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Page 1: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions
Page 2: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Existing MDX Systemy

Page 3: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Proposed MDX SystemSystem

Page 4: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Project Development & MPO ProcessPLANNINGPLANNINGPLANNINGPLANNING MPO LRTPMPO LRTPMPO LRTPMPO LRTPPLANNINGPLANNINGPLANNINGPLANNING

PROJECT DEVELOPMENT PROJECT DEVELOPMENT & ENVIRONMENT& ENVIRONMENT

PROJECT DEVELOPMENT PROJECT DEVELOPMENT & ENVIRONMENT& ENVIRONMENT

MPO LRTPMPO LRTPMPO LRTPMPO LRTP

APPROVAL BY MPO APPROVAL BY MPO BOARD IN NOVEMBERBOARD IN NOVEMBER

APPROVAL BY MPO APPROVAL BY MPO BOARD IN NOVEMBERBOARD IN NOVEMBER& ENVIRONMENT & ENVIRONMENT

(PD&E) PROCESS(PD&E) PROCESS& ENVIRONMENT & ENVIRONMENT (PD&E) PROCESS(PD&E) PROCESS

FINAL DESIGN &FINAL DESIGN &FINAL DESIGN &FINAL DESIGN &

BOARD IN NOVEMBER BOARD IN NOVEMBER 20082008

BOARD IN NOVEMBER BOARD IN NOVEMBER 20082008

FINAL DESIGN & FINAL DESIGN & ENGINEERINGENGINEERING

FINAL DESIGN & FINAL DESIGN & ENGINEERINGENGINEERING

RIGHT-OF-WAY RIGHT-OF-WAY ACQUISITIONACQUISITION

CONSTRUCTIONCONSTRUCTIONCONSTRUCTIONCONSTRUCTIONCONSTRUCTIONCONSTRUCTIONCONSTRUCTIONCONSTRUCTION

OPERATIONS & OPERATIONS & MAINTENANCEMAINTENANCEOPERATIONS & OPERATIONS & MAINTENANCEMAINTENANCEMAINTENANCEMAINTENANCEMAINTENANCEMAINTENANCE

Page 5: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Economic Development BenefitsEconomic Development Benefits

The Washington Economics Group, Inc.

Page 6: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Characteristics of Miami-Dade’s Economy

• Modern logistics center: competition intensifying in XXI Century

Vi it Gl b l B i P d ti it– Visitors - Global Business - Productivity• Need for connectivity and mobility will increase

steadily through 2035steadily through 2035– Mobility from place of residence to place of work– Seaport connectivity to airport and new urban

tcenters– Airport, seaport connectivity to visitor destinations

MULTIMODAL SURFACE CONNECTIVITY AND MOBILITY ESSENTIAL FOR ECONOMIC DEVELOPMENT

Page 7: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Population and Employment Projections Indicate the Need to Improve Connectivity & Mobility

• Population growth of 43% expected between 2000 and 2030

From: 2.2 million To: 3.2 million• Household growth is expected to increase with

population an increase of 40% between 2000population – an increase of 40% between 2000 and 2030

From: 774,300 To: 1,084,900E l t th k ith• Employment growth keeps pace with population growth: 34% increase in jobs between 2000 and 2030, strongly points to

i d bili d i icontinued mobility and connectivity enhancement requirements

Source: Miami Dade Transportation Plan to 2030Source: Miami-Dade Transportation Plan to 2030

Page 8: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

New Large Employment Centers Will Develop Requiring Speed-to-Market Transportation for Connectivity Within

th S b R ithe Sub-RegionsConnectivity

Requirements*

Employment Growth

2000 2030

Population Growth

2000 2030

Estimated Population 2030Requirements 2000-2030 2000-2030 Population 2030

South 45% 83% 747,000

West 39% 44% 402,000

Northwest 33% 46% 619,000,

Beach / CBD 34% 41% 514,000

North 33% 24% 689,000

Central 30% 25% 258,000* Transportation Planning Areas: Arrows denote connectivity.

