State Revolving Fund Conference Tampa, Florida Jeff Hughes - - PowerPoint PPT Presentation

▶
state revolving fund conference tampa florida jeff hughes
SMART_READER_LITE
LIVE PREVIEW

State Revolving Fund Conference Tampa, Florida Jeff Hughes - - PowerPoint PPT Presentation

Apr 28, 2023 46 likes •380 views

YES SRFs can Participate in Financing Alternative Project Delivery Models (P3s, DBO, DBOT), but its not always easy State Revolving Fund Conference Tampa, Florida Jeff Hughes Environmental Finance Center at the University of North

slide-1
SLIDE 1

http://efc.sog.unc.edu @EFCatUNC

YES SRFs can Participate in Financing Alternative Project Delivery Models (P3’s, DBO, DBOT), but its not always easy…

State Revolving Fund Conference Tampa, Florida Jeff Hughes

Environmental Finance Center at the University of North Carolina November 2, 2015

slide-2
SLIDE 2

http://efc.sog.unc.edu

@EFCatUNC

2

How you pay for it matters

Supporting the fair, effective, and financially sustainable delivery of environmental programs through:

  • Applied Research
  • Teaching and Outreach
  • Program Design and Evaluation
slide-3
SLIDE 3

3

Acknowledgements

Environmental Protection Agency

The EPA Water Infrastructure and Resiliency Finance Center provides financial expertise to communities that are financing drinking water, wastewater, and stormwater infrastructure. www2.epa.gov/waterfinancecenter The West Coast Infrastructure Exchange (WCX) promotes the type of new thinking necessary to solve our infrastructure crisis. WCX is a unique regional platform designed to spur infrastructure innovation and accelerate a pipeline of innovative infrastructure projects in California, Oregon and Washington. westcoastx.com

slide-4
SLIDE 4

Topics

  • Terminology basics
  • Traditional vs. Alternative Project Delivery

Mechanisms

  • Water Finance Center Alternative Service

Delivery Project

  • SRF Opportunities and Obstacles

– California Experience

slide-5
SLIDE 5

Alphabet Soup

  • DBB
  • DB
  • DBO
  • DBOM
  • DBOF
  • Concession
  • CMAR
  • PPP
  • P3
  • Design Bid Build
  • Design Build
  • Design Build Operate
  • Design, Build, Operate, Maintain
  • Design, Build, Operate, Finance
  • Giving up something
  • Construction Manager at Risk
  • Private Public Partnership
  • Private Public Partnership
slide-6
SLIDE 6

Traditional Procurement

What is a P3? Manage Project Design (D) Build (B) Operate (O) Maintain (M) Finance Project (F) Own Project Own Land Public Sector Private Sector

6

SLIDE SOURCE: Jonathan TruG, West Coast Exchange

slide-7
SLIDE 7

My SRF program has had significant problems (cost overruns, poor project delivery etc.) with a DBB project in the past.

  • A. Strongly Agree
  • B. Agree
  • C. Neutral
  • D. Disagree
  • E. Strongly Disagree

Strongly Agree Agree Neutral Disagree Strongly Disagree

9% 18% 14% 16% 43%

slide-8
SLIDE 8

My community has had significant problems (cost overruns, poor project delivery etc.) with a DBB project in the past.

  • A. Strongly Agree
  • B. Agree
  • C. Neutral
  • D. Disagree
  • E. Strongly Disagree

Strongly Agree Agree Neutral Disagree Strongly Disagree

42% 31% 3% 3% 22% Informal poll of approximately 30 utilities in California in October 2015

slide-9
SLIDE 9

Alternative Delivery Method Options

What is a P3? Manage Project Design (D) Build (B) Operate (O) Maintain (M) Finance Project (F) Own Project Own Land Public Sector Private Sector

9

SLIDE SOURCE: Jonathan TruG, West Coast Exchange

slide-10
SLIDE 10

Alternative delivery mechanisms reduce costs

  • A. Strongly Agree
  • B. Agree
  • C. Neutral
  • D. Disagree
  • E. Strongly Disagree

Strongly Agree Agree Neutral Disagree Strongly Disagree

6% 40% 0% 26% 28% Informal poll of approximately 30 utilities in California in October 2015

slide-11
SLIDE 11

P3s reduce costs

  • A. Strongly Agree
  • B. Agree
  • C. Neutral
  • D. Disagree
  • E. Strongly Disagree

Strongly Agree Agree Neutral Disagree Strongly Disagree

25% 36% 0% 8% 31% Informal poll of approximately 30 utilities in California in October 2015

slide-12
SLIDE 12

Example of Summary Sheet for Two Options: Source: Memo to Miami-Dade Sewer Department from PRAG 11/14/14

slide-13
SLIDE 13

Example of display of variable Risk Cost: Source Deloitte Analysis submitted in report to Regina

slide-14
SLIDE 14

Assessing Cost Impacts of Alternative Service Delivery Partnerships

  • 10 to 15 Financial Impact Assessments

– Base case vs. alternative paths – Mix of models – Greenfield and upgrades – Geographic diversity

  • Simplified financial impact model
  • Findings, conclusions, lessons learned
  • Education materials
slide-15
SLIDE 15

http://efc.sog.unc.edu

@EFCatUNC

slide-16
SLIDE 16

Name Service Procured Type of Contract AnLcipated Type of Savings Rialto (CA) Full service water and wastewater Concession ????, Project cost, O&M, retained risk Bayonne (NJ) water/wastewater collection/ distribution and customer service Concession O&M, capital plan Woodland Davis (CA) Water withdrawal, treatment, and bulk transfer Design - Build - Operate Project cost Regina (Canada) Wastewater treatment Design - Build - Finance - Operate

