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Amy Potter Chief Financial Officer
March 16, 2016
J.P. Morgan Public Finance Transportation & Utility Investor Forum
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TCA History/Background
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Highlights
Restructurings in 2013 and 2014 put the Agencies on solid financial footing
Traffic and revenue are growing steadily, supported by a strong economy and a congested network of freeways and major arterial roads
As you’ll see, credit quality is improving; neither agency is a speculative credit
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Governance – Joint Powers Authorities – Formed in 1986 – 18 cities and three
County Supervisor Districts
The two JPAs are separate legal entities with separate finance structures (one staff)
Authority to collect tolls obtained from State legislature in 1987
Toll revenue for each Agency can only be spent on operating costs, debt service and system improvements
San Joaquin Hills Toll Road Foothill Toll Road Eastern Toll Road
TCA Staff
San Joaquin Hills Board of Directors
Foothill/Eastern Board of Directors
Transportation Corridor Agencies
Three Roads, Two Agencies, One Staff TCA Structure
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TCA Toll Roads provide Vital Links in the OC and Regional Transportation Network
The Foothill/Eastern System and San Joaquin Hills System comprise a 51-mile tolled highway network
– 20 percent of OC highway system
– 290,000 trips on a typical weekday
– $300 million annual toll revenue
– All drivers pay electronically
– 780,000 accounts
– 1 million transponders
– Built parallel to OC’s congested I-5, I-405 and SR-55 freeways
– System provides predictable access to commercial centers and Airport
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California Toll Facilities
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1990
Golden Gate Bridge
Antioch Bridge Benicia-Martinez Bridge Carquinez Bridge Dumbarton Bridge Richmond-San Rafael Bridge San Francisco-Oakland Bay Bridge San Mateo-Hayward Bridge
17-Mile Drive
Coronado Bridge
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California Toll Facilities
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2016
Golden Gate Bridge
Antioch Bridge Benicia-Martinez Bridge Carquinez Bridge Dumbarton Bridge Richmond-San Rafael Bridge San Francisco-Oakland Bay Bridge San Mateo-Hayward Bridge
I-680 Express Lanes (SB) I-580 Express Lanes
SR-237 Express LanesI-880 Express Lanes
I-10 Express Lanes I-110 Express Lanes
SR 73 Toll Road SR 133, SR 241, SR 261 Toll Roads
I-15 Express Lanes SR-125
SR-91 Express Lanes
17-Mile Drive
Coronado Bridge (now free)
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California Toll Facilities
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2016 + Planned
Golden Gate Bridge
Antioch Bridge Benicia-Martinez Bridge Carquinez Bridge Dumbarton Bridge Richmond-San Rafael Bridge San Francisco-Oakland Bay Bridge San Mateo-Hayward Bridge
I-680 Express Lanes (SB+NB) I-580 Express Lanes I-880 Express Lanes Extension
SR-237 Express Lanes ExtensionI-880 Express Lanes Extension SR-85 Express Lanes US 101 Express Lanes
SR-91 Express Lanes I-405 Express Lanes
I-10 Express Lanes I-110 Express Lanes High Desert Corridor I-5 Express Lanes I-405 Express Lanes SR-710 Bypass
SR 73 Toll Road SR 133, SR 261 Toll Roads, SR 241 Extension/I-5 Connector, SR 241/91 Connector,
I-15 Express Lanes SR-125 SR-11/Otay Mesa I-805 Managed Lanes I-5 Managed Lanes
I-80 Express Lanes SR-156 Toll Road
880 Express Lanes Extension
US 101 HOT Lanes
SR-91 Express Lanes I-15 Express Lanes
I-10 Express Lanes I-15 Express Lanes High Desert Corridor
I-680 Express Lanes
CONTRA COSTA transportation authority
17-Mile Drive
US 101 Express Lanes
Coronado Bridge (now free)
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Orange County and Regional Economic Update
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Orange County Economic Indicators Continue Positive Trends
Sources: (1) State of California Employment Development Department; (2) US Census Bureau, California DOF; (3) California Association of Realtors; (4) US Census Bureau
Unemployment Rate as of January 20161 Population as of January 20152
