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Innovative Finance for 183A

Innovative Finance for 183A. Bill Chapman CFO, Central Texas Regional Mobility Authority. Who 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

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Innovative Finance for 183A

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  1. Innovative Finance for 183A Bill Chapman CFO, Central Texas Regional Mobility Authority

  2. Who 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

  3. How It Works in Central Texas TxDOT Central Texas Regional Mobility Authority Transit Agency MPO Local Government

  4. Regional Plan • Over 75 miles of new capacity already open – Phase 1 • Electronic tolling • Multiple agency participation

  5. 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

  6. First 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

  7. Mobility 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

  8. Mobility 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

  9. Mobility 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

  10. Mobility 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

  11. Sources 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

  12. Uses 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

  13. CDA 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

  14. TIFIA • $66,000,000 • Flexibility • Multiple payment schedule • Ability to Restructure/Flexible • Subordinate Lien • Deferred payment • Negotiations • Prepayment • 4.69% interest rate

  15. TIFIA Timeline • Letter of interest             3/12/04 • Application                    7/13/04 • Executed term sheet      2/7/05 • Secured loan agreement 3/1/05

  16. 183AFunding

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

  18. Financing 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

  19. Financing 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

  20. Bond Insurance Bond Insurance Bond Insurance Bond Insurance Bond Insurance CDA AGREEMENT 730 DAYS TO COMPLETE Financing Plan Toll Revenues $66,000,000 BANS $55,000,000 TxDOT Toll Equity Grant $55,000,000 TxDOT Toll Equity Grant $66,000,000 BANS $66,000,000 BANS $167,967,611 Senior Lien Revenue Bonds $167,967,611 Senior Lien Revenue Bonds March 2007 Complete March 2, 2005

  21. Bond Deal of the Year 2005 Southwest Bond Deal of the Year

  22. Legislative 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

  23. Innovative Finance for 183A Bill Chapman CFO, Central Texas Regional Mobility Authority

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