PPP - FDOT Teams Update
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  • What's NOT NEW –CASH MANAGEMENT In our Tool Box for financing Transportation Projects, we have lots of CHOICES. Some are used on a PROGRAM BASIS, some are used on a PROJECT SPECIFIC basis. General Public DEMAND for our services are continuing to INCREASE and while more funds may be the preferred option, we also need to look at being more EFFICIENT AND EFFECTIVE with the funds we have. In Florida, we have had to look beyond PAY-AS-YOU-GO.
  • LOAN PROGRAMS: Toll Facilities Revolving Trust Fund (TFRTF) Loans State Infrastructure Bank (SIB) Loans State Transportation Trust Fund (STTF) Loans Local Government Loan Program Transportation Infrastructure Finance and Innovation Act (TIFIA) BONDING PROGRAMS: State-funded SIB – 1 st in Country to Bond SIB Private Activity Bonds Right of Way Acquisition/Bridge Bonds Fixed Guideway Bonds Turnpike Bonding Program Grant Anticipation Revenue Vehicles (GARVEE) Bonds FEDERAL-AID MATCHING REQUIREMENTS Flexible Match and Soft Match and * Shared Resources OTHER INNOVATIVE FINANCING OPTIONS: Advanced Construction (In Florida, we can now use Private Sector Funds for Advancing a project in our Work Program) Toll Facility Lease Purchase Agreements Value Pricing and Express Lanes Local Option Gas Taxes Local Government Infrastructure Surtax TRANSPORTATION INCENTIVE PROGRAMS
  • FINANCIAL PROVISIONS in HB 985 that the FINANCE TEAM is reviewing and working on. Some of these provisions we may have some of the answers and some of these we are analyzing to get the “right” answer for FL DOT! Leasing – WHERE the DEPARTMENT IS!!!! The Department will analyze each existing asset to determine the feasibility of leasing with specific attention to the lease being in the best interest of the public, being a cost effective approach for the facility and in conjunction with the interest of our local partners in the geographic area where the facility is located and executive leadership of the state.
  • Cost Effectiveness Study – VALUE for MONEY – Used to determine best approach to timely delivery of asset, determines financial capacity and gap HB 985 requires that the department shall provide an independent analysis of the proposed P3 that demonstrates the cost-effectiveness and overall public benefit at the following times: PRIOR to moving forward with the procurement and If the procurement moves forward, PRIOR to awarding the contract
  • Indexing of the Toll Rates – We are open for input as we work out the appropriate index factor for P3s
  • POMT – DEAL with the Concessionaire is an AVAILABILITY Payment – Their payment is based on them having the tunnel open to traffic. Availability Payment – Amount will be based on level of service provided Availability Payments – We’ve learned a lot from the POMT – WILL continue to learn from the projects and the process
  • Structure of Security Package – Will consider all options –Department will balance the structure of the security package for the P3 that ensures performance and payment of subcontractors with the cost of the security to ensure that the most EFFICIENT pricing.
  • P3 agreements – shall be limited to a term not exceeding 50 years. The Secretary may authorize up to 75 years. Legislature may approve greater than 75 years. NO more than 15 percent of total federal and state funding in any given year for the STTF shall be obligated collectively for all projects. - AMOUNTS to around $1B per year LIMIT.
  • Each Project such as the First Coast Outer Beltway, will have a financial on board advising the Department CO is contract manager, districts will task order and handle invoices LEGAL TEAM will include local and IN- house counsel . These firms will be used to support specific P3 projects. 7 Firms are: Jeff Parker and Associates, Inc. Pricewaterhouse Coopers LLP KPMG Corporate Finance LLC Infrastructure Management Group, Inc. Deloitte Financial Advisory Public Financial Management, Inc. Goldman Sachs
  • DEAL must fit the project - FCOB will use VALUE for money and not use shadow tolls or availability payment Remain focused on what is best for the public: win-win, transparent Post any Boilerplate Language on the P3 website
  • THANK YOU!