Median Home Price as of January 20163 Residential Building Permits (Units)4
4.0% 5.8%
Median Home Price as of January 2016 Residential Building Permits (Units)
Actuals through September 2015
Positive trends in each of these four indicators are also observed in Riverside and San Diego Counties
5-Year Avg. Growth Rate: +0.91%
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3 4
Orange County Driving Trends California Gas Prices are Near Five-Year Lows2 A Typical Weekday Commute1
Sources: (1) http://maps.google.com accessed 6:00 PM December 3, 2015; (2) U.S. Energy Information Administration, Weekly California All Grades Reformulated Retail Gasoline Prices (March 7, 2016); (3) Inrix 2014 Urban Mobility Scorecard Annual Report
Selected Freeway Segments3 Freeflow Travel Time Peak Travel Time Average Speed During Peak Worst Day/Hour
1. I-405 SB From MacArthur to Jeffrey Rd (4.6 mi) 4 minutes 8 minutes 34 mph Wed 17:00
2. I-405 NB From CA-55 to Brookhurst (7.0 mi) 6 minutes 15 minutes 29 mph Fri 17:00
3. CA-55 NB From I-405 to Irvine Blvd (6.4 mi) 6 minutes 13 minutes 30 mph Thu 17:00
4. I-5 NB From CA 133 to 17th St. (8.4 mi) 8 minutes 17 minutes 30 mph Thu 17:00
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Foothill/Eastern TCA Financial Update
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Transactions Transactions and Average Toll Rate
* 52-week moving average ** Through February; growth rate versus same period in FY 2015
Annual Transactions
Toll Increases:
Fiscal Year Transactions (Millions) Transactions Growth
2007 67.56 +0.6% 2008 64.74 -4.2% 2009 59.78 -7.7% 2010 56.40 -5.7% 2011 56.16 -0.4% 2012 56.17 0.0% 2013 55.39 -1.4% 2014 56.64 +2.3% 2015 58.42 +3.1% 2016 ** 41.37 +9.3%
Transactions are on pace for three consecutive years of growth
– FY 2016 Budget assumed 1.4% transaction growth; 9.3% growth observed to date
– One-year transaction growth rate is currently at its highest level since FY 2001
– Transactions outpaced the 2013 Traffic Study by 5.2% in FY 2014 and 5.9% in FY 2015
78.0% of transactions are processed on the mainline toll plazas
Weekend/non-commute and ramp usage is increasing
Toll increases in five consecutive years; +2.0% FasTrak rate increase was effective July 1, 2015 (while maintaining the $1.00 increment above the FasTrak rate for non-FasTrak transactions)
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Toll Revenues Toll Revenue and Average Toll Rate
* 52-week moving average ** Through February; growth rate versus same period in FY 2015
Annual Toll Revenues
Fiscal Year Toll Revenues (Millions)
Toll Revenues Growth
2007 $106.40 +9.6% 2008 $102.32 -3.8% 2009 $94.08 -8.1% 2010 $99.68 +6.0% 2011 $100.14 +0.5% 2012 $107.15 +7.0% 2013 $111.73 +4.3% 2014 $119.41 +6.9% 2015 $126.47 +5.9% 2016 ** $92.16 +12.5%
Toll Increases:
Foothill/Eastern TCA
Toll revenues for the first eight months of FY 2016 are up 12.5% versus the prior year
– FY 2016 Budget assumed 3.4% revenue growth (2.0% from toll increase)
Compound average annual growth
– FY 2001 to FY 2015: 4.0%
– FY 2009 to FY 2015: 5.1%
– Debt service growth rate through FY 2038: 3.75%
Revenue breakdown by transaction type in FY 2015 (excluding violations)
– FasTrak: 87.9%
– ExpressAccount (license plate tolling account): 7.3%
– One-Time-Toll (license plate tolling with no account): 4.9%
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F/ETCA Performance Relative to Traffic Studies
Transactional toll revenues averaged 105.7% of the 1999 Stantec study during the period 2000 through 2007
Transactional toll revenues are averaging 108.5% of the 2013 Stantec study in the period FY 2014 through FY 2016 (projected)
2013 Stantec study toll rate increases average 2.5%-3.0%; inflation assumption: 2.5%
Average actual toll rate increases have been 2.0% per year since the 2013 refinancing
Average annual growth rate over T&R study period:
– 1999 Stantec Study: 5.4%
– 2013 Stantec Study: 4.5%
– Restructured Debt: 3.75%
Restructured debt profile was created during the post-recession low point in the revenue cycle
F/ETCA Transactional Toll Revenue
Foothill/Eastern TCA
* FY 2016 Transactional Toll Revenues as projected by the Agency based on actual results through November 30th, 2016
