Infra Insight Blog : written by Nossaman LLP Infrastructure attorneys, covers infrastructure project delivery, including Public-Private Partnerships, Operations & Management Agreements, policy, and news.

On October 8, 2009, FHWA issued electronic toll collection rules in response to a 2005 SAFTEA-LU law, which in all respects reiterate the status quo for the tolling industry and provide no guidance or standards with respect to SAFTEA-LU’s goal of progressing towards a nationwide interoperable electronic toll collection system.

With regard to interoperability, Section 950.7 of the rules require the tolling agency to identify: (i) the projected users of the facility; (ii) the predominant electronic toll collection systems likely utilized by users of the facility; and (iii) the non-cash electronic technology likely to be in use for the next 5 years in that area, including a requirement that the tolling agency demonstrate that “the selected toll collection system and technology achieves the highest reasonable degree of interoperability with both technology currently in use at other existing toll facilities and with technology likely to be in use at toll facilities within the next five years in that area.” 

All of these requirements specifically focus on existing and local interoperability, but do not require a specific standard for nor set a specific path to achieving national interoperability. The comments that FHWA received in response to the Notice of Proposed Rulemaking suggested that setting a specific interoperability standard would be premature pending changes made possible with wide scale adoption of 5.9 GHz technology. Moreover, the response to comments also made clear that there was no clear consensus around what standards national interoperability should be built. Thus, FHWA adopted a rule that essentially maintained and encouraged existing trends toward achieving regional interoperability, and provided for reasonable opportunities for motorists outside of particular toll systems to pay tolls through alternative means. 

Hence, the “interoperability requirements” set forth in these rules have long been the industry standard in developing tolling collection systems. Well before these rules were promulgated, tolling agencies have spent considerable time and money researching these identical factors in developing toll collection systems. Without any federal rules requiring toll agencies to move towards a nationwide interoperable system, toll agencies will likely continue to focus its efforts on developing toll collection systems that are generally accepted and used in the local area, which is entirely acceptable under these newly promulgated federal rules.

FHWA signaled its intent to address interoperability again as new technologies come on line and if the demand to true interoperability increases.

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Senators Boxer and Inhofe are preparing to hotline a six-month extension of the federal surface transportation programs, which would provide funding at gross FY2009 levels, with an additional $8.7 billion in contract authority to replace the funds rescinded on September 30.  

The bill would also extend funding for projects of national and regional significance (SAFETEA-LU 1301) and national corridor infrastructure (SAFETEA-LU 1302) according to 2009 receipts. House Transportation and Infrastructure chairman Jim Oberstar’s 3-month extension, which recently passed in the House, would allow USDOT to distribute the money as discretionary grants, and did not address the September rescission of contract authority. (See Transportation Reauthorization: House T&I Committee's 3-Month Extension Fails to Address $8.7 Billion Rescission).

“Hotlining” involves notifying all 100 Senate offices of the bill and checking to see if they have any objection to the legislation being considered and passed by unanimous consent at the close of the day’s business. Boxer and Inhofe hope to hotline the bill today Monday, October 26, if Oberstar can be convinced to accept the new legislation without amendment. 

The six month extension will not require an infusion from the general fund into the Highway Trust Fund, which FHWA expects to remain solvent through the first eight months of FY2010.   The bill would provide a total of $24.6 billion in highway formula contract authority.

Senator Voinovich, who had held back the previous 18-month extension bill on the grounds that it was too long, is trying to persuade Oberstar to accept the Senate’s offer as states begin to shut off contract bidding for lack of contract authority. 

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The Denver Regional Transportation District (RTD) has released a Lessons Learned Report which gives a realistic and sober review of what’s gone well and what should be done differently to implement the FasTracks program. The FasTracks is the RTD’s voter-approved, multi-billion dollar program to build 122 miles of rail transit, including six new commuter rail and light rail lines and extensions of three existing lines, build 18 miles of bus rapid transit service, add 21,000 new parking spaces, redevelop Denver Union Station and redirect bus service to better connect the eight-county District.

