DENVER | Transportation Thread

[wong21fr]

Due diligence failure by the legal audit on this one:

Set to debut, Boulder-to-Denver bus line clipped by surprise legal snag
The Daily Camera

The Flatiron Flyer bus system was designed to offer rapid transit on U.S. 36 between Boulder and Denver making use of new express lanes and, when traffic slows or halts altogether, cruising past on the shoulder of the road.

But in a development arriving just weeks ahead of the Flyer's Jan. 3 debut — and that somehow went unforeseen for six years by both state transportation planners and a coalition of mayors and commissioners along the highway's corridor — the buses' privilege to drive on the shoulder will have to be sorted out in the Legislature.

Before its drivers are allowed to use the shoulder, the Flatiron Flyer, operated by the Regional Transportation District, will need Colorado lawmakers to pass a bill granting a special exemption.

[bunt_q]

Originally Posted by wong21fr

Due diligence failure by the legal audit on this one:

No, no, there was no surprise. It's not the best reporting ever. It's also not a big deal.

[wong21fr]

Originally Posted by bunt_q

No, no, there was no surprise. It's not the best reporting ever. It's also not a big deal.

Okay, lousy reporting and no big deal. But why didn't CDOT/RTD tackle this last session so that it's not perceived as an opening day failure? Did a operations agreement need to get completed between RTD and CDOT first?

[TakeFive]

Originally Posted by bunt_q

No that's wrong, the O&M agreement just covers the nuts and bolts of what the O&M subcontractor does during operations; the concessionaire won't do the O&M itself, it does it through that subcontract. It won't include any changes - how could it, RTD isn't even a party to that agreement. Everything you want to know is in the concession agreement.

I can't really know. I find various dots but it's impossible to see how they connect.

I did just find on Page 3, Par. 3 the following:

The availability payments paid to the concessionaire will be split into two parts. The part covering debt service is not subject to appropriations, but the part covering O&M is and could be reduced if the concessionaire fails to meet performance targets.

That seems pretty clear that there is a debt component but no reference to amortization period.

I could be wrong about the "total cost" (maybe - LOL). On Page 4 it mentions that DTP will fund about $1.3 billion while RTD will fund $777 million which adds up ~to the capital costs/Bid. RTD's amount covers soft costs especially ROW acquisition. DTP then has a ~matching $1.27 billion DB contract.

Here's another interesting tidbit:

The Macquarie team anticipates using 30 year, tax exempt private activity bonds with a 10 year call.

Interesting given the 10 year call; otherwise it doesn't mean much.

[Zmapper]

In regards to the Eagle P3 project:

Who receives the farebox revenues - RTD or DTP?

As an offshoot from the first question, suppose that ridership was extremely high/oil hits $200-per-barrel/cars are outlawed, and the project makes an operational profit; who keeps the additional revenues?

[wong21fr]

Originally Posted by TakeFive

I can't really know. I find various dots but it's impossible to see how they connect.

I did just find on Page 3, Par. 3 the following:

That seems pretty clear that there is a debt component but no reference to amortization period.

I could be wrong about the "total cost" (maybe - LOL). On Page 4 it mentions that DTP will fund about $1.3 billion while RTD will fund $777 million which adds up ~to the capital costs/Bid. RTD's amount covers soft costs especially ROW acquisition. DTP then has a ~matching $1.27 billion DB contract.

Here's another interesting tidbit:

Interesting given the 10 year call; otherwise it doesn't mean much.

RTD's annual concession payments to Denver Transit Partners ("DTP") is comprised of two parts, one of which goes toward paying the debt that was issued by RTD and is subject to TABOR that was used by DTP to partially fund Eagle P3. So RTD is servicing it's debt for P3 and paying the service fee to DTP under the same monthly payment. Looks like RTD has ~$600M in bonds subject to TABOR they issued to pay for Eagle P3 which will be paid back over a period of 28 years. Over the same period RTD will pay a service fee to DTP that has a base fee with escalation, performance, and usage factors. DTP receives this and will cover O&M excluding train utilities (i.e. electricity) which will be paid by RTD. RTD retains all farebox revenue and is responsible for collection (I think).

