gail Lewis, Director Deb Sydenham, Deputy Director

Advisory Committee External Review Team Policy feedback Review unsolicited projects phase II Solicited project development State Transportation Board Review overall program Place projects on STIP Award final contract(s) Outside Professionals Develop final policies Develop and update web site Conduct unsolicited proposal review phase I Conduct compete process for phase II Develop and prioritize solicited projects Negotiate and finalize projects Stakeholders Receive information updates Invited to attend public meetings Invited to send feedback via web Take larger role in projects in their communities Steering Committee (ADOT Internal Leadership Team) Consensus policy review Unsolicited project review Solicited project development Project interaction

Solicited Proposals

ADOT consultant team prepares initial list of criteria

with input from planning partners

ADOT and COGs/MPOs apply criteria to existing

projects, plans and future needs (including maintenance and related facilities such as rest areas, transit, rail, freight needs)

Consultant team reviews lists with the Steering

Committee and Advisory Committee

Stakeholder and public input is solicited Time passes…. Competitive procurement process is established by

consultant team

Competitive procurement is sought Board awards final contract

Unsolicited Projects

Phase I: Pass/Fail Phase II: Initial Evaluation Phase III: Final Evaluation ADOT controls the process, it

doesn’t control us

ADOT will charge administrative

fees adequate to cover our costs – initial fee will be $15,000

“Unsolicited” doesn’t mean

“undiscussed”!

ADOT will be an enabler of good

projects, not a cheerleader for bad

• nes

P3 Outreach

Adding web content regularly. Preliminary site is live on ADOT’s site with the following

information:

• Guiding Principles
• Bill Overview
• Process
• Projects
• Resources

this presentation program information sheet articles, links, etc.

• FAQs

Coming soon: Stakeholder outreach with email address and blast email capability P3Office@azdot.gov

www.azdot.gov/Highways/Projects/Public_Private_Partnerships

In Conclusion…

Failure could result in P3 capital moving away from

Arizona.

P3s are a long-term funding strategy, not an immediate

solution.

P3s are not THE answer, but another tool in our

transportation funding toolbox.

We only have one chance to do it right,

but one hundred chances to do it wrong – success is the goal!

Take Aways

Transparency Long-term financial viability Let’s do it right, not necessarily fast Multimodal and maintenance NOT just toll roads