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JEB BUSH GOVERNOR Florida Department of Transportation 605 Suwannee Street, MS 07 Tallahassee, FL 32399 JOSE ABREU SECRETARY September 30, 2003 Dear MIC Partner: Attached is the third Annual Update

1 JEB BUSH GOVERNOR Florida Department of Transportation 605 Suwannee Street, MS 07 Tallahassee, FL JOSE ABREU SECRETARY September 30, 2003 Dear MIC Partner: Attached is the third Annual Update of the Financial Plan for the Miami Intermodal Center (MIC) program. The report has been issued in the format agreed to by FHWA for their use. The Financial Plan is designed primarily for use by the United States Department of Transportation (USDOT) to assist the USDOT in oversight responsibilities mandated by Federal law. Respectfully submitted by: Eugene A. Branagan Manager Project Management Office EAB/smb

2 JEB BUSH GOVERNOR Florida Department of Transportation 605 Suwannee Street, MS 07 Tallahassee, FL JOSE ABREU SECRETARY Transmit to: Mark Sullivan Project Finance Coordinator Federal Highway Administration th Street, S.W. Washington, DC Tom Sorel Major Projects Team Leader Infrastructure Office of Administration Federal Highway Administration th Street, S.W. Washington, DC Ron Gressel FHWA Florida Division Office 5 w/ one cover 5 w/ one cover 2+ original w/ one cover Kouroche Mohandes (Nick?) NW 111 TH Avenue Miami, FL Johnny Martinez Secretary, District 7 0(Kouroche) Greg Owens, MIA 5 Nick Serianni 3 Jeff Parker 0, (Nick) Sec. Abreu reading file 1 TOTAL 28

$FLORIDA DEPARTMENT OF TRANSPORTATION MIAMI INTERMODAL CENTER \\DOTSCOSAN04\CO\OMB\PRIVATE\PRESENTATIONS\MAJOR_PROJECTS\M_I_C\FIN_PLAN\2003\MIAMI_INTERMODAL_CENTER_A$

3 FLORIDA DEPARTMENT OF TRANSPORTATION MIAMI INTERMODAL CENTER \\DOTSCOSAN04\CO\OMB\PRIVATE\PRESENTATIONS\MAJOR_PROJECTS\M_I_C\FIN_PLAN\2003\MIAMI_INTERMODAL_CENTER_A NNUAL_FINANCIAL_PLAN_ DOC FLORIDA DEPARTMENT OF TRANSPORTATION MIAMI INTERMODAL CENTER THIRD ANNUAL FINANCIAL PLAN UPDATE September 30, ANNUAL FINANCIAL PLAN UPDATE September 30, 2001 Page 1 of 10

5 LETTER OF CERTIFICATION BY AGENCY HEAD The Florida Department of Transportation has a dynamic and on-going comprehensive Financial Plan for the Miami Intermodal Center in accordance with the requirements of Section 106, Title 23, and the Financial Plan guidance issued by the Federal Highway Administration. The plan provides detailed cost estimates to complete the project and the estimates of financial resources needed to fully finance the project. The information provided in the report reflects a summary of the overall information. More detailed project and financial information is reported on a monthly basis to the FHWA Florida Division Office and the Major Projects Team. In addition, the Florida Department of Transportation has comprehensive systems and processes to manage the Miami Intermodal Center group of projects including the overall finances needed to fund these projects. The FHWA Florida Division Office and the Major Projects Team reviewed these comprehensive processes and systems during field visits to Miami and our Central Office in Tallahassee. The cost data in the Financial Plan and supporting systems and processes provide an accurate accounting of costs incurred to date and include a realistic estimate of future costs based on engineer s estimates and expected construction cost escalation factors. While the estimates of financial resources rely upon assumptions regarding future economic conditions and demographic variables, they represent realistic estimates of available monies to fully fund the project. We believe the Financial Plan and supporting processes and systems provide an accurate basis upon which to schedule and fund the Miami Intermodal Center. To the best of our knowledge and belief, the Financial Plan Update and supporting systems and processes fairly and accurately present the financial position of the Miami Intermodal Center and expected conditions for the project's life cycle. The financial forecasts in the Financial Plan are based on our judgment of the expected project conditions and our expected course of action. We believe that the assumptions underlying the Financial Plan Update and supporting processes and systems are reasonable and appropriate. Further, we have and routinely will make available all significant information that is relevant to the Financial Plan and, to the best of our knowledge and belief, the documents and records supporting the assumptions are appropriate. José Abreu, P.E. Secretary September 30, 2003 Page 1 of 7