The report reviews lessons learned in nine main areas that can be used throughout the completion of FasTracks itself – currently one of the most ambitious transit expansion efforts in the country – as well as for future programs.  Among those lessons are things that have worked well including:

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California will soon have a new authority that can authorize California transportation agencies to toll transportation facilities, eliminating the need for legislative approval for each tolling project. 

AB 798, a bill sponsored by state treasurer Bill Lockyer and recently signed by Governor Schwarzenegger, creates a new state level agency, the California Transportation Finance Authority, with the limited purpose of issuing revenue bonds for new capacity or improvements to the “state transportation system” at the request of a public sector “project sponsor”. Project sponsors include the state department of transportation (Caltrans) as well as regional or county transportation agencies. Eligible projects include a wide range of transportation improvements, including highways, streets, rail bus or related facilities owned and operated by Caltrans or other project sponsors. The Authority is governed by a seven member board chaired by the State Treasurer, and includes local agency representatives appointed by the State Legislature.

In addition to establishing a statewide “conduit” revenue bond issuer, the new law makes further advances in the use of pricing to pay for needed transportation improvements. 

With passage of AB 798, highway projects that meet the normal planning and environmental review requirements would be eligible for tolling if they meet the requirements for financing through the new Authority, even if they are financed by other means. 

The only political approval that would be required for these new toll projects would be a majority vote by the board of the project sponsor authorizing the imposition of tolling, OR majority approval of the voters in its jurisdiction. 

AB 798 has been described by Treasurer Lockyer as promoting “public-public partnerships” vs the “public private partnerships” for transportation projects approved earlier this year, thus giving Caltrans and local transportation agencies another option to consider.

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The Florida Department of Transportation (FDOT), announced at a press conference in Miami today that it has reached financial close on the Port of Miami Tunnel Project. 

FDOT, in partnership with Miami-Dade County and the City of Miami, entered into an agreement with MAT Concessionaire, LLC (MAT) which includes Meridiam Infrastructure Finance, S.a.r.l. and Bouygues Travaux Publics as equity members. The $900 million public-private partnership (PPP) deal uses an availability payment structure that provides for payment to MAT over 30 years after completion of construction, which is expected to occur in five years. This is the second transportation infrastructure project in the United States to use an availability payment structure, following the recently closed FDOT I-595 Corridor Improvements Project. 

Financing for the project includes a $341 million low-cost federal loan through the Transportation Infrastructure Finance and Innovation Act, equity contributions from MAT, and $330 million in loans from the following senior lenders:

• BNP Paribas
• Banco Bilbao Bizcaya Argentina
• RBS Citizens
• Banco Santander
• Bayerische Hypo
• Calyon, Dexia
• ING Capital
• Societe Generale
• WestLB

The Port of Miami Tunnel will link the Port of Miami facilities on Dodge Island with MacArthur Causeway and I-395 via twin 42’ diameter tunnels under Biscayne Bay, increasing the Port’s competitiveness and relieving congestion in downtown Miami by diverting passenger and freight traffic to I-395 and improving access to I-95. The project also includes widening of MacArthur Causeway and other roadway improvements.

Bouygues Civil Works Florida, Inc. will design and construct the project with engineering assistance from Jacobs Engineering Group, Inc. VMS, Inc. will serve as the lead operations and maintenance contractor. In addition to Nossaman, FDOT’s advisors include Jeffrey Parker & Associates (financial), Parsons Brinkerhoff and T.Y. Lin (technical), and Marsh (insurance).

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California is now ready to assess P3 candidate projects. At its October 14^th meeting, the California Transportation Commission approved policy guidance addressing the Commission’s role in selecting proposed P3 projects. The CTC developed the guidelines to assist Caltrans and regional transportation agencies (RTAs) as they move to develop P3 transportation projects, taking advantage of the new authority granted to them under Senate Bill X2 4, enacted in February of this year.

