Art Guzzetti Vice President - Policy American Public Transportation Association November 11, 2011

1. Art Guzzetti Vice President - Policy American Public Transportation Association November 11, 2011 European Metropolitan Transport Authorities Autumn General Meeting, Birmingham, UKPublic Transportation in the U.S.: Trends and Prospects

2. What is APTA? • Public transportation sector organization based in United States, with 1,500 transit, business, and other members worldwide. • Began in 1882 - the era of horse-drawn street railway cars.

3. Presentation Overview • Forward Looking Trends • Overview of Public Transportation Finance in the U.S. • Specific Case Studies

4. What is Public Transportation? • Buses, heavy rail, commuter rail, light rail, streetcars, ferryboats, paratransit, vanpools • Scale of operations • Large Urban (Rail, Bus, Paratransit) • Small to Medium Urban (Bus, streetcars, light rail) • Rural (Demand response, limited fixed-route service) • Typically local/regional delivery with local, state and federal funds

5. Public Transportation in the U.S. • 35 million boardings every weekday. • 10.2 billion annual boardings in 2010. • Approximately 7,700 transit providers in U.S., but 70% of usage on top 30 systems. • 46% of U.S. households have no access • $55 billion / yr. industry; directly employs 400,000 and supports 1.9 million jobs.

6. Trends Point to an Expanding Role • Population Growth • Urbanization • Social & Demographic • Economic • Energy & Environment • Household & Affordability • Public Choice

7. Significant Expansion Nationally(# of rail systems)

8. Public Transit Use Growing Faster Than Highway Use (1995 – 2009) (15%) (21%) (31%)

9. Sources of Transit Funding • Federal • State • Local • Directly Generated • Fares • Agency taxes • Other (parking, advertising, etc.)

10. 2008 Industry Revenue Sources – $55 Billion 2008 Capital Funding - $17.4 Billion 2008 Operating Funds- $38.0 Billion

11. Sources of State/Local Funding Assistance • Sales Taxes • Property Taxes • Motor Fuel • Vehicle Fees • Car Rental / Leases • Room/Occupancy • Impact Fees • Realty Transfer • Naming Rights, etc. • Assessment Districts • Parking Fees • Tolls / Road Pricing • Employer/ Payroll/ Earnings/ Personal Income / Wage • Corporate Income • Utility Fees • Corporate Franchise Taxes

12. Sources of State Dedicated Tax Revenue for Operating (U.S Total)

13. Sources of Local Dedicated Tax Revenue for Operating (U.S. Total)

14. Sources of Directly Generated Dedicated Tax Revenue forOperating (U.S Total)

15. Sources of State Dedicated Tax Revenue for Capital

16. Sources of Local Dedicated Tax Revenue for Capital

17. Sources of Directly Generated Dedicated Tax Revenue for Capital

18. Specific Case Studies: • Transit Ballot Initiatives • APTA Task Force on Public-Private Partnerships • Denver Eagle P3 Project • Los Angeles: America Fast Forward • Denton County, Texas: Financing Through Tolls • Los Angeles: Metro ExpressLanes • Value Capture • NCTD Private Contractor

19. Public Transportation Measures Win at the Polls • 71% Approval Rate for Transportation Measures • Twice the Approval Rate of All Ballot Measures • Success Across Region, Population, Party Affiliation

20. Key Trends • Voters Continue to Support Transportation Investment in Difficult Economic and Electoral Climates • Frequency of Advisory Measures ↑ • Trend towards New Financing Tools • Three-way Partnership – Locals Continue to Pick up Greater Share of Funding; Waiting for Federal and State Support to Catch Up • Public Education Efforts are Working

21. Public-Private Partnerships Growing Markets bring Greater Private Sector Interest bring A New and Evolving Private Sector Role APTA TransitVision 2050

22. Back to 2007… APTA Task Force on Public-Private Partnerships: • Determine the Viability of Private Sector Investments in Transit. • Identify Barriers and Impediments. • Recommend ways to enhance PPPs as a management tool for project finance and project delivery.

