Meeting the State’s Transportation Needs Julie Brogan Deputy Director, ODOT Division of Innovative Delivery

Give it some • Gas tax is not enough • $1.6B shortfall in shovel-ready projects • $10B need in future project development • Preservation needs continue to grow while

gas receipts decline • No money for new capacity

Give it some • 2011 P3 legislation • 2012 Division of Innovative Delivery

Working Groups/IDTTs Construction, Communication,

Planning, Engineering, Finance, Maintenance, District Representatives, Chief Legal

Consultant Contracts TFAC – HNTB/E&Y TFAC – PFM/HMM

TFAC – Parsons/E&Y Insurance Advisor – AON Turnpike – KPMG/PB/A&O

Portsmouth – CH2/E&Y/Calfee/A&O BSB – HNTB/KPMG/Frost Brown

Director: Jerry Wray

Chief of Staff, Assistant Director: Greg Murphy

Deputy Director: Julie Brogan

Mike Wawszkiewicz Adam Sheets Julie Gwinn

Steering Committee Assistant Directors

SMART I • Revenue from advertising sales, sponsorships for

the 45 Interstate rest area locations • Selected Travelers Marketing Group • Target revenue: $2M/year

SMART II • 511 Program • Freeway Service

Patrol Program • OHGO • Traffic Generator Signs • Bridges • Interchanges • Target revenue: $15M+

Ohio’s Jobs & Transportation Plan • Turnpike Options Analysis completed

December 2012 • Status quo option chosen over ODOT

merger and private lease – Issue $1.5B in new bonds backed

by future toll revenues – Tolls increase annually by CPI for 10 years – Tolls frozen for local trips for 10 years

Ohio’s Jobs & Transportation Plan • Implementing the plan – House Bill 51

– Took effect July 1, 2013 – Changes Ohio Turnpike Commission (OTC) to Ohio Turnpike

and Infrastructure Commission (OTIC) – Increases members from 9 to 10

• Governor appoints 6 • Term reduces from 8 to 5 years

– Establishes criteria for OTIC to fund ODOT Projects • Projects first approved by Transportation Review Advisory Council

(TRAC) • Projects must have a “nexus” or economic or transportation impact

on Turnpike

Ohio’s Jobs & Transportation Plan • Governor’s plan

– $1.5B investment from OTIC • 27 projects with nexus in Turnpike in northern Ohio

– $3B+ total investment with state, local and federal funds

• 41 projects overall

Implementing P3s • Screening

– Costs – O&M potential – Priority Project – Ripe (project status) – Sufficient time and staff

• Prioritization • Value for Money/Options Analysis • Procurement

Active P3 Projects • Portsmouth Bypass (SCI-823) • Brent Spence Bridge • Active Traffic and Demand Management

Study for Ohio Urban Cores • Turnpike Study – completed

– New Jobs and Transportation Plan • Cleveland Innerbelt CCG2

Cleveland Innerbelt – CCG2 Design-Build-Finance • Short list: Kokosing, Walsh, TGR • Efficiencies in combining demolition and construction contracts • Shorten duration of bi-directional traffic on single bridge

(2-lane EB/4-lane WB) • Roadway user cost savings – $25M+ • Best value selection: TGR

Portsmouth Bypass • Project Location

– Rural community in Scioto County • 90 miles south of Columbus, OH • 45 miles northwest of Huntington, WV

• Population Data – Scioto County approximate population - 75,000 – City of Portsmouth approximate population - 20,000 – Economically underserved region

• 22% of population living below poverty line • 11.2% unemployment (3rd highest rate in the state) • Classified as “economically at-risk” – in the bottom 10%-25% of

counties nationally

Portsmouth Bypass • 16-mile, 4-lane, limited access

highway in Scioto County • Bypasses 26 miles of US 23 and

US 52 • Interchanges at:

• US52 & SR140 • TR234 (Shumway Road) • CR28 (Lucasville-Minford Road) • US23

Purpose & Need - Portsmouth • Regional Benefits

– Provides improved access to areas within the Region

– Alternative to I-77 and I-75 for reaching Columbus, Ohio from the South – Majority is full access controlled

Design and Construction • Key Characteristics of Reference Design

• Significant earthwork: – ~ 25M Cubic Yards of excavation, mainly rock – ~ 20M Cubic Yards of embankment

• 21 bridges and 17 retaining walls • Two horizontally curved bridges over US 23 (north

end) • Crossing of CSX and NS Railroads

Design and Construction • Performance-based O&M Scope encourages

efficient lifecycle decisions • O&M is a relatively small portion of total Project cost • Developer responsible for the majority of the O&M on the

