PPEA and Other Alternative Funding Programs for Public

Works

American Public Works Association Annual Meeting, Hampton, Virginia

Chris LloydMcGuireWoods Consulting

May 12, 2005

Presentation Overview

• Brief History of the Virginia’s PPEA

• PPEA Overview and Process• Virginia Experience – Examples• Potential PPEA growth areas• Other funding tools

• Built on the successes of the PPTA (895, 288, 28, Coalfields Expressway)

• Passed General Assembly in 2002• Model Guidelines issued in October

2002, state guidelines in December• First comprehensive agreement

signed July 1, 2003• Amendments occur in 2003

(adding technology) and 2004

PPEA History

What is it?- An alternative procurement tool that allows public entities to more efficiently develop infrastructure and achieve better value for the taxpayer

What it is NOT?- A panacea that resolves all procurement issues- Solely a financing tool- A way to get something for nothing

- A way to steal ideas from the private sector

Public-Private Education Facilities and Infrastructure Act of 2002

• Allows for solicited and unsolicited proposals to develop or operate a qualifying project

• A qualifying project is:– education facility (public school and higher

ed)– equipment to enhance public safety and

security at public buildings– utility and telecommunications and other

communications infrastructure – recreational facilities – Technology infrastructure

Public-Private Education Facilities and Infrastructure Act of 2002 - provisions

• Public body adopts PPEA guidelines• 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 2002 - 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 (unsolicited proposals only)

Public-Private Education Facilities and Infrastructure Act of 2002 - process

• Private entity secures confidentiality agreement for FOIA protection

• Private entity submits a conceptual proposal for review (qualifications and experience, conceptual schedule and cost, public benefit)

• Open competition period of not less than 45 days• Public body determines whether or how to

proceed• If public body moves forward, asks for a detailed

submission• At this phase, schedule and price become locked

in• One proposer is elevated to the

interim/comprehensive agreement stage

Public-Private Education Facilities and Infrastructure Act of 2002 - process

• Creates the “interim agreement” concept

• Broadens definition of a qualifying project to include “any building or facility that meets a public purpose and is developed or operated by or for any public entity”

• Makes it clear that water and waste authorities can use PPEA

• Requires public entities to adopt guidelines and contains some direction on what qualities a public entity should look for from the proposer

• Creates an accelerated review process for priority projects

PPEA History – 2005 amendments

What is happening across Virginia?• School facilities in Falls Church, Fredericksburg,

Chesterfield, Winchester, and Stafford County - agreements signed

• Pending school proposals in Warren County, Bedford County

• Public safety facilities in Roanoke, Stafford, and Frederick Counties

• Capitol Square redevelopment• DOC Prison construction program (Centex), regional

jails• Parking decks (Fredericksburg)• Technology projects (VITA and DSS)• Richmond utility management system• GMU faculty housing and hotel-convention center• Prince William and Chesapeake human services offices• Bedford County Public Service Authority facilities• Crater Public Safety Training Academy• Wiehle Avenue development project – Fairfax County

Public-Private Education Facilities and Infrastructure Act of 2002 - implementation

PPEA Guideline Implementation

City of Salem ChesterfieldCity of Richmond StaffordCity of Winchester RoanokeCity of Manassas Park FrederickCity of Virginia Beach LoudounCity of Fredericksburg ChesapeakeCity of Falls Church James CityCity of Manassas YorkCity of Lynchburg BedfordNorfolk Airports Authority FairfaxClarke County FauquierCity of Suffolk Southampton

Public-Private Education Facilities and Infrastructure Act of 2002 - implementation

Stafford School Construction Project (I)

• County issues a solicitation for 3 new schools on county owned land, some design has been completed, includes a wish list (February 11, 2003)

• 7 firms respond in 30 days, narrowed to 2 in one week

• Detailed proposals were requested with one month turnaround

• Each team had revenue generating opportunities• Haskell/Hess team is selected, derives revenue from

sale of land for senior living center, joint uses of facilities, exchange of developer proffers

• Comprehensive agreement signed July 1, 2003 • County will finance using VPSA bonds• First school opens August 2004• Receives CCIM award for “Project of the Year” –

March 2005

Public-Private Education Facilities and Infrastructure Act of 2002 - implementation

Roanoke County Public Safety Project• Northrop Grumman first in door, leads 3 day ‘visioning’

session with county staff• NGMS presents white paper to county administrator,

includes 30% design – all at no cost to the locality• Plan includes building and equipment, routine technology

refresh, lease structure• Roanoke County accepts white paper as an unsolicited

proposal (June 29, 2003), advertises for 75 days• Two competing proposals were filed by September 15• Staff recommends that only 2 of the 3 proposals move

forward, board wants additional information on all three (October 28, 2003)

• County issues RFP for design review (December 2003)• Consultant (CDG) recommends NG in August 2004• NG signs comprehensive agreement in October 2004

Public-Private Education Facilities and Infrastructure Act of 2002 - implementation

Fredericksburg Parking Deck Project• Fredericksburg adopts PPEA guidelines on May 13, 2003• Donley’s makes initial contact with City, reviews prior

parking needs studies• Donley’s narrows potential properties, partners with a local

broker to secure options on the preferred site• Fredericksburg receives unsolicited proposal from Donley’s

on January 27, 2004 and opens 45-day competition period• No competing proposal is received, Donley’s (in

cooperation with the city) begins meetings and makes a presentation to city council

• Downtown merchants group assembled by Council to work on design, several changes are made, city appropriates $75,000 to continue design work

• Fredericksburg agrees to enter into comprehensive agreement with Donley’s, groundbreaking on 11/11/04

Public-Private Education Facilities and Infrastructure Act of 2002 - implementation

Anticipated growth areas• Water and wastewater • Public safety• Colleges and universities with

small/unsophisticated endowments• Courthouses and other local government

buildings• Local/regional jails• Technology

procurement/telecommunications• Performance contracting/energy

conservation

Public-Private Education Facilities and Infrastructure Act of 2002 - implementation

• Community Development Authorities• Direct legislative grants (Chesapeake

Bay funding)• Nutrient trading program• Service districts• Tolls and user fees

Other Public Works Funding Tools

Internet Resources

• www.mwcllc.com – PPTA/PPEA Bulletins

• www.mcguirewoods.com (Public Finance department)

• www.ncppp.org• www.vedanet.org (2005 Spring

Conference materials)• www.yesvirginia.org• www.virginiadot.org