23. Since 2007… • Continued good work by FTA. • APTA PPP recommendations for surface transportation authorization. • DOT / HUD / EPA Livability initiative makes the connection between transit and real estate. • Collapse of National and International Finance, Credit and Insurance Markets. • Landmark PPP deals in Denver, Virginia,California….

24. Denver Eagle P3 Project • Includes East Rail Line, Gold Line, Commuter Rail Maintenance Facility and a portion of Northwest Rail Line (to south Westminster) • Projects Funding - $2.1 billion - $1.03 billion in federal funds (largest FFGA under Obama ) - $486 million in private equity - $500 million in local funds - Pursuit of $280 million TIFIA loan in process

25. Denver Eagle P3 • First full transit P3 in the United States (broader than earlier precedents in New Jersey) • Leverages a Local Revenue stream (sales tax) • Project is part of FTA’s Public-Private-Partnership-Pilot Program (Penta P) • DBFOM – design-build-finance-operate-maintain

26. Denver Eagle P3 • 34-year term (6 years – design/build; 28 years O&M) • Availability payment model • Includes incentives and penalties • RTD retains ownership of assets • Performance requirements • Appropriate risk sharing

27. America Fast Forward Initiative (LA) • Leverages a local revenue stream (sales tax) to accelerate program delivery. • 30-year capital program implemented within ten years. • Expanded use of direct federal loans through the Transportation Infrastructure Finance and Innovation Act (TIFIA) program. • Qualified Transportation Improvement Bonds (QTIB): Federal tax credits in lieu of interest.

28. Denton County, Texas:A Toll Road and a Train • TXDOT granted authority to enter into Corridor Development Authority • Expedite near-term, near-neighbor transportation projects with excess toll revenue • New Toll Road: 26 miles of State Highway121 connecting to DFW • Private sector ($2.8B) ultimately outbid by North Texas Tollroad Authority ($3.2B) to finance, design, construct, operate and maintain SH121 for 52 years

29. RTRFI: Value of SH 121 Project Up-front Concession Fee $2.50B Excess Revenue Over Time $0.83B Construction of SH 121 $0.69B Future O&M (Net Present Value) $1.30B Profit to NTTA $1.36B $6.68B

30. Los Angeles County MTA ExpressLanes Summary of Transit Advantages: • Significant investment in transit stations. Increase in transit service prior to opening the ExpressLanes • Toll-free travel for public transit & privately operated buses • Minimum peak tolls shall be no less than 150% of Metro transit fare on the ExpressLane • Toll Credits are available to frequent ExpressLane transit riders • Net toll revenues are reinvested in transit improvements in the corridor where generated

31. Value Capture – Implementation: • Special Assessment Districts • Municipal Management Districts • Transportation Reinvestment Zone • Public Improvement District • Tax Increment Financing • Developer Support

32. North County Transit District (NCTD)Oceanside, California Transition to Private Contracting for Bus Operations and Maintenance

33. Core Terms of Agreement betweenNCTD and the Private Contractor • NCTD responsibilities: - Contract management and contractor oversight - Providing and replacing revenue vehicles and major capital maintenance equipment - Fuel costs - Providing facilities - Developing service/route schedules - Marketing and customer service

34. Core Terms of Agreement betweenNCTD and the Private Contractor • NCTD is at risk for: - Contract costs • Service levels drive cost • Payment is based on cost-per-mile with rates for big bus and small bus - Reputation/Public Perception • Performance of contract reflects/impacts perception of NCTD

35. Core Terms of Agreement betweenNCTD and the Private Contractor • Contractor is at risk for: - Budget for service delivery • Contractor required to negotiate agreement with Union - Cost escalation for wages, benefits, materials and services - Accidents – claims processing - Labor negotiations

36. And The List Goes On and On… THANK YOU EMTA! aguzzetti@apta.com