Legislative Opportunities and Impediments - The Virginia Experience Virginia Public Private Partnerships ATRA TECHNIX Program Phil Bomersheim “Activist” Washington D.C. January 11, 2009

“Sacred Cows Make the Best Burgers!”

Laws, Regulations Same old Way Special Interests $$$$$ Politics Design Build Rules Similarities in all Governments Etc., Etc., Etc., Impediments

Virginia Public Procurement Act Capital Outlay Manual Oversight role of the Department of General Services Design-Build Review Board (1996) Regulatory Framework in Virginia

Public-Private Transportation Act *Allows for unsolicited proposals to develop transportation infrastructure *Utilizes a review process that is outside standard procurement process *Provides for ample review and public input *Final decision made by VDOT Commissioner Commonwealth Competition Council Things Begin to Change

Public Private Transportation Act Allow private entities to enter into agreements to construct, improve, maintain and operate Transportation facilities Public-Private Transportation Act

Unsolicited proposals may be submitted IAW the PPTA and Commonwealth Guidelines ppta-default.asp Public-Private Transportation Act

VMS - Contract for maintenance of 25% of Virginia’s interstate lane miles Interstate $325 million, connecting suburbs to Richmond International Airport Route $236 million, 17.5 mile beltway around Richmond Coalfields Expressway - 80 mile “economic development road” in southwest Virginia Route 28 - six new interchange on access road serving Dulles International Airport Etc., Etc., Etc.,……………….. PPTA Success Stories

Local governments rely on property taxes for all construction “Pay as you go” legacy - debt limits imposed by Virginia Constitution Taxpayer lawsuits blocked “creative” ways to develop infrastructure Rapid population growth increasing demands for new schools and infrastructure Aging state facilities need rehabilitation and/or replacement Reluctance to issue debt or raise taxes Infrastructure Needs In Virginia

Virginia revenue crisis further delays capital projects All new debt is dedicated to college construction and environmental projects Economic Growth and Tax Relief Reconciliation Act of 2001 creates opportunity for new debt structure Design-Build Review process has been a failure PPTA/D-B at VDOT has been a success Public-Private Education Facilities and Infrastructure Act of background

Allows for solicited and unsolicited proposals to acquire, design, construct, improve, renovate, expand, equip, maintain, or operate a qualifying project A qualifying project is: –education facility (public school and higher ed) –“any building or facility for principal use by a public entity” –equipment to enhance public safety and security at public buildings –utility and telecommunications infrastructure –recreational facilities Public-Private Education Facilities and Infrastructure Act of provisions

AGC immediately opposes - says legislation will crush Virginia contractors AIA - concerned about impact on members Speaker of the House - former highway contractor who values competitive low bid system Opposition requires modifications to the legislation to make it acceptable despite 66 House patrons and 25 Senate patrons Public-Private Education Facilities and Infrastructure Act of opposition

Private entity submits proposal to public body Public body makes a written determination whether the project is developed using competitive bid or competitive negotiation Competitive negotiation can proceed if the public body determines that this method is “likely to be advantageous” because of the “probable scope, complexity or urgency of the project” or “risk sharing, added value, an increase in funding or economic benefit from the project that would not otherwise be available” Public-Private Education Facilities and Infrastructure Act of process

Public body must also determine that the project “serves the public purpose” by demonstrating: –Public need –Cost is reasonable in relation to similar facilities –Will result in timely delivery of the project Public body may charge a reasonable fee to cover processing costs including fees for attorneys and financial and other advisors Public-Private Education Facilities and Infrastructure Act of process

Public body enters into a comprehensive agreement with the private entity Public body retains general oversight of the project to ensure compliance with local standards Private operator files routine reports with the public body Public-Private Education Facilities and Infrastructure Act of process

Traditional government sources User fees Service contracts Private Activity Bonds Lease-purchase/sale-leaseback Public-Private Education Facilities and Infrastructure Act of funding

May not use traditional procurement process and bureaucracy Provides opportunities for cost efficiencies in project development % in other states Leverage low cost financing Depreciation Leverage state and local funding streams Public-Private Education Facilities and Infrastructure Act of benefits

Resist attempts by opponents to roll-back provisions during 2003 General Assembly That is funny!!!!!!!!!!! Experience: Seven Unsolicited Proposals In Capitol Area Amendments were to Add Technology Public-Private Education Facilities and Infrastructure Act of next steps

Virginia Senate Bill 681 Public–Private Education Facilities and Infrastructure Act of Virginia Code § § HTM Public-Private Education Facilities and Infrastructure Act of information