PARTNERSHIPS ACCELERATE ECONOMIC DEVELOPMENT & JOB CREATION. J. Douglas Koelemay, Director

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1 PARTNERSHIPS ACCELERATE ECONOMIC DEVELOPMENT & JOB CREATION J. Douglas Koelemay, Director

2 VIRGINIA LEADERSHIP IN PUBLIC-PRIVATE PARTNERSHIPS PPTA enabling legislation , 2005, 2008 Revisions to PPTA Implementation Guidelines Creation of VAP3 office in 2010 with creation of a Manual and Guidelines 2014 Updated 2012 PPTA Implementation Manual & Guidelines Goal is to build strategic program, extend VAP3 leadership

3 PARTNERSHIPS CREATE HUGE PUBLIC BENEFITS P3 Project Project Cost State Contribution % of Total Cost Jobs Supported Economic Activity 495 Express Lanes (O&M) 95 Express Lanes (O&M) Midtown Tunnel (O&M) $ 1.9 B $ 409 M 22 % 31,000 $ 3.5 B $ 925 M $ 71 M 7.6 % 8,000 $ 2 B $ 2.1 B $ M 20 % 1,700 $ M Total Benefits $ 4.9 B $ 901 M 18.4 % 40,700 jobs ~ $5.7 B

4 I-95 & I-495 EXPRESS LANES PROJECTS I-95 Express Lanes Comprehensive agreement with Transurban/Fluor executed July 2012 Opens in December 2014 Transurban 73-year concession period Virginia contribution of $71 million leveraged $925 million project Adds to managed lanes system that include I-495 Express Lanes I-495 Express Lanes Over 10 million users of I-495 Express Lanes in first two years Virginia s contribution of $409 million leveraged $1.7 billion I-495 project Transurban increased its equity investment in 2014

5 ELIZABETH RIVER TUNNEL PROJECT Two-lane tunnel connects Norfolk and Portsmouth Parallels existing Midtown Tunnel under Elizabeth River Includes maintenance, safety improvements for existing Midtown & Downtown Tunnels, extension of MLK Freeway VDOT maintains ownership and oversight Private partner ERC will finance and build facilities, operate and maintain for 58-year concession period

6 NEW 2014 PPTA MANUAL AND GUIDELINES Spencer Townsend Deputy Program Manager

7 COMMENTS ON 2012 PPTA MANUAL & GUIDELINES 100+ responses over a 30-day comment period Broad cross section of respondents businesses, elected officials, MPOs, legal teams and citizens Key Takeaways: Response to the P3 program and processes almost universally positive Public and stakeholders shared broad suggestions to improve transparency, competition and accountability Many specific suggestions included in Manual & Guideline revisions

8 KEY CHANGES IN 2014 PPTA MANUAL & GUIDELINES Increase CTB involvement Include Oversight Board members on PPTA Steering Committee Seek Oversight Board approval to advance to project development, then project procurement phases Seek Oversight Board approval for inclusion of project in SYIP before advancing to project development stage Brief Oversight Board on selection of preferred proposer and on major business terms prior to commercial close Increase Transparency Make PPTA Steering Committee meetings public, include Oversight Board members Report to CTB at monthly CTB meetings for road and rail projects Include Initial Finding of Public Interest during project development and Final Finding of Public Interest during project procurement Provide notice and briefings to Transportation Committee Chairmen at project development and procurement steps

9 PPTA PROJECT DELIVERY FRAMEWORK *Parties to be notified and briefed upon request after the Oversight Board decision: Chairs of General Assembly committees MPO s Interested members of General Assembly Special interest groups Regulatory Agencies Public Briefing Focus: Detail-Level Screening Report Desirability as P3 Feasibility as P3 HB 2 Prioritization Duration of P3 development and procurement Briefing Focus: RFI results (as appropriate) Schedule Refresh on the high points from Project Development Preliminary Procurement documents Risk Analysis and Value-for-Money Estimated project cost Potential public subsidy Potential economic benefits Preliminary Business Points Initial Finding of Public Interest Draft and Final Contract Documents posted on P3 Website for review & comment Final Contract Documents posted on P3 Website Briefing Focus: Major Business Points Updated Risk Allocation & Management Plan Statutory Audit results Final Value-for-Money Analysis Updated economic benefits Project bid results Public subsidy (if required) Final Finding of Public Interest

