Innovative Finance

for 183A

Innovative Finance

for 183ABill Chapman

CFO, Central Texas Regional Mobility

Authority

Bill Chapman

CFO, Central Texas Regional Mobility

Authority

Who is the Central Texas Regional Mobility AuthorityWho is the Central Texas Regional Mobility Authority

• A multi-modal transportation agency authorized under 2001 state legislation

• A bi-county agency created in 2002 by Williamson and Travis Counties

• Oversight by a seven member board of local volunteers

• 11 employees

MPOMPO Transit Transit AgencyAgency

Central Central Texas Texas

Regional Regional Mobility Mobility

AuthorityAuthority

Local Local GovernmeGovernme

ntnt

TxDOTTxDOT

How It Works in Central TexasHow It Works in Central Texas

Regional PlanRegional Plan

• Over 75 miles of new capacity already open – Phase 1

• Electronic tolling

• Multiple agency participation

Central Texas Regional Mobility AuthorityAuthority & Purpose

Central Texas Regional Mobility AuthorityAuthority & Purpose• Purpose: To construct, reconstruct,

improve, extend, repair, maintain and operate revenue-generating tollway systems

• Powers of Authority: Acquire, hold, construct, improve, operate, own and lease the System, enter into contracts, set, change and collect tolls, rates, fees, and rentals, borrow money and power of eminent domain

First ProjectFirst Project

• Originally proposed in 1982

• Built under a Comprehensive Development Agreement Design/build process

Contractor assumes risk

Guaranteed maximum price of $178 million

Guaranteed completion March 2007

Public involvement activities included

Mobility Authority’s 183A CDA Procurement ProcessMobility Authority’s 183A CDA Procurement Process

• CDA Procurement Goals Foster Innovation

• Concept with Performance Requirements

• Workshops and One-on-One Meetings

• Alternate Technical Concepts

Expedite Schedule• 3 ½ years From Solicitation of Proposals to Open to

Traffic (Traditional Method Would Have Taken 5 to 7 Years)

• Overlapping Design/ROW/Utility Construction Process Rather than End on End

Mobility Authority’s 183A CDA Procurement ProcessMobility Authority’s 183A CDA Procurement Process

• CDA Procurement Goals (continued) Obtain Best Value

• Included approved Alternate Technical Concepts

• Included Added Value Concepts as separate proposals not included in cost

• Technical proposal was reviewed separately from cost proposal

• Project Completion Date corresponded as close as possible with the Opening of SH 45

• Proposers evaluations were based on the completion date, each day over minimum schedule added money to proposal

• Incentives and disincentives were used

Mobility Authority’s 183 CDA Procurement ProcessMobility Authority’s 183 CDA Procurement Process

• Primary Benefits of CDA Process: Guaranteed Maximum Price Guaranteed Delivery Date

• 183A CDA Process Specifics: The GEC prepared a cost estimate of various

alternatives and to assure reasonable price bids Right of Way Acquisition was done by Williamson

County Utility relocations were included in CDA contract

Mobility Authority’s 183 CDA Procurement ProcessMobility Authority’s 183 CDA Procurement Process

• Schedule Receipt of Unsolicited Proposal September 15,

2003

Request for Competing Qualifications December 19, 2003

Received Five Qualifications Statements February 2, 2004

Three Proposers Short Listed February 25, 2004

Issued Draft Request for Detailed Proposals March 15, 2004

Issuance of Request for Detailed Proposals May 5, 2004

Receipt of Detailed Proposals August 16, 2004

Potential CDA Award Date October 1, 2004

Began Toll Collection May 3, 2007

Sources of FundsSources of Funds

• Par Amount of Senior Lien Bonds$182,049,638

• Par Amount of BANS 66,000,000

• TxDOT Equity 64,700,000

• Local Contributions 14,100,000

• Reoffering premium 5,441,955

• Interest Earnings 3,405,973

• Accrued Interest on market debt 1,040,831

Total sources 336,738,397

Uses of FundsUses of Funds

• Project Construction Fund $212,000,000• Deposit to Capitalized Interest Fund 31,124,342• Deposit to Debt Service Reserve Fund 15,006,200• Future Feasibility Studies 15,000,000• Right of Way Acquisition 14,100,000• O & M Reimbursement 13,797,497• Preconstruction Costs 12,700,000• Gross Bond Insurance 9,634,737• Working Capital Requirements 8,500,000• Underwriters Discount/Cost Of Issuance 3,283,769• Deposit to Debt Service Fund 1,040,831• Deposit to Renewal and Replacement Fund 550,000• Rounding 1,021