PPP - FDOT Teams Update PPP - FDOT Teams Update Presentation Transcript

  • P3 Teams Update: Procurement Team Engineering and Operation Team Financing Team July 11, 2007
  • Procurement Team Ruth Dillard Director, Office of Administration July 11, 2007
  • PPP Goals
    • Procure services, not assets, from private sector
    • Require output terms as part of each PPP Procurement providing opportunity for innovation and risk transfer
    • Bundles include Design-Build-Finance at a minimum, and where appropriate, Operations-Maintenance, resulting in an Integrated, Efficient, Service Delivery
    • Project partially or fully financed by private sector
    • Risks allocated to party best able to manage them
  • FDOT Procurement Successes
    • Outsourcing transportation projects since the 1960s
    • Construction Outsourcing composed of:
      • Building roads and bridges – 100% outsourced
    • Maintenance Outsourcing – 80% outsourced
    • Engineering Service – 80% outsourced
  • PPP Foundation
    • Well-Established FDOT Procurement Processes
    • Construction, Design/Build, Professional Services and Asset Maintenance
    • Rules
    • Procedures
    • Refined and improved over the years as more and more processes have been done
    • Input from internal and external customers
  • 2 Triggers for P3s
    • Solicited Proposals
    • Unsolicited Proposals
  • Solicited PPP Proposals
    • Design/Build and Asset Maintenance procurement processes solid foundations to build upon
    • DOT will advertise projects utilizing established processes
    • - Contracts Administration website: http://www.dot.state.fl.us/cc-admin/
    • - Procurement website: http://www.dot.state.fl.us/procurement/
    • Firms not prequalified may be qualified via the procurement process
  • Solicited PPP Proposals (continued)
    • Transparent Process
    • Sunshine Law applies, except:
      • 10 days after Proposal is received
      • Exempt items such as company financial statements
    • Time Added from Short-List and Issuance of RFP for Interaction Between Teams and FDOT on Draft Documents and Technical Issues
  • Solicited PPP Proposals (continued)
    • One on Ones will occur during this time for discussion, not decision-making
    • Fair, Open, and Competitive
    • Best Value Approach
  • Unsolicited PPP Proposals
    • What is Different?
    • Please talk to FDOT prior to a submittal of unsolicited proposal
    • May submit a concept proposal, provided FDOT can determine the project being proposed
    • When unsolicited proposals are submitted - $50,000 fee required
  • Unsolicited PPP Proposals (continued)
    • DOT will publish notice in the Florida Administrative Weekly AND newspaper of general circulation at least once a week for 2 weeks and accept proposals for 120 days after initial publication
    • Substantial deviation from project purpose requires permission
    • Teams submitting proposals must meet minimum qualifications, which the Department will publish
  • Strict Procurement Process
    • RFQ Issued
    • “ Cone of Silence”
      • Once RFQ is issued, FDOT will not talk about or take comments from one proposer about another proposer
      • “ Cone” covers Evaluation Team members, Selection Team members, those “Up Line”
    • DOT will evaluate the submitted information
  • Strict Procurement Process (continued)
    • Firms will be short-listed
    • Short-listed firms will be posted
    • Request for Proposals will be issued to short- listed firms
    • Proposals move to “Sunshine” after 10 days
  • Strict Procurement Process (continued)
    • Once in the Sunshine, all non-exempt information subject to review
    • Proposals will be evaluated
    • Proposals will be ranked
    • DOT will finalize the agreement
  • Ethics Policy Considerations
    • FDOT employees not allowed to take ANY gift or benefit from a company doing business with or seeking to do business with FDOT.
  • Final FDOT PPP Procurement Vision
    • Open, Fair, Competitive Process
    • Draft process today, open for input
    • Evolution into standard process
    • PPP Procurement Questions:
    • Ruth Dillard – [email_address]
    • Juanita Moore – j [email_address]
  • Engineering and Operations Team Ananth Prasad Chief Engineer July 11, 2007
  • Engineering and Operations Task Team
    • Objective to “mainstream” P3s by
      • Developing Policies and Procedures
      • Boilerplate documents such as RFP, Technical Requirements.
    • While recognizing that these documents are “living” documents and will change as we continue to learn from such projects.
  • Technical Requirements
    • Being developed by the various disciplines within the Department (i.e. Roadway Design, Pavements, Structures, Construction, Maintenance, etc.)
    • FDOT has extensive Design-Build and Warranty experience.
  • Technical Requirements
    • Design Criteria
    • Construction Criteria
    • Alternative Technical Concepts
    • Maintenance and Handback Requirements
    • Oversight Role
      • Owner/FHWA
  • Technical Requirements
    • General Philosophy is that our standards and specifications are the baseline.
      • Use the Alternative Technical Concept Proposals to submit innovative ideas.
      • Be open minded on ATCs.
    • Allow choices to be made on Life Cycle Analysis
      • Asphalt pavement vs. Concrete Pavement
      • Concrete Bridge vs. Steel Bridge
      • Median Guardrail vs. Median Concrete Barrier Wall
  • Alternative Technical Concepts (ATC)
    • The ATC process allows proposers to incorporate innovation, flexibility, creativity and construction time and cost savings into the design and construction of a project and to obtain the best value for the public.