10 KEY CHANGES IN 2014 PPTA MANUAL & GUIDELINES Enhance Competition Coordinate P3 process with HB 2 prioritization process Require additional review of RFQ/RFP where there is only one proposer Require additional review of procurement if material change in project scope or risk allocation Increase Public Engagement Expand public members of a PPTA Advisory Group Encourage public comments in monthly CTB meetings Develop P3 Public Engagement Guidelines Outreach to drive public to website information and P3 documents Provide 24/7 website comment opportunities throughout the process Improve Risk Assessment and Management Revise Risk Management Guidelines to focus on greater communication and accountability Include risk workshop and discussions, risk registers and risk management plans at the initial, interim and final stages of P3 project activity

11 ADDRESSING RISK FOR P3 s Handoff from VAP3 to the Agency Solicited P3 Projects High-Level Screening with Recommendations Screening and Identification Phase Project Development Phase Project Procurement Phase Project Implementation Construction Phase Project Implementation Operations Phase Detail-Level Screening with Recommendations Project Development (PD) P3 Project Procurement Comprehensive Agreement (CA) Executed Project Implementation Design and Construction Project Implementation Operations and Maintenance Project Handback Policy Review with Recommendations Unsolicited P3 Projects Screening Risk Workshop and Discussions PD Risk Workshop Procurement Risk Workshop Screening Risk Register PD Risk Register Final CA Risk Register Agency Determined Risk Management Procedures Agency Determined Risk Management Procedures PD Risk Management Plan Final CA Risk Management Plan

12 I-66 MULTIMODAL PROJECT Morteza Farajian Program Manager

13 PROJECT LOCATION

14 NEPA STUDY Purpose and Need: Improve multimodal mobility along the I-66 corridor by providing diverse travel choices in a cost-effective manner Enhance transportation safety and travel reliability Tier 1 EIS/Record of Decision (ROD) was approved on November ROD states that roadway and major transit concepts can proceed separately to a Tier 2 study as long as the following criteria are met: Connect logical termini and be of sufficient length Have independent utility Not restrict consideration of alternatives for other reasonably foreseeable transportation improvements Tier 2 EA was initiated in summer 2014 and expected to be completed by the end of 2015.

15 I-66 MULTIMODAL PROJECT Two express lanes (convert existing HOV lane and add one lane) HOV-3 and buses travel free Non-HOV tolled Congestion-based tolls Convert HOV-2 to HOV-3 by 2020,consistent with region s Constrained Long Range Plan Three general lanes Open to all traffic No tolls Ramp-to-ramp connections (auxiliary lanes) Rapid bus service High frequency of service beyond peak hours Travel in express lanes for predictable travel times Park & Ride Facilities

16 I-66 PARK & RIDE FACILITIES STUDY US 15/James Madison Hwy. P University Blvd. P VA 234/Prince William Pkwy. P Balls Ford Rd. P Centreville VA 28/Sully Rd. Stringfellow Rd. P T P Monument Dr. P/T P P I-66 park-and-ride focus location T I-66 transit transfer focus location

17 PROPOSED TYPICAL SECTIONS Alt. 1 Concrete Barrier with Full Shoulders and Median for Future Center Transit (with auxiliary lanes, if needed) Alt. 2A Flexible Barrier with Buffer and Median for Future Center Transit (with auxiliary lanes, if needed) 206 Alt. 2B Flexible Barrier with Buffer and No Median (with auxiliary lanes, if needed)

18 WHERE ARE WE IN THE PPTA PROJECT DELIVERY FRAMEWORK Project Development

19 PROJECT PROGRESSION & STATUS High-Level Screening (March 2013) Detail-Level Screening (June 2013) Request for Information (June-November 2013) Public Information Meetings ( February 2014) CTB Briefing (June 2014) Risk Workshop (July 2014) Ongoing Project Development Activities Traffic and Revenue Study Benefit Cost Analysis Value for Money Analysis Affordability Analysis Preliminary Design IJR Analysis Geotechnical Analysis Aerial Mapping & Surveying TDM/Transit Study Tier 2 EA Ongoing Public Engagement Risk register and all other documentation available on Project website (

