LEADING THE WAY 2013 ANNUAL REPORT

Transcription

1 LEADING THE WAY 2013 ANNUAL REPORT

2 GUN CLUB RD E-470 Route E-470 Larkridge Regional Retail Center TH E-470 MAINLINE TOLL PLAZA YORK ST U.S. 85 INTERCHANGE 144TH E BRIGHTON 76 THORNTON Barr Lake COLORADO BLVD 120TH 112TH ADAMS COUNTY E-470 morning rush hour in Parker. 25 COMMERCE CITY 104TH 96TH D Denver International Airport PENA BLVD E-470: 47 miles of innovative engineering and technology MORE THAN 22 YEARS OF AWARD-WINNING, GLOBAL INDUSTRY LEADERSHIP 25 SANTA FE DR Downtown DENVER BROADWAY EVANS COLORADO BLVD HAMPDEN AVE BELLEVIEW AVE ARAPAHOE RD COUNTY LINE RD C-470 COLFAX AVE 6TH PARKER RD 25 Park Meadows Shopping District Rocky Mountain Arsenal National Wildlife Refuge Cherry Creek Reservoir PEORIA ST Centennial JAMAICA ST Airport PEORIA ST 225 A MISSISSIPPI AVE CHAMBERS RD AURORA ILIFF AVE Buckley Air Force Base QUINCY AVE Quincy Reservoir SMOKY HILL RD JORDAN RD TOWER RD ARAPAHOE COUNTY PARKER RD PICADILLY RD C B 64TH 56TH 26TH 70 6TH PKWY JEWELL AVE ORCHARD RD Southlands Shopping Center GARTRELL RD PARKER LEADING THE WAY SINCE DAY ONE Since its inception, E-470 has introduced new, more convenient approaches to tolling. The toll road has set the standard for tolling facilities across the country, becoming an industry leader and a model for other organizations to emulate. Built and opened in segments, the first five-mile segment of the highway opened to drivers in Douglas County in June It marked not just the opening of a new toll road but also of a new way of tolling. On the day it opened, E-470 became the first toll road in America to offer drivers the option of nonstop tolling at highway speeds, provided through ExpressToll, E-470 s electronic toll collection system. Customers still had the option of paying tolls the traditional, manual way, at a toll plaza or ramp toll basket. However for the first time customers could opt to use the ExpressToll throughlanes and have their tolls automatically charged to their prepaid accounts. to either ExpressToll or manual tolling. LPT utilizes photo images of license plates to generate toll bills that are mailed to customers. Six months later, E-470 took a further pioneering stride closing all of its cash toll collection facilities and adopting all-electronic tolling (AET), where all customers tolls are collected either through ExpressToll or LPT. E-470 was one of the first toll roads in the nation to convert to AET. Beginning with those first five miles and a typical traffic count of 5,000 per day in 1991, E-470 is now 42 miles longer and logs more than 58 million toll transactions per year. In addition, E-470 s toll-collection system in 2013 continued to serve two other tolling agencies in the Denver metro area, the Colorado Department of Transportation s High Performance Transportation Enterprise (HPTE), which at that time operated the central Denver I-25 Express Lanes (managed lanes), and the Northwest Parkway. DOUGLAS COUNTY In January 2009, E-470 took another bold step by introducing License Plate Toll (LPT) as an alternative ONE

