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Creating World-Class Infrastuructre to Drive Indiana's Economy

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Creating World-Class Infrastuructre to Drive Indiana's Economy P3/Public Private Partnerships Indiana’s Road Funding Solution: Long Term Lease of the Indiana Toll Road Dennis Faulkenberg CONSTRUCTION OUTLOOK PRE-MAJOR MOVES 1,600 1,400 1,200 1,000 800 Needs Previous Funding 600 400 200 0 2006 2007 2008 2009 2010 2011 2012 The Lease: Indiana Toll Road y September, 2005: RFP for lease published y January, 2006: Winning bid announced y ITR Concession Company y $3.85 billion bid y March, 2006: Lessee officially accepted y June 29, 2006: Closing occurred CONSTRUCTION OUTLOOK POST-MAJOR MOVES 1,600 1,400 1,200 1,000 Needs 800 Previous Funding Major Moves Funding 600 400 200 0 2006 2007 2008 2009 2010 2011 2012 The Law Two components of the introduced bill: y The lease of the Indiana Toll Road y The authorization of an I-69 PPP The Law: Indiana Toll Road y 75 year lease y Toll revenue to operator y Operator pays the State of Indiana a predetermined amount y Sets up process to fund state and local highway projects The Law: Indiana Toll Road y The proceeds from the lease were deposited into the Toll Road Fund y The Toll Road Fund pays for: y Retirement of existing bonds y Administrative costs of the lease y Next Generation Fund y The Next Generation Fund provides a $500 M trust The Law: Indiana Toll Road y Remaining funds went to the Major Moves Construction Fund: y $150 M to local governments statewide y $120 M to Northwest Indiana y $240 M to counties located along Toll Road y Toll freeze for passenger cars y Early retirement for Toll Road Employees y INDOT highway construction projects The Law: Indiana Toll Road y Local funding: y $75 M a year for two years y To all Indiana counties, cities and towns based existing formulas: y Population y Road mileage y Vehicle registrations y May be used on highway dept., construction, maintenance, equipment The Law: Indiana Toll Road y Toll Road County fundingRDA Counties y $40 M to each county, except RDA counties y Distributed within a county to its cities and towns based on existing formula y May be used on y Highways, roads and bridges y Economic development projects y Matching federal or RDA funding The Law: I-69 PPP y Similar to authorization given to Indiana Toll Road: y 75 year lease term y Standards compliant with INDOT procedures y Financing may be provided by the State y Property tax exemptions y Political contribution prohibitions The Law: I-69 y Significant differences, however: y State authority given to INDOT, not state bonding agency y Increased legislative oversight y Legislative restrictions on route, funding y Funds deposited into MMCF, the State Highway Fund, or given to debt reduction The Votes y Very controversial y Passed the House (the first time) 52-47 y Passed the Senate (the first time) 29-20 y Final House vote 51-48 y Final Senate vote 31-19 y Signed by the Governor on March 15 The Issues y “Sale” of Indiana highway y Length of lease y Value of bid y Interest of “foreigners” in deal y I-69 y Why not just bond? The Supporters Indiana Chamber of Commerce Hagerman Construction Corporation American Teamsters Joint Council – 69 Concrete Pavement Association of IN Bestway Express, Inc. Greater Indianapolis Chamber of Commerce Teamsters Local Union – 135 Build Indiana Council Indiana Motor Truck Association Greater Fort Wayne Chamber of Commerce Operating Engineers, Local 103 Operating Engineers, Local 150 Operating Engineers, Local 841 Indiana Association of Realtors Indiana Association of County Commissioners US 31 Coalition Associated General Contractors of IN Indiana Manufacturers Association Terre Haute Chamber of Commerce Hoosier Voices for I-69 Indiana Economic Development Association Tech Point Indiana Manufactured Housing Association North East Indiana Chamber Coalition Vectren Indiana Fort to Port Task Force Indiana Constructors, Inc. Metropolitan Evansville Chamber of Commerce Indiana Equipment Distributors Indiana Mineral Aggregates Association Indiana Builders Association Indiana Ready Mixed Concrete Association Rolls Royce Indiana Coal Council Hoosier Heartland Corridor Asphalt Pavement Association of IN Southern Indiana Chamber of Commerce Precision Rings, Inc. (Indpls.) Greater Northwest Indiana Association of REALTORS® Indiana-Kentucky Regional Council of Carpenters American Council of Engineering Companies of IN And the journey continues… y P3’s have been discussed in every subsequent legislative session y One project (Indiana Commerce Connector) was proposed but then pulled due to local objection y Authorization for two additional projects were added to statute in 2010 y Illiana Expressway y Bridges between Indiana and Kentucky y Full P3 authorization was added in 2011, except for y I-69 in Perry Township y Tolls on I-69 y Tolls on any road in existence/under construction y Budget Committee review within 90 days when P3 involves tolls and after the offerer is determined And the journey continues… y Additional local input requirements have been added y A Feasibility Study and an Economic Impact study must be completed if tolls involved y Before the studies begin, a local hearing must be held y The studies examine impacts of toll road on: y Employment y Future development y County revenue y Government service demands y Study results are presented in a local public hearing y The results are also given to the State Budget Committee for review within 90 days And the journey continues… Bridges along Ohio River between Indiana and Kentucky Future Challenges y Battling the disbursement of bad information y Spending the proceeds wisely y Taking care of future highway budgets y Balancing tolling versus other P3 types For more information Dennis Faulkenberg [email protected] 317.822.9207.
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