    • ATC’s are accepted by the Department at their discretion.
  • Alternative Technical Concepts
    • The RFP indicates ATC areas that are off limits. Any proposed changes shall provide a solution that is equal or better to what is required by the RFP as determined by the Department.
    • A concept is NOT an ATC if it reduces quality, performance, or reliability.
    • Strict confidentiality shall be maintained during the ATC review process through meetings.
  • ATC Submittals
    • ATC Submittals need to include information such as:
      • Description
      • Usage – How being used?
      • Explain deviations from the RFP
      • Analysis justification
      • Impacts
      • Risks
      • Quality
      • Changes to Operations and Maintenance
  • ATC Advantages
    • Promotes innovation and taps expertise
    • Can result in reduction of project costs
    • Justifies the stipend for unsuccessful proposers when their ideas can be incorporated
    • Provides the Owner with new ideas, techniques, or materials to use in future projects
  • ATC Disadvantages
    • Be careful not to accept proposals that cut the scope (i.e. drop lanes, reduce shoulder widths, delete components)
    • Can make comparison of proposals somewhat difficult
    • Typically adds an extra month to the proposal process
  • Concessionaire’s Oversight Role
    • Complies with the Approved Project Management Plan (PMP)
    • Complies with all Contract Requirements
    • Signs and Seals all Engineering Drawings
    • Self-Reports on Non-Compliance (monitoring compliance)
    • Conducts Inspection Testing and Acceptance
  • Owner’s Oversight Role
    • Monitors the Concessionaire’s Compliance with Concession Agreement
      • Conformance to the PMP
      • Public and End User Safety
      • Monitors Project Performance Over Term of Concession Agreement
      • Handback Standards (Residual Life Expectancy)
  • Owner Oversight Philosophy
    • Owner will have oversight commensurate to the concession period
      • Every contract will have some oversight.
    • Use Department’s process for Disputes Review Boards to resolve disputes.
  • Owner/FHWA Oversight Philosophy
    • Materials Testing
      • DOT’s Contractor Quality Control (QC) Model
        • Open to ATC such as ISO Accreditation, Different QC Model.
      • Owner reserves the right to perform independent tests
        • No set frequency but commensurate with history of results and risk.
        • Failing tests requires resolution.
  • Maintenance Requirements
    • FDOT has extensive experience in Asset Management and Asset Maintenance Contracts.
    • Asset Maintenance Contract criteria to be included
      • Criteria is performance based.
  • Maintenance Requirements
    • Should cover the following areas and more:
      • Customer Response
      • Incident Response
      • Roadway (Potholes, Raveling, Shoving, Depressions, etc)
      • Roadside (Unpaved Shoulders, Slopes, Fence, etc)
      • Traffic Services (Striping, Pavement Markings, Guardrail, Signs, Lighting, etc)
      • Drainage (Cross drains, ditch, inlets, sweeping, etc)
      • Vegetation and Aesthetics (Mowing, Litter, Tree Trimming, Turf, etc)
      • Bridge Condition
      • Signals
      • ITS
  • Major Repairs/Rehab
    • Pavements
      • Pavement Conditions Surveys (every year)
        • Flexible Pavement are rated for Rutting, Ride, and Cracking on a scale of 0 (worst) to 10 (best). Rigid Pavement are rated on defect and ride.
        • Pavement segments with any rating of 6.4 or below are classified deficient and require replacement.
    • Structures
      • Bridge Condition Survey (every 2 years)
        • Bridge Condition Index should always be 6 (satisfactory) or higher
          • Structural Elements shows minor deterioration
  • Handback Requirements
    • The terms, conditions, requirements and procedures governing the condition in which Concessionaire is to deliver the Project and Project Right-of-Way to the Owner upon expiration or earlier termination of the Agreement and Lease, as set forth in the Technical Requirements.
  • Handback Requirements
    • Renewal Work Schedule – each year before Handback
      • Concessionaire’s calculation of Residual Life
      • Estimates cost of the Renewal Work
    • Major Residual Life Categories
      • Pavement
      • Structures
      • Building and Maintenance Facilities
      • Toll Collection and Traffic Management Facilities
      • Drainage
      • Safety Appurtenances
  • Handback Requirements
    • Develop Residual Life Methodology
    • Perform Residual Life Inspections
      • First Inspection – Between 58 and 62 months before Handback.
      • Second Inspection – Between 15 and 18 months before Handback.
      • Final Inspection – Not later than 90 days before Handback.
