SR 836 and SR 112 Rate Setting Workshop

October 2, 2012

Agenda

PurposePurpose Where are we today?Where are we today?

Where are we going?Where are we going?

How do we get there?How do we get there?

Toll Rate OptionsToll Rate Options

Purpose of Meeting

• Discuss options for rates on SR 836 and SR 112• Presentation of Proposed New Toll Policy• Review schedule for toll rate approval

Timeline – Post ORT Master Plan

28% of Users Pay

42% of Users Pay

SR 924, SR 874, SR 878 Go‐Live

97% of Users  Will Pay

SR 112/SR 836 Go‐Live

Toll Rate Setting for Pilot ORT

SR 836 Extension & 

Project Opened

SR 924, SR 874, SR 878 Toll Rate Approval

ORT Master Plan 

Approved

SR 112/SR 836 Civil & Gantry work begins

SR 112/SR 836 Toll Rate Approval

2006

2007

2009

2014

2010

2013

2008

Updated Toll Rate Policy Approval

55% of Users Pay

2012

Current Financial Position• No further bonding capacity to fund projects• No future toll increase is assumed in financing plan• Revenue is not indexed to Consumer Price Index• Bond Series 2010 fully funded the FY 2011‐2015 work program

• Additional ORT revenue for SR 112 and SR 836 is not leveraged

• R&R is funded annually from ongoing revenue• Coverage ratios must be maintained at 1.4x

MDX Unfunded Projects – Shovel Ready

$85 Million

$65**/$160***Million

$160 Million

$220* Million

Approx. $800 Million in Unfunded Needs

*  Excludes Right‐Of‐Way**   Phase 1 ‐12 Ave Ramp 

(MDX)***Phase 2 –SR 836 Improv.         

(MDX)

LEGEND83611–SR 836 / I‐95 Interchange (MDX/FDOT Joint Participation)83628–SR 836 East of Section 583629–SR 836 / NW 87 Avenue87410–SR 874 Ramp Connector92404–SR 924 Extension West$110* Million

TOTALREVENUES

FINANCIALCAPACITY

PROJECTINVESTMENT

Funding Gap

$1.3BCURRENTDEBT

PROJECTPRIORITIES

$125M

FROM INCEPTION TO FY 2014WORK PROGRAM

SR 874SR 878SR 924

FUNDING GAP$800 M

SR 836 & SR 112‐ Existing Tolling Locations

Rate Setting Methodology

• Toll Rate sensitivity (consumer)• Industry average• Time value for trips• Equitability• Direct correlation to economic impact

MDX Toll Rates Compared to OthersRevenue Generation Alternative Estimated Average 