20 TENTATIVE MILESTONE SCHEDULE Milestone Anticipated Date Refine Project Scope Oct 2014 Jan 2015 CTB Project Briefing January 2015 Public Information Meetings January 2015 Issuance of RFQ February 2015 NEPA Public Hearing May 2015 Announcement of Short-listed Teams Late Spring 2015 Issuance of Draft RFP Late Spring 2015 NEPA / FHWA Decision End of 2015 Issuance of Final RFP End of 2015 Financial Close Late 2016 Start of Construction 2017

21 PROJECT SCREENINGS AND THE PIPELINE Ali Lauzon Deputy Program Manager Jackie Cromwell Communications & New Business Development

22 PROJECT SCREENING PROCESS Solicited P3 Projects Unsolicited P3 Projects High-Level Screening with Recommendations Policy Review with Recommendations Agency Detail-Level Screening with Recommendations NO NO PPTA Steering Committee Returned to Agency or Proposer Oversight Board* Project Development

23 PROJECT SCREENING PROCESS High-Level Screening Criteria Ability to Transfer Risk Funding Requirement Ability to Raise Capital Complexity of Effectively Leveraging Private Sector Innovation/Expertise Consistent with Federal Requirements Accelerated Project Development Satisfies Public Transportation Need Addresses Priorities in State, Regional and/or Local Transportation Plan Project Efficiencies through PPTA Delivery Solicited P3 Projects High-Level Screening with Recommendations Agency Detail-Level Screening with Recommendations PPTA Steering Committee Oversight Board* Project Development Unsolicited P3 Projects NO Policy Review with Recommendations NO Returned to Agency or Proposer

24 PROJECT SCREENING PROCESS Detail-Level Screening Criteria Public Need and Benefits Economic Development Market Demand for PPTA Delivery Stakeholder Support Legislative Considerations Technical Feasibility Systematic Interface and Compatibility Financial Feasibility Legal/Legislative Feasibility Project Risks Life Cycle Management Solicited P3 Projects High-Level Screening with Recommendations Agency Detail-Level Screening with Recommendations PPTA Steering Committee Oversight Board* Project Development Unsolicited P3 Projects NO Policy Review with Recommendations NO Returned to Agency or Proposer

25 CURRENT PPTA PIPELINE Status of Current PPTA Pipeline Projects in Current PPTA Pipeline 15 Projects with Completed High-Level Screening 12 Projects Advanced to Detail-Level Screening 7 Projects Currently in Detail-Level Screening 4 Projects with Completed Detail-Level Screening 3 Projects Advanced to Project Development as a P3 1

26 CURRENT PPTA PIPELINE

27 CURRENT PPTA PIPELINE

28 FUTURE OF VIRIGINIA P3 PROGRAM Program centered on true P3s - - equity, risk sharing, life-cycle costs, timely delivery I-66 Multimodal Improvements will add to managed lane system Continue the review of P3 process, decision-making, accountability Goals are to strengthen transparency, competition, public engagement, risk assessments and management

29 P3 COMMUNICATIONS NEXT STEPS The Commonwealth of Virginia Implementation Manual and Guidelines For the Public-Private Transportation Act of 1995 (As Amended) Distribute 2014 PPTA Implementation Manual and Guidelines Coordinate transportation agencies adoption of the 2014 PPTA Implementation Manual and Guidelines Finalize Public Engagement, Risk Management and Value for Money Analysis Guides in early 2015 Encourage public engagement via and social media 24/7 Brief General Assembly members, media, business groups, other government agencies and stakeholders

30 LESSONS LEARNED, CHALLENGES AHEAD Douglas Koelemay King of Awesomeness (aka Director)

31 Permanent office acts as champion, catalyst, guide Consistent, detailed guidelines facilitate delivery, realization of public benefits Continuous reviews of assumptions and conclusions improve project decisions Effective communications focus on benefits produced, broad policy goals advanced Steady flows of information to agencies, officials, planners, media build understanding and trust Others have good ideas, too, and competition is growing P3 LESSONS LEARNED

32 P3 SHARED CHALLENGES Public funds are shrinking Traditional delivery methods are not filling the gap Political focus too often is short-term and small, not strategic Engagement allows us to see members of the public as customers and consumers of services willing to pay for what they value P3s remain unnecessarily complex, mystery to many More standard approaches, terms are needed New P3 approaches can help fill gaps beyond transportation

33 THANK YOU PARTNERSHIPS ACCELERATE ECONOMIC DEVELOPMENT J. Douglas Koelemay Director, Virginia Office of Public-Private Partnerships