GL_Industry_Forum.pptx

Great Lakes Public-Private Partnership Sources Sought Cleveland, OH February 10, 2015 Richard Ornitz InfraLinx

Misty Jones USACE Procurement Analyst

Christina Baysinger CELRD Civil Works Transformation Program Manager IWR Alternative Resourcing and Financing Deputy

Ernie Drott USACE P3 Demonstration Project PM

US Army Corps of Engineers

BUILDING STRONG®

Civil Works Transformation USACE Infrastructure Strategy

Civil Works Infrastructure Investment Strategy

DeAuth/Transfer/Divest Notional - Not to Scale

Appropriated CW Budget 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 5600 5500 5400 5300 5200 5100 5000 5000 4900 4900 4800 4800 Non-Appropriated funds 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2050 2563 1994 2089 2498 2500 2500 2500 2500 2500 2500 2500 Funds returned to Treasury 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 O & M Efficiencies/Optimization 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 100 100 200 200 300 700 1000 1000 1000 1200 1500 1500 Other Non-Federal Investment 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 100 100 200 200 500 1000 1200 1200 1500 2500 3000 4000 DeAuth-Transfer-Disposal-Caretaker 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 100 100 200 200 300 700 1000 1000 1200 1200 1500 1500 Gap 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 7500 7200 7500 7700 7200 6000 6000 6200 6100 5000 4000 3000

Alternative Resourcing and Financing/P3 Program USACE ARF program seeks to optimize the funding and delivery environment of the nation’s water infrastructure.

ARF program codified in WRRDA 2014 through a variety of measures, including a P3 pilot program, WIFIA, divestitures, and facilitated non-federal funding programs.

USACE working to implement the program in a balanced manner, creating the appropriate enabling framework to ensure the sustainability of individual projects and the program

Declining federal investments are creating a gap in funding for new infrastructure and major rehabilitations. This has led to a growing backlog of critical authorized projects.

USACE CW missions and programs play a crucial role in assuring that the Nation's water infrastructure systems continue to meet the Nation's current and future needs.

Nationally Critical Role of

USACE

Declining Federal Investment Primary objectives of ARF:

Enable increased investment by non-federal interests to improve return on federal investment;

Accelerate infrastructure service delivery to advance project benefits;

Reduce life-cycle costs when providing infrastructure services;

Access additional financial resources and increase funds available for infrastructure investment; and Realize efficiency gains through innovation and better aligned service delivery incentive structures.

Need for Alternative Resourcing & Financing

Vision A comprehensive systems approach to planning, managing and prioritizing investments in the Civil Works Infrastructure portfolio so that it is relevant, resilient and reliable.

Implement the USACE Infrastructure Strategy (UIS) Optimize O&M Efficiencies Coordinated Watershed Investment Decisions Develop and Implement Alternative Resourcing and Financing Approaches Outcomes:

Resilient, reliable and sustainable water resources infrastructure that:

(1) Leverages private capital to accomplish Civil Works Missions;

(2) Eliminates underperforming assets from the inventory; and

(3) Repurposes assets to perform contemporary missions.

FY15-19 Lines of Effort Apply Lifecycle Portfolio Management

USACE Strategic Direction

USACE Alternate Resourcing & Financing (ARF) Strategy

Accelerate delivery to speed up public benefits.

Increased total investment for national water resources infrastructure Decrease backlog of authorized critical water infrastructure projects.

Streamline and improve processes for contributed funds, project approvals, divestiture.

Reduce life cycle costs Innovation Public-Private Partnerships Contributed Funds Divestiture

WRRDA 2014

Whitter Narrows (FRM)

Fargo Moorhead

(FRM)

Sabine Nechez

(NAV)

Great Lakes

(NAV)

IL Waterways

(NAV)

Recreation

(REC)

WD Mayo (Hydro)

List of Projects

P3 Demonstration Project Status

Project Screening Qualitative Evaluation Quantitative Evaluation Market Testing RFQ Issuance RFP Issuance P3 Negotiation Financial Close Project Governance

Steps to a P3 Project Viability screening: Consideration of project size, complexity, criticality, environmental impact, revenue potential, sponsor authority, public support. Determine whether new legal authority needed to move forward with project. Determine whether OMB scoring impacts project.

