|Financing: revenue sources.
- Federal Aid Highway Program.
- New Jersey Transportation Trust Fund Authority.
- User charges: direct or shadow tolling, HOT lanes.
- Local involvement: developer assessments, sales taxes, property taxes.
- Private sources: construction companies, other contractors.
- State general funds (GO bond proceeds).
- FAHP: uncertainty of reauthorization; multiple major projects competing for funds; stretch funds using financing mechanisms (GARVEEs) (may limit future flexibility); consider different programs, e.g. ITS, safety, for funding various components of project.
- NJTTFA: needs renewal after 2006; gas tax lags behind peer states and needs; capacity to issue debt.
- User charges:
- Shadow tolling may include payments from Delaware River Port Authority (DRPA) and South Jersey Transportation Authority (SJTA) as proxies for direct tolling (authorities could increase tolls and pass on revenues to NJDOT). Move toll collection sites closer to project to capture traffic-extend DRPA and expressway collection authority to cover project segments.
- Create HOT lanes in segment for through traffic with value pricing to manage congestion.
- Payments from NJTP.
- Local involvement: region benefits from increased mobility, improved safety. Capture benefits through developer assessments (unlikely due to mature development), sales taxes, tax increment financing, property taxes and dedicate to project.
- Companies provide construction financing.
- Capture receipts from State general obligation debt as "equity" contribution or as debt repayment.
|Financing: financing mechanisms.
- GARVEE bonds.
- Trust fund tax-free debt.
- 63/20 non-profit corporation.
- DBOM/DBM contracting (prepaid maintenance/warranty).
- ROW lease-purchase (annuity).
- Construction cash-flow financing.
- Commercial paper issued by State or trust fund.
- GARVEE bonds: pledge of Federal revenues to repay long-term debt; term typically 12-15 years.
- Trust Fund tax-free debt: New Jersey Transportation Trust Fund Authority structured to issue debt backed by dedicated revenues.
- 63/20: non-profit corporation structured to issue debt to provide tax exempt financing off State balance sheet (Virginia Pocahontas Parkway).
- Design-build-operate-maintain or design-build-maintain contracts incorporate prepayment of maintenance costs up front. Contractor warrants performance, performs maintenance (New Mexico 44).
- Acquire ROW by creating annuity for ROW owner-small up front payment, stream of cash flows to owner, possibly based on traffic counts in new project (spreads out ROW acquisition costs, unique long-term, transferable benefit for property owner) (Texas DOT).
- Construction cash-flow financing: construction companies provide up-front financing later replaced by long-term debt or directly repaid.
- Commercial paper (short-term debt) would allow low interest construction financing before locking in long-term interest rates. Could use variable rate debt, depending on cost.
|Financing: financial plans.
- Basic financing plan and time schedule for each alternative as decision criteria:
- Consistent with project schedule.
- Cost estimate.
- Common cost categories including environmental, traffic management, and utilities.
- Inclusive of project scope, financing costs.
- Expressed in year of construction dollars.
- Includes contingencies.
- Incorporates certainty/probability (Washington State DOT cost estimation model).
- Finance plan should be standard component of the alternative selection process, incorporated as early as possible into the planning process.
- Costs can be expressed in ranges and/or using probabilities to manage expectations. (See: Washington State DOT cost estimating).
- Upon passage of TEA-21 reauthorization, it is expected that FHWA will be required to publish cost estimating guidelines. In addition, it is likely that major projects ($100 million+) will require project finance plans. Projects $1 billion+ require project management plans integrated with project finance plans. Considered "prudent management" by Congress.
- Essential to express costs in year of construction dollars-choose inflation rates to apply to estimates.
- Project finance plans should include contingencies (larger earlier in development cycle, smaller with greater certainty) and financing costs (cost of debt service).
- See "Checklist for Project Financial Plan" from AASHTO Project Finance Institute.
- Phased construction.
- Advance construction (DBB).
- Primary contract (method DB).
- Program management oversight.
- Utility relocations.
- Pre-purchase material.
- ITS for alternate routes.
- Special prequalifications (short list).
- Risk allocation.
- Clearly define roles/responsibilities.
- Prescriptive performance requirements.
- Cost plus time bidding.
- Commonly referred to as a A+B bidding.
- Award to the lowest A+Bx where:
- Inclusive incentive/disincentive (I/D) provisions in the contract.
- Multiple-parameter bidding.
- Special prequalifications.
- Pass/fail criteria.
- Specialized expertise.
- User cost is very high for this project.
- Limit money value on RUC. NY FL use a lot. Utility out of way and similar items.
- Contractor risk to estimate time and do faster.
- Design built with A+B, some states have done it.
- Critical piece of contract.
- A = traditional bid component
- B = contractors bid for the number of days to complete critical work.
- X = An amount based on road user cost/day.
- A+B = Cost plus time.
- C = Maintenance or warranty parameter.
- Design build or design competition.
- Pennsylvania-Competition among 5-10 design consultants; owner pay and choose idea or design.
- Stipend funding for this DB competition.
- Lane rental.
- Quality-based methods.
- ADR-alternative dispute resolution.
- Time I/D.
- Quality I/D.
- Traffic management I/D.
- Lane rental: Lane closure for part of time.
- NJDOT choose lane closing and time hours weekends and night. Contractor bid lane closing hours and cost of it.
- NJ Turnpike alternate route.
- Elevate issues in a timely fashion.
- Eliminate litigation and claims.
- Complete projects on schedule.
- Complete projects within budget.
- Maintain high quality.
- Maintain safety.
- Find better ways to get job done.
- Warranty/maintenance provisions.
- Mediation/DRB.Mandatory prebid.
- Preconstruction workshops.
- Utility coordination and process review.
|8. Bid alternate.
- Alternate technical concepts.
- VECP program.
- Restrictive specs, NJDOT is conservative.
- Fed has to say in approval.
- Alternate bridge design, structures.