Pennsylvania Public-Private Transportation Partnerships (P3)overview

Pennsylvania Department of Transportation

Pennsylvania Public-Private Transportation Partnerships (P3) Michael Bonini, Director Pennsylvania Public-Private Transportation Partnerships Office

www.P3forPA.pa.gov www.P3forPA.com

What is a P3 Project?

• A P3 project is a contractual agreement between a public entity and private entity that: – Transfers responsibility of a facility’s engineering, construction, operation and/or maintenance to the private sector for a defined period of time; – Allows the private sector to perform by contract a service previously provided by the public sector; and – Ensures the private firm receives payments either from existing revenue sources or through the collection of new tolls or user fees. www.P3forPA.com

Goals of Public-Private Partnerships Accelerate the delivery of transportation projects Deliver on-time, on-budget projects at rates higher than traditional delivery Access private sector skills and innovation Leverage private investment to enable major projects (maximize tax dollars) Shift key risks to private sector (away from taxpayers)

www.P3forPA.com

P3s are about Creating Value for Both Parties Public Sector

Shared

Private Sector

• Monetize non-core services to generate upfront payment

• Partner to share risk

• Access to markets with traditionally high barriers to entry

• Opportunity to reset stakeholder objectives

• Access to public and private funds

• Pre-established client base

• Frees up resources and increases capacity for other projects

• Leverage partner’s market access

• Relatively less competitors in the market

• Creates competition and transparency

• Reallocation of expertise and responsibilities

• Leverage existing expertise to improve asset value and return

• Utilize private sector expertise

• Contractually defined deadlines and terms to mitigate uncertainty in deal

• Long-term, relatively predictable revenues

• Potential improvements in asset value and operational efficiencies

• Value driven pricing

• Potential benefits from tax and other credits

• Alternative to traditional financing methods

• Transparency in all phases of project

• Building firm brand on large scale projects

www.P3forPA.com

Key Ingredients to a Successful P3

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Act 88: P3 Enabling Legislation • Authorizes private entities to develop and operate qualifying transportation facilities • Allows for solicited and unsolicited proposals

• Allows public and affected jurisdictions to comment on candidate projects • Encourages investment by private entities • Enables procuring agency not to be required to accept lowest price offer www.P3forPA.com

Act 88: P3 Enabling Legislation • The Act provides for an array of project delivery methods ranging from predevelopment agreements through a concession allowing a “Development Entity” to design, build, operate, maintain, manage or lease a transportation facility –

The Act also allows for “any other innovative or nontraditional project delivery method”

• Act 88 requires RFP’s as the source selection mechanism for P3 projects –

Sole-source procurements are not authorized

www.P3forPA.com

Act 88: Interesting Facts • The successful offeror for a P3 RFP is awarded a “Public-Private Transportation Partnership Agreement” (PPA) for the subject transportation project. Of particular note: – the terms of a P3 agreement can extend for up to 99 years – user fees for the subject transportation facility are authorized – ownership of the transportation facility must lie with the “proprietary public entity” – public bargaining unit covered employees displaced by the P3 project must be offered employment with the development entity on terms essentially identical to those in the relevant CBA for its duration – any net proceeds realized by the proprietary public entity are reserved for use in transportation projects in the Commonwealth

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P3 Office Overview

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P3 Board Members PennDOT Secretary Leslie S. Richards, Chair Honorable Randy Albright Secretary of the Budget

Honorable Gregory Davis

Honorable Ronald Drnevich

Honorable Ryan Boyer

Honorable Steve Santarsiero

President pro tempore of the Senate Appointment (Vacant)

■ The Board can consider both solicited and unsolicited projects ■ PennDOT provides the resources, staffing and professional services to support the Board’s operations

www.P3forPA.com

P3 Board Duties • Meet annually • Adopt Guidelines establishing the procedures for transportation projects to be considered • Evaluate, and where the board finds that the requests or plans for projects are in the best interest of the Commonwealth, approve the requests or plans for transportation projects • Submit an annual report to the General Assembly

www.P3forPA.com

PennDOT P3 Program Act 88 Signed into Law (July 2012) P3 Office Established (August 2012)

P3 Board Approves Guidelines (January 2013) P3 Board Approves First Projects (January 2013) P3 Office Implements Approved Projects (2014-current) www.P3forPA.com

Current P3 Projects

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Pennsylvania Department of Transportation

CNG for Transit Agencies

www.P3forPA.pa.gov www.P3forPA.com

CNG: Project Goals & Objectives • Provide cost-effective CNG fuel availability to enable transit

fleets to switch from diesel and gasoline to CNG • Generate operational cost savings for transit agencies • Reduce greenhouse gas emissions

• Deliver operational, maintenance and safety expertise • Establish consistency between transit agencies for the deployment of CNG fueling infrastructure