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Development Impact Fee Program The Development Impact Fee (DIF) Program collects fees at
the time of building permit approval in proportion to projected traffic demand attributable to the new residential and commercial development
Development Impact Fees in excess of $2.5 million for each six month period are pledged under the 2013 Master Indenture
Over the life of the DIF program, Foothill/Eastern TCA has collected $462.7 million of DIFs
Development Impact Fees Accrued
Fiscal Year Forecast DIF Revenues
($000) Actual DIF Revenues
($000) Difference
(As % of Forecast)
2013 $9,271 $11,794 +27.2%
2014 11,885 19,813 +66.7%
2015 13,407 24,901 +85.7%
2016 14,836 14,8751 -
In 2013, PB Consult forecasted F/ETCA DIF revenues through 2035; F/ETCA has significantly outperformed these forecasts for each the past three fiscal years
DIF revenue is not included in coverage in annual TCA Budgets or TCA’s long-term financial projections
1 FY 2016 actual receipts as of January 31, 2016
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Near-Corridor Development Update Tustin Legacy: 3,200 homes & apartments
built to date; 3,600 planned in next decade with new sales resumed in mid-2015
Great Park: 1,000 homes sold out; 10,700 total homes planned
The 2,379-home & 50,000 sq. ft. commercial use Baker Ranch development commenced sales in early 2015
Rancho Mission Viejo: 1,200-home Phase 1 sold out in 2014-15; 2,800-home Phase-2 for sale Q3 2015; total planned community: 14,000 homes
Sources: City of Lake Forest Orange County Register
Los Patrones
Parkway
(Under Construction)
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1. Includes violations, non-revenue users, unprocessable images and account accruals 2. Through FY 2014 the Agency included in Violation Penalty Revenue toll revenue associated with violations, as it was not material; as a result of the conversion to AET and the resulting
shift in payment patterns, this violation toll revenue portion is more significant and it has been recorded as a component of Net Collectible Tolls for FY 2015 and later 3. Based on partial year due to FY 2014 restructuring transaction 4. Based on partial year due to FY 2014 restructuring transaction, and includes $19.8 in Development Impact Fees 5. Enhanced coverage includes pledged DIFs, which are equal to total DIF collections less $5.0 million
Net Toll Revenues Detail Category
FY 2014
Actual
FY 2015
Actual
FY 2016
Budget
Revenues ($ Millions) Transactional Toll Revenues $119.4 $126.5 $129.2 Violations / Non Revenue1 ($5.1) ($9.1) ($9.8) Violation Penalty Revenue (Toll Component)2
- $4.8 $4.3
Net Collectible Tolls $114.3 $122.2 $123.7
Violation Penalty Revenue (Violation Component)2
$13.2 $14.9 $14.3
Acct. Maintenance Fees $9.8 $11.1 $11.5 Other Revenue $1.6 $1.7 $1.5 Interest Earnings $2.2 $1.5 $1.6 Total Revenues $141.1 $151.4 $152.6
Current Expenses ($23.3) ($22.3) ($26.3) Adj. Net Toll Revenues $117.8 $129.1 $126.2
Development Impact Fees $19.8 $24.9 $15.0 Senior Net Debt Service ($48.2)3 ($85.2) ($88.9) Aggregate Net Debt Service ($55.1)3 ($98.0) ($101.6) Surplus Revenue $36.44 $51.1 $30.8
Coverage Ratios Enhanced Senior (Incl. DIFs)5 1.60x3 1.75x - Enhanced Aggregate (Incl. DIFs)5 1.40x3 1.52x - Senior 1.43x3 1.52x 1.42x Aggregate 1.25x3 1.32x 1.24x
Increasing debt service
coverage and DIFs are producing increased margin and Surplus Revenues
Unlike most toll roads,
TCA does not pay
O&M for the system
FY 2016 Current Expenses reflect variable costs associated with increasing transactions
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Foothill/Eastern TCA Capital Improvement Plan
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Capital Improvement Program Update
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Foothill/Eastern TCA
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241/91 Connector: Additional connection between tolled OCTA 91 Express Lanes and SR 241 (SR 91 general purpose lane connector exists); completion in 2019
– Project approval and Environmental Documents over next two years; $180 million cost to be shared with OCTA
– Connector is likely to include a new tolling facility with potential to generate toll revenues
Tesoro Extension: provides a 5.5-mile extension south of Oso Parkway
