Roger S. Moliere Chief, Real Property Management & Development
FTA – PPP WORKSHOPSSAN DIEGO, CA - JULY 7 – 8, 2009
IMPLEMENTATION OF PPPs FOR
TRANSIT
FINANCING TRANSIT PPPs
Los Angeles County Covers 4,084 Sq. Miles
● Total county population: 10.2 million – 88 cities - 5.1 million
– Los Angeles – 4 million
– Unincorporated county- 1.1 million
– Larger than 42 states (just behind Ohio)
Los Angeles County Metropolitan Transportation Authority (Metro)
regional transportationplanner;
regional builder; and the regional transit operator
…. for Los Angeles County.
Is different from other transit agencies because it is the . . .
73 Miles of Metro Rail – 63 Stations – 225 Rail Cars
447 Miles of HOV Lanes
Fiscal Year 2009 Operating Budget Resources $3.4 Billion
Passenger
Fares &
Advertising
10.3%
Net Proceeds
from Financing
.08%
Other
2.9%
Federal, State,
& Local Grants
22.0%
Local Sales
Tax, STA &
TDA
64.1%
Summary of Funding by Source (%)
Fiscal Year 2009 Operating Budget - Expenses$3.4 Billion
Streets &
H ighways
9.7%
Debt Service
9.4%
Other
Governmental
3.5%
M etro Bus
35.6%
M unicipal
Operator &
Paratransit
9.6%
Sales Tax
Local Return
8.9%M etrolink
1.8%
M etro Rail
21.5%
Summary of Expenses/Expenditures by Program (%)
“Measure R”
● ½ -cent local sales tax
● $35 – $40 billion over 40 years
Land Use/Transportation Challenge
● Adding 2 million more people to our urban landscape
● Development impacts transportation
● Building further out increases trip length, travel time and traffic impact on communities
● Sprawl reduces speed
Financial Challenge
While population and mobility needs continue to increase…
● Federal and state operating funds have declined
● Transportation capital and operating costs have increased
Public-Private Partnership
● Can private capital be leveraged to deliver and/or operate projects faster & cheaper
● Limited experience in the United States
Los Angeles County
Metropolitan Transportation Authority
METRO’SPUBLIC-PRIVATE PARTNERSHIP
PROGRAM
How Do We Increase Financial Capability?
● Activate potential new private sources
● Maximize leverage provided
● Maximize use of flexible and fungible revenue
● Minimize annual debt service payments
● Phase spending to reflect revenue
PPP Program Objectives
● Accelerating delivery to improve service
● Reducing costs through contracting and construction methods
● Develop projects integrated with existing transit/highway infrastructure
● Allocating risk
How Do We Begin?
● Metro retained program management and advisory consulting team
– InfraConsult LLC KPMG LLP
Nossaman LLP
Halcrow Inc.
Sharon Greene + Associates
Englander & Associates
● Initial activities underway– Primary screening criteria - LRTP and “Measure R”
– Preliminary screening of all projects
– Development of financial assumptions
– Readiness assessment Risk analysis Technical and operational considerations
Project Approach
● Projects with greatest likelihood of success:
– Clearly defined (i.e., draft EIR/EIS), high-priority, non-controversial project with demonstrated public sector commitment
– Fair risk allocation
– Transparent, well-defined procurement process, experienced public sector staff
Program Management
● Strategic planning and management
● Financial feasibility
● Technical business analysis
● Legislative analysis/remedies
● Risk assessment
● Strategic marketing/stakeholder outreach
Sector Roles and Responsibilities
● Public Partner – Project definition
– Environmental clearance
– Stakeholder support
– Political commitment
– Financial Feasibility
– Well-defined, transparent procurement process
● Private Partner – Project realization
– Funding/financing
– Design/construction
– Operation/management
PPP program
plan; Project
screening
criteria;
Evaluation
team
formation
Project
screening
from LRTP
project list
Comprehensive
analysis
Optimum
business case
model and
project
benchmark
criteria
Marketing,
industry
forum,
Develop
legslation
RFQ or EOI
Prepare
and Issue
RFP
ShortlistSelect
preferred
bidder
Contract
negotiation
PPP PROJECT SELECTIONPPP PROJECT DEVELOPMENT
AND DELIVERY
Project
selection/
Board
approval
Signed
contract;
Financial
close
TASK 1
Program
Development
TASK 2
Project
Screening
TASK 3
Strategic
Assessment
TASK 4
Business CaseTASK 5
Procurement
TASK 6
Concession &
Contract Agmts
Public Private Partnership (PPP) Process
Initial Program Activities