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					The Public Private Education Facilities and Infrastructure
                       Act of 2002

           2003 VIRGINIA ENGINEERS CONFERENCE



                        Chris Lloyd
                  McGuireWoods Consulting
                        October 10, 2003
PPTA Success Stories

          „ VMS - Contract for maintenance of 25% of Virginia’s interstate
            lane miles
          „ Interstate 895 - $325 million, connecting suburbs to Richmond
            International Airport
          „ Route 288 - $236 million, 17.5 mile beltway around Richmond,
            support Capital One expansion
          „ Route 28 - new interchanges on access road serving Dulles
            International Airport
          „ Coalfields Expressway - new road for SW Virginia, leverages
            dedicated federal funds
Public-Private Education Facilities and Infrastructure Act of
2002
            What are the components of a successful proposal?
            „ Delivers something in demand
            „ Private sector shares in the risk
            „ Minimizes impact on state/local debt model
            „ Faster, better, and cheaper
            „ Deliver something unique
            „ Broad political support
            „ Open and inclusive process that keeps the public informed
            „ Strong partnership between staff and elected body
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
              - A way to get something for nothing
Public-Private Education Facilities and Infrastructure Act of
2002 - funding

              Structures                           Funding/Value
              „   Design-build                     „ Traditional government sources
              „   Design-build-O&M                   (GF/NGF)
              „   Build-own-operate                „ User fees
              „   Build-own-revert                 „ Service contracts
              „   Sale-leaseback                   „ Lease payments
              „   Lease-purchase                   „ Commercial revenues
              „   Long-term O&M contracts          „ Private activity bonds
              „   Various development agreements   „ Depreciation and other tax credits for
                                                     private entities
                                                   „ Leverage funding streams
Public-Private Education Facilities and Infrastructure Act of
2002 - funding

              Typical deal structure
              „ Team offers “turn-key” project delivery
              „ Contractor willing to assume project delivery risk
              „ Life-cycle maintenance is included
              „ Other revenue-generating activities are suggested
              „ Team members provide free services that benefit government entity even if
                project does not proceed
              „ Achieves cost savings through design-build and financing
              „ Financing vehicles use solely local funds or 63(20) structure
Public-Private Education Facilities and Infrastructure Act of 2002 -
implementation
              What is happening across Virginia?
              „ Education facilities in Falls Church and Stafford County - agreements signed
              „ Pending school proposals in Chesterfield, City of Fredericksburg, Manassas
                Park, and City of Winchester
              „ Longwood University facilities
              „ Public safety facilities in Roanoke and Frederick Counties (others in the works)
              „ Capitol Square redevelopment
              „ Prison construction program
              „ Science Museum of Virginia at Belmont Bay
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
              „   Performance contracting/energy conservation
Public-Private Education Facilities and Infrastructure Act of 2002 -
implementation
              Who are the major players?
              „   Northrop Grumman Mission Systems
              „   Haskell Company
              „   Centex Construction
              „   Clark Construction
              „   English Construction
              „   Moseley Architects
              „   Morgan Keegan
              „   Lehman Brothers
              „   J.P. Morgan Chase
              „   GE Capital
              „   Lincoln Properties
              „   Fluor
Public-Private Education Facilities and Infrastructure Act of 2002 -
implementation
              Trends - How Are Local Governments Reacting?
              „   Implementation of PPEA guidelines becoming more widespread
              „   “Smart” firms are actively looking for good projects
              „   “Smart” local governments are seeking maximum leverage
              „   Deals are closing very quickly
              „   Public input is lacking
              „   Creative financing has not been embraced
              „   Board vs. staff debates
Public-Private Education Facilities and Infrastructure Act of 2002 -
implementation
              Potential pitfalls
              „   Too much work goes to out-of-state companies or large conglomerates
              „   Cost savings are hard to define
              „   Process seems rushed, appearance of inside deals
              „   Debt capacity is compromised
              „   Voters feel left out of the process
              „   Non-performance by a contractor (picked the wrong team)
              „   Board vs. staff debates cause long term problems
Public-Private Education Facilities and Infrastructure Act of 2002 -
implementation
              How can engineers get more involved?
              „ Assess your capabilities ‟ where have you done projects that have made you a
                trusted resource
              „ Talk to contractors ‟ they have the lead
              „ Survey government contacts for potential projects
              „ Be willing to put in some sweat equity
Public-Private Education Facilities and Infrastructure Act of 2002 -
implementation




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