– F/ETCA and Rancho Mission Viejo (developer) have been working on parallel paths
– RMV is moving forward with arterial project as a requirement of their environmental document under terms defined in the Major Thoroughfare and Bridge Fee Ordinance
– Project increases traffic and revenue to the 241 system
– Ultimate disposition of the segment is dependent on the on-going stakeholder process to define the connection of the 241 Toll Road to the I-5 freeway
SR 241 Long Range Planning: Regional planning efforts to date demonstrate the need for additional transportation improvements to relieve existing and future congestion on I-5 and local arterials in south Orange County
– F/ETCA is evaluating regional mobility needs to identify an acceptable solution
– Long Range Planning efforts are currently in the community outreach stage, which is expected to continue through FY2017
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241/91 Express Lanes Connector
Median-to-median connector ― Structure over 241/SR-91
north-west direct connector and the SR-91 Gypsum Canyon I/C
― Provides direct access into the SR-91 Express Lanes
― ~$180M project cost
Enhances regional connectivity between toll systems
Provides relief for existing freeways by improving mobility and traffic flow Reduces emissions by increasing movement through corridor Enhances safety by reducing weaving across general purpose lanes Maintains SR 91 Express Lanes operational performance levels
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241 Connection to I-5
TCA is engaging key stakeholders in the region on the broader long-term regional mobility challenges
Completed community ascertainment study Jan. 2016
Deliberative multi-step stakeholder outreach leading to new federal and state environmental documents and permits
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San Joaquin Hills TCA Financial Update
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SJHTCA Continues to Provide Access to Key Regional Economic Drivers, Job Centers and Residential Areas
Vantis Housing Development
Laguna Niguel Gateway Commercial Complex
South Coast Plaza Retail District
John Wayne Airport / Irvine Business Complex
Costa Mesa Residential Center
Laguna Niguel Residential Center
Newport Center Commercial District
Irvine Company Spectrum Business and Residential Centers
Fashion Island Retail District
Newport Beach Residential Center
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Transactions Transactions and Average Toll Rate
* 52-week moving average ** Through February; growth rate versus same period in FY 2015
Annual Transactions
Toll Increases:
Fiscal Year Transactions (Millions)
Transactions Growth
2007 31.10 +1.6% 2008 30.06 -3.3% 2009 26.81 -10.8% 2010 25.31 -5.6% 2011 25.45 +0.6% 2012 25.42 -0.1% 2013 24.98 -1.7% 2014 26.46 +5.9% 2015 27.97 +5.7% 2016 ** 20.01 +10.7%
Transactions are on pace for three consecutive years of growth in excess of 5% per year
– FY 2016 Budget assumed 1.3% transaction growth; 10.7% growth observed to date
In FY 2015, transactions exceeded the 2014 Traffic Study projection by 9.1%
70.1% of transactions are processed on the mainline Catalina View toll plaza
Weekend/non-commute and ramp usage is increasing
Toll increases in five consecutive years; +2.0% FasTrak rate increase was effective July 1, 2015 (while maintaining the $1.00 increment above the FasTrak rate for non-FasTrak transactions)
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Toll Revenues Toll Revenue and Average Toll Rate
* 52-week moving average ** Through February; growth rate versus same period in FY 2015
Annual Toll Revenues
Fiscal Year Toll Revenues (Millions)
Toll Revenues Growth
2007 $89.06 +8.7% 2008 $91.43 +2.7% 2009 $86.42 -5.5% 2010 $87.10 +0.8% 2011 $88.10 +1.2% 2012 $92.97 +5.5% 2013 $100.53 +8.1% 2014 $117.14 +16.5% 2015 $131.56 +12.3% 2016 ** $96.55 +13.6%
Toll Increases:
Toll revenues for the first eight months of FY 2016 are up 13.6% versus the prior year
– FY 2016 Budget assumed 3.1% revenue growth
Compound average growth rates
– FY 2001 to FY 2015: 7.0%
– FY 2009 to FY 2015: 7.3%
– Debt service growth rate through FY 2040: 2.3%
Revenue breakdown by transaction type in FY 2015 (excluding violations)
– FasTrak: 87.3%