Qualitative Evaluation: Determination of risk allocation, bundling efficiencies, network completion, scheduling efficiency, cost savings, and innovation and technology Quantitative Evaluation: Analyze funding & finance options, affordability, value for money, financial viability Test market interest via a project prospectus and release of an RFI Issue RFQ Issue RFP Negotiate P3 Close P3 Manage P3

*Current pilot avoids this issue – however – issue precludes us from implementing a full/traditional P3.

List of Projects

NEW

Payment Mechanisms Budget Scoring Revenue Ring-Fencing Contracting Authority Bundling, & Purposing Liability & Immunity Budget Ranking Appropriation & New Starts Institutional Capacity Decision -Making Credit Support Mechanisms

P3 Demonstration Project Constraints

Key Program Constraints Pilot Impediments Program Gaps

Internal Policies and Procedures

Water Resources Reform and Development Act of 2014

5014: Aim to complete updates to the draft 5014 guidance by 3 Oct. Draft guidance will be a living document further informed by pilots. After 3 Oct, will seek opportunity to brief senior leadership on the draft guidance.

1043(b): The main difference between 1043(b) and 5014 is that the private finance role isn’t addressed in 1043(b). Will maintain focus on 5014. We will address 1043(b) implementing guidance after 5014 guidance is approved by CW Leadership because 1043(b) guidance will be a subset of that guidance, for most part.

Divestiture: Draft 6002 guidance reviewed by HQUSACE and updated accordingly. Working through 6002 divestiture confusion (e.g. there are differences between 6002 report to Congress vs. OPORD to inventory assets and screen for divestiture). Aim to have a F2F on divestiture next week or the week after.

Bill is actively working on a draft FRAGO.

OMB: Meeting scheduled 1 Oct to discuss the A-129 circular which regards the scoring of the federal credit program (such as WIFIA). The A-129 circular doesn’t address the availability payments issue.

Water Infrastructure P3 Pilot Program (§5014)

Authorizes Secretary of the Army to enter into agreements with non-federal interests, including private entities, to deliver and finance construction of at least 15 water resources projects

Water Infrastructure Finance & Innovation Act (WIFIA)

WIFIA credit facility contemplates loans, lines of credit, and loan guarantees to support water infrastructure projects of national and regional significance (including flood damage reduction, restoration of aquatic ecosystems, improvements to inland and intra-coastal waterway navigation systems, wastewater treatment works, desalination plants, etc.)

Program Reforms & Streamlining

WRRDA offers a variety of other initiatives and authorities to facilitate and/or enable alternative resourcing and financing. Relevant examples include §1008 (Expediting Hydropower at Corps of Engineers Facilities), §1014 (Study and Construction of Water Resources Development Projects by Non-Federal Interests), §1022 (Credit in Lieu of Reimbursement), §1043 (Non-Federal Implementation Pilot Program), and §6002 (Review of Corps of Engineers Assets)

Contrib Funds P3s

WIFIA

Alternative Financing Line of Operation

Alternative Resourcing and Financing Approach 120 Day Approval Process for Model Agreements WRRDA 2014 Implementing Guidance for Contributed Funds Phase 2:Non-Model Agreement Process Improvement for Contributed/Advanced Funds Develop Pilot Projects RFI for one P3 Pilot Phase 2 Pilot Program Decision on WRRDA Sec 5014 guidance RFP for one P3 pilot Divestiture Guidebook Execute Divestiture Pilots FRAGO (need stratcom) Finalize Divestiture Candidates Develop Divestiture Process Divestiture Process Improvement Oct Jan Jun Sep Feb Dec Mar Aug Nov Feb May Oct Jan Nov Apr Jul Dec Mar Divestiture

All O&M CF agreements completed within 120 days of initiation by District ID impediments, Constraints, Gaps Coordinate for Enabling Legislation Recommend P3 Enablers P3 Pipeline Established RFQ for one P3 pilot Policy & Legislative Barriers Implement 2 ARD projects Develop out year program WIFIA Collaboration MOU Signed No WIFIA Funding in FY15 (USACE) Launch WIFIA program Approve Divestiture Implementation Strategy WRRDA Sec 6002 Implementation Guidance Submit Recommended Legislation/6002 report Report to GSA & Congress National, Regional, Local Stakeholders MSC Road Shows OMB, ASA(CW), Congress P3 101 Roll Out to FOAs

Continuous Strategic Communications

Key:

UCP

Items Challenges UCP Support Items ESPC’s Disposal Funding & Public Support Local CF Availability xx Working or In Place Across USACE Valued at $???

