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LRTP forecast report

LRTP forecast report

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Published by sourcemetro
Staff report on funding projects in the LRTP.
Staff report on funding projects in the LRTP.

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Published by: sourcemetro on May 15, 2013
Copyright:Attribution Non-commercial

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07/10/2013

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Los
Angeles
County
One
ateway
Plaza
zi3.9z2z000
Metropolitan
Transportation Authority
Los
Angeles,
CA
9ooiz
-2952
metro.net
Metro
FINANCE,
BUDGETAND
AUDIT
COMMITTEE
MAY
5,
2013
SUBJECT:
UPDATED
LONGRANGE
TRANSPORTATION
PLAN
FINANCIAL
FORECAST
ACTION:
ACCEPT
THE
LRTP
FINANCIAL
FORECAST
UPDATE
RECOMMENDATIONS
A.
Accept
the
updated
Long
Range
Transportation
Plan
(LRTP)
inancial
Forecast
described
in
Attachment
A,
ncluding:
1.
Additional
"up
to"
cost
assumptions
or
the
ollowing
LRTP
programs:
a)
tate
of
Good
Repair
$
750
Million;
b)
ccelerated
Regional
Transportation
Improvement
Project
(ARTI)
Assumes
oll
based
borrowing]
$
410
Million;
c)
A
ummary
of
the
use
of
fund
assignment
uthority
delegated
to
the
Chief Executive
Officer
(CEO)
n
Appendix
A
o
Attachment
A; and
2.
Measure
R
roject
Cost
Control
Process
and
Policy
compliance
recommendations
ound
in
Attachment
B:
a)
estside
Subway
Section
1
FTA
roject
Management
OversightConsultant
(PMOC)
stimate
$
178
Million;
b)
Regional
Connector
PMOC
stimate
$
33
illion;
c)
nterstate
5
outh
(LACMTA)
$
153
illion;
d)
nterstate
5
outh
(Excess
ROW,
tate,
&Other)
$
50
illion;
e)
nterstate
405
Northbound
HOV
ane
$
75
illion;
fl
Exposition
Phase
1
(Expo
Authority)
$
32
illion;
g)
xposition
Phase
1
(LACMTA)
$
7
illion.
ISSUE
The
LACMTA
oard
of
Directors
last
received
an
update
to
the
LRTP
inancial
Forecast
in
April
2012.
As
hown
in
Attachment
A,
ignificant
changes
o
the
forecast
since
April
2012
nclude
a
continuing
economic
recovery,
an
annual update
to
the
UCLA
Anderson
Forecast
of
axable
retail
sales,
new
interestrate
assumptions
or
all
planned
borrowing,
preliminary
Stateof
Good
Repair study
results,
narrowing
of
the
difference
between
engineering
estimates
and
low
bids,
significant
new
project
cost
estimates,
and
further
developments
in
our
Public
Private
Partnership
(PPP)
nd
Call for
Projects
programs.
 
In
addition
to
the
above
updates,
rior
to
the
new
update
of
the
LRTP
inancial
Forecast,
we
nticipate
that
the
LACMTA
Board
of
Directors
will
need
to
consider
additional
funding
for
the
following
programs
and
projects:
State
of
Good
Repair study
$
50
M
ARTI[Assumes
oll
Based
Borrowing]
$
10
M
Westside
Subway
Project
Management
OversightConsultant
(PMOC)
stimate
$
78
M
Regional
Connector
PMOC
stimate
$
3
M
Interstate
5
outh
(LACMTA)
$
53
M
Interstate
5
outh
(Excess
ROW,
tate,
&Other)
$
0
M
Interstate
405
orthbound
HOV
Lane
$
5
M
Exposition
Phase
1
(Expo
Authority)
$
2
M
Exposition
Phase
1
(LACMTA)
$
M
Total
$1,688
M
Collectively,
these
funding
needs
appear
o
require
deferring
or
compromising
other
LRTP
nd
30/10
policy
objectives.
However,
we
elievethat
these
additional
capital
funding
needsand
the
LACMTA
oard's
30/10
policy
objectives
should
be
met
ith
changes
n
planned
borrowing,
changes
n
corridor
andsub
-
regional
funding
assumptions,
and
a
business
case
based
approach
to
the
ARTI
project.
The
planned
borrowing
strategies
are
made
ossible
by
lower
interestrate
assumptions
as
addressed
in
Attachment
A.
The
changes
in
corridor
andsub
-
regional
funding
assumptions
are
found
in
the
Measure
R
ost
Control
Process
and
Policy
analysis
in
Attachment
B.
The
new
approach
to
the
ARTI
PPP
roject
is
described
in
this
report
andon
page
8
f
Attachment
A
found
on
page
11
of
his report).
Finally,
the
Appendix
to
Attachment
A
ummarizes
funding
assignment
changes
made
through
the
use
of
authority
delegated
to
the
CEO.
The
summaryshows
etail
for
LACMTA's
10
argestprojectsonly,
but
we
re
providing
additional
detail
under
separate
cover
to
be
known
as
the
"Beige
Book
").
Fund
assignmentcomparisons
or
any
of
the
projects
in
thisdetail
can
be
prepared
upon
request.
DISCUSSION
Economic
Recovery:
We
ontinue
to
enjoy
a
sustained
economic
recovery,
making
t
easier
for
State
and
Federalfunding
partners to
keep
their
commitments and
yielding
strong
sales
tax
receipts
relative
to
the
depths
of
theworldwide
economic
downturn.
As
shown
in
Attachment
A,
he
actual
salestax
receipts
have
tracked
well
since
our
last
forecast
update
was
eceived
from
UCLA
n
late
2011.
The2012
update
to
the
UCLA
Anderson
Forecast
of
axable
retail
sales
shows
an
overall
decrease
relative
to
the
2011
forecast,
but
is
close
enough
that
counter
-balancing
changes
in
interest
cost
assumptions
or
our
planned
borrowing
can
adequately
address
any
problems
LRTP
inancial
Forecast
Update
&
easure
R
roject
Finance
Acceleration
Plan
Page
2
 
