future projects forum presentation 9-25-07 · system is $2.4 billion over 25 years.system is $2.4...
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Existing MDX Systemy
Proposed MDX SystemSystem
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
Economic Development BenefitsEconomic Development Benefits
The Washington Economics Group, Inc.
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
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
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.
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
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
Future Projects
SR 924 Extension West to the HEFT SR 924 East Extension to I-95
North South Connector
SR 874 Ramp Connector
SR 836SR 836 Southwest ExtensionExtension
Truck way Connector Between Port of Miami and Airport/Medley Cargo Areap y g
US-1 Managed Lanes from Kendall to Florida City
US-1 Reversible Lanes from Kendall to I-95
US 27- New Limited Access Facility(SR 826 to HEFT to Krome)
Managed gLanes System Master PlanMaster Plan
Traffic and Revenue Analysis
Wilbur Smith and Associates
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
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
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
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
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
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
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
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
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
Project Implementation
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
•
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
Implementation Strategies and Financial OverviewOverview
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.
Debt Breakdown
Revenue Bonds $943.2
$1 Billion$1 Billion
Federal Grants
$$
State Loans$61.2
$1.1
State Loans Federal Grants Revenue Bonds
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
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
$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$495 M
g•ORT Implementation•SR 836 Capacity Improve
Cost Bonding Power
Future Projects
Potential Bonding(In Millions)
Projects CostPotential Revenue
Bonding Capacity
836 SW Ext 1,300$ 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$
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
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
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
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
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
10 Minute Break10 Minute Break
Evaluating Financial FundingEvaluating Financial Funding Alternatives and Valuing Assets
September 25, 2007
Proprietary. Copyrighted By FSC, 2007
Public Private Partnership Group
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
Analyzing Funding Alternatives
Traditional Tax Exempt
Bonds
Private Equity
State ProgramsFederal
Programs
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
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
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
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
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
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)
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
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
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.
Industry Inputy p
Moving Forward
PROJECTS
COLLABORATIVE EFFORTS
FUNDING TOMEET
VISION MISSION EFFORTSVISION-MISSION