Could some or all of the project elements be considered a viable candidate for P3/P4?

Project Screening

Great Lakes P3 Demonstration Project Sources Sought advertised in FedBizOps (8 Jan) Describes challenges Process will identify parties interested in discussion/collaboration Industry Forum (10 Feb) Clarify challenges Validate interest Publish Way Ahead based on Industry Forum Results (27 Feb) Communicate with industry Industry and Stakeholder Outreach (Mar-Apr) Refine scope Viability screening of potential P3 Qualitative Evaluation Quantitative Evaluation Request For Qualifications (TBD) Prequalify/Prescreen bidders Request For Proposals (TBD)

Our path forward… Continue active participation/advocacy on White House Task Force on P3s Support interagency partnerships for WIFIA implementation Support development of strategy to revise OMB/CBO scoring rules for Infrastructure P3s Advocate for legislative/policy guidance needed to enable P3/4 projects, including in WRRDA guidance STRATCOM/Engagement with investors, industry, Congress, Administration, agencies at all levels

P3 Critical Success Factors Basic Structure Examples Benefits to Industry Risk Allocation Federal contribution State and City Needs and Priorities Industry Needs and Priorities

Non-Federal Perspective

Contact Information Richard Ornitz InfraLinx richard.ornitz@infralinx.com 203-515-1948

Misty Jones USACE Procurement Analyst misty.d.jones@usace.army.mil 513-684-2019

Christina Baysinger CELRD Civil Works Transformation Program Manager IWR Alternative Resourcing and Financing Deputy christina.m.baysinger@usace.army.mil 513-684-2237

Ernie Drott USACE P3 Demonstration Project PM ernest.a.drott@usace.army.mil 513-684-2016

Microsoft_Office_PowerPoint_Presentation1.pptx

USACE InfrastructureStrategy

Watershed-Informed Budgeting

Quality Solutions and Services

Planning Modernization

Pre-Decisional Working Draft FOUO. Do Not Release/Distribute

Four pillars of Civil Works Transformation (contained in Goal 2 of the USACE Campaign Plan):

Modernize the CW project planning program and process

Enhance and refine the CW budget development process through a systems-oriented watershed approach, priorities and collaboration.

Improve USACE methods of Deliver to produce quality engineering solutions and services on schedule

Deliver reliable, resilient and sustainable infrastructure systems.

image1.jpeg image2.jpeg image3.png image4.png image5.png image8.jpeg

Microsoft_Office_Excel_Worksheet2.xlsx Sheet1

Appropriated CW Budget Non-Appropriated funds Funds returned to Treasury O&M Efficiencies/Optimization Other Non-Federal Investment DeAuth-Transfer-Disposal-Caretaker Gap

2009 5600 2050 474 100 100 100 7500

2010 5500 2563 559 100 100 100 7200

2011 5400 1994 579 200 200 200 7500

2012 5300 2089 529 200 200 200 7700

2013 5200 2498 572 300 500 300 7200

2014 5100 2500 700 1000 700 6000

2015 5000 2500 1000 1200 1000 6000

2016 5000 2500 1000 1200 1000 6200

2017 4900 2500 1000 1500 1200 6100

2018 4900 2500 1200 2500 1200 5000

2019 4800 2500 1500 3000 1500 4000

2020 4800 2500 1500 4000 1500 3000 image10.png image11.png image6.jpeg image19.png image20.png image12.png image13.png image14.png image15.png image16.png image17.png image18.emf image23.png image21.png image22.png image24.jpeg image25.png image26.jpeg image27.jpeg image7.png