The Long Road to Public Understanding of Tolls, Managed Lanes and Innovative FinancingColleen Gants, FacilitatorNTPAW – August 18, 2011
Agenda • National Funding/Financing Outlook • Innovative Financing 101 (Matthias Klinteback) • Case Study • Dulles Toll Road, MWAA (Lisa Thompson) • I-405/SR 167 Eastside Corridor, WSDOT (Colleen Gants) • Question/Answer • Breakout Session
National Funding/Financing Outlook CH2MHILL
National Perspective • “To bring the nation’s surface transportation infrastructure up to tolerable levels… funding gap.. $94 billion per year” American Society of Civil Engineers
Innovative Financing 101Why Innovative FinancingPublic Private Partnerships Matthias Klinteback CH2M Hill CH2MHILL
P3 vs. Traditional Procurement PPPFundamentals • It fails to secure maintenance of the asset • American Society of Civil Engineers “to bring the nation’s surface transportation infrastructure up to tolerable levels… funding gap.. $94 billion per year” Key problem with tax-paid procurement Critical Success Factors • Long term thinking – lifecycle focus • Clear responsibilities – better risk allocation • Economically motivated – prioritized • Large project – financially sound • Enabling legislation • Public and political will Source : http://www.asce.org/Press-Releases/2011/New-Report-Shows- Failing-to-Invest-in-Transportation-Will-Cause-Job-Losses,-Shrink- Household-Incomes/ August 2011
P3 vs. Traditional Procurement What is PPP about • Providing a public service or a public facility by the private sector • Project revenue stream sole security for lenders • Development-design-build-finance-operate-maintain-transfer • The public sector becomes partner and/or regulator rather than executor Characteristics PPP Structures - Models • Real Toll • Revenue stream from Client/ End User. Cash Tolling and open Road Tolling. Volume and Revenue risk on private Sector • Availability Payment • Revenue stream from DOT – DOT may collect tolls
Real Toll Project PPP Structure Revenue stream from vehicle traffic DOT PPP contract Exclusive right to collect tolls Equity /Risk capital Shareholder Vehicle Traffic Special Purpose Vehicle, SPV Lender Loans Engineering Procurement Construction contract Operation & Maintenance contract Construction Operation & Maintenance
Availability Payment PPP Structure Revenue stream from DOT DOT Equity /Risk capital Availability Payments Shareholder Special Purpose Vehicle, SPV Lender Loans Operation & Maintenance contract Engineering Procurement Construction contract Construction Operation & Maintenance
PPP Risk Allocation Risks allocated to the party best able to manage it. Traditional Procurement PPP Supplier Supplier Client Client Financing Financing Planning Planning Government Government Opinion Opinion Organization Organization Design Design Construction Construction O&M O&M Traffic Traffic
Benefits Why PPP is a Success. • Possible to realize earlier • Easier procurement – possible international tender • Faster execution Time Economical • Known maximum cost, no cost overruns • Investments earlier will boost economy • Off Balance sheet • An alternative financial solution • Save money when looking at LCC (Life Cycle Cost
Benefits Society Perspective • Value for money for taxpayers • Benchmarking for public services • Driver for innovative solutions in the construction industry • Should be needed projects not a mean to fulfill political promises Innovations, efficiency and economics
Case Study: Trains, Planes & Automobiles • A Public-Public Partnership Lisa Thompson HNTB
Background of DTR The Dulles Toll Road (Virginia Route 267) is an 8-lane, 14-mile (22.7 km) highway in Northern Virginia. The Virginia Department of Transportation transferred the operation of the Toll Road to the Metropolitan Washington Airports Authority on November 1, 2008. The Airports Authority has been the sole operator of the Toll Road since October 1, 2009. The Airports Authority's purpose in operating the Toll Road includes financing the construction of Metrorail in the Corridor using Toll Road revenue to support the sale of bonds.