• Provide retail CNG fueling to the public, where feasible

www.P3forPA.com

CNG: Project Delivery • PennDOT is seeking a turn-key solution which includes (what we’re going to get):  Design and construction of fueling stations and necessary facility upgrades  Upfront private-sector investment  Ongoing operation and maintenance responsibility for fueling stations

www.P3forPA.com

CNG: Location of Fueling Stations

CNG Readiness Date

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Tier 1

Fall 2016 – Spring 2017

Tier 2

Spring 2017 – Summer 2017

Tier 3

Fall 2017 – Spring 2021

CNG: Shortlisted Proposers • Clean Energy - Newport Beach, CA 

Pennoni Associates – Philadelphia, PA

• GP Strategies - Escondido, CA  L.R. Kimball - Ebensburg, PA  McCrossin - Bellefonte, PA

• Trillium CNG – Salt Lake City, UT  Larson Design Group - Williamsport, PA

www.P3forPA.com

CNG: Next Steps • Technical Proposals due: 01/14/2016 • Financial Proposals due: 02/04/2016 • Announcement of Preferred Proposer anticipated soon

www.P3forPA.com

Pennsylvania Department of Transportation

AMTRAK Station Improvement

Keystone Corridor, Middletown Station

www.P3forPA.pa.gov www.P3forPA.com

Middletown Station: Project Overview Project Overview

• P3 Components: – Design, Build, Finance, Maintain – Parking – Transit Oriented Development (TOD)

www.P3forPA.com

• Not in P3: – Track/Platform work – Station (Towers/Ped Bridge)

Why P3?

Why P3?

• Provides Framework:

– Leverage Existing Funding – Minimize O&M Risks/Costs – Maximize TOD Opportunity

• Best Value Selection: – Price – Technical Approach – TOD Development

www.P3forPA.com

Draft Conceptual Rendering – 11/24/2015

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Draft Conceptual Rendering – 11/24/2015 Potential TOD

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AMTRAK Stations Improvement Project

Draft Conceptual Rendering – 11/24/2015

www.P3forPA.com

AMTRAK Stations Improvement Project

Draft Conceptual Rendering – 11/24/2015

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AMTRAK Stations Improvement Project Draft Conceptual Rendering – 11/24/2015

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Pennsylvania Department of Transportation

Northampton County P3 Bridge Renewal Program

www.P3forPA.pa.gov www.P3forPA.com

Northampton Co. Project Overview • • • • • • •

Enhance Overall Condition of County Bridge Inventory Eliminate Structurally Deficient Bridges Reduce Quantity of Functionally Obsolete Bridges Improve Inventory’s Bridge Sufficiency Ratings Address Safety Needs Remove Weight Limit Postings Exceed Traditional Delivery Schedule

www.P3forPA.com

Northampton Co. Project Overview

www.P3forPA.com

REPLACE

REHAB

STRUCTURALLY DEFICIENT

7

1

FUNCTIONALLY OBSOLETE

14

4

AGED BRIDGES

7

1

TOTAL

28

6

Northampton Co. Project Locations Northampton County

www.P3forPA.com

Northampton Co. P3 Process Outline 1 2 3 4 5 6

• Proposal is submitted to P3 Office/Steering Committee for review • P3 Board Review/Approval

• County Authority Issues RFP • County Authority Proposal Review and Selection • County Authority Executes P3 Transportation Partnership • Design and Construction

www.P3forPA.com

Pennsylvania Department of Transportation

Rapid Bridge Replacement

www.P3forPA.pa.gov www.P3forPA.com

RBR Project: Overview • Rapid Bridge Replacement Program (RBRP) is the first P3 project for the Commonwealth of PA – Project was approved by the Commonwealth’s Public Private Transportation Partnership Board in September 2013

• Project includes the design, demolition, construction, financing and routine maintenance/ lifecycle maintenance for 558 structurally deficient bridges across Pennsylvania (geographically dispersed)

www.P3forPA.com

RBR Project: Snapshot Authority

Pennsylvania Department of Transportation

Consortium

Plenary Walsh Keystone Partners

Financial Close March 2015 Substantial Completion

December 2017

Status

Construction

Total D&C Cost US$899 million Design-Builder A joint venture of Walsh Construction Company and Granite Construction Company O&M Provider Walsh Infrastructure Mgmt.

