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- 1. Government Relations Committee – April 16, 2015 Rebuilding Our Infrastructure Political, Jurisdictional & Funding Challenges Dr. Julius Chang, P.E. Columbia University HDR Photo Credit: New York State Thruway Authority
- 2. Government Relations Committee – April 16, 2015 Outline • Overview of Institutions • “Fragmented” Examples • Funding Challenges – Era of High Deficits – Demographics • Some Recommendations – Project Evaluation – Alternate Delivery Methods
- 3. Government Relations Committee – April 16, 2015 Infrastructure Institutions
- 4. Government Relations Committee – April 16, 2015 Some Regional Agencies • MTA • Long Island Rail Road • Metro-North Railroad • NY City Transit • MTA Capital Construction • MTA Bridges & Tunnels • MTA Bus • Port Authority of NY & NJ • Aviation • Port Commerce • PATH • Tunnels, Bridges & Terminals • NYSDOT • NYCDOT • NY City Economic Development Corp. • Empire State Development • NJDOT • NJ Turnpike Authority • NJ Transit • NY City Dept. of Environmental Protection • NY City Dept. of Sanitation • USDOT • FHWA • FTA • US Army Corps of Engineers • US Environmental Protection Agency • National Parks Service
- 5. Government Relations Committee – April 16, 2015 Multi-Layered • Three Layers of Government • Public Authority -Port Authority -MTA • Institutional “Fragmentation”
- 6. Government Relations Committee – April 16, 2015 Transportation (USDOT) • Federal Agencies Provide $ & Support • Congress Appropriates $ • National Transportation Policy (?) • Vast Majority of Highways & Roads Owned & Operated by State/Local Govt.
- 7. Government Relations Committee – April 16, 2015 US DOT
- 8. Government Relations Committee – April 16, 2015 • Focus Upon Safety & Technology • Provides Financial & Technical Support • Annual Budget > $50 Billion • Field Office in Each State
- 9. Government Relations Committee – April 16, 2015 FTA • Provides Aid to Support Public Transit Services • Annual Budget @ $18 Billion (requested) • Mass Transit Projects in NY
- 10. Government Relations Committee – April 16, 2015 NYSDOT Transportation System • Highway System Handles Over 100 Billion Vehicle Miles • 110,000 Highway Miles & 17,000 Bridges • 5,000 Mile Rail Network • 456 Public & Private Aviation Facilities • 5 Major Ports
- 11. Government Relations Committee – April 16, 2015 NYCDOT • Manages City’s Streets, Highways, Sidewalks & Bridges • Does NOT Oversee Capital Construction (DDC Responsibility) • Does NOT Operate Buses, Rail, Subways • Does NOT Manage All Bridges/Tunnels
- 12. Government Relations Committee – April 16, 2015 Public Authority The term refers to those organizations, created by local, state or national statutes which are partially independent of elected officials in their formal structure and in their gathering and use of funds.
- 13. Government Relations Committee – April 16, 2015 Public Authorities • Some 6,000 state & local authorities in US • Legal autonomy -separate corporate status • Financial autonomy -user fees • Administrative autonomy -own personnel & pay systems
- 14. Government Relations Committee – April 16, 2015 Port Authority
- 15. Government Relations Committee – April 16, 2015 World Trade Center Site http://blog.archpaper.com/wp-content/uploads/2014/09/13-MemorialPlazaAerial-CreditSilversteinPropertiesInc.jpg
- 16. Government Relations Committee – April 16, 2015 MTA Organization 6 Operating Agencies • NYC Transit • LIRR • Metro-North • Bridges & Tunnels • Capital Construction • MTA Bus
- 17. Government Relations Committee – April 16, 2015 MTA Facts & Figures 2014 Operating Budget $13.6 Billion Average Weekday Ridership 8,552,646 Rail and Subway Lines, and Bus Routes 345 Rail and Subway Cars 8,778 Buses 5,701 Track Miles 2,047 Bus Route Miles 2,858 Rail and Subway Stations 736 Employees 65,150 Source:www.mta.info
- 18. Government Relations Committee – April 16, 2015 Mega-Projects
- 19. Government Relations Committee – April 16, 2015 Fragmented Infrastructure Some Examples
- 20. Government Relations Committee – April 16, 2015 High-Speed Rail A Federal-State Divide
- 21. Government Relations Committee – April 16, 2015 Turf Battles
- 22. Government Relations Committee – April 16, 2015 No One Seat Ride
- 23. Government Relations Committee – April 16, 2015 MTA NYCDOT PA
- 24. Government Relations Committee – April 16, 2015 “Bridge Shopping” http://www.econlife.com/congestion-pricing-through-new-nyc-bridge-tolls https://thenypost.files.wordpress.com/2014/03/103112queensboro4tb_68056969.jpg
- 25. Government Relations Committee – April 16, 2015 Financing
- 26. Government Relations Committee – April 16, 2015 Current Environment • Era of high deficit spending • Argue against paying for infrastructure while still demanding its services • Aversion to Higher Taxes – Gas tax “third rail” • Aversion to “foreign ownership” of public infrastructure
- 27. Government Relations Committee – April 16, 2015 Typical Sources • Current Revenue -taxes -user fees -other • Debt -general obligation bonds -revenue bonds -project bonds • Government Grants -FHWA, FTA
- 28. Government Relations Committee – April 16, 2015 Road Finance • Local Roads- Property Tax • Highways – Fuel Tax -Federal Tax:18.4 cents/gallon • Fuel Tax Levied on Volume, Not Price • Sales Tax by Voter Initiative
- 29. Government Relations Committee – April 16, 2015 • Mandatory – Social Security – Medicare • Discretionary – Defense, Transportation, etc. • Interest on Debt Federal Budget
- 30. Government Relations Committee – April 16, 2015 Federal Budget Source:www.nationalpriorities.org
- 31. Government Relations Committee – April 16, 2015 A Widening Gulf
- 32. Government Relations Committee – April 16, 2015 Federal Budget
- 33. Government Relations Committee – April 16, 2015 Simple Demographics Source: US Census Bureau
- 34. Government Relations Committee – April 16, 2015 U.S. Downgrade
- 35. Government Relations Committee – April 16, 2015 Some Thoughts & Recommendations
- 36. Government Relations Committee – April 16, 2015 How can we more effectively engage the engineering community in the infrastructure discourse?