Page 9: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Implications of Sub-Regional Growth Patterns for MDX Future ProjectsPatterns for MDX Future Projects

Pop lation gro th is greatest in so thern and• Population growth is greatest in southern and western areas of Miami-Dade

J b h i d h h Mi i D d• Job growth is spread throughout Miami-Dade

• Job growth in north and central transportation planning areas exceeds population growth

• These patterns imply that demand for surface p p ytransportation to enhance mobility WILL increase significantly between now and 2035

Page 10: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Cutting-Edge Technology Must be Applied to Remain Competitivee a Co pet t e

• New and innovative technologies and gmethods include:– Open Road Tolling (ORT)– Open Road Tolling (ORT)

– Managed Lanes

– “Reversible” flow lanes

– Intelligent Transportation Systems to g p yidentify and address traffic disruptions

Page 11: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Future Projects

Page 12: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

SR 924 Extension West to the HEFT SR 924 East Extension to I-95

Page 13: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

North South Connector

Page 14: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

SR 874 Ramp Connector

Page 15: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

SR 836SR 836 Southwest ExtensionExtension

Page 16: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Truck way Connector Between Port of Miami and Airport/Medley Cargo Areap y g

Page 17: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

US-1 Managed Lanes from Kendall to Florida City

Page 18: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

US-1 Reversible Lanes from Kendall to I-95

Page 19: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

US 27- New Limited Access Facility(SR 826 to HEFT to Krome)

Page 20: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Managed gLanes System Master PlanMaster Plan

Page 21: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Traffic and Revenue Analysis

Wilbur Smith and Associates

Page 22: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Sketch Level Assessments

• WSA evaluated six potential projectsUpdated modeling on four

• WSA evaluated six potential projectsUpdated modeling on four– Updated modeling on four

– Extrapolations of previous studies on two• Preliminary Assessments

– Updated modeling on four– Extrapolations of previous studies on two

• Preliminary Assessments– More detailed analysis to come before project

implementation• Estimated traffic and revenue for each

– More detailed analysis to come before project implementation

• Estimated traffic and revenue for eachEstimated traffic and revenue for each project– 20 year forecasts

Included revenue from proposed facilities and

Estimated traffic and revenue for each project– 20 year forecasts

Included revenue from proposed facilities and– Included revenue from proposed facilities and revenue impacts on existing MDX expressways

• All projects assumed to use ORT

– Included revenue from proposed facilities and revenue impacts on existing MDX expressways

• All projects assumed to use ORT

Page 23: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

SR 924 Extension West to the HEFT

Weekday Traffic (Thousands)

LegendHEFT

00.000.0

- 2015- 2030

Weekday Traffic (Thousands)

Annual Revenue

17.030.7

HialeahGardens

2015 - $4.8 Million 2030 - $15.7 Million

Page 24: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

SR 924 Extension East to I-95

Annual Revenue

2015 - $28.1 Million2030 - $30.7 Million

Annual Revenue

73.295.0

North Ave.

LeJeune /Douglas

NW 27th

Ave.80.898.6

76.691.6

68.083.2

LegendExisting

Proposed

00.000 0

- 2015Weekday Traffic (Thousands)

00.0 - 2030

Page 25: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

North-South Connector

Weekday Traffic (Thousands)

Legend

21.230.0

51 400.000.0

- 2015- 2030

Weekday Traffic (Thousands)

NW 103rd St.

51.464.2

51.0

Annual RevenueNW 79th St.

63.4

61.476.3

2015 - $62.3 Million2030 - $80.6 Million

NW 54th St.

6 3

77.695.1

Page 26: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

SR 874 Ramp Connector

HEFT Existing

Proposed

Legend

00.000.0

- 2015- 2030

Weekday Traffic (Thousands)

29.038.0 Annual Revenue

SW 136th St.

2015 - $1.1 Million2030 - $1.6 Million

Page 27: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

SR 836 Southwest Extension

49.463.6

23.231.4

SW 137th Ave.Existing

Proposed

Legend

SW 8TH St.

SW 42nd St.

26.237.6

21 4

00.000.0

- 2015- 2030

Weekday Traffic (Thousands)

SW 88th St.

21.431.2

11.015.6 Annual Revenue

SW 104th St.

SW 136 St

15.6

3.26.0

2015 - $21.6 Million2030 - $29.1 Million

SW 136 St.6.0

Page 28: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

U.S. 1 Reversible Lanes from Dadeland South to I-95

Annual Revenue

2015 - $42.5 Million2030 - $99.8 Million

Annual Revenue

27.034.0

U.S. 1

HEFT22.835 6

33.241.2

34.0

L d

SW 152nd St.