History of the Dulles Corridor • 2005 – Five Firms proposed to VDOT to privatize operation of the Toll Road under the Virginia Public Private Transportation Act (PPTA) • Some included a substantial payment to the Commonwealth, • All submittals would require permission and possible additional easements from the Airports Authority • Airport access and a rail transit line to Dulles is one of the Airports Authority’s highest priorities • Realized if the Airports Authority operates the Toll Road and commits all revenues (in excess of operating costs) to construction of rail and other corridor improvements, the greatest benefit of the Corridor will be achieved • Phase II of the Metrorail Extension can be funded at the same time as Phase without any further contribution from the Commonwealth
Dulles Corridor Metrorail Extension • 23-mile new Metrorail line • Branches off the Orange Line after East Falls Church • 11 new stations • Five (5) in Phase I • Six (6) in Phase II • Seamless integration with current 106-mile Metrorail system • Estimated Cost for Phase 1 and Phase 2: $5.25 Billion
Concrete segments being erected for spans on Route 123 near Northrop Grumman
Dulles Corridor Metrorail Project FinancesWhere Does theMoney Come From? Funding Sources - Phases 1 and 2 “Drive to Ride”
The Tactical Plan • Development of communications matrix • Open Houses (3) for toll rate increase • Editorial Board Meetings with newspapers • Aggressive government relations plan • Newspaper advertisements • 800 pubic meetings on Dulles Metrorail in 3 years • Monthly Newsletter on progress of project • Monthly feature in area publications • Collateral materials
Communications Matrix Context: • The Airports Authority is responsible for financing and constructing the Dulles Corridor Metrorail Project (Project) • The Dulles Toll Road (DTR) is a major part of the Dulles Corridor Metrorail Project financing plan. • Periodic toll rate increases, with the first to occur in 2010, will help finance the project and provide this long awaited service to the corridor. Goal: Consistently inform our customers, partners and the general public as part of a transparent process that delivers the Dulles Metrorail Project and improvements in the Dulles Corridor. Key Messages: Drive to Ride - Thank You for Driving Transformation in the Dulles Corridor • Mass Transit in the Corridor = More Transportation Options • Toll Road Improvements, More Jobs, More Business = A Better Corridor • Money Stays in the Corridor = Focused Investment
Bringing Constituents Into The Circle When Thinking Outside The Box PUBLIC INVOLVEMENT Media Relations Campaign Grass Roots Effort Speakers Bureau/ Presentations Government Relations Public Outreach (NEPA) Marketing/ Collateral Material Community Awareness Advertising
System Users/Taxpayers/General Public Residents and Businesses Along the Corridor Chambers of Commerce/RDCs/ CIDs/Civic Organizations Media Policy Makers: LocalGovernments State/Federal Transportation Partners Boards Governor BUILDING CONSENSUS KEEPS YOU ON POINT
Corridor Specific • Choose Your Venues • Civic/Business/Community Organizations • Chambers of Commerce • Business Associations • Development Authorities • Professional Organizations • Rotary/Kiwanis Clubs • PTAs • Home Owner Associations • Other SPEAKERS BUREAU / PRESENTATIONS
Organizational Endorsements and Support • Fairfax County Board of Supervisors • Loudoun County Board of Supervisors • Committee for Dulles • Tysons Transportation Association (TYTRAN) • Washington Airports Task Force • Fairfax Chamber of Commerce • Loudoun Chamber of Commerce
Other Organizations Kim Poulton, Director of Public Affairs, Florida Turnpike Enterprise “The most factor in the successful delivery of a toll rate increase is making sure the public clearly understands what they are getting in return for their investment, where project or improvement” Below are successful tactical tools currently used by FTE: • Open Houses broadcast as webinar live (greater participation) • Twitter • Facebook • Newspaper
Case Study:WSDOT’s I-405/SR 167 Eastside Corridor Colleen Gants PRR
I-405 Master Plan Regional Consensus • EIS Record of Decision, 2002 Roadways • 2 new lanes in each direction • Local arterial improvements Transit & Transportation Choices • Bus Rapid Transit system • 9 new transit centers added • 50% transit service increase • HOV direct access ramps and flyer stops • Potential express toll lanes system • 5000 new Park & Ride spaces • 1700 new vanpools Environmental Enhancements
Legislative Charge Transportation Budget – ESSB 5352 By January 2010, the department must prepare a traffic and revenue study for Interstate 405 in King county and Snohomish county that includes funding for improvements and high occupancy toll lanes, as defined in RCW 47.56.401, for traffic management. The department must develop a plan to operate up to two high occupancy toll lanes in each direction on Interstate 405. For the facility listed in (a) of this subsection, the department must: i. Confer with the mayors and city councils of jurisdictions in the vicinity of the project regarding the implementation of high occupancy toll lanes and the impacts that the implementation of these high occupancy toll lanes might have on the operation of the corridor and adjacent local streets; ii. Conduct public work sessions and open houses to provide information to citizens regarding implementation of high occupancy toll lanes and to solicit citizen views; iii. Regularly report to the Washington transportation commission regarding the progress of the study for the purpose of guiding the commission’s toll setting on the facility; and iv. Provide a report to the governor and the legislature by January 2010.