3 E-470 Public Highway Authority Leadership BOARD OF DIRECTORS E-470: The toll road and who steers it The 75-mph E-470 toll road forms a 47-mile semi-circular beltway around metropolitan Denver s eastern area and provides an entrance to Denver International Airport. E-470 connects in the south to the I-25/C-470 interchange in Douglas County, and in the north to the Northwest Parkway/I-25 interchange in Adams County. DICK McLEAN Chair Mayor, City of Brighton HEIDI WILLIAMS Vice-Chair Mayor, City of Thornton CHAZ TEDESCO Secretary/Treasurer Commissioner, Adams County The highway has been financed, constructed, operated and governed by the E-470 Public Highway Authority. The authority is a legal subdivision of the State of Colorado, composed of its eight member jurisdictions listed below. EIGHT MEMBER JURISDICTIONS: Adams County City of Brighton Arapahoe County City of Commerce City Douglas County City of Thornton City of Aurora Town of Parker JIM BENSON Council Member, City of Commerce City BILL HOLEN Commissioner, Arapahoe County STEVE HOGAN Mayor, City of Aurora ROGER PARTRIDGE Commissioner, Douglas County JOSH MARTIN Council Member, Town of Parker NON-VOTING MEMBERS LOCAL GOVERNMENTS EXECUTIVE LEADERSHIP City of Arvada City and County of Broomfield City of Greeley Weld County AGENCIES Colorado Department of Transportation (CDOT) Denver Regional Council of Governments (DRCOG) JOHN McCUSKEY Executive Director DAVID KRISTICK Deputy Executive Director, Director of Operations STAN KONIZ Director of Finance NEIL THOMSON Director of Engineering and Roadway Maintenance MARSHA WILLIAMS Director of Information Technology Regional Transportation District (RTD) TWO

4 2013: Leading the way E-470 s solar-power initiative earned two awards in 2013 from the International Bridge, Tunnel and Turnpike Association (IBTTA): the Toll Excellence award for social responsibility, announced in June, and the President s Award for Excellence, announced in September at IBTTA s annual meeting. Accepting the Toll Excellence award from Awards Chairman David Machamer at the annual meeting were Operations Manager Walt Arnason (center) and Deputy Executive Director and Director of Operations Dave Kristick (right). INDUSTRY PIONEERS, PAVING THE WAY FOR IMPROVED REGIONAL MOBILITY While, as the saying goes, necessity may be the mother of invention, it is also true that sometimes invention is born of the desire to go beyond what is simply necessary. Instead invention is often driven by a motivated spirit a force that takes processes, products and services to the next level. Since the earliest days of the E-470 Public Highway Authority, that kind of trailblazing mindset has been its hallmark. Established under Colorado law as a self-sustaining enterprise with no recourse to any taxpayers for potential funding shortfalls the eight municipal and county governments who compose the authority have operated in an enterprising way, as a selfsustaining business. During 2013, the success of E-470 s pioneering approach was manifested in a number of ways: E-470 was honored in September with the singular, most prestigious award of the International Bridge, Tunnel and Turnpike Association. The President s Award recognized E-470 for its solar energy program in which it created its own source of electricity along a 17-mile stretch of the road. The solar program also won the Toll Excellence Award for social responsibility. As an acknowledged leader in all-electronic tolling, in July E-470 co-hosted the Alliance for Toll Interoperability s Summit on All-Electronic Tolling, Managed Lanes and Interoperability. The long-established toll collection back office for two other Colorado tolled facilities, E-470 made considerable progress on negotiating an innovative, complex toll services agreement for an ambitious, new regional mobility improvement project. THREE

5 SETTING NEW FINANCIAL MILESTONES IN A REBOUNDING ECONOMY The economy continued its rebound from the 2007 recession and with it came stronger demand for the convenience, speed and reliability E-470 offers. Traffic, as measured by the number of toll transactions, increased 8.2 percent over 2012, with transactions rising from 54.0 million to a record 58.4 million. It was the fourth straight year of traffic growth. The rise in traffic, coupled with a 2013 toll increase, resulted in record toll revenues. E-470 received a boost in its Standard & Poor s bond rating, moving up from BBB- to BBB with a stable outlook. E-470 successfully completed at very attractive rates the reoffering of $66.1 million in senior revenue bonds originally issued in STABLE FINANCIAL FOUNDATION ENABLES MAJOR ROADWAY IMPROVEMENT E-470 s reserves made it possible to move forward in 2013 with the design of a new interchange at Quebec Street in Thornton to be paid for without outside financing. Construction will begin in spring THE E-470 GOOD GUYS AND THE TRANSPORTATION SAFETY FOUNDATION MAKE A DIFFERENCE E-470 is proud of its employees, not just for the way they handle their jobs, but also what many of them do for others in their free time. The E-470 Good Guys, a volunteer group of employees, raised funds and devoted countless hours to a variety of volunteer projects throughout 2013, including blood drives, military care packages, flood relief efforts, Coats for Colorado, the Denver Rescue Mission, Denver Children s Home, Food Bank of the Rockies and Special Olympics. In addition, the E-470 Transportation Safety Foundation awarded a total of $15,000 in grants supporting diverse programs, including one to ensure low-birth-weight babies have specially designed car seats to use when being transported home. Another grant went to purchase safety equipment and fund training expenses to ensure developmentally disabled adults remain safe while being transported in a vehicle. Golf carts line up at Saddle Rock Golf Course in Aurora for the E-470 Transportation Safety Foundation s annual golf tournament, which raised $43,000. Throughout 2013 the E-470 Good Guys served as volunteers for a variety of causes. FOUR