6 EXECUTIVE SUMMARY The Florida Department of Transportation (FDOT) is pleased to provide the third annual update of the Miami Intermodal Center (MIC) Financial Plan. The Financial Plan is designed primarily for use by the United States Department of Transportation (USDOT) to assist the USDOT in fulfilling its oversight responsibilities mandated by Federal law. The FDOT is pleased to report that the MIC program is moving forward on the schedule adopted after the events of September 11, In the September 2001 Update, FDOT reported that the MIC program had been put on hold to assess the situation after these tragic events. This was necessary because the MIC program is driven largely by travel demands generated by Miami International Airport. As reported to USDOT in a briefing in April 2002, a follow-up letter to the FHWA Administrator dated May 17, 2002, and the most recent briefing for USDOT on September 18, 2003, FDOT is anticipating an approximate 18- month to 24-month delay in overall program implementation from the schedule provided in the TIFIA application. At this time, land acquisition is virtually complete and environmental remediation on the Priority 1 and 2 sites is almost complete. The Rental Car Facility is under construction, roadway designs are almost complete, with all roadway construction expected to be let by the June 30, Miami International Airport and Miami-Dade County are proceeding with a Design-Build-Operate-Maintain procurement for the MIA Mover and a construction financing plan that involves an advance of funds from the County is being finalized. A revised revenue operation date for the MIA Mover of June 2008 has been established and incorporated into the Rental Car Facility financial plan. The MIC Core design and construction effort is advancing with construction associated with the relocation of Tri-Rail slated to begin next calendar year. Pursuant to agreements with Hertz and Avis on acquisition of their sites, construction of the Core itself will begin after the Rental Car Facility begins revenue operations in early The MIC continues to advance below the original budget estimates. A change in the configuration of the MIA Mover has resulted in an $87.7 million budget reduction, accounting for the largest single change in costs. While title to all but two properties (Avis and Florida Power and Light in Priority 3) has been acquired, final judgments remain outstanding on several large properties. Costs thus far for land acquisition and environmental remediation are tracking below budget estimates; however, no adjustments to contingencies have been made due to the uncertainties remaining. Small increases in the road improvement budgets occurred this year as designs were finalized, but remain well below original budget forecasts. Contingency reserves remain strong after the transfer of $80 million from the FDOT portion of the MIC to the Miami-Dade County-funded MIA Mover. The $80 million transfer includes $30 million of additional funding for the MIC provided by FDOT District 6. The Rental Car Facility (RCF) is currently budgeted in the MIC Work at $225.5 million; however, a $190-million scope has been agreed to by all parties and an updated financial plan is currently being reviewed by the rating agencies. When the RCF TIFIA Loan is finalized, the Work estimate will be conformed to the project budget. Finance costs for TIFIA capitalized interest are budgeted at the same amounts shown in the TIFIA loan approval package as a placeholder value. TIFIA loan draws by FDOT are occurring more slowly than originally forecast and lower TIFIA loan balances are anticipated for eventual repayment. September 30, 2003 Page 2 of 7

7 INTRODUCTION This report is the third Annual Update of the Financial Plan for the Miami Intermodal Center (MIC) program. The original Financial Plan was included in the TIFIA Loan Application, dated July 29, This report is required under Section 1305(b) of the Transportation Equity Act for the 21st Century (TEA-21) that modified Section 106 of Title 23 by adding subsection "(h)" which requires "... A recipient of Federal financial assistance for a project...with an estimated total cost of $1,000,000,000 or more shall submit to the Secretary an annual financial plan for the project." The act requires that the plan be based on detailed annual estimates of the cost to complete the remaining elements of the project and on reasonable assumptions of future increases in the cost to complete the project. The MIC Financial Plan will be updated annually each September. Each update will be designed to reflect changes in total compared to the previous Financial Plan update and to identify the remaining project cost and/or available funding. FINANCIAL PLAN 2003 UPDATE BRIEF OVERVIEW OF MIC PROGRAM FINANCING The MIC financial structure involves blending numerous funding sources in order to deliver a master planned series of phased improvements that, when combined, achieves the greatest reduction in congestion at the lowest cost. Funding for the program is derived from a wide range of sources linked to specific program elements, referred to as tenant transportation modes. In most instances, the tenant modes are responsible for financing the construction and future operations and maintenance of their improvements on the MIC site. Due to the large scale of outlays associated with the MIC, from the initial stages of the financial planning effort, commitments of Federal, state and local funding were spread over time with the view that a mechanism would be established to leverage those commitments when necessary to match project cash flows. Use of the TIFIA program along with other current debt options satisfied those early expectations. The total cost of the MIC program as included in the original TIFIA application of $1.349 billion has been established as the baseline for cost management and control. The TIFIA Loan is provided in two agreements: an FDOT Loan of $269.1 million that closed in June 2000 and an RCF Loan of approximately $163.5 million that is being negotiated. Due to the combined effects of the events of September 11, 2001 and the continuing recessionary environment on air passenger traffic and rental car activity, the MIC experienced an approximate month delay. In recognition of the delay in initiating anticipated TIFIA loan draws, FDOT requested on May 17, 2002 and FHWA approved on September 13, 2002 a two year deferral of the schedule for repayment of the FDOT TIFIA loan. In addition, FDOT agreed to assume up to $80 million of the cost of the MIA Mover peoplemover system that was to have been fully funded from the MIA Capital Improvement. The deferral of the FDOT Loan payment by two years released state transportation funds that have been used as part of FDOT's funding contribution to the MIA Mover. FDOT also has added approximately $30 million of State funds to fulfill its commitment for the MIA Mover construction. September 30, 2003 Page 3 of 7

