FTI Consulting Infrastructure Public/Private Partnerships April 2017 ASCE/COPRI Workshop

The “Big Three” of Getting It Done FEASIBILITY Is there a Viable Deal? Screening Tools Project Attributes BUSINESS CLEARANCE Who are the Stakeholders? Legislative Authorities Funding Requirements and Approvals TRANSACTION AGREEMENTS Lease Contract License Concession Agreement Or Combination Thereof?

Feasibility – Is there a Viable Deal? Screen Before you Study– initial screening will save time and money Project Attributes (The Initial Screen) Project Creates or Increases Reliable, Vendible, Durable Revenue Stream Economic or Resource Benefit to Other Stakeholders Aligns with, or Satisfies, Other Agencies' Goals Non-Federal Sponsor Level of Engagement/Political Willingness Level of Community Opposition/Controversy Local Support/Sentiment Toward Project Planning, Design, Costing, Approval and Regulatory Process Status Policy and/or Statutory Roadblocks Project Funds or Creates Unfunded Corps O&M Funding Obligation Benefit-Cost Ratio (Value for Money) Physical Condition, e.g., New, Renovate Existing or Deferred Maintenance Environmental, Habitat, Historical, Cultural or Archeological Issues

Feasibility – Revenues Drive Capital Access Projects that pass the initial screen warrant a deeper dive into the revenue potential and opportunities for “alternative financing” Annual Project Gross Revenue to Project Cost % Potential Gross Annual Ancillary Revenue, e.g. Recreation Fees, User Fees Frees-Up or Creates Land or Facilities for Lease, License or Purchase Capital Stack & Blended Cost Federal Financing Leverage Investment Debt/Sponsor Equity Mix MAXIMIZE Term, MINIMIZE Rate RISK drives DSCR and Blended Cost

Business Clearance Sponsor Agency – Who takes the lead? Legislative Authorities – WRDA, WIFIA, Special Legislation, other? Funding Availability/Sources Creditworthiness of Non-Federal Sponsor (Rating of Recent Bond Issuances)? Project & Sponsor Generated Debt Capacity? Access to State or Regional Funds, e.g. State Infrastructure Bank? Large Private/Corporate End-User/Payer will Participate in Funding? Other Stakeholders will Participate in Funding? Federal Funding, Loans or Guarantees Available Approval and Reporting Protocol Value for Money Analysis OMB and Congressional Engagement/Notification Life-Cycle Oversight

Business Clearance Federal Credit Scoring Rules – a blessing or a curse? It depends on structure… Appropriately structured federal direct loans and loan guarantees can be a powerful tool to bridge funding gaps

Transaction Phase License Contract Lease Concession Agreement Match the tool to the task – different agreements have different uses but all should be considered License Contract Lease Concession Agreement Or Combination Thereof? AUTHORITY governs Roles/Responsibilities/Participation TRANSACTION aligns Rights/Risks/Protocols INSTRUMENTS establish Performance/Protections/Remedies