6 2013 Financial Overview 2013 OPERATING REVENUES 2013 Budget 2013 Actual Tolls $ 124,800,000 $ 129,181,918 Other fees 3,000,000 4,557,779 Vehicle Registration Fees 8,860,600 9,367,238 Unrestricted Investment Income 5,700,000 5,861,203 Other Income 2,090,000 2,354,647 Total $ 144,450,600 $ 151,322, REVENUES: $151.3 MILLION 85% Tolls 3% Other fees 6% Vehicle Registration Fees 4% Unrestricted Investment Income 2% Other Income 2013 OPERATING BUDGET 2013 Budget 2013 Actual Operating Revenues $ 144,450,600 $ 151,322,785 Operating Expenses (Amended) (32,973,600) (30,606,102) Vehicle registration fee debt service 0 0 Net income available for senior debt service $ 111,477,000 $ 120,716,683 Aggregate senior bonds debt service $ 81,846,000 $ 81,657,745 Senior bonds debt service coverage ratio DEBT SERVICE COVERAGE 1.30 Minimum Required 1.36 Budgeted Coverage 1.48 Actual Coverage As reported in the audited financial statements issued by the Authority on April 21, FIVE

7 2013 Financial Statements STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION For the Year Ended December 31, 2013 STATEMENT OF NET POSITION As of December 31, 2013 Operating Revenues Tolls $ 129,181,918 Other fees 4,557,779 Total operating revenues 133,739,697 Operating Expenses Toll road operations 24,889,301 Salaries and benefits 5,700,806 General and administrative 2,268,341 Total operating expenses before depreciation 32,858,448 Depreciation expense 33,683,646 Total operating expenses 66,542,094 Operating income 67,197,603 Non-Operating Revenues (Expenses) Vehicle registration fees 9,367,238 Investment income 5,605,313 Change in fair value of derivative instruments and investments 13,209,717 Interest expense (100,078,345) Other income 2,209,400 Total non-operating expenses, net (69,686,677) Loss before intergovernmental expense (2,489,074) Intergovernmental expense (3,207,700) Change in net position (5,696,774) Assets and Deferred Outflows of Resources Current unrestricted assets $ 91,794,174 Current restricted assets 43,092,725 Capital assets (net of accumulated depreciation) 639,916,297 Other noncurrent assets 248,426,010 Liabilities Total assets 1,023,229,206 Deferred outflows of resources 115,386,000 Total assets and deferred outflows of resources 1,138,615,206 Other current liabilities 28,295,561 Current bonds payable 59,880,000 Other noncurrent liabilities 47,693,998 Noncurent bonds payable 1,544,485,689 Net Position Total liabilities 1,680,355,248 Net investment in capital assets (163,212,683) Restricted for debt service 19,361,562 Unrestricted (397,888,921) Total net position (541,740,042) Total liabilities and net position $ 1,138,615,206 Net Position, beginning of year (536,043,268) Net Position, end of year $ (541,740,042) As reported in the audited financial statements issued by the Authority on April 21, SIX