Toll Rate / Mile(FY‐15)*

Turnpikes $0.02 ‐ $0.08

Orlando‐Orange County Expy. Auth. SR 408 (FL) $0.15

North Texas Tollway Auth. (TX) $0.16

Central Texas Regional Mobility Authority (TX) $0.17

Tampa‐Hillsborough County Expy. Auth. (FL) $0.17

Massachusetts Turnpike‐Boston Extension (MA) $0.23

Indiana Toll Road Concession (IN) $0.23

Richmond Metropolitan Authority Powhite Parkway (VA) $0.24

E‐470 Public Highway Authority (CO) $0.32

Dulles Greenway (VA) $0.32

South Bay Expressway LP (CA) $0.39

MDX options Toll Rate per mile for SR 836 and SR 112 

$0.15 ‐ $0.18

* Only includes known future toll rate increases

SR 836 Toll Rate Options

Note:All ramps are assumed at a rate of $0.30

Option 1 Option 2 Option 3 Option 4 Option 5

Mainline $0.60 $0.65 $0.60/.75 $0.70 $0.75

Additional bonding revenue $41 M $47.1 M $47.2 M $53 M $59 M

Bonding capacity $369 M $424 M $425 M $479 M $534 M

Average rate per mile $0.15 $0.16 $0.16 $0.17 $0.18

Average increase for roundtrips

$0.90‐$1.40

$1.10‐$1.60

$1.20‐$1.70

$1.30‐$1.80

$1.50‐$2.00

Percentage of projects funded 46% 53% 53% 60% 67%

Job years created/retained 4,000 4,600 4,620 5,200 5,800

SR 836 Common Trips – Option 1

TripsExisting Future

From To

SR 874 MIA $2.00 $3.20

SR 874 Downtown $3.00 $4.40

SR 826 MIA $0.00 $1.20

SR 826 Downtown $1.00 $2.40

Turnpike MIA $1.50 $2.40

Turnpike Downtown $2.50 $3.60

$0.60 Mainline / $0.30 Ramps

SR 836 Common Trips – Option 2

TripsExisting Future

From To

SR 874 MIA $2.00 $3.30

SR 874 Downtown $3.00 $4.60

SR 826 MIA $0.00 $1.30

SR 826 Downtown $1.00 $2.60

Turnpike MIA $1.50 $2.60

Turnpike Downtown $2.50 $3.90

$0.65 Mainline / $0.30 Ramps

SR 836 Common Trips – Option 3

TripsExisting Future

From To

SR 874 MIA $2.00 $3.50

SR 874 Downtown $3.00 $4.70

SR 826 MIA $0.00 $1.50

SR 826 Downtown $1.00 $2.70

Turnpike MIA $1.50 $2.70

Turnpike Downtown $2.50 $3.90

$0.65 Mainline / $0.75 57th Ave Mainline / $0.30 Ramps

SR 836 Common Trips – Option 4

TripsExisting Future

From To

SR 874 MIA $2.00 $3.40

SR 874 Downtown $3.00 $4.80

SR 826 MIA $0.00 $1.40

SR 826 Downtown $1.00 $2.80

Turnpike MIA $1.50 $2.80

Turnpike Downtown $2.50 $4.20

$0.70 Mainline / $0.30 Ramps

SR 836 Common Trips – Option 5

TripsExisting Future

From To

SR 874 MIA $2.00 $3.50

SR 874 Downtown $3.00 $5.00

SR 826 MIA $0.00 $1.50

SR 826 Downtown $1.00 $3.00

Turnpike MIA $1.50 $3.00

Turnpike Downtown $2.50 $4.50

$0.75 Mainline / $0.30 Ramps

SR 112 Toll Rate Options

Option 1 Option 2 Option 3 Option 4

Mainline $0.30 $0.35 $0.40 $0.45

Additional bonding revenue $1.6 M $3.8 M $5.9 M $8.1 M

Bonding capacity $15 M $34 M $53 M $73 M

Average rate per mile $0.15 $0.17 $0.20 $0.22

Average increase for roundtrips $0.20 $0.40 $0.60 $0.80

Additional Percentage of projects funded 2% 4% 7% 9%

Job years created/retained 18 360 580 800

Proposed New Toll Policy

• CPI Adjustment− Starting July 2015 − Rounded to nearest $0.05− Miami/Ft. Lauderdale index

• Toll‐By‐Plate rate equal to Twice the SunPass rate− Starting July 2013

• New projects shall be self sustained within 5 years (Principal, Interest and O&M)

• Toll rate setting must comply with Trust Indenture, all agreements and coverage requirements

Closing the Funding Gap

$110 

$65 $369

Option 1 

$160 

$85 

$220 

$160 

 $‐

 $100

 $200

 $300

 $400

 $500

 $600

 $700

 $800

 $900

Unfunded Project Needs Bonding Capacity

83611 Ph.2 ‐SR 836 Improv/I‐95

92404‐SR 924 West Extension

83629 ‐SR 836/87 Ave

83628 ‐Ph1B,2. SR 836 Improv East

83611 Ph.1 ‐SR 836/12 Ave

87410 ‐SR 874 Ramp Connector

‐CPI‐Toll Adjustments‐Minor Contributions     (Non‐Toll Revenue)

‐State & Federal Grants‐Partnerships

$424Option 2

$425Option 3

$479Option 4

$534Option 5

Revenue Potential – CPI in FY 2015

$0$50$100$150$200$250$300$350$400$450$500

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Millions

Current Revenue SR 112/SR 836

CPI starts

Note:Does not assume any toll adjustment.

Fiscal Years

Revenue Potential ‐ CPI in FY 2008

$0$50$100$150$200$250$300$350$400$450$500

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Millions

Current Revenue SR 874/878/924 SR 112/SR 836

Fiscal Years

CPI starts

Revenue Potential Comparison

 $‐

 $100

 $200

 $300

 $400

 $5002012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Millions

CPI in FY 2008 CPI in FY 2016

$358M

$440M

Fiscal Years

Time/Value/Money Comparison

1953 1983 1995 2005 2011

Loaf of bread $0.16 $0.20 $1.15 $1.25 $1.98

Gallon of Milk $0.94 $2.24 $2.96 $2.22 $3.39

Gallon of Gas $0.22 $1.20 $1.09 $3.18 $3.52

First Class Stamp $0.03 $0.20 $0.32 $0.37 $0.44

Average Car $1,850 $8,500 $15,500 $28,400 $30,748

Average Home $17,400 $82,600 $113,150 $297,000 $202,100

• Last toll increase in 2005 ‐ 7 years ago• $1.00 in 2005 is the equivalent of $1.25 today

Next Steps• Elected Official briefings• Public reviews• Consideration by Budget & Finance and Policy & Planning Committees

• Public Hearings• Board meeting & adoption of Toll Policy• Board approval of rates for SR 112 and SR 836• Simultaneous approval of the Five‐Year Work Program & updated Financing Plan

Board Discussion