Total 336,738,397

CDA AgreementCDA Agreement

• CDA Execution Authorized (HCC) October 27, 2004

• Notice To Proceed 1 December 7, 2004

• Notice To Proceed 2 March 2005 730 days from Notice to Proceed 2

• Guaranteed Completion March 2007

• Begin Toll Collection March 2007

• Guaranteed Lump Sum Cost of $178 Million

• Incentive: $10,000 per day for early opening (maximum $1,000,000)

• Liquidated Damages: $20,000 per day beyond 730 days (no maximum)

• $50,000,000 Performance and Payment bonds

TIFIATIFIA

• $66,000,000

• Flexibility Multiple payment schedule Ability to Restructure/Flexible Subordinate Lien Deferred payment

• Negotiations

• Prepayment

• 4.69% interest rate

TIFIA TimelineTIFIA Timeline

• Letter of interest             3/12/04

• Application                    7/13/04

• Executed term sheet      2/7/05

• Secured loan agreement 3/1/05

183AFunding183AFunding

CoverageCoverage

On Senior Lien Bonds, coverage rampsup from 1.75 in 2009 to 5.65 in 2045

Central Texas Regional Mobility Authority183-A Project

$-

$5,375,000

$10,750,000

$16,125,000

$21,500,000

$26,875,000

$32,250,000

$37,625,000

$43,000,000

$48,375,000

$53,750,000

$59,125,000

$64,500,000

$69,875,000

$75,250,000

$80,625,000

Period Ending 1/1

2005 Senior D/S TIFIA D/S Capitalized Interest Net Revenues at 1.75x Coverage (Senior) Net Revenues

Financing Objectives ChecklistFinancing Objectives Checklist

• Achieve Investment Grade Rating on Senior Lien Debt

• BBB- Standard and Poor’s

• Baa3 Moody’s

• FGIC Insurance

• 1.75 Minimum coverage

• Achieve lowest possible borrowing cost

• Produce maximum amount of net available cash flow

• CDA agreement

Financing Objectives ChecklistFinancing Objectives Checklist

• Make CTRMA financially self-sufficient for visible future TIFIA Loan

TxDOT Toll Equity Grant

• Close financing by mid to end of February Closed March 2, 2005

Bonds issued in a market environment with extremely low yields

Financing PlanFinancing Plan

$167,967,611Senior Lien

Revenue Bonds

March 2, 2005

$66,000,000BANS

Bond Insurance

$55,000,000

TxDOT Toll Equity Grant

Bond Insurance

CDA AGREEMENT 730 DAYS TO COMPLETE

Bond Insurance

March 2007 Complete

$167,967,611Senior Lien

Revenue Bonds

$66,000,000BANS

Bond Insurance

$55,000,000

TxDOT Toll Equity Grant

Toll Revenues$66,000,000

BANS

Bond

Insurance

Bond Deal of the YearBond Deal of the Year

2005 Southwest Bond Deal of the Year

Legislative UpdateLegislative Update

• House Bill 1892 Toll road moratorium bills

• 2 year ban on privatization of state toll roads (9/1/09)

• Lengthy list of exceptions including NTTA in Dallas and HCTRA in Houston

Passed in House 137 to 2

Passed in Senate 27 to 4

Passed in House 139 to 1

• Senate Bill 1267 – Sen. Nichols Very similar

Innovative Finance

for 183A

Innovative Finance

for 183ABill Chapman

CFO, Central Texas Regional Mobility

Authority

Bill Chapman

CFO, Central Texas Regional Mobility

Authority