  • PPP Guidelines
    • The Guidelines will document
      • the Department’s activities with respect to implementing P3 projects.
    • The manual will consist of sections that focus on the procurement process, from the planning phase through final award of the project.
    • The goal is for the Department and the Industry to be aware of the major considerations involved in the process and to promote the consistency necessary to ensure the best value statewide.
  • PPP – Engineering Issues
    • Finally, we would like to hear your thoughts and comments.
      • Ananth Prasad
      • (850) 414-5240
      • [email_address]
  • Financing Team Marsha Johnson, CPA Director, Office of Financial Development July 11, 2007
  • Finance Presentation
    • What’s “Not” New with P3
    • Alphabet Soup
    • What’s “New” with P3
    • Summary
  • Cash Management
    • FDOT utilizes various cash management techniques to manage revenues and expenditures
    • Cash management techniques include INNOVATIVE FINANCE TOOLS
    • We call it “The Tool Box”
  • Innovative Financing Tools
    • Federal Flexibility
    • Reasonable Level of Bonding
      • Turnpike Revenue Bonds
      • Right of Way and Bridge Bonds
      • GARVEE Bonds
      • Seaports Bonds
    • State Infrastructure Bank
    • P3 – Public-Private Partnerships
    • Other Innovative Financing Options
  • Public Private Partnership (PPP, P3)
    • Contractual agreement between public and private partners which allows more private sector participation than traditional contracting.
    • Alphabet soup construction
      • D-B (design-build)
      • D-B-B (design-bid-build)
      • D-B-F (design-build-finance)
      • D-B-O-M-F (design-build-operate-finance)
  • HB 985 Financial Policies
    • Leasing of Existing Toll Facilities and P3s
      • Allows Existing FDOT Facilities to be Leased to a P3, except the Turnpike
      • Leases of Existing Toll Facilities must be approved by the Legislative Budget Commission Prior to Awarding a contract
      • Allows P3 to Deliver New Toll Facilities
  • HB 985 Financial Policies
    • Policies on All Toll Facilities
      • Toll Rates Regulated by FDOT through Concession Agreement
      • Requires FDOT to Receive a Portion of the Excess Revenues as Part of the Agreement
      • Provide Investment Grade Traffic and Revenue Study and detail Finance as part of the Proposal
  • HB 985 Financial Policies
    • Cost-effectiveness and Overall Public benefit Study
      • Value for Money analysis
      • Prior to moving forward with the procurement
      • Prior to awarding the contract
      • Independent Financial Advisor Will Perform
  • HB 985 Financial Policies
    • Indexing of the Toll rates
      • Index to Annual Consumer Price Index or Similar Index
      • No more Frequently than Once a year and
      • No Less Frequently than once Every 5 years
  • HB 985 Financial Policies
    • Availability Payments/Shadow Tolls
      • Allows for Payments based on Availability of Facility or based on the level of traffic using the facility
      • Payments included in the Work Program and Long-Range Plan ahead of New Capacity Projects
      • Subject to Annual Appropriation by the Legislature
  • HB 985 Financial Policies
    • Link of Project Development and Financial Policies
      • P3 projects Must Meet All Planning and Environmental Requirements Before Moving Forward
      • FDOT will Normally develop Project to Completion of Environmental Clearance
      • Will Ensure Project is Supported and Well Developed
  • HB 985 Financial Policies
    • Financial Security Package
      • Allows Use of Flexible Approach to Secure Delivery of Project
      • Includes Combination of Surety Bonds, Letters of Credit, Parent Company Guarantees and Related Items
      • Balance the Structure of the Security Package for the P3 that Ensures Performance and Payment of Subcontractors with the cost of the security to ensure the most efficient pricing.
  • HB 985 Financial Policies
    • Terms at 50, or up to 75 Years
    • Limit on FDOT Funds for P3s
    • Clarifies FDOT may use innovative financing techniques such as hedges associated with P3s
  • Financial Advisor Update
    • Financial Advisory Experts
      • Seven Short-listed
      • Will Narrow to Three, then to One for Each New P3 Project
      • Also, Advise on Overall Process
      • Will Work Closely with Legal Team who will be Experienced in P3 Transactions
  • Summary
    • The “Deal” must fit the project!
    • Help develop an understanding and knowledge on P3s
    • Help define common sense rules, bench mark on the best approaches for successful P3s
    • Remain focused on what is “ best ” for the public
  • PPP – Finance Issues
      • Marsha Johnson
      • (850) 414-4647
      • [email_address]
      • presentationsp3FTBA P3 Team Update.ppt
    Questions or Comments?