  • Maintain

Retained risk, out of pocket funds, design/construcLon Santa Paula (CA) Wastewater treatment Design - Build – Operate Finance Own Project Cost, Capital Plan, O&M San Diego/ Carlsbad (CA) Desalinated drinking water Water purchase agreement Technology Risk San Antonio (TX) Water rights, withdrawal, treatment, transmission Design - Build - Finance - Operate

  • Maintain

Risk, Hedging Long Term Costs Middletown (PA) Full service water and wastewater Concession Capital Plan, O&M

slide-17
SLIDE 17
slide-18
SLIDE 18

For Information on this Project

Subscribe to our Environmental Finance Blog efc.web.unc.edu Follow us on Twitter: @EFCatUNC

slide-19
SLIDE 19

Advantages of SRF Financing Alternative Delivery Mechanisms

  • Potential reduced project cost
  • Potential reduced risks falling on public

sector and eventually SRF

  • Lower cost of capital
  • Lower life cycle costs
  • Reduced segmentation
slide-20
SLIDE 20

Going Beyond Savings

  • Higher quality of asset management or

service delivery (contractually required)

– Woodland Davis – Santa Paula

  • Tapping into Public Entity Equity (for water
  • r other benefits)

– Rialto – Bayonne – Middletown

slide-21
SLIDE 21

We have funded a service delivery mechanism

  • ther than Design Bid Build within the last 5 years?
  • A. Yes
  • B. No
  • C. Don’t Know

Yes No Don’t Know

49% 11% 41%

Informal poll of approximately 30 utilities in California in October 2015

slide-22
SLIDE 22

We have participated in a

  • DB
  • DBO
  • CMAR
  • P/3Concession
  • Private owned utility debt
slide-23
SLIDE 23
slide-24
SLIDE 24

Davis Woodland Project

  • Service Provided: Raw water withdrawal,

transport, and treatment

  • Service Delivery Mechanism: Design,

build, operate

  • Estimated capital cost savings: 10 to

20%

slide-25
SLIDE 25

25

30 mgd Project Costs Presented at April Board Meeting (Apr 2013 million dollars)

Construction Costs(a) Capital Costs, 2009-2016

(a) Includes DBO contract design and construction costs, design-bid-build Joint Intake construction costs, and Agency design review, construction quality assurance and contract compliance, engineering services during construction, environmental construction monitoring, environmental mitigation, permitting, and incidental costs. (b) Costs currently under discussions with RD 2035.

Cost Category Total Agency Administration 3.56 Program Management 3.47 Water Supply 1.71 Environmental & Permitting 1.59 Land/ROW Acquisition 4.30 Pre-Design 6.18 Construction 166.91 Capital Contingency 7.79 Woodland and Davis Local Facilities 31.74 Costs Expended 2009-2011 7.49 TOTAL CAPITAL COSTS 234.75 Project Component Cost Joint Intake (Agency Portion)(b) 14.52 Raw Water Pipeline 23.76 Regional Water Treatment Facility (RWTF) 96.7 Woodland Treated Water Pipeline 5.70 Davis Treated Water Pipelines 23.35 Permit Fees & Construction Counsel 2.89 TOTAL 166.91

Slide Source: Woodland Davis Clean Water Agency

slide-26
SLIDE 26

SRF DBO Loans

  • Borrower: Woodland Davis Clean Water

Agency

  • DBO Lead: CH2M
  • City of Davis/UC Davis $95.5 Million

CWSRF Loan 1.7% over 30 years

  • City of Woodland $111.4 Million DWSRF

1.7875% for 20 years

slide-27
SLIDE 27

Making it Happen

  • Proposition 218 rate process
  • Changes to state law (5956.10)
  • Project development services
slide-28
SLIDE 28

We can’t fund a Design, Build, and Operate because

  • Finish the sentence..
slide-29
SLIDE 29

What’s Included in Project Cost? Example from Rialto Concession

slide-30
SLIDE 30

Can you?

  • Co-fund a project that has private equity

funding part of the project?

  • Include concession payments in SRF

funding?

slide-31
SLIDE 31

We are likely to fund a service delivery mechanism

  • ther than Design Bid Build within the next 5 years?
  • A. Strongly Agree
  • B. Agree
  • C. Neutral
  • D. Disagree
  • E. Strongly Disagree

Strongly Agree Agree Neutral Disagree Strongly Disagree

29% 45% 3% 11% 13% Informal poll of approximately 30 utilities in California in October 2015

slide-32
SLIDE 32

We are likely to use a service delivery mechanism

  • ther than Design Bid Build within the next 5 years?
  • A. Strongly Agree
  • B. Agree
  • C. Neutral
  • D. Disagree
  • E. Strongly Disagree

Informal poll of approximately 30 utilities in California in October 2015

slide-33
SLIDE 33

I am more open to alternative delivery mechanisms than I was before this session?

  • A. Strongly Agree
  • B. Agree
  • C. Neutral
  • D. Disagree
  • E. Strongly Disagree

Strongly Agree Agree Neutral Disagree Strongly Disagree

17% 44% 0% 3% 36% Informal poll of approximately 30 utilities in California in October 2015