8 The MIC produces many other reports on a periodic basis for the management and control of the project. These are available to the FHWA Florida Division Office on a routine basis and specialized reports may be requested as needed. PROPOSED RCF TIFIA CREDIT STRUCTURE FDOT is proposing an Ultimate Recovery credit structure for the RCF, as it is currently configured and budgeted at a cost of $190 million. This approach will permit variable principal payments that reflect current uncertainties regarding the future rental car market in Miami. Recent trends have shown considerable shrinkage in the Miami rental car market since 1999 and only slight recovery in recent months. This pattern lags behind the experience of other major airports in the region and nationally. There is a strong body of sentiment that a recovery to historic transaction day levels will occur, particularly as Latin American economies bounce back over time. However, there is also a strong body of concern that the sluggishness in the current market will persist as MIA loses market share to other South Florida airports and vacation travel trends continue in a state of flux. The Ultimate Recovery credit structure will permit full repayment of the TIFIA Loan Balances and approximately $95 million of repayments to FDOT for the RCF site acquisition under a stress case environment that anticipates no significant improvement in the Miami rental car market. As part of a rate covenant built into the structure, the rental car companies will have exposure for contingent rent that would equal facility operations and maintenance costs. FDOT s land repayments (at zero interest) are subordinated to repayment of the TIFIA Loan Balance. In the event of even a gradual recovery to 1999 transaction day levels, the Ultimate Recovery structure would permit TIFIA Loan Balance repayments to accelerate automatically and retire outstanding balances well in advance of the October 1, 2040 Maturity Date. In addition, accumulated surpluses would be available to accelerate the FDOT land repayments and to expand the RCF to its full design capacity, if necessary. NEXT STEPS IN PROGRAM IMPLEMENTATION FDOT is proceeding with the following next steps to close the RCF loan transaction and move the Miami Intermodal Center forward on the schedule shown on page 7: Agreement on the ultimate recovery approach with USDOT incorporate relevant templates from other TIFIA transactions (TTA, SR 125). Presentation of Base and Stress Cases to USDOT and advisors. Refinement of tests and financial models. Brief rating agencies and incorporate feedback. Finalize RCF finance plan. Finalize/execute concession agreements. Reaffirm county funding strategy for people mover to ensure completion by mid Obtain investment grade rating for the RCF TIFIA loan. Negotiate/execute TIFIA RCF loan documents. September 30, 2003 Page 4 of 7