I'm guessing the other $177M that was mentioned are costs that were incurred prior to the notice to proceed for Eagle P3- probably for land acquisition for the corridors.

[TakeFive]

Originally Posted by wong21fr

RTD's annual concession payments to Denver Transit Partners ("DTP") is comprised of two parts, one of which goes toward paying the debt that was issued by RTD and is subject to TABOR that was used by DTP to partially fund Eagle P3. So RTD is servicing it's debt for P3 and paying the service fee to DTP under the same monthly payment. Looks like RTD has ~$600M in bonds subject to TABOR they issued to pay for Eagle P3 which will be paid back over a period of 28 years. Over the same period RTD will pay a service fee to DTP that has a base fee with escalation, performance, and usage factors. DTP receives this and will cover O&M excluding train utilities (i.e. electricity) which will be paid by RTD. RTD retains all farebox revenue and is responsible for collection (I think).

I'm guessing the other $177M that was mentioned are costs that were incurred prior to the notice to proceed for Eagle P3- probably for land acquisition for the corridors.

TABOR just is not something that grows on me. I didn't understand any of that; I ignored it basically.

That all sounds reasonable but I don't know where you're pulling it from. Where did the $177 million come from? You're always good at this stuff though.

Coincidentally, using some different key words I found some info at Transportation.gov. It's actually well written and it was apparently updated September 29. The very last sentence states the following:

The availability payments due to DTP under the concession agreement will cover repayment of the PABs and returns to the concessionaire’s private equity contributions.

Do you understand the PAB's? It looks to me like the Private Activity Bonds totaling $397.8 million are a series of different bonds, presumably with different maturities and yields (that average 6.078%) that were issued by Barclays/Bank America to DTP and make up the biggest component of their private equity contribution. There was also a separate $54 million private equity contribution.

[bunt_q]

Originally Posted by TakeFive

Do you understand the PAB's? It looks to me like the Private Activity Bonds totaling $397.8 million are a series of different bonds, presumably with different maturities and yields (that average 6.078%) that were issued by Barclays/Bank America to DTP and make up the biggest component of their private equity contribution. There was also a separate $54 million private equity contribution.

The PABs are not counted as a private equity contribution. The (conduit) issuer on the PABs would technically be RTD (normally - although TABOR might have complicated that). Private equity is just that - private equity. If you add up everything RTD had available during the construction period, it wouldn't have been enough to pay the actually amounts spent. Enter private equity, which gets repaid over time (though how and when varies greatly). Structuring that is one of the big ways competing teams can win a bid, since they all have to build the same project scope, and they get evaluated on the annual availability payment they'd be willing to accept.

It's a big project, RTD might have issued its own bonds to make construction period payments (likely), and a separate series of PABs issued as a conduit by the concessionaire. That makes sense to me.

You could also go on to EMMA and see.

[TakeFive]

Originally Posted by bunt_q

The PABs are probably not counted as a private equity contribution, though I do not know exactly where you are looking. The (conduit) issuer on the PABs would technically be RTD.

In addition to the linked reference above I used the previous linked news release, very first part.

Balfour Beatty's own site states:

The notice to proceed was given concurrently with reaching financial close in New York. DTP arranged for $452 million in private financing, including $397.8 million in Private Activity Bonds.

[bunt_q]

Originally Posted by TakeFive

In addition to the linked reference above I used the previous linked news release, very first part.

That doesn't say what you are saying. It says what I am saying. ?? Paragraphs one and two are separate things - permitted equity transfers in the deal vs. issuance of the PABs. Not the same as the equity contribution to the deal.

[TakeFive]

Originally Posted by bunt_q

That doesn't say what you are saying. It says what I am saying. ?? Paragraphs one and two are separate things - permitted equity transfers in the deal vs. issuance of the PABs. Not the same as the equity contribution to the deal.

Also check my edit above.

[TakeFive]

The PAB's defined from milbank.com case study:
Dang, won't copy...

The PAB'S were 3X over subscribed
$80 million has maturities between 7/15/2015 and 1/15/2026
$62 million matures in 2030
$80 million matures in 2034
$175 million matures in 2041

Looks like all this is within the $2.1 billion bid so I take back my speculation about it needing to be added to the cost.

