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County of Fairfax, Virginia
Department of Transportation
Potential Use of Virginia Public-Private ActTransportation Legislation
To Provide Transportation Facilitiesin 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 4-23-09
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 andPublic-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
Project Location Limited Access Toll PPTA Type Status
Route 460 Corridor Improvements Richmond - Portsmouth Yes Yes Design – Build – Finance –
Operate - Maintain Under
procurement
I-95 HOV / HOT Lanes Northern Virginia Yes Yes1 Design – Build – Finance – Operate – Maintain2 Under
Contract Downtown Tunnel / Midtown Tunnel / MLK Extension Norfolk Yes Yes Design – Build – Finance –
Operate - Maintain
Capital Beltway (I-495) HOT Lanes
Fairfax County Yes Yes1 Design – Build – Finance – Operate - Maintain
Under Construction
Route 58 Southside No No Design - Build
Route 28 Fairfax and Loudoun Counties Yes No Design – Build – Finance3
Coalfields Expressway Southwest Virginia Yes No Special4
Dulles Rail Fairfax and Loudoun Counties Design – Build – Finance
Route 288 Richmond area No No Design - Build
Complete Route 895 Pocahontas Parkway Richmond area Yes Yes Design – Build - Finance
Route 199 Williamsburg No No Design - Build
1 Tolls applied to certain vehicle types via HOT-lane concept 2 Assumed structure, pending final agreement 3 Financing through special tax district 4 Excavation / grading by private sector in conjunction with coal extraction
County of Fairfax, Virginia
Department of Transportation 9
Stages of Virginia PPTA Project Development
* Taken from VDOT Presentation 4-23-09
County of Fairfax, Virginia
Virginia PPTA AssessmentMay, 2010
Department of Transportation 10
County of Fairfax, Virginia
Department of Transportation 11
IntroductionSummary 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 4-23-09
County of Fairfax, Virginia
Department of Transportation 14
County of Fairfax, Virginia
Department of Transportation 15
Virginia Local Government Experience with PPTAs
Prince William County
• Guidelines adopted 2003
• 3 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 2004
•2 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 COUNTYPUBLIC-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 ExperiencePublic-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 ExperiencePublic-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 LearnedPPTA / 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 LearnedPPTA / PPEA Critical Success Factors (cont’d)
•“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 LearnedPPTA 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 (cont’d)
•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 (cont’d)
•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
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