8 PLACEHOLDER Financial Highlights THOUSANDS 1, YEARLY INCREASES IN EXPRESSTOLL ACCOUNTS AND TRANSPONDERS TOTAL TRANSPONDERS TOTAL ACCOUNTS ANOTHER RECORD-SETTING YEAR E-470 s overriding goal is to maintain its stable debt management program with sufficient reserves and liquidity. That goal was helped considerably with the record traffic and revenue results posted in Traffic, as measured in the number of toll transactions, rose for the fourth consecutive year, reaching 58.4 million. That total was a new high for E-470. The transactions were percent of E-470 s 56.8 million budgeted projection. The traffic increase, along with E-470 s scheduled January 1, 2013 toll increase, lifted net toll revenues to a record $129.2 million a $12.4 million, 10.6 percent upturn. This let E-470 stay apace with its escalating debt service requirement. E-470 EXERCISES FINANCIAL RESPONSIBILITY WITH THE IMPLEMENTATION OF ITS VEHICLE REGISTRATION HOLD PROGRAM During 2013, thanks to a Colorado statute in support of tolling agencies, and the cooperation of the state s motor vehicle division, for the first time E-470 implemented a new policy to pursue payment from the most flagrant non-paying License Plate Toll customers. Customers who have a large amount of unpaid tolls, fees, and civil penalties incurred on E-470 and who have repeatedly ignored requests for payment may not renew their Colorado vehicle registration until their debts are satisfied. SEVEN

9 STRONG SUPPORT FROM THE INVESTMENT COMMUNITY, INCLUDING A RATING BOOST Bond investors in the summer of 2013 demonstrated heightened confidence and enthusiasm for E-470 bonds during the reoffering of $66.1 million in E-470 s subseries 2007C-2 and 2007D-2 senior revenue bonds. The bonds have a four-year maturity and were marketed in an indexed variable-rate mode. Demand for those bonds far exceeded supply. Underwriters received orders totaling more than $270 million. The high market demand enabled the authority to lower its interest cost, saving E-470 approximately $1.6 million over the four-year term of the bonds. The market for the reoffering was aided by Standard & Poor s (S&P) with its July 25 announcement that it had raised E-470 s bond rating. The rating increased from BBB- to BBB with a stable outlook. It was the first time in the authority s history that its debt had earned that high of a stand-alone rating from S&P. In addition, the two other major rating agencies, Fitch and Moody s, announced they would continue to assign investment-grade ratings: Fitch maintained its BBB- rating with a stable outlook, and Moody s continued its Baa2 rating (equivalent to S&P s BBB) with a stable outlook. A STABLE APPROACH TO TOLL RATE AND REVENUE GROWTH E-470 continued to benefit from a change in toll policy implemented in Prior to 2011, E-470 s policy was to raise toll rates every three years. E-470 s board of directors authorized a change to yearly incremental toll increases beginning on January 1, The toll increase over each three-year period corresponds to the original toll rate schedule. For E-470 s customers, this policy of modest annual increases instead of considerably larger increases every three years lessens the budgetary impact for the customer. This policy results in a cumulatively more productive, as well as more predictable, toll revenue stream that is in line with the annual debt service requirement increases. REVENUES ALIGN WITH DEBT SERVICE REQUIREMENTS AND GOALS The 10.6 percent growth in toll revenues, combined with operating expense that came in well under budget ($30.6 million actual compared to the final amended $32.9 million budget), produced financial results that were more than sufficient to meet E-470 s financial obligations. Debt service coverage for 2013 was 1.48, surpassing the budgeted This exceeded the required debt service coverage per the Master Bond Resolutions of producing net income at least 1.30 times the aggregate senior debt service due for the year. E-470 has $1.6 billion in outstanding bond debt. In 2013 E-470 made $81.7 million in debt service payments to bondholders. The debt service obligation is currently scheduled to increase each year by an average of $6 million until 2020, when it then levels off for several years at $122 million and subsequently escalates to $135 million through 2039, with final maturities of $52 million in 2040 and The authority s plan of finance calls for taking advantage of two refunding opportunities in the coming years to achieve level annual debt service of slightly under $120 million through final maturity by RESERVES ALLOW E-470 TO REINVEST TOLL REVENUE IN SELF-FUNDED ROADWAY IMPROVEMENTS E-470 s reserve funds enable financial flexibility to fund all near-term capital expenditures and implement plans to retire debt early to achieve interest savings and level debt service. E-470 s reserves allowed the road to self-fund a $5 million new interchange at Quebec Street in Thornton. This project completed its design phase in 2013 and construction will begin in spring MILLIONS E-470 YEARLY TOLL TRANSACTIONS AND REVENUE TRAFFIC VOLUME: TOTAL TOLL TRANSACTIONS TOLL REVENUE (DOLLARS) $ $ $ $ $ EIGHT