19.4

27.546.6

35.6

00.000.0

- 2015- 2030

Weekday Traffic (Thousands)

Legend

13.028.0

40.0

U.S. 1 SouthSouth

Page 29: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Overall Summary of Impacts

• All projects would have a positive impact on MDX revenue

• All projects would have a positive impact on MDX revenue

• Total annual revenue impacts (all projects combined)– 2015 - $160 million

• Total annual revenue impacts (all projects combined)– 2015 - $160 million– 2015 - $160 million– 2035 - $300 million

Si ifi t i t i l bilit

– 2015 - $160 million– 2035 - $300 million

Si ifi t i t i l bilit• Significant impacts on regional mobility– Over 1 million annual hours of travel saved if all

projects implemented in 2015

• Significant impacts on regional mobility– Over 1 million annual hours of travel saved if all

projects implemented in 2015– Recent TTI study ranks Miami-Dade 11th most

congested area in US -- average driver loses 50 hours a year to congestion

– Recent TTI study ranks Miami-Dade 11th most congested area in US -- average driver loses 50 hours a year to congestion

Page 30: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

More Detailed Studies Still to Come

• As part of project planning and refinement

• As part of project planning and refinementrefinement

• Prior to actual project financingSt di ill i l d

refinement• Prior to actual project financing

St di ill i l d• Studies will include– Extensive market research

D t il d i l i

• Studies will include– Extensive market research

D t il d i l i– Detailed economic analysis– More detailed traffic modeling

T ll t ti i ti l i

– Detailed economic analysis– More detailed traffic modeling

T ll t ti i ti l i– Toll rate optimization analysis– Updated financial feasibility assessments

Risk analysis and more

– Toll rate optimization analysis– Updated financial feasibility assessments

Risk analysis and more– Risk analysis and more– Risk analysis and more

Page 31: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Project Implementation

Page 32: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Project Implementation

• Paving the Way– ORT Master Plan

• Established the framework for ORT, our spring board into the future

– Proven Ability

• Requirements for Implementationq p– Planning– Project Development– Permits and Approvals– Early Right-of-Way Acquisition / Partnerships

Page 33: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Project Implementation

• Project Delivery– Ability to deliver is dependent upon project b ty to de e s depe de t upo p oject

costs, revenues, timeline & funding.– Determine project delivery methods earlyp j y y

• Design/Bid/Build• Design/Build (DB)• DB Operate/Maintain/Finance• DB Finance

PPP t• PPP etc.– Match method to project goals

• Time/Risk/FinanceTime/Risk/Finance

Page 34: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Implementation Strategies and Financial OverviewOverview

Page 35: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Financial Challenges

• The investment required to maintain the MDX system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge

conditions and traffic levels of service remain the B l thi l l diti illsame, on average. Below this level, conditions will

deteriorate, and congestion will grow.

• The investment necessary to improve the MDX system is $9.5 to $10.0 Billion– “Improve” means that all additional spending on the MDX

system will have a positive benefit/cost ratio and will improve and support the future local economic outlook.

Page 36: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Debt Breakdown

Revenue Bonds $943.2

$1 Billion$1 Billion

Federal Grants 

$$

State Loans$61.2

$1.1

State Loans Federal Grants Revenue Bonds

Page 37: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Debt Service

2033-372038-39

2013 172018-222023-272028-32

Total Repayment

201020112012

2013-17 Total Repayment$1.8 Billion

200820092010

Total Interest PrincipalTotal Interest Principal

Page 38: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Financial Assumptions

• Debt coverage maintained at 1.50M i t i t dit ti• Maintain current credit rating

• ORT Implementation– Assuming an approximate calculated system wide

rate of 14 cents per mile• No rate increases• No rate increases• No managed lanes revenue• Issue debt over 30 year term• Issue debt over 30 year term• O&M adequate to maintain the system

conditioncondition

Page 39: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

$8 B $6.7 B$9.5 BillionFuture Projects

$8 BillionFunding Gap$6.7 Billion

P bli / P bli• Public / Public

• Public / Private

• User Fees

•836 SW Ext

•874 Connector

•924 East Ext

•924 West Ext

$2.8 B$2.8 BF di f

• Managed Lanes

• Pay as you go

•924 West Ext

•North/South Corridor

•US-1

•Potential ROW

$1.5 B$1.5 B

Funding from New Projects

$1.3 B$1.3 B

$250 M$250 M

New Projects• Planning• Limited R/W C t ti

$1.5 B$1.5 B•Truck way

ORT System-WideBonding

FY 2010 - 2012$950 M$950 M

• Construction

$700 M$700 M

- - - - - - - - - - - - - - - - - - - - - - - --I-95 Improvements•Kendall Drive 87409•SR 874 Ramp Connector•SR 874/826 Interchange•SR 836/826 Interchange

