Public-Private Partnership Program 2015 Update

1. Public-Private Partnership Program 2015 Update 2015 American Council of Engineering Companies ACEC – Los Angeles Chapter Luncheon, July 8, 2015

2. Presentation Agenda • Agenda • Metro P3 Management and Organization • Metro P3 Program Foundation Assumptions • Select projects under evaluation for financial strategy assessment • Sepulveda Pass • High Desert Multipurpose Corridor • I-710 South • SR-710 North • Unsolicited Proposals • Ballot Measure • Questions 2 2

3. Current P3 Organization • P3 organization seeks to foster Executive Team ownership by optimizing expertise: • Project development and environmental functions managed by planning staff • Insurance issues managed by Risk Management staff • Procurements managed by procurement staff • Objectives • Align Metro P3 program with Metro’s Long Range Transportation Planning and Programming functions • Broaden ownership of P3 process and ideas to improve results • Develop framework to evaluate proposals • Long Range Planning • Financial Forecast/Programming • Grants Management Managing Executive Officer P3 Executive Officer (Open Until Filled) • Financial Forecast Interface • Executive Team P3 Ownership Metro Legal/Risk Management Team Deputy Executive Officer Director, P3 Program Metro Subject Matter Experts P3 Subject Areas P3 Subject Areas LRTP Modeling Oversight • Legal Structures • Risk Management • Formal Agreements • Project Development • (Environmental) • Project Scope • Project Engineering 3

4. P3 Foundation – Risk Transfer Benefits • P3 is a finance and delivery mechanism not a funding source • P3 is a financing tool; not a funding solution with free money • Private equity will be repaid using either project revenues or agency tax funds (Revenue Risk versus AP structure) • Funding for all P3 projects take the form of either tolls or taxes • Market can ID projects most viable for P3 (e.g., unsolicited proposals) • P3s can provide long-term life-cycle cost benefits and transfer risk • Private developers can be incentivized to do preventative maintenance rather than corrective maintenance (O&M Risk) • Qualified design-build contract structure could offer equivalent life cycle value (scheduling and delivery risk) • Annual maintenance fees (AP) do not ensure increased value but do provide a defined payment stream in advance (Cost Risk) 4

5. Public-Private Partnership Program: Background Original Countywide project evaluation started with 81 potential projects, narrowed down to 14, further refined to six. Project evaluation identified four mega projects in LRTP identified for potential P3 delivery: • Sepulveda Pass Transit Corridor • High Desert Multipurpose Corridor • I-710 South • SR-710 North Going forward P3 project selection should be market driven 5 5

6. PPP Program: Sepulveda Pass Study Corridor • Funding available: $2.5 Billion (FY 2030-38 in LRTP) • Project cost estimate range: $1-$33 Billion (CY) • Maximum feasible cost with new taxes +/- $9 B (YOE) • Possibilities include: • At Grade Managed Lanes with BRT • Toll Highway Tunnel with BRT • Rail Tunnel • Toll Highway with Rail Tunnel • Project can be done in phases/segments: • Initial segment is 9-11 miles • Full segment is 21-30 miles • Studies to date are inconclusive: • Cost estimates exceed available funding • Shortfalls are too large to attract revenue risk developers • Strategic Financial Plan completed July 2015 • Board Update Anticipated September 2015 6

7. PPP Program: High Desert Multipurpose Corridor (HDMC) • Funding available: $2 million remaining after $31 million spent on draft EIR • Project cost estimate: $5,000 - $9,000 million (YOE $ 2016-2024) • Draft EIR completed • Goal to build new multi-modal link between State Route (SR)-14 in Los Angeles County and SR-18 in San Bernardino County • Strategic Financial Plan completed July 2015 – Board Update Anticipated September 2015 7

8. PPP Program: I-710 South • Funding available: $682.5 million (FY 2013-38 in LRTP) • Project cost estimate: $5.3 – 9.0 Billion (YOE $ 2015-2021) • Possibilities include: • At Grade Managed Lanes with BRT • Toll Highway Tunnel with BRT • Rail Tunnel • Toll Highway Tunnel with Rail • 18 miles of the I-710 between the Ports of Long Beach & Los Angeles, and Pomona Freeway (SR-60) • Studies to date are inconclusive and project goals are evolving • Draft EIR/EIS prompted further evaluation: • Traffic patterns are different than identified • Physical constraints on design for access points to 710 • “No Build” alternative needed • Financial Strategy Study Proposed – RFP to be released in FY 2016 8

9. PPP Program: SR-710 North • Funding available: $1.66 Billion (FY 2013-36 in LRTP) • Project cost estimate: $3.25 Billion (2011 $ - updated cost estimates required) • Draft EIR scheduled circulated in February 2015; Public comments open through August 2015 • Goal to build new multi-modal link between Interstate 10 and Interstate 210 • Financial Plan is yet to be fully identified – Additional studies forthcoming 9

10. Unsolicited Proposals • Unsolicited proposal policy adopted July 2014 • Unsolicited proposal guidelines adopted February 2015 • Currently developing streamlined version of guidelines • Metro is focused on market interests 10

11. Ballot Measure – P3 Program Future • To ignite the P3 Program additional funding needs to be identified • Future State and Federal assistance will likely be limited • Market determination of which projects are best suited for P3 delivery • To advance potential opportunities for P3 delivery, the program will need revenue from a potential 2016 Ballot Measure to provide and accelerate capital 11

12. Questions? Contact Information: Mark Linsenmayer Metro 213-922-2475 LinsenmayerM@metro.net 12