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

Susan Martinovich, president of the American Association of State Highway and Transportation Officials (AASHTO), together with representatives of several state departments of transportation, held a news conference yesterday to urge Congress to take action before September 30 to extend the gas tax and to reauthorize federal highway and transit programs at current funding levels.  The press conference was held at the annual meeting of the Southeastern Association of State Highway and Transportation Officials.

A press release reporting the news conference quoted Martinovich, who is also the director of the Nevada Department of Transportation, as saying that "Congress must take action by September 30th, or the federal highway and transit programs that support thousands of jobs in every state will shut down." Both the 18.4-cents-per-gallon gas tax and the seventh extension of the Safe, Accountable, Flexible, and Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) are set to expire on September 30.

AASHTO also reports that state transportation officials around the country are taking advantage of the congressional summer recess to advocate for a reauthorization that would maintain existing funding levels.  And in recent remarks, President Obama has also been urging Congress to take action, telling audiences:  “Tell Congress to get past their differences and send me a road construction bill  so that companies can put tens of thousands of people to work right now building our roads and bridges and airports and seaports.”

Major differences between the proposals currently under consideration are complicated by the fact that Congress has only 11 legislative days scheduled between its return to Washington and the September 30 deadline.  Because of the time squeeze, in a conference call to industry stakeholders last week, Sen. Barbara Boxer announced a proposal to extend  SAFETEA-LU for another four months at current funding levels, to allow time for Congress to debate and pass a multiyear reauthorization.  AASHTO’s report on that proposal is available here.  The bipartisan two-year reauthorization bill outlined by Sen. Boxer and Sen. James Inhofe in July would maintain funding at current levels.

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Utah Transit Authority (UTA) brought online this week two new extensions of its well-regarded Salt Lake City TRAX light rail network.  The first projects in UTA’s ambitious Frontlines 2015 program, UTA delivered the new West Valley and Mid-Jordan TRAX lines 20% under budget and a year early, boosted by funds the federal New Starts grant program and from a quarter-cent local sales tax increase.

The 5.1-mile West Valley extension ($370 million total cost) forms part of a new TRAX green line that will eventually run from downtown Salt Lake City to the Salt Lake City International Airport.  The 10.6-mile Mid-Jordan extension ($535 million total cost) lengthens the TRAX red line to connect to a new mixed-use transit oriented development dubbed Daybreak.

The two extensions will more than double total TRAX light rail vehicles in operation, including 77 new Siemens S70 low-floor cars and almost double total TRAX system mileage. 

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On August 8, 2011, the 1st District Court of Appeal in San Francisco published a decision holding that Phase 2 of the Presidio Parkway project can move forward as a public-private partnership (P3).  The unanimous opinion approved of and affirmed the February decision by Judge Wynne Carvill of the Alameda County Superior Court to the same effect, allowing the California Department of Transportation (Caltrans) and the San Francisco County Transportation Authority (SFCTA) to proceed with Phase II as a P3. The decision was issued less than five months after the appeal had been taken, because Caltrans and SFCTA had asked the Court to expedite what would normally be a longer process in order to get the critical project moving forward promptly.

Professional Engineers in California Government (PECG), the union representing Caltrans engineers, sought to stop Phase II of the project, which is replacing the old and outmoded approach to the Golden Gate   Bridge in San Francisco.  PECG sued Caltrans and the SFCTA, arguing that the project was not authorized by Streets and Highways Code section 143, recent legislation broadening the types of P3 projects that could be performed in California.  However, the Court of Appeal rejected PECG’s argument that, under section 143, Caltrans employees or direct consultants must perform all the preliminary planning and design services, as opposed to being only responsible to see them done correctly.  The Court also rejected PECG's other arguments, that the project was not supplemental and that P3 efforts under California law must be confined to toll projects, holding that the legislation authorized much broader use of innovative financing, in this case an availability payment.

The Presidio Parkway Project is the first project to reach award under California’s new public-private partnership statute.  This decision should ease the way for other projects, and also provide helpful precedent for design build projects authorized under parallel legislation.

At the end of 2010, Caltrans, in cooperation with SFCTA, signed a contract awarding the project to Golden Link Concessionaire, LLC, a consortium led by Hochtief PPP Solutions North America and Meridiam Infrastructure North America.

PECG will have until September 16 to ask the California Supreme Court to review the Court of Appeal decision.  It is not known if PECG will seek review, however the Supreme Court grants review in only a small number of cases based on specific criteria.

Nossaman represented SFCTA in the litigation and Caltrans was represented by its own Department counsel. Nossaman has also provided assistance to Caltrans in the procurement of the project.

For more about the Presidio Parkway Project and section 143, see Presidio Parkway Project Moves Forward as Court Denies Request for Writ of Mandate and Injunction, Presidio Parkway Project Awarded,  Preferred Proposer Selected for Presidio Parkway Project, Final RFP for the Presidio Parkway Project Released, Presidio Parkway Reaches Two Important Milestones, and Presidio Parkway Project RFQ Issued.

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The Pennsylvania Transportation Funding Advisory Commission just issued its final report on a strategy to improve the commonwealth's transportation funding. Aside from a list of recommendations for streamlining operations, the Commission made the following key recommendations for solving the commonwealth's transportation revenue and funding problems:

• Expand program management and outsourcing, including bundling "individual projects into programs—such as rehabilitating 100 to 300 bridges at one time—and engag[ing] experienced private sector program managers to produce benefits for PennDOT as well as local governments."
• Adopt P3 legislation. The report expressly recognized the cost efficiencies and construction time savings that PPPs generate. It cautions that "for PPPs to be an option, there would need to be revenue generation for operations and maintenance associated with the facility (e.g., tolling, fare collection)." A PPP bill has been tied up in the Legislature, but sources indicate that the Legislature may be poised to act now that the Commission has endorsed PPP authorizing legislation.
•  Create state authority to toll all interstates and devote the revenues exclusively to each corridor. The report also recommends flexibility to use existing public as well as private toll operators. The report recognizes that federal restrictions on tolling interstates will also need to evolve, an issue the commonwealth is acutely familiar with after FHWA denial of its SEP-15 application to toll I-80.
• Undertake a detailed study on how to transition from the fuel tax to "a new method of revenue generation for highway funding." The report emphasizes that any new method charge users "equally based on their usage." Without using the acronym "VMT," the report clearly is pointing toward vehicle miles traveled as the fundamental basis for generating reliable, fair, and equitable highway funding revenues.

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