$100 M$100 M

$395 M$395 M5 Year PlanWP 2008 - 2012 5 Year Plan

924 ORT FY 2009$495 M$495 M

g•ORT Implementation•SR 836 Capacity Improve

Cost Bonding Power

Page 40: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Future Projects

Potential Bonding(In Millions)

Projects CostPotential Revenue

Bonding Capacity

836 SW Ext 1,300$ 21.6$ 160.0$ 874 Connector 154 1.1 8.8874 Connector 154 1.1 8.8 924 East Ext 323 28.1 224.8 924 West Ext 140 4.8 38.4 North/South Corridor 2,500 62.3 498.4 US-1 1,000 42.5 340.0 Truckway 1,400 Sub-total 6,817 160.4 1,270.4

Potential ROW 1,183

Transportation Needs 8 000$ 160 4$ 1 270 4$Transportation Needs 8,000$ 160.4$ 1,270.4$

Page 41: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Transportation Needs - $8.0 Billion

(Millions)

$1,300 $1 000

$1,400 $1,183 (Millions)

$154

$1,000

$323 $140 $2,500 836 SW Ext 874 Connector924 East Ext 924 West ExtNorth/South Corridor US-1Truckway Connector Potential ROW

Page 42: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Financing Strategies• Commitment to broaden the base of user fees through

Open Road Tolling (equitable tolling) • New revenue streams indexed to inflation to maintain

bonding power• Potential to increase bond terms from 30 to 35 years.• Dedicate % annual net revenues to short term highDedicate % annual net revenues to short term high

impact projects– Immediate operational improvements to the system– Completion of corridor improvements– Build up reserve for right-of-way acquisition

• Build in prudent flexibility• Consider a range of possible futuresg p• Alternative financing

– Public participation – Contractor financing g– Private sector participation

Page 43: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Financing Strategies Timeline

Short-Term Strategies: 2009 to 2012• Start to close revenue gap implementation of ORT

(equitable tolling)– New revenue streams indexed to inflationNew revenue streams indexed to inflation – Evaluate debt structure for potential savings/bonding capacity– Short term strategies must be implemented while long term

solutions are being developedsolutions are being developed

Midterm Strategies: 2010 to 2020– Broaden the base of user revenue to include managed lanesg– Prepare scenario to attract private and continue to strengthen

public financing support

Page 44: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Bonding Capacity

$1,600

$1 000

$1,200

$1,400

$600

$800

$1,000

$0

$200

$400

$030 Years 35 Years 40 Years

Future Project Revenue Bonding Ability

Page 45: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Financial Outlook

“You’ve got to be very realistic about whereYou ve got to be very realistic about where you are, but be very optimistic about

where you can go”where you can go

CEO Microsoft

Page 46: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

10 Minute Break10 Minute Break

Page 47: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Evaluating Financial FundingEvaluating Financial Funding Alternatives and Valuing Assets

September 25, 2007

Proprietary. Copyrighted By FSC, 2007

Public Private Partnership Group

Page 48: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Defining Objectives• Defining the objectives involves a number of

multi-faceted issues that in many cases are it tiiterative

• Primary catalysts for exploring financial lt tialternatives:

Short-term funding needs Long-term needsg

- Funding - Operational Improvementp p- Revenue Management- Inter-Governmental Issues

Page 49: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Analyzing Funding Alternatives

Traditional Tax Exempt

Bonds

Private Equity

State ProgramsFederal

Programs

Page 50: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Defining ObjectivesNon-Financial Considerations

• Review of the non-financial elements needs to be considered in deliberating the financing alternativesg g

ons Time Horizon

A t P f

onsi

dera

ti Asset Performance

Risk Aversion

Asset Control Spectrum

anci

al C

o

Human Resources

Identification of Responsibility

Use of Proceeds

Non

-Fin Use of Proceeds

Exit Strategy/Renegotiations

Page 51: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Ownership & Funding AlternativesAlternatives Financing Paths

Continued Ownership Asset Sale Concession Agreement

Partial Short-Term Existing Owner

Partial Ownership

(IPO)

Public/ Private

Oth

Retain an Interest

Public/ Private

Oth

No Ownership

Transfer

Other Govt.

Private

Other Govt.