Fascinating deal making.

[bunt_q]

Yeah, private financing is not the same thing as private equity.

Also, PABs are not really private financing, considering they are tax exempt. RTD gets a PABs allocation from USDOT, acts as conduit issuer, publishes the OS, provides legal opinions on the issuance, and provides all of the pledged revenues to the concessionaire. Now maybe that's "private" by some definitions, insofar as the private concessionaire is on the hook for making the payments. But it's not like "a company went to a bank and got a loan" private. It was entirely brokered by the public sector.

[TakeFive]

Denver is listed under "Other" - along with Philadelphia, Norfolk and Tampa.

That puts Denver decidedly behind Chicago, Los Angeles, New York Metro, Austin, San Francisco, Boston, Seattle, Miami, Houston, Atlanta, Washington, DC and Dallas.

7NewsDenver in a story about bottlenecks by Mark Boyle, Associated Press brings to light the fix according to Tyree Wilson who suggests cutting through the Albertson's parking lot.

In any case...

Hill Street Blues (NBC) via Buzzfeed

[EngiNerd]

Originally Posted by TakeFive

Denver is listed under "Other" - along with Philadelphia, Norfolk and Tampa.

That puts Denver decidedly behind Chicago, Los Angeles, New York Metro, Austin, San Francisco, Boston, Seattle, Miami, Houston, Atlanta, Washington, DC and Dallas.

7NewsDenver in a story about bottlenecks by Mark Boyle, Associated Press brings to light the fix according to Tyree Wilson who suggests cutting through the Albertson's parking lot.

In any case...

Hill Street Blues (NBC) via Buzzfeed

While I agree with the bottleneck they list as being our worst, its kind of a silly comparison to compare a 0.8 mile bottleneck with Chicago's 12 mile long one. Having driven in many of the other major cities during rush hour, while we complain about our traffic, it's really no comparison to the others on that list, they are pretty horrendous. I think the difference here is that there aren't a lot of alternatives to the major interstate corridors, its either I-25/I-70 and sit in traffic or the side roads which take forever on their own, or pay tolls.

[EngiNerd]

Also, not sure if anyone heard of this yet or not, but RTD submitted a solicitation for a team to provide "Estimation of a range of costs to introduce, implement, maintain, and operate a District-wide paid parking system."

Basically, RTD is looking into the feasibility of converting all of their garages and lots to paid parking, and what the outcome of doing so would mean to spill over parking in the neighborhoods and ridership.

[bunt_q]

I more wonder what it would mean for ridership, unless they kept the first 24-hours free for in-district residents. It would sort of nullify the Eco-pass. Given what I pay for my Eco-pass, even $1/day would push it over the line where parking downtown might just be more cost effective for me. (Also, it would need to be pre-paid, I'll be damned if I'm going to take the time to fiddle with a parking payment machine every day.)

[EngiNerd]

Originally Posted by bunt_q

I more wonder what it would mean for ridership, unless they kept the first 24-hours free for in-district residents. It would sort of nullify the Eco-pass. Given what I pay for my Eco-pass, even $1/day would push it over the line where parking downtown might just be more cost effective for me. (Also, it would need to be pre-paid, I'll be damned if I'm going to take the time to fiddle with a parking payment machine every day.)

I think that's exactly the information they are trying to determine, whether the increased funding from parking will offset potential decreased ridership, and whether they end up with a bunch of calls from upset neighbors due to spillover into the free neighborhood parking areas.

Is it prepaid now for the overnighters?

Will be interesting to see the results, though it will likely be a while, this is just the RFQ out right now.

[bunt_q]

Originally Posted by EngiNerd

Is it prepaid now for the overnighters?

Not sure, but that's a relatively infrequent use. If it becomes a requirement to pay on a daily basis, they would have to dramatically expand the number of machines. Considering it took RTD a decade to figure out how to work a credit card, I am skeptical. More likely, we continue to have one machine, and lines of ecopass holders 20-deep unfurling $5 bills they dug out of the laundry trying to use it.

[TakeFive]

I see where that new CDOT guy, Shailen P. Bhatt, believes in magic.