Innovative Finance for 183A

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

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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 Authoritys 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

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Mobility Authoritys 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

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Mobility Authoritys 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

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Mobility Authoritys 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

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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

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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

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TIFIA

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

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TIFIA Timeline

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

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183AFunding
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Coverage

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

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Financing Objectives Checklist

• Achieve Investment Grade Rating on Senior Lien
  Debt
• BBB- Standard and Poors
• Baa3 Moodys
• FGIC Insurance
• 1.75 Minimum coverage
• Achieve lowest possible borrowing cost
• Produce maximum amount of net available cash
  flow
• CDA agreement

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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

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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
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Bond Deal of the Year

• 2005 Southwest Bond Deal of the Year

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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

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Innovative Finance for 183A

• Bill Chapman
• CFO, Central Texas Regional Mobility Authority