PPEA and Other Alternative Funding Programs for Public Works American Public Works Association

1. PPEA and Other Alternative Funding Programs for Public Works American Public Works Association Annual Meeting, Hampton, Virginia Chris Lloyd McGuireWoods Consulting May 12, 2005

2. Presentation Overview • Brief History of the Virginia’s PPEA • PPEA Overview and Process • Virginia Experience – Examples • Potential PPEA growth areas • Other funding tools

3. PPEA History • Built on the successes of the PPTA (895, 288, 28, Coalfields Expressway) • Passed General Assembly in 2002 • Model Guidelines issued in October 2002, state guidelines in December • First comprehensive agreement signed July 1, 2003 • Amendments occur in 2003 (adding technology) and 2004

4. Public-Private Education Facilities and Infrastructure Act of 2002 What is it? - An alternative procurement tool that allows public entities to more efficiently develop infrastructure and achieve better value for the taxpayer What it is NOT? - A panacea that resolves all procurement issues - Solely a financing tool - A way to get something for nothing - A way to steal ideas from the private sector

5. Public-Private Education Facilities and Infrastructure Act of 2002 - provisions • Allows for solicited and unsolicited proposals to develop or operate a qualifying project • A qualifying project is: • education facility (public school and higher ed) • equipment to enhance public safety and security at public buildings • utility and telecommunications and other communications infrastructure • recreational facilities • Technology infrastructure

6. Public-Private Education Facilities and Infrastructure Act of 2002 - process • Public body adopts PPEA guidelines • Private entity submits proposal to public body • Public body makes a written determination whether the project is developed using competitive bid or competitive negotiation • Competitive negotiationcan proceedif the public body determines that this method is “likely to be advantageous” because of the “probable scope, complexity or urgency of the project” or “risk sharing, added value, an increase in funding or economic benefit from the project that would not otherwise be available”

7. Public-Private Education Facilities and Infrastructure Act of 2002 - process • Public body must also determine that the project “serves the public purpose” by demonstrating: • Public need • Cost is reasonable in relation to similar facilities • Will result in timely delivery of the project • Public body may charge a reasonable fee to cover processing costs including fees for attorneys and financial and other advisors (unsolicited proposals only)

8. Private entity secures confidentiality agreement for FOIA protection Private entity submits a conceptual proposal for review (qualifications and experience, conceptual schedule and cost, public benefit) Open competition period of not less than 45 days Public body determines whether or how to proceed If public body moves forward, asks for a detailed submission At this phase, schedule and price become locked in One proposer is elevated to the interim/comprehensive agreement stage Public-Private Education Facilities and Infrastructure Act of 2002 - process

9. PPEA History – 2005 amendments • Creates the “interim agreement” concept • Broadens definition of a qualifying project to include “any building or facility that meets a public purpose and is developed or operated by or for any public entity” • Makes it clear that water and waste authorities can use PPEA • Requires public entities to adopt guidelines and contains some direction on what qualities a public entity should look for from the proposer • Creates an accelerated review process for priority projects

10. Public-Private Education Facilities and Infrastructure Act of 2002 - implementation What is happening across Virginia? • School facilities in Falls Church, Fredericksburg, Chesterfield, Winchester, and Stafford County - agreements signed • Pending school proposals in Warren County, Bedford County • Public safety facilities in Roanoke, Stafford, and Frederick Counties • Capitol Square redevelopment • DOC Prison construction program (Centex), regional jails • Parking decks (Fredericksburg) • Technology projects (VITA and DSS) • Richmond utility management system • GMU faculty housing and hotel-convention center • Prince William and Chesapeake human services offices • Bedford County Public Service Authority facilities • Crater Public Safety Training Academy • Wiehle Avenue development project – Fairfax County

11. Public-Private Education Facilities and Infrastructure Act of 2002 - implementation PPEA Guideline Implementation City of Salem Chesterfield City of Richmond Stafford City of Winchester Roanoke City of Manassas Park Frederick City of Virginia Beach Loudoun City of Fredericksburg Chesapeake City of Falls Church James City City of Manassas York City of Lynchburg Bedford Norfolk Airports Authority Fairfax Clarke County Fauquier City of Suffolk Southampton

12. Public-Private Education Facilities and Infrastructure Act of 2002 - implementation Stafford School Construction Project (I) • County issues a solicitation for 3 new schools on county owned land, some design has been completed, includes a wish list (February 11, 2003) • 7 firms respond in 30 days, narrowed to 2 in one week • Detailed proposals were requested with one month turnaround • Each team had revenue generating opportunities • Haskell/Hess team is selected, derives revenue from sale of land for senior living center, joint uses of facilities, exchange of developer proffers • Comprehensive agreement signed July 1, 2003 • County will finance using VPSA bonds • First school opens August 2004 • Receives CCIM award for “Project of the Year” – March 2005

13. Public-Private Education Facilities and Infrastructure Act of 2002 - implementation Roanoke County Public Safety Project • Northrop Grumman first in door, leads 3 day ‘visioning’ session with county staff • NGMS presents white paper to county administrator, includes 30% design – all at no cost to the locality • Plan includes building and equipment, routine technology refresh, lease structure • Roanoke County accepts white paper as an unsolicited proposal (June 29, 2003), advertises for 75 days • Two competing proposals were filed by September 15 • Staff recommends that only 2 of the 3 proposals move forward, board wants additional information on all three (October 28, 2003) • County issues RFP for design review (December 2003) • Consultant (CDG) recommends NG in August 2004 • NG signs comprehensive agreement in October 2004

14. Public-Private Education Facilities and Infrastructure Act of 2002 - implementation Fredericksburg Parking Deck Project • Fredericksburg adopts PPEA guidelines on May 13, 2003 • Donley’s makes initial contact with City, reviews prior parking needs studies • Donley’s narrows potential properties, partners with a local broker to secure options on the preferred site • Fredericksburg receives unsolicited proposal from Donley’s on January 27, 2004 and opens 45-day competition period • No competing proposal is received, Donley’s (in cooperation with the city) begins meetings and makes a presentation to city council • Downtown merchants group assembled by Council to work on design, several changes are made, city appropriates $75,000 to continue design work • Fredericksburg agrees to enter into comprehensive agreement with Donley’s, groundbreaking on 11/11/04

15. Public-Private Education Facilities and Infrastructure Act of 2002 - implementation Anticipated growth areas • Water and wastewater • Public safety • Colleges and universities with small/unsophisticated endowments • Courthouses and other local government buildings • Local/regional jails • Technology procurement/telecommunications • Performance contracting/energy conservation

16. Other Public Works Funding Tools • Community Development Authorities • Direct legislative grants (Chesapeake Bay funding) • Nutrient trading program • Service districts • Tolls and user fees

17. Internet Resources • www.mwcllc.com – PPTA/PPEA Bulletins • www.mcguirewoods.com (Public Finance department) • www.ncppp.org • www.vedanet.org (2005 Spring Conference materials) • www.yesvirginia.org • www.virginiadot.org