- 37. Government Relations Committee – April 16, 2015 Trends “America’s tax problem is less the public’s obstinate refusal to pay more taxes than its disenchantment with the capacity of the public sector to deliver public goods.” “The federal budget embodies priorities that cannot garner enough public support to pay for them. The political system has nevertheless failed to alter its priorities or to improve its efficiency. A chronic and swelling fiscal deficit is the result.” David P. Calleo, The Bankrupting of America, 1992
- 38. Government Relations Committee – April 16, 2015 Trends “The United States is one of the few countries in the world to make the majority of its transportation investments without first conducting any kind of economic analysis to determine whether those investments will have any practical benefits for commuters and shippers. The results are telling.” Mary Peters, Former U.S. Secretary of Transportation Source: The New York Times
- 39. Government Relations Committee – April 16, 2015 Worthwhile Investment? Net Present Value C0 C3 C6C5C4 Cn NPV = C0 + C1 + C2 + C3 . . . Cn (1+r) (1+r)2 (1+r)3 (1+r)n C2C1
- 40. Government Relations Committee – April 16, 2015 Benefits & Costs • Financial – Net Revenues • Economic – Regional Growth/development – Time savings for travelers – Logistics cost savings for freight • Social/Environmental – Noise/air pollution remaining residents – Loss of Habitat • Safety – Reduction in Accidents
- 41. Government Relations Committee – April 16, 2015 • Net Present Value • Internal Rate of Return • Benefit Cost • Cost Effectiveness Project Evaluation Techniques
- 42. Government Relations Committee – April 16, 2015 Project Delivery Contracts DBB CM DB DBO DBFO Owner Designer Builder Owner Designer Builder Owner Designer Builder Operator Owner Designer Const Mgr Builder A Builder B Owner Designer Builder Operator Financier Owner Designer Const Mgr Builder A Builder B Agent At-Risk
- 43. Government Relations Committee – April 16, 2015 Project Delivery Contracts DBB CM DB DBO DBFO Owner Designer Builder Owner Designer Builder Owner Designer Builder Operator Owner Designer Const Mgr Builder A Builder B Owner Designer Builder Operator Financier Owner Designer Const Mgr Builder A Builder B Agent At-Risk
- 44. Government Relations Committee – April 16, 2015 Infrastructure Investment “Infrastructure is a multi-trillion dollar global marketplace with enormous needs for private investment.” -Henry R. Kravis
- 45. Government Relations Committee – April 16, 2015 Public-Private Partnerships
- 46. Government Relations Committee – April 16, 2015 One Definition Public-Private Partnerships (PPP) refer to the joint funding and operation of infrastructure projects between public and private entities. A Brownfield PPP refers to the lease of an existing asset while a Greenfield PPP refers to the development of a new asset.
- 47. Government Relations Committee – April 16, 2015 Old London Bridge
- 48. Government Relations Committee – April 16, 2015 Recent Examples
- 49. Government Relations Committee – April 16, 2015 Recent Examples • Chicago Skyway -99-year, $1.8B lease • Indiana Toll Road -75-year, $3.8B lease • Scuttled Deals -PA Turnpike -New Jersey Turnpike -Garden State Parkway
- 50. Government Relations Committee – April 16, 2015 Growing Appeal • Budget Shortfalls • Attractive Investments -Long-Term, Predictable Cash-flows -Yields Between Stocks and Bonds
- 51. Government Relations Committee – April 16, 2015 Potential “Win-Win” • For Private Sector: - steady annual cash flows - asset depreciation for tax purposes • For Public Sector: -flexibility with proceeds -greater upfront proceeds -strict O&M standards
- 52. Government Relations Committee – April 16, 2015 How it Works 2 2 C.J. Leslie NYSDOT TDP Symposium March 8, 2006
- 53. Government Relations Committee – April 16, 2015 Legal Framework Project Implementation P3 Process Enact enabling legislation Design the concession agreement • Financial & economic analysis • Public-private risk sharing •Bid process Solicit Bidders Select Concessionaire Negotiate and execute the concession contract
- 54. Government Relations Committee – April 16, 2015 Making it Work The procurement process is the best opportunity to build the working partnership between the public and private entities.
- 55. Government Relations Committee – April 16, 2015 Spheres of Influence Community Users DeveloperOwner or Authority Financial Investors Area of Overlapping Goals
- 56. Government Relations Committee – April 16, 2015 PPP (P3) Considerations • What are the public policy implications? -rate & magnitude of toll increases -safety & environmental concerns -status of public employees • What authority is relinquished? • What is appropriate term of concession?
- 57. Government Relations Committee – April 16, 2015 Recap • “Fragmented” Institutions lead to Fragmented Infrastructure • Funding Issues – >2/3 Federal Spending on Autopilot – 1 out of 5 Americans >65 by 2030 • Looking Ahead – Project Evaluation – Alternate Delivery Methods
- 58. Government Relations Committee – April 16, 2015