Roger S. Moliere Chief, Real Property Management & Development

FTA – PPP WORKSHOPSSAN DIEGO, CA - JULY 7 – 8, 2009

IMPLEMENTATION OF PPPs FOR

TRANSIT

FINANCING TRANSIT PPPs

Los Angeles County Covers 4,084 Sq. Miles

● Total county population: 10.2 million – 88 cities - 5.1 million

– Los Angeles – 4 million

– Unincorporated county- 1.1 million

– Larger than 42 states (just behind Ohio)

Los Angeles County Metropolitan Transportation Authority (Metro)

regional transportationplanner;

regional builder; and the regional transit operator

…. for Los Angeles County.

Is different from other transit agencies because it is the . . .

73 Miles of Metro Rail – 63 Stations – 225 Rail Cars

447 Miles of HOV Lanes

Fiscal Year 2009 Operating Budget Resources $3.4 Billion

Passenger

Fares &

Advertising

10.3%

Net Proceeds

from Financing

.08%

Other

2.9%

Federal, State,

& Local Grants

22.0%

Local Sales

Tax, STA &

TDA

64.1%

Summary of Funding by Source (%)

Fiscal Year 2009 Operating Budget - Expenses$3.4 Billion

Streets &

H ighways

9.7%

Debt Service

9.4%

Other

Governmental

3.5%

M etro Bus

35.6%

M unicipal

Operator &

Paratransit

9.6%

Sales Tax

Local Return

8.9%M etrolink

1.8%

M etro Rail

21.5%

Summary of Expenses/Expenditures by Program (%)

“Measure R”

● ½ -cent local sales tax

● $35 – $40 billion over 40 years

Land Use/Transportation Challenge

● Adding 2 million more people to our urban landscape

● Development impacts transportation

● Building further out increases trip length, travel time and traffic impact on communities

● Sprawl reduces speed

Financial Challenge

While population and mobility needs continue to increase…

● Federal and state operating funds have declined

● Transportation capital and operating costs have increased

Public-Private Partnership

● Can private capital be leveraged to deliver and/or operate projects faster & cheaper

● Limited experience in the United States

Los Angeles County

Metropolitan Transportation Authority

METRO’SPUBLIC-PRIVATE PARTNERSHIP

PROGRAM

How Do We Increase Financial Capability?

● Activate potential new private sources

● Maximize leverage provided

● Maximize use of flexible and fungible revenue

● Minimize annual debt service payments

● Phase spending to reflect revenue

PPP Program Objectives

● Accelerating delivery to improve service

● Reducing costs through contracting and construction methods

● Develop projects integrated with existing transit/highway infrastructure

● Allocating risk

How Do We Begin?

● Metro retained program management and advisory consulting team

– InfraConsult LLC KPMG LLP

Nossaman LLP

Halcrow Inc.

Sharon Greene + Associates

Englander & Associates

● Initial activities underway– Primary screening criteria - LRTP and “Measure R”

– Preliminary screening of all projects

– Development of financial assumptions

– Readiness assessment Risk analysis Technical and operational considerations

Project Approach

● Projects with greatest likelihood of success:

– Clearly defined (i.e., draft EIR/EIS), high-priority, non-controversial project with demonstrated public sector commitment

– Fair risk allocation

– Transparent, well-defined procurement process, experienced public sector staff

Program Management

● Strategic planning and management

● Financial feasibility

● Technical business analysis

● Legislative analysis/remedies

● Risk assessment

● Strategic marketing/stakeholder outreach

Sector Roles and Responsibilities

● Public Partner – Project definition

– Environmental clearance

– Stakeholder support

– Political commitment

– Financial Feasibility

– Well-defined, transparent procurement process

● Private Partner – Project realization

– Funding/financing

– Design/construction

– Operation/management

PPP program

plan; Project

screening

criteria;

Evaluation

team

formation

Project

screening

from LRTP

project list

Comprehensive

analysis

Optimum

business case

model and

project

benchmark

criteria

Marketing,

industry

forum,

Develop

legslation

RFQ or EOI

Prepare

and Issue

RFP

ShortlistSelect

preferred

bidder

Contract

negotiation

PPP PROJECT SELECTIONPPP PROJECT DEVELOPMENT

AND DELIVERY

Project

selection/

Board

approval

Signed

contract;

Financial

close

TASK 1

Program

Development

TASK 2

Project

Screening

TASK 3

Strategic

Assessment

TASK 4

Business CaseTASK 5

Procurement

TASK 6

Concession &

Contract Agmts

Public Private Partnership (PPP) Process

Initial Program Activities