Public Understanding • Demonstrate the need • Congestion relief • Revenue generation • Address two key questions • How do Express Toll Lanes work? • Why would I want to use them?
Demonstrate the need for congestion relief • 370,000 vehicle hours (520,000 person hours) daily delay (2004) • Chiefly affecting urban areas and especially the Puget Sound • region
How do ETLs work? • Traffic 101 – speed flow curve • Visualization – Rachel’s Drive
Why would I want to use ETLs? • Testimonials • KING 5 news story (handout) • SR 167 Users – Businesses • Key messages • ETLs are a choice • Travel time savings • “Being able to move effectively in a non-traffic lane saves time which in turn saves me money, especially with today’s gas prices.” • “I have to commute to attend meetings. If there is a traffic jam I can still arrive to my meetings on time. I have an extra choice and can plan my time and day better.”
What did we do on I-405? • Hosted booths at 10 summer festivals • Heard from 1,105 people through comment forms and email correspondence • Mailed 220,000 postcards to households in the I-405 and SR 167 corridor to advertise the online survey and open houses • Held 5 public meetings, 3 in August and 2 in November • Fielded 2,584 online surveys • 40% of participants use both I-405 and SR 167 regularly • 3% of participants use only SR 167 • Conducted a statistically valid phone survey of 1,002 I-405 or SR 167 users • Facilitated 4 corridor focus groups • 2 with I-405 users and 2 with SR 167 users (30 total participants)
Online Survey Results • Factors most predictive of support for express toll lanes: • Previous experience using HOT lanes on SR 167 • Experienced more congestion on SR 167 in previous week • Younger in age Online Survey Market Segments Base: All respondents who participated in the online survey N=2537 Probably I’m Sold Possibly No way
Phone Survey Results Phone Survey Market Segments Base: All respondents who participated in the phone survey • Factors most predictive of support for express toll lanes: • The more traffic congestion experienced on I-405 in the last week, the more supportive of express toll lanes • Strong appeal of the statements: • “Tolling will help guarantee travel speeds of at least 45 mph, providing a more reliable trip to those who use express toll lanes” • “Moving vehicles out of the general purpose lanes and into express toll lanes will increase speeds in all lanes” • “Tolling funds could go directly into a dedicated account to maintain and improve the I-405 and SR 167 travel corridors” • “Express toll lanes would collect tolls electronically as vehicles travel at regular highway speeds. There would be no toll booths” N=1002 Probably I’m Sold No way Possibly
Public support for tolled lanes increases after implementation
Key Findings from research & public outreach • Use = Support. Focus groups show that those who have used toll lanes, like the SR 167 HOT lanes, support the idea of express toll lanes on I-405. • Congestion relief = Willingness to pay. Our research shows that approximately 52 percent of those who filled out comment forms would pay to use express toll lanes if it would give them a faster, more reliable trip. • Understanding = Support. People who understand the benefits of express toll lanes tend to support them. • Undecided = Opportunity. For people who do not yet know the benefits of express toll lanes, there is an opportunity to alleviate their concerns through further information. • Dislike of tolls = Non supporters. People who dislike the idea of tolling under most or all circumstances are unlikely to become supporters.
Political Understanding • Briefings, briefings, briefings • Expert Review Panel • Coalition building • Executive Advisory Group • Stakeholder outreach • Businesses • Cities • Transit agencies • Users
Expert Review Panel • Reviewed and confirmed 2010 Study results • Policy, Methodology, Phasing, and Financing • Bi-partisan group helped communicate issues and messages
Regional Support Executive Advisory Group support for express toll lanes Dave Gossett, Snohomish County Councilmember, substituting for former EAG member and Councilmember Mike Cooper
Where is the project now? • Received legislative authorization: Develop and operate express toll lanes on I-405 between Bellevue and I-5 in Lynnwood. • Project went to Advertisement on July 25, 2011. • Transportation Commission Study to update Traffic and Revenue projections. • Legislative direction to continue ongoing public outreach and education.