9 MIC Uses of Funds by Element July, 2003 ($1,000s) Jul-99 TIFIA Application Sept-01 Work Sept-02 Work July-03 Work Net Change from TIFIA Application Right of Way & Environmental $379,072 $390,277 $391,914 $392,474 $13,402 Initial MIC Core $80,696 $53,459 $47,935 $47,935 ($32,761) Road Improvements $143,424 $116,208 $112,893 $121,208 ($22,216) MIC/MIA Connector $399,680 $399,680 $312,000 $312,002 ($87,678) Rental Car Facility $161,554 $229,778 $231,347 $225,456 $63,902 Capitalized Interest $61,390 $63,914 $63,914 $63,914 $2,524 RCF Reserves & Costs $5,715 $2,122 $2,122 $2,122 ($3,593) Other $118,203 $167,511 $164,606 $155,196 $36,993 Total Cost $1,349,734 $1,422,949 $1,326,731 $1,320,307 ($29,427) MIC Uses of Funds by Activity July, 2003 ($1,000s) Uses of Funds Jul-99 TIFIA Application Sept-01 Work Sept-02 Work July-03 Work Net Change from TIFIA Application PE, Feasibility Studies & NEPA $22,737 $23,727 $21,983 $21,983 ($754) Right of Way $306,035 $356,279 $360,726 $361,475 $55,440 Environmental Remediation -1 $73,037 $33,998 $31,188 $30,999 ($42,038) Design -2 $123,426 $93,287 $99,625 $86,466 ($36,960) Project Administration $33,152 $43,229 $41,739 $41,750 $8,598 CEI -2 $48,448 $17,717 $15,317 $20,681 ($27,767) Construction -2 $613,480 $688,121 $589,233 $598,385 ($15,095) Contingency $62,314 $100,555 $100,884 $91,463 $29,149 Subtotal, Before Financing $1,282,629 $1,356,913 $1,260,695 $1,253,202 ($29,427) TIFIA Capitalized Interest - FDOT $32,327 $32,327 $32,327 $32,327 $0 RCF Reserves & Costs $5,715 $5,715 $5,715 $5,715 $0 TIFIA Capitalized Interest - RCF $29,063 $29,063 $29,063 $29,063 $0 TOTAL $1,349,734 $1,424,018 $1,327,800 $1,320,307 ($29,427) September 30, 2003 Page 5 of 7

10 MIC Sources of Funds July, 2003 ($1,000s) Sources of Funds Federal Funds Jul-99 TIFIA Application Sept-01 Work Sept-02 Work July-03 Work (Note 4) Net Change from TIFIA Application TIP/LRTP & Prior $106,718 $62,394 $71,586 $31,422 ($75,296) Non-Federal Funds TIP/LRTP & Prior + Other State $157,033 $231,855 $298,550 $375,212 $218,179 Airport Capital Improvement Plan $399,680 $399,680 $232,000 $232,000 ($167,680) Dedicated Revenues - RCF $25,000 $63,224 $64,966 $16,694 ($8,306) MDX Tolls $86,568 $86,568 $86,574 $86,467 ($101) MDTA - 50% $15,000 $0 $0 $0 ($15,000) Ancillary Revenues $37,000 $30,000 $24,000 $25,000 ($12,000) Subtotal, Non-Federal Grants $720,281 $811,327 $706,090 $735,373 $15,092 Financing TIFIA Loan + Capitalized Interest -3 $497,735 $524,228 $524,055 $528,512 $30,777 SIB Loan $25,000 $25,000 $25,000 $25,000 $0 Subtotal, Financing $522,735 $549,228 $549,055 $553,512 $30,777 TOTAL $1,349,734 $1,422,949 $1,326,731 $1,320,307 ($29,427) MIC program obligations now extend through 2006/07 fiscal year (previously 2005/06) due to Events of 9/11/ Florida DOT estimated total cost to complete dated Environmental allocations in various projects. 2- Portions of this work are performed under Memoranda of Understanding and other intergovernmental agreements. As a result, allocations between these categories are estimates. 3- Assumed increase in TIFIA loan for RCF results in temporary increase above 33% of MIC program; however, the cost of the RCF is a placeholder pending formal adoption of a revised scope. The current RCF cost estimate is approximately $190 million (inflated) and brings the TIFIA principal under 33% after allowances for early collection of customer facility charges during RCF construction. 4- The TIFIA Application included funds allocated for the MIC and the Interconnector Roadway from the LRTP. In subsequent USDOT reports these future LRTP amounts were included as a "placeholder" value for continuity. The current report modifies the methodology in order to link directly back to the actual MIC Work and avoids inclusion of a "surplus" value based upon the LRTP placeholder assumption. For comparison purposes, the Sources of of Funds is calculated using both approaches in an accompanying spreadsheet. In addition, the back-up Work fund sources from 9-02 and 7-01 are provided for project-by-project verification. September 30, 2003 Page 6 of 7

11 September 30, 2003 Page 7 of 7

12 For Further Information, Please Contact: Eugene A. Branagan Project Management Office Manager Florida Department of Transportation 605 Suwannee Street, M.S. 07 Tallahassee, FL FAX: September 30, 2003

MIAMI INTERMODAL CENTER

FLORIDA DEPARTMENT OF TRANSPORTATION MIAMI INTERMODAL CENTER NINTH ANNUAL FINANCIAL PLAN UPDATE MAY 31, 2012 F L O R I D A D E P A R T M E N T O F T R A N S P O R T A T I O N M I A M I I N T E R M O