presented
by
thelower
orecast.
State
of
Good
Repair: Stateof
Good
Repair
analysis
and
the
narrowing
difference
between
engineering
estimates
and
low
bids
are
a
major concern.
We
reresponding
to
a
LACMTA
oard
of
Directors
request
and
a
national
policy
effort
on
the
part
of
theFederal
TransitAdministration
(FTA)
o
improve
State of
Good
Repair
practices
by
carefully
studying
these
needsand
identifying
their
anticipated
cost
and
funding.
As
shown
in
Attachment
A,
we
re
using
preliminary
data
from
the
State
of
Good
Repairstudy
to
insurethat
we
ave
provided
for
State
of
Good
Repair
needs
going
forward.
Bid
Environment:Also
shown
in
Attachment
A
s
Caltrans statewide
data
that
indicates
that
the
difference
between
engineering
estimates
and
low
bids
is
significantly
narrowing
as
the
economic
recovery
continues.
While
we
ave
benefited
from
large
bid
savings
over
the
last
several years,
we
owknow
this
will
become
an
area
of
ignificant
concern
for
our
capital
projects
due
to
the
narrowing
we
reseeing
in
the
Caltransdata.Public
/Private
Partnership
Development:
As
ur
irst
PPP
roject,
ARTI,
nters
the
later
stages
of
ts
financial
analysis.
t
will
soonbe
possible
to
conduct
thebusiness
case
analysis
necessary
to
evaluate
fundamental
PPP
pproaches.
In
preparation
for
this
business
case
analysis,
we
re
recommending
assumptions about
the
appropriatetax
exempt
inancing
for
the
LACMTA-
funded
capital
components
of
the
ARTI
project.
Theserecommended
finance
methods
ill
be
urther
evaluated
in
thependingbusiness
case
or
the
PPP
roject.
The
contractually
based
taxable
private
finance
often
used
in
PPP
rrangements
is
almost
ertainly
more
expensive
than
what
we
an
provide
through the
recommended
assumptions
in
this
LRTP
pdate.
The
additional
interest
expense
resulting
from
private
financing
will
need
to
be
weighed
againstother
factorsto
be
discussed
in
the
PPP
roject
business
case
analysis.
Please
see
Attachment
A
or
more
information
about
the
possible
use
of
ax
exempt
inancing
for
the
LACMTA
sponsored
portion
of
ARTI.
The
allocation
of
public
sector
debt
inancing
secured
by
LACMTA
evenues
is
carefully
considered
through
our
LRTP
rocess.
In
considering
public
sector
debt
inancing
secured
by
LACMTA
evenues
or
PPP
rojects,
we
re
cognizant
hat
the
PPP
program
could
become
a
new
pathway
to
utilizing
LRTP
inancial
resources
not
originally
contemplated
in
the
LRTP
rocess.
In
other
words,
the
LRTP
inancial
constraints
could
themselves
become
a
PPP
ationalefor
high
cost
project
finance
strategiesthat
may
ot
be
as
cost
ffective
as
possible
for
the
public.
Balancing
these
considerations
presents
a
dilemma
for
evaluating
PPP
usiness
casesbecause
eliminating
access
to
tax
exempt
or
LACMTA
inancing influences
thecomparative data
used
for
thebusiness
case and
utilizing
those
strategies
could
compromise
the
LRTP
process.
When
axable
private
financing
is
contracted
through
PPP
rrangements,those
arrangements
must
not
come
t
the
unanticipated
expense
of other
LRTP
commitments.
Inclusion
of
the
ARTI
project
in
the
LRTP
pdate
does
notimply
any
conclusions
have
been
reached:
hat
can
only
be
done
through
thebusiness
case
analysis.
LRTP
inancial
Forecast
Update
&
easure
R
roject
Finance
Acceleration
Plan
Page
3

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