The enabling legislation requires the CTC to select projects nominated by Caltrans or an RTA seeking to use the P3 model. The CTC policy guidance describes the selection process, including the project report and information required to be submitted to the CTC, the CTC’s criteria for evaluating projects, and the timing and scope of the CTC’s role. 

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In the last week, much has been written about the submission of more than $50 billion in Track 2 high-speed and intercity passenger rail (HSIPR) funding applications to the Federal Railroad Administration (FRA).  But the resolution of FY 2010 transportation appropriations may be just as important in determining the direction of HSIPR and freight rail projects.

The OneRail Coalition, a coalition of passenger and freight rail stakeholders promoting investment in rail infrastructure, has written to House and Senate appropriators urging the highest possible support for HSIPR in the final FY 2010 Transportation, Housing and Urban Development, and Related Agencies (THUD) appropriations measure. Specifically, OneRail is asking appropriators to endorse the House proposal of $4.0 billion for HSIPR instead of $1.2 billion in included in the Senate-passed measure.  The $4.0 billion included in the House THUD measure would be the equivalent of 50 percent of the amount appropriated for HSIPR in the American Recovery and Reinvestment Act (ARRA) economic stimulus legislation and would dramatically enhance high-speed rail development efforts across the country.

[One Rail organizations include the American Public Transportation Association, Amtrak, American Short Line and Regional Railroad Association, Association of American Railroads, National Association of Railroad Passengers, National Railroad Construction & Maintenance Association, Natural Resources Defense Council, Railway Supply Institute, States for Passenger Rail Coalition, Surface Transportation Policy Partnership, and United Transportation Union.]

OneRail also:

-- Urged appropriations for Amtrak at the authorized amount of $1.84 billion and funding for other rail programs at the highest possible level.

-- Requested that National Infrastructure Investment Grants (the successor to the TIGER program) be funded at $1.1 billion to facilitate further investment in freight rail projects.

-- Asked that House and Senate conferees make rail passenger and freight infrastructure projects eligible expenditures to the degree that general fund revenues help maintain current federal surface transportation programs. Such eligibility was adopted in ARRA.

Also related to rail funding in the FY 2010 THUD measure, more than 20 members of the California Congressional delegation wrote to appropriators urging funding of $50 million for Rail Safety Technology Grants to support installation of Positive Train Control. See House and Senate letters.

The Senate has appointed FY 2010 THUD conferees but the House has not. It is unclear when the final FY 2010 THUD measure may be considered.
 

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With the delay of the federal transportation re-authorization and federal transportation funding in limbo, state transportation agencies across the nation are trying to cope any way they can. In California this week, 19 “self help” local transportation financing agencies - that collectively generate more than $4 billion a year for transportation - drew a large crowd of transportation public agency officials, elected officials, contractors and consultants to the 20^th Annual Focus on the Future Conference in Los Angeles to explore their options. Conference speakers discussed current developments in transportation funding, environmental compliance and project delivery. The news on project delivery and innovation was positive, the environmental compliance news mixed, and the funding news pretty discouraging.

Interspersed with the grim chronicling of the current state and federal funding landscapes, the conference highlighted some bright spots, including federal ARRA funds, Measure R funding in Los Angeles, and innovative project delivery, PPPs and congestion pricing.

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Texas Department of Transportation (TxDOT) officials executed a comprehensive development agreement (CDA) Tuesday October 6 with NorthGate Constructors, J.V., led by Kiewit Texas Construction L.P. (Fort Worth), and Zachry Construction Corporation (San Antonio).  NorthGate Constructors, J.V. will develop, design and construct 8.4 miles of the SH 114/121 corridor known as the DFW Connector. Construction on the $1.02 billion design/build project is expected to begin by 2010 and the project is scheduled to open to traffic in 2014.
 

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