Private

Maintain Existing System

Develop or Expand Additional

Assets

Maintain an Interest

Maintain an

Interest

Revenue Management

Decision

CDA/DBF Path

Page 52: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Defining Alternatives (Continuing Ownership)

Financial considerations in selecting alternativesFinancial considerations in selecting alternativesBenchmarking • Revenue Modeling

► Time HorizonT lli S h d l (C D i d d M i i i )► Tolling Schedule (Current, Desired and Maximization)

► Diversion► Elasticity► Inflation Rate► Sensitivity Analysis

Debt Capacity • Additional Bonds Test Limitationsebt Capac tyAnalysis

dd t o a o ds est tat o s• Desired rating level limitation• Interest Rate Assumptions• Timing of New Money IssuancesTiming of New Money Issuances• Lien Structure (Senior/Sub/Other)• Credit Enhancement Capacity (Concentration and Other Limitations))• Financing Risk (Fixed, Variable and Financially Engineered Products)• Valuing Coverage

Page 53: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Defining Alternatives (Continuing Ownership)

Expense Modeling

• Operational• Life Cycle Replacement

D fi i E i tiDefining Weighted Average Cost of Capital

• Existing• Current Market• Going Forward

p

Physical Condition of Asset

• Current• Needs Over Specific Time Horizons

Limitations of Existing Financial A t

• Existing Indenture• Flow of Funds • Governing Laws

Arrangementg

• Federal GrantsRating Impact • Revenue Constraints

• Reserve Fund RequirementsReserve Fund Requirements• Impact on Future Debt• Effects on the Overall Governmental Rating Outlook

Page 54: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Asset Sale & Long Dated ConcessionFinancial considerations related to potential Sale of an AssetAsset Definition

• Complete System• Partial System

Operational Standards• Operational Standards

Potential Acquirers

• Other Governmental Units• Private Entities• Combination

Analyzing the Value of the

• Creation of a Governmental Corporation • Issues that are important to the acquirer

Acquirerp q

Revenue Management Flexibility Operational ResponsibilityTaxes & Potential Tax BenefitsReturn to InvestorCompetitionAccess to Financing (Public and Private)Governmental Financing Vehicles (SAFETEA-LU, TIFIA, Others)Liability IssuesLiability IssuesEnvironmentalTort

Page 55: Future Projects Forum Presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4 billion over 25 years. – “Maintain” means that pavement and bridge conditions

Asset Sale & Long Dated ConcessionFinancial considerations related to potential Sale of an Asset

Determining • ComparablesSimilar TransactionsEconomic

ValueSimilar TransactionsMultiple of Revenues

• Replacement Cost• Discount Cash Flow

Finance Acquisition and Risk Profile

• Short-term• Permanent Financing• Willingness to Accept a Different Risk Profile on Revenue RealizationRevenue Realization

Payment Representation

• Defeasance Costs• Effect of State and Local TaxesRepresentation

and Items that Diminish Value

• Rate Stabilization• Competition (Myth or Reality)• Diversion Mitigation• Cost(s) to unwind transactionCost(s) to unwind transaction• Transaction Costs (Initial, Ongoing Monitoring, Potential Remediation)

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Sample Concessions

Time HorizonUnited States Transactions Foreign Transactions

Original Concession

Original Concession

ConcessionLength (Years) Concession

Length (Years)

Chicago Skyway 99 Toronto 407 99Dulles Greenway 40/60 Lane Cove Tunnel (Sydney) 33Indiana Toll Road 75 County Route (UK) 30Trans Texas Corridor (TTC-35) 50 Tube Lines (UK) 30Pocahontas 99 M6 (UK) 53SR-125 San Diego 35 CityLink (Austrialia) 27 to 33.5Route 495 Hot Lanes Virgina 60/75 Westlink M7 (Sydney) 34

M5 (Sydney) 30M2 (Austrialia) 33.5 to 42.5

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Timing and Selecting the Alternative

• Comparison of alternatives► Assumption homogenization► Understanding and valuing risks

• Testing the Market► Acceptance of Asset► Depth and Breadth of Market

• Scope of Projects Identifiedp j

• Right-of-Way Acquisition

• Environmental Approval

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Closing• Second most important decision regarding the asset

after the decision to build or acquire the asset initially.• This is a dynamic process that evolves over time withThis is a dynamic process that evolves over time with

many steps. Process may be iterative.• Requires a disciplined approach on comparison of

alternativesalternatives.• Most likely regardless of the decision, the decision

makers will be viewed as responsible for the asset one way or another over the life of the assetway or another over the life of the asset.

• If entering into a public private transaction, be prepared to revisit or negotiate the sale or concession

• If retaining an asset, revisit performance periodically to see if asset is being managed consistently with the decision to retain the asset.

• Be prepared for ongoing costs in monitoring the performance of the asset.

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Industry Inputy p

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Moving Forward

PROJECTS

COLLABORATIVE EFFORTS

FUNDING TOMEET

VISION MISSION EFFORTSVISION-MISSION