Equity Plenary Group (80%), Walsh www.P3forPA.com www.P3forPA.com Provider Group (20%)

RBR Project: P3 Arrangement • Transaction Highlights: – 1 DBFM Contract – PennDOT maintains ownership, but the Development Entity is responsible for maintaining each bridge for 25 years after replacement • 28 Year Contract (w/ 25 year maintenance term per bridge)

www.P3forPA.com www.P3forPA.com

RBR Project: Meet the Team • • • •

Development Entity – Plenary Walsh Keystone Partners Lead Construction Firm – Walsh Granite JV Lead Design Engineering Firm – HDR Lead Maintenance Firm – Walsh Infrastructure Management (WIM) • Construction Quality Acceptance Firm – TRC

www.P3forPA.com

RBR Project: PennDOT Team • • • •

Kleist / Macioce / McAuley / Thompson Project Mgmt Consultant – AECOM / JMT Design Review Team - Gannett Fleming RoW Acquisitions – Percheron / Highlands

• • • • •

Executive Committee Steering Committee PennDOT QA Team Involvement Regular District Communications District Site Visits

www.P3forPA.com

RBR Project: Why P3?

• Accelerate the replacement of SD bridges • Maximize efficiencies to deliver more projects • Minimize the impact to traveling public • Allocate risks to the party best able to manage them

• Establish P3 as a viable way to get projects done

www.P3forPA.com

RBR Project: Payment Structure • Payment Highlights: – Mobilization payment – Milestone payments

– Availability payments

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RBR Project: Statewide Map of Bridges

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RBR Bridges: Districts 10, 11, 12 By the Numbers: District 10: 38 bridges - 7 bridges completed in 2015 District 11: 85 bridges - 8 bridges completed in 2015

District 12: 81 bridges - 8 bridges completed in 2015

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RBR Project: Bridge Selection ● Programmatic database screening

● Single spans and some multi-spans ● Full replacements ● Statewide distribution ● Minimal alignment changes ● Limited impacts to utilities, R/W, environmental resources

www.P3forPA.com

RBR Project: Bridge Categories • Early Completion Bridges – Construction started in 2015 – Similar to Design/Build, PennDOT provided TS&L, H&H, NEPA, ROW, Utility Clearance, and Permits – Development Entity performs Final Design • Remaining Eligible Bridges – PennDOT provides: Scoping documents, Min Bridge width, detour or staged, and 2 borings per bridge – Development Entity performs: NEPA, TS&L, H&H, survey, ROW Plan, Permits, and Final Design

www.P3forPA.com

RBR Project: Approach • What’s different?

– Best Value Selection – One-on-One meetings – Construction Involvement – Maintenance Responsibilities • Handback • Useful Life

– Payment Structure – Noncompliance Regime www.P3forPA.com

RBR Project: Behavioral Drivers • Noncompliance point system created to incentivize Development Entity compliance with contractual documents – Noncompliance points for each occurrence • Cure Period • Interval of Recurrence

– Financial impact and point accrual • Deduction of funds per point • Points can lead to default

• Unavailability Events – Financial deductions • Calendar, Detour, Lane Closure

www.P3forPA.com

RBR Project: Handback Requirements • Punchlist at “Final Acceptance” – Department takes over maintenance of signs, delineators, line painting, vegetation, etc.

• Early Handback – Seeding after growth established 1 year – Flexible pavements handed back in 5 years – Must meet our 5 year warranty conditions

• Handback at end of Term – Condition rating of 7 throughout the Term – Condition 7 for 98% at end / at least 6 for remainder

www.P3forPA.com

RBR Project: “Game Changer” • First multi-asset, multi-location P3 project to close in US • Fastest executed P3 procurement in the US with a 12 month timeline from RFQ issuance to commercial close, and 15 months from RFQ to financial close • Includes the largest Private Activity Bond financing of a transportation P3 in US history with $721.5 million • Shares the permitting risk on 558 individual projects www.P3forPA.com

RBR Project: 2015 Status • 75 Construction NTPs issued • 58 bridges into construction phase • 48 bridges replaced and open to traffic

• Bridges built in 6 PennDOT Districts

• 6,762 Design submissions • 5,212 submissions accepted/approved www.P3forPA.com

RBR Project: National Recognition • P3 Bulletin – Transportation Project of the Year • Bond Buyers of America – Deal of the Year • P3 Bulletin – Government Agency of the Year • Infrastructure Journal – North America P3 Deal of the Year • ACEC-PA – 2016 Diamond Award • ENR MidAtlantic – Owner of the Year

www.P3forPA.com

RBR: First Bridge Completed JV 376 SR 3012, Butler County Open: 8/27/2015

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RBR Construction Activities JV 556 SR 2013 Westmoreland County

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RBR Construction Activities JV 107 SR 44 Lycoming Co

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RBR Project: At the End of the Day…

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RBR Project: PWKP Website

http://parapidbridges.com/

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Pennsylvania Department of Transportation

RBR Panel Discussion

www.P3forPA.pa.gov www.P3forPA.com

RBR Project: Meet the Panel • Scott Benjamin – Walsh Construction • Jim Bintrim – HDR • Scott Gallaher – TRC

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Panel Discussion

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Questions?

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