Florida Department of TRANSPORTATION Finance Tools for Project Advancement Leon Corbett Project Finance Manager NCSL Southern States Fiscal Leaders September 23, 2016
Discussion Topics Public-Private Partnerships (P3s) New Transportation Finance Corporation 2
FDOT s P3 Program - $6.8B in Projects 9B - $95M (DBF) UNDER CONSTRUCTION SR 79 - $98M (DBF) UNDER CONSTRUCTION US 19 - $125M (BF) I-4 Connector - $438M (BF) I-95 - $130M (DBF) UNDER CONSTRUCTION I-4 Ultimate - $2.3B* (DBFOM) I-95 at Pineda - $199M (DBF) IN OPERATIONS I-595 - $1.2B* (DBFOM) I-75 N of SR 80 to S of SR78 - $72M (DBF) *construction portion I-75 (IROX) - $458M (DBF) US 1/SR 5 - $114M (DBF) BF Build Finance DBF Design Build Finance DBFOM Design Build Finance Operate Maintain IN OPERATIONS PortMiami Tunnel - $667M* (DBFOM) I-95 Express Lanes - $139M (DBF) UNDER CONSTRUCTION Palmetto Section 5 - $567M (DBF) IN PROCUREMENT - FEB. 2016 I-395 - $626M (DBF) Palmetto Section 2 - $191M (DBF) 3
Two Methods for P3 Delivery Procured under s.334.30, F.S., two categories: Design-Build Finance (DBF) or Build Finance (BF) Traditional agreement Construction only Cash Availability Schedule Terms around 7 years Short-term financing $100 M - $600 M Project typically advanced 2-3 years Design-Build-Finance- Operate-Maintain (DBFOM) Concession Agreement Add Operations and Maintenance Construction period and Availability Payments Terms of 35 to 40 years Long-term financing More than $500 M Project advanced 15 years or more 4
Legal Framework Ensures Creditworthiness Authority for availability payment deals introduced in 2007 statutes 15% of federal and state funding cap, cost effectiveness analysis Availability payments prioritized ahead of new capacity projects Further controls introduced in 2012 Approval by Governor following Legislature review Inclusion in State Transportation Trust Fund debt assessment Additionally, portions of P3 payments are included in the Division of Bond Finance Debt Affordability Report 5
Why has FDOT pursued P3s? Both DBF and DBFOM: Advance priority projects that add capacity, enhance safety and reduce congestion Additional sources of capital via private sector DBFOM procurement method further incentivizes private sector innovation DBFOM contract transfers appropriate risks through construction and operations Toll revenue risk has not been transferred with FDOT s P3s 6
PortMiami Tunnel DBFOM Financing: $341M federal TIFIA loan, $341.5M bank loans, and $80.3M in private equity Construction Cost: $667M Milestone, final acceptance and availability payments Benefits: Direct access from I-395 to PortMiami Concessionaire has 30-year O&M period following construction Construction complete in 2014 Key Decisions: PortofMiamiTunnel.com No tolls Shared geotechnical risk 7
I-595 DBFOM Financing: $603.4M federal TIFIA loan, $781.1M bank loans, and $207.7M in private equity Final acceptance and availability payments Benefits: Adds 3 at-grade reversible tolled express lanes and full corridor improvements Concessionaire has 30-year O&M period following construction Estimated 15 year advancement Key Decisions: Tolls set and retained by FDOT Provisions for sharing refinancing gain Construction Cost: $1.2B 595express.info 8
I-4 Ultimate DBFOM Financing: $949M TIFIA loans, $486M bank loans, and $104M private equity Construction period, final acceptance, and availability payments Benefits: Major interchanges and bridge reconstruction Addition of express lanes provides congestion relief and improves safety Estimated 20-year advancement Key Decisions: 21 miles at one time, size and complexity of project 40-year concession agreement Construction Cost: $2.3B I4Ultimate.com 9
Transportation Financing Corporation Created under s. 339.0809, Florida Statutes Nonprofit corporation that can finance projects for FDOT Adds another tool to our toolbox 10
Who oversees the TFC? BOARD OF DIRECTORS Secretary of the Florida Department of Transportation Director of the Division of Bond Finance Director of the Office of Policy and Budget within the Executive Office of the Governor 11
How does the TFC work? Contractual Relationship #1 Transportation Financing Corporation Debt Proceeds Service Payments Florida Department of Transportation Contractor Payments Contractor Contractual Relationship #2 12
How does the TFC benefit Floridians? ADDITIONAL FINANCING TOOL LOWER INTEREST RATES PROJECT ADVANCEMENT 13
Questions and Contact Information Leon Corbett Project Finance Manager Office of Comptroller 850-414-4421 Leon.Corbett@dot.state.fl.us www.dot.state.fl.us/officeofcomptroller/pfo.shtm 14