– ExpressAccount (license plate tolling account): 6.4%
– One-Time-Toll (license plate tolling with no account): 6.3%
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1. Includes violations, non-revenue users, unprocessable images and account accruals 2. Through FY 2014 the Agency included in Violation Penalty Revenue toll revenue associated with violations, as it was not material; as a result of the conversion to AET and the resulting shift in
payment patterns, this violation toll revenue portion is more significant and it has been recorded as a component of Net Collectible Tolls for FY 2015 and later 3. Based on partial year due to FY 2015 restructuring transaction; includes $3.5 million of DIFs and $16.8 million deposited to the Supplemental Reserve Fund 4. Enhanced coverage includes pledged DIFs, which are equal to total DIF collections less $5.0 million 5. Does not include Toll Stabilization Funds utilized to pay debt service 6. Based on partial year due to FY 2015 restructuring transaction
Net Toll Revenues Detail Category
FY 2014 Actual
FY 2015 Actual
FY 2016 Budget
Revenues ($ Millions) Transactional Toll Revenues $117.1 $131.6 $134.1 Violations / Non Revenue1 ($6.4) ($15.5) ($15.9) Violation Penalty Revenue (Toll Component)2
Note 3 $8.3 $7.7
Net Collectible Tolls $110.7 $124.4 $125.9
Violation Penalty Revenue (Violation Component)2
$14.5 $19.3 $18.8
Acct. Maintenance Fees $3.0 $3.2 $3.3 Other Revenue $0.9 $0.8 $0.8 Interest Earnings $2.2 $1.1 $0.2 Total Revenues $131.3 $148.8 $149.0
Current Expenses ($12.1) ($12.9) ($14.0) Adj. Net Toll Revenues $119.2 $135.9 $135.0
Development Impact Fees $3.8 $3.5 $3.5 Senior Net Debt Service ($94.8) ($38.0) ($91.4) Aggregate Net Debt Service - ($48.7) ($106.9) Surplus Revenue $2.5 $37.13 $32.5
Coverage Ratios Enhanced Senior (Incl. DIFs)4 - - - Enhanced Aggregate (Incl. DIFs)4 - - - Senior 1.26x5 2.38x6 1.48x Aggregate - 1.86x6 1.26x
FY 2016 revenues through
November are ahead of Budget and Stantec forecast
Increasing debt service coverage is producing increased margin and Surplus Revenues
Unlike most toll roads, TCA
does not pay O&M for the
system FY 2016 Current Expenses
reflect variable costs associated with increasing transactions
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Debt Portfolio Information
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Current F/ETCA Debt Structure
2013 Bond Refinance greatly improved debt service coverage margins and ability to withstand future economic downturns
Refinance resulted in decreased debt service growth rate, substantially lower MADS and is now based on average inflation assumptions
1995 Bond refunding in February 2015 resulted in savings of $33.5 million which was deposited into a project fund
These refinancing transactions enhance the Agency’s credit rating upgrade strategy
$0
$100
$200
$300
$400
$500
2015 2020 2025 2030 2035 2040 2045 2050
$ m
m
Series 2013 Senior Debt Service Series 2015A Senior Debt ServiceSeries 2013 Junior Debt Service Adjusted Net Toll Revenues
Series 2015A Bonds refunded
the 1995 Bonds, creating over
$33 million in PV savings/
upfront proceeds
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0
50
100
150
200
250
300
2016 2021 2026 2031 2036 2041 2046
$ M
illion
s
Untendered Non-Callable Series 1997A Bonds Series 2014A (Sr.)
Series 2014B (Jr.) Prior Debt Service
SJHTCA 2014 Restructuring Establishes Strong Financial Foundation for the Agency
Restructured Debt Profile
Refunded all callable bonds with Series 2014 bonds.
Low interest rates, the successful tender of $914 million in maturity value of the non-callable Series 1997A CABs and the successful exchange of all the Series 1997A CCABs created PV savings and further reduced debt service growth rate and peak payment
Projected Net Toll Revenues > 1.3x Senior Lien Debt
Debt Service Growth Ends
in 2041
Significantly Lower Peak Debt Payment
$186 million (vs $269 million prior peak)
Lower Debt Service Growth Produces
Greater Excess Cash Flow & Increased
Cushion
All Series 2014 Bonds Can Be Called
On or After 2025 Without Penalty
* Projection based on Stantec’s base case toll revenue forecast 29
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For More Information
Amy Potter
949-754-3498
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