Bypass for 35 year period following Substantial Completion

• Mainly capital maintenance, limited routine maintenance • Hand-back criteria at the end of the project term

• Supported by hand-back reserve, funded 24 months prior to the end of project term

Project Scope – O&M • Developer Capital Maintenance scope includes:

• Pavement resurfacing and reconstruction • Bridge maintenance and rehabilitation • Retaining walls, slopes and drainage maintenance

• Developer Routine Maintenance scope includes: • General cleaning, mowing, minor repairs • Maintenance of traffic

• ODOT retained Routine Maintenance scope: • Winter maintenance (snow and ice treatment) • Incident response/ emergency management • Roadway weather information sensors

Project Scope – O&M • Performance Regime

• Non-compliance: • Points based system covering compliance, reporting,

notification requirements • Each point has a dollar value, and deductions are

made monthly • Self reporting with ODOT audits, enforced by

audit and non-compliance regime • Persistent non-compliance can lead to

termination of the Developer

Delivery Mechanism • Design-Build-Finance-Operate-Maintain

(DBFOM) delivery model • Construction Period

– Anticipated to be 5 years or less, delivered as a single phase

• Operating Period – Operations & Maintenance (O&M)

responsibility for fixed 35 year period following Substantial Completion, unless terminated earlier

Delivery Mechanism • Availability Payment structure

• Developer will use private capital to finance construction

• In return for the opportunity to earn Availability Payments:

• Developer will design, build, finance, operate and maintain facility for ~ 35 years following Substantial Completion

• Equity investors and debt providers are at-risk if payments are not earned

Delivery Mechanism • DBFOM Availability Payment structure benefits

• Accelerates the project by eight years • creates jobs now when construction prices are low • delivers the complete project rather than phases with limited utility

• Frees budgetary capacity in the short-term • provides similar or lower whole life cost to design-bid-build

• Allows ODOT to pay for the project over a longer period, without a cost premium

• Enables competitive, firm fixed-price with substantial risk transfer and de facto long-term warranty of construction

• Generate economies of scale related to construction

Delivery Mechanism • Payment Structure

• Milestone payments • ADHS funds paid during construction period • Substantial completion milestone is subject to

deductions regime for non-compliance • Monthly availability payments

• Begin only after successful construction completion - mitigates cost and delay risk

• Paid on the basis of meeting performance standards (regardless of traffic volume)

Delivery Mechanism • Performance regime generally consistent with

precedent availability payment projects • Periodic availability payments subject to

“unavailability” and “non-compliance” deductions • Unavailability:

• Financial deductions from monthly payments for unavailability/closures of ramps, single and multiple lanes

• Unavailability deductions applied hourly, with higher unavailability deductions during peak hours

• Deductions calibrated as LDs

Financial Plan Overview • Shadow Model assumes Developer finances

project using: – PABs, – TIFIA ($230 million, Rural Rate Allocated) – Developer equity and – Milestone payments

• Milestone payments using ADHS funds anticipated to be paid in three tranches: – 70% of D&C spend – 80% of D&C spend – Substantial Completion

Private Activity Bonds • Conditional PABs allocation of $610m for

project approved by USDOT in November 2013

• Ohio Treasurer of State available to act as conduit – Proposers may use other Ohio based conduit, if desired

• Proposers have the option, but not obligation, to use PABs in their financing plans

Facts – Portsmouth Bypass Portsmouth Bypass Development Partners Equity: Cintra Construction: Ferrovial/Allan A. Meyers Designers: Othon, Mannik & Smith and Bowman Consulting

SHO

RT-L

ISTE

D PWP Portsmouth

Equity: Plenary Group, Walsh Investors, Parsons Enterprises Construction: Walsh/Trumbull/Parsons JV Designers: Parsons Transportation Group

Portsmouth Gateway Group Equity: ACS Infrastructure, InfraRed Capital Partners, Star America Fund Construction: Dragados USA, Beaver Excavating, John R. Jurgenson Designers: ms Consultants • Issuance of last planned RFP Addendum- July 25, 2014 • Technical proposals due- August 22, 2014 • Financial proposals due- September, 19 2014 • Selection of successful proposal- October 17, 2014

Brent Spence Bridge Corridor (I-71/I-75 Improvements)

• Options Analysis – August 2013 • Initial Financial Plan – December 2013 • Potential DBFOM with

Tolling/Availability Payment • TIFIA LOI to be submitted • Ohio HB533 passed in May 2014 • Video Tolling • Tolling Enforcement

Questions? Julie Brogan phone: 614.466.2825 / email: julie.brogan@dot.state.oh.us