10 New interchange leads list of roadway projects This overpass in Thornton will become an interchange by Installation of five continuous miles of deer fence greatly reduced deer-vehicle collisions. E-470 maintains high standards for roadway convenience, speed, safety and service. Throughout 2013, E-470 reinvested heavily in projects aimed at meeting those standards. Design work was completed for a new $5 million interchange at Quebec Street in Thornton. Construction will begin in spring A traffic and revenue study projects the cost of the new interchange will be offset rapidly with the additional toll revenues it will generate. E-470 undertook its second year of a three-year project to replace rusting bridge safety rails at the tollway s oldest bridges. The safety rails help prevent vehicles from running off bridges in the event of an accident. The annual budget for this project is approximately $500,000. An extensive median rehabilitation project continued into its second year to correct and guard against erosion problems that can have impacts on safety as well as aesthetics. A five-mile stretch of deer fencing was installed in an area of Douglas County where 58 percent of recorded deer-vehicle accidents occurred in The project was largely completed by September. Deer-vehicle collisions in the targeted five-mile section during the final four months of the year were reduced by 74 percent compared to Efforts continued to combat wrong-way driving incidents. Flashing LED WRONG WAY signs were installed at 15 locations in 2013, bringing the total to 35. E-470 approached completion on its long-term project to install surveillance cameras covering the entire 47-mile length of the toll road. The cameras now in place provide E-470 s Communications Center with views of 96 percent of the roadway. The addition Aerial view of the future new Quebec Street interchange in Thornton. Design work was completed in of five more cameras in 2014 will provide virtually 100 percent coverage. These cameras help E-470 monitor road conditions as well as enable emergency responders to react quickly to roadway incidents. NINE

11 PLACEHOLDER Display ad at Denver International Airport. MARKETING THAT EDUCATES AS WELL AS PROMOTES E-470 has an integrated marketing program focused on three objectives: converting License Plate Toll (LPT) customers to ExpressToll (thereby lowering toll collection costs), increasing traffic, and improving public understanding and perceptions of E-470. E-470 s marketing program is centered on education the more people know and understand about the value of E-470 and ExpressToll, the more likely it is they will become ExpressToll customers. To accomplish this educational strategy, E-470 communicates through a wide array of channels including radio, television, digital advertising, airport signage, marketing and social media, including many YouTube educational videos. In addition, there are specialized promotions to LPT customers with incentives to convert to ExpressToll. E-470 s marketing and communications team stays in touch with the public; it monitors public online conversations about E-470 and proactively engages in those conversations, offering to provide helpful information or assistance in solving problems. CUSTOMER DRIVEN MANAGEMENT With 527,437 inbound calls, queries and walkup customers handled in 2013, maintaining E-470 s standards for exceptional service was a considerable challenge, one that is met through E-470 s Customer Driven Management (CDM) program. With CDM, E-470 promptly reaches out to customers when they have had recent contact with the ExpressToll Service Center. Customers provide E-470 with instant critiques of the service they received, which then aids E-470 in improving its processes and helping guide the training and development of each Customer Service Representative (CSR). E-470 achieved positive results in its 2013 CDM customer satisfaction survey, in which 29,000 customers participated, including those who telephoned, sent queries, or visited our walkup office. On a scale of 1 5, on average customers gave E-470 s CSRs a rating of Based on the survey, E-470 resolved 97 percent of all customer requests on the first contact. Airport terminal advertising. License Plate Toll billing statement insert. TEN

12 E-470 Public Highway Authority East 6th Parkway Suite 100 Aurora, Colorado