county of fairfax, virginia department of transportation potential use of virginia public-private...

County of Fairfax, Virginia

Department of Transportation

Potential Use of Virginia Public-Private ActTransportation Legislation

To Provide Transportation Facilitiesin Fairfax County

Board Transportation Committee

November 29, 2011


Department of Transportation 2

PPTA DEFINITION

• Public Agency partners with a Private Firm for:

• Planning,• Financing,• Constructing, and / or• Operating

. . . . . .a Road / Bridge / Tunnel / Ferry / Airport /

Mass Transit / Parking / other transportation facility


Assumed Advantages of PPTAs

• Faster project delivery

• Additional resource capability and capacity vs. scarce public funds

• Cost savings on individual projects

• Increased efficiency

• Shared risk

• Use of innovative approaches / new technology

• Increased accountability for project delivery and performance



Major Types of Public-Private Contracts• Design – Build

• Design – Build – Finance

• Design – Build – Finance - Operate – Maintain


* Taken from VDOT Presentation 4-23-09


COMMONWEALTH OF VIRGINIA EXPERIENCE



Public-Private Transportation Act (PPTA) of 1995

• Authorizes state and local governments to execute agreements with private firms to:

• Develop

• Construct and / or

• Operate

. . . . transportation facilities

• To Promote Innovative Construction or Financing

• To Achieve Faster and / or Less Costly Project Delivery



Public-Private Transportation Act (PPTA) of 1995 andPublic-Private Education Facilities and Infrastructure Act

(PPEA) of 2002

• Types (Solicited / Unsolicited)

• Local Ordinance Requirements–

Guidelines for acceptance and review of proposals Acceptance and review schedule and alteration

mechanism Opportunity for competing proposals Type and amount of information needed for adequate

review Project-specific Comprehensive Agreement



Current Virginia Projects in Procurement or Beyond


Project Location Limited Access Toll PPTA Type Status

Route 460 Corridor Improvements Richmond - Portsmouth Yes Yes Design – Build – Finance –

Operate - Maintain Under

procurement

I-95 HOV / HOT Lanes Northern Virginia Yes Yes1 Design – Build – Finance – Operate – Maintain2 Under

Contract Downtown Tunnel / Midtown Tunnel / MLK Extension Norfolk Yes Yes Design – Build – Finance –

Operate - Maintain

Capital Beltway (I-495) HOT Lanes

Fairfax County Yes Yes1 Design – Build – Finance – Operate - Maintain

Under Construction

Route 58 Southside No No Design - Build

Route 28 Fairfax and Loudoun Counties Yes No Design – Build – Finance3

Coalfields Expressway Southwest Virginia Yes No Special4

Dulles Rail Fairfax and Loudoun Counties Design – Build – Finance

Route 288 Richmond area No No Design - Build

Complete Route 895 Pocahontas Parkway Richmond area Yes Yes Design – Build - Finance

Route 199 Williamsburg No No Design - Build

1 Tolls applied to certain vehicle types via HOT-lane concept 2 Assumed structure, pending final agreement 3 Financing through special tax district 4 Excavation / grading by private sector in conjunction with coal extraction



Stages of Virginia PPTA Project Development



Virginia PPTA AssessmentMay, 2010




IntroductionSummary of Recommendations


VA Office of Transportation Public-Private Partnerships (OTP3)

• Project Screening Criteria

• Complexity

• Potential for acceleration

• Consistency with transportation priorities

• Foster efficiencies

• Risk transfer

• Revenue generation / funding potential

• Ability to raise capital




Virginia Local Government Experience with PPTAs

Prince William County

• Guidelines adopted 2003

• 3 projects – all unsolicited Sudley Manor Drive/Linton Hall Road

Route 15 (several components)

University Boulevard

• PPTAs used exclusively for Design-Build

• All funding from County




Loudoun County

•Guidelines adopted 2004

•2 proposals received

•Leesburg parking garage rejected

•Beaumeade (Ashburn / Redskins Park area) Essentially Design-Build

Funding with available County funds and developer reimbursement

Currently in final negotiation




Stafford County

• 1 unsolicited proposal received. Negotiations still underway

• Design – Build only

Spotsylvania County

• 5 intersection projects built, 37 candidates

• Design – Build only

• Issues due to change orders




City of Chesapeake

• 2 proposals received (1 solicited, 1 unsolicited)

• Neither project accepted

• Lengthy negotiation period / unacceptable conditions

City of Lynchburg

• 1 proposal discussed (2006); not pursued

• No subsequent PPTA activity

James City County• Rt. 199 project completed as Design-Build



Virginia Localities’ PPTA Experience and Lessons Learned

• Almost 100% Design–Build, 0% Finance

• Some projects completed in cooperation with landowners – not PPTAs

• PPTA mostly a procurement mechanism, not a financing mechanism

• Lengthy and complex negotiations

• Some unrealistic proposals

• Additional costs due to change orders



FAIRFAX COUNTYPUBLIC-PRIVATE PARTNERSHIP

EXPERIENCE



Fairfax County Public-Private Partnership Experience (Selected)

Fairfax PPEA Guidelines adopted by Board of Supervisors March, 2009

• Government Center*

• South County Government Center*

• South County Secondary School*

• Laurel Hill Golf Course*

• Wiehle Ave. Garage

• Government Center Residences

• Mid-County Center / Woodburn Center

* Partnership Agreement or Pre-PPEA



Fairfax County ExperiencePublic-Private Partnership Objectives

•Access to capital markets - (not an issue for Fairfax)

•Exploit design-build cost efficiencies – (unproven to date)

•Achieve cost savings through project acceleration

•Leverage non-cash assets

•Minimize / eliminate debt impact

•Satisfy as many priorities as possible within budget constraints



Fairfax County ExperiencePublic-Private Partnerships

•Several successful partnership projects completed

•Significant negotiations required on some projects

•Other proposals under review / being negotiated

•Some proposals failed in negotiation

•Wide range of facilities

Roads / schools / parking / rail / libraries / other facilities

•Multiple funding arrangements; custom solutions



Lessons LearnedPPTA / PPEA Critical Success Factors

Critical need for organizational capability (number of personnel, level of expertise) in:

• Procurement / selection• Contract development, negotiation• Contract administration• Creative financing• Land use impact / real estate analysis



Lessons LearnedPPTA / PPEA Critical Success Factors (cont’d)

•“Can-do” attitude

•Dedicated management and staffing

•Thorough understanding of technical details and political realities

•Focus on goal

•Keep options open; analyze alternatives

•Stay flexible. Prepare to respond to opportunities. Lower priority projects may offer better PPEA / PPTA opportunities.



Lessons LearnedPPTA Disadvantages, Impediments and Risks

• Confidentiality / privacy

• Public participation is different than citizens’ expectations

• Confidentiality may erode public confidence

• No panacea, especially for financially marginal projects

• Diversion of staff resources to respond to unsolicited proposals

• Difficulty of tolling non-limited access roads



Lessons Learned (cont’d)

•No free lunch. Need revenue source

•No free risk. Shift of risk to private sector increases cost

•Deals are complicated and usually require outside help (usually expensive)

•Time savings not often realized. When realized, often at cost

•Difficult to identify all possibilities initially, before all public input & design complete

•Once comprehensive agreement is signed, changes are usually at public expense



Lessons Learned (cont’d)

•Probably no advantage for simple projects

•Borrowing costs cheaper for public sector than private

•Solicited agreements generally work better than unsolicited ones

•Market realities not always consistent with public priorities

•Projects can be realized with intense negotiation


QUESTIONS?


county of fairfax, virginia department of transportation potential use of virginia public-private...

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