County of Fairfax, Virginia Department of Transportation Potential Use of Virginia Public-Private Act Transportation Legislation To Provide Transportation Facilities in Fairfax County Board Transportation Committee November 29, 2011

County of Fairfax, Virginia 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

County of Fairfax, Virginia 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 Department of Transportation 3

County of Fairfax, Virginia Major Types of Public-Private Contracts Design – Build Design – Build – Finance Design – Build – Finance - Operate – Maintain Department of Transportation 4 * Taken from VDOT Presentation

County of Fairfax, Virginia COMMONWEALTH OF VIRGINIA EXPERIENCE Department of Transportation 5

County of Fairfax, Virginia 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 Department of Transportation 6

County of Fairfax, Virginia Public-Private Transportation Act (PPTA) of 1995 and Public-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 Department of Transportation 7

County of Fairfax, Virginia Current Virginia Projects in Procurement or Beyond Department of Transportation 8

County of Fairfax, Virginia Department of Transportation 9 Stages of Virginia PPTA Project Development * Taken from VDOT Presentation

County of Fairfax, Virginia Virginia PPTA Assessment May, 2010 Department of Transportation 10

County of Fairfax, Virginia Department of Transportation 11 Introduction Summary of Recommendations

County of Fairfax, Virginia 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 Department of Transportation 12

County of Fairfax, Virginia Department of Transportation 13 * Taken from VDOT Presentation

County of Fairfax, Virginia Department of Transportation 14 Virginia Local Government Experience with PPTAs Loudoun County Prince William County Stafford County Spotsylvania County James City County Chesapeake Lynchburg

County of Fairfax, Virginia Department of Transportation 15 Virginia Local Government Experience with PPTAs Prince William County Guidelines adopted 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

County of Fairfax, Virginia Department of Transportation 16 Virginia Local Government Experience with PPTAs Loudoun County Guidelines adopted 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

County of Fairfax, Virginia Department of Transportation 17 Virginia Local Government Experience with PPTAs 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

County of Fairfax, Virginia Department of Transportation 18 Virginia Local Government Experience with PPTAs 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

County of Fairfax, Virginia Department of Transportation 19 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

County of Fairfax, Virginia Department of Transportation 20 FAIRFAX COUNTY PUBLIC-PRIVATE PARTNERSHIP EXPERIENCE

County of Fairfax, Virginia Department of Transportation 21 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

County of Fairfax, Virginia Department of Transportation 22 Fairfax County Experience Public-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

County of Fairfax, Virginia Department of Transportation 23 Fairfax County Experience Public-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

County of Fairfax, Virginia Department of Transportation 24 Lessons Learned PPTA / 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

County of Fairfax, Virginia Department of Transportation 25 Lessons Learned PPTA / PPEA Critical Success Factors (contd) 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.

County of Fairfax, Virginia Department of Transportation 26 Lessons Learned PPTA 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

County of Fairfax, Virginia Department of Transportation 27 Lessons Learned (contd) 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

County of Fairfax, Virginia Department of Transportation 28 Lessons Learned (contd) 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

County of Fairfax, Virginia QUESTIONS? Department of Transportation 29