and the lighting is right and all of the amenities that we have are built in and stay on the front are there. and they do a good job and get the monthly service payment if they do a bad job, they get deductions on that and they never get that money back, once they correct it, they get their money, but once you lose it you never get it back, what it does is provides you 30 years of senator of what that is going to be without necessarily uptick and they will take the market risk and construction risk and they will take the material intexts and light and cycle thating is all now part of it and you will know that up front. and other transactions are coming on-line and not just in rail, but in highways, and in vertical construction as well. again, the one thing that just to always keep in mind that the taxes and bonding abt will cost

you a little bit more because you are actually buying the insurance payment if you will with the behavior tool of that availability payment. so just to talk about some of the examples. design build. there is a real solid history and some of it has been good and some of it has been bad and it depends on how you set up your transaction and it is mainly about change orders and litigation that is associated with that and what is misunderstood, a lot of times is when you get into the design and build you do get the risk transfer not as much as you want and thes a comfort thing of where you want that to sit. >> it is not ideal from those perspectives. and design built is just a few of these example and they have used it on three highway project and some roads down in florida, and very successfully delivered, and typically about 203 years of financing because they are looking for federal toneding to come in. and to date, none of them have gone bad in any way, they have

all been kind of successful and there is not a horror story to tell you. but what is misunderstood is for you to understand that there are legal obligations that we have it look at and make sure that that is okay and each state has a different set of criteria and the legislation that has to be made and make sure that can work in the way that it is and especially considering everything that you are going to do financially. and on the db, fm concessions i just want to point this out and where you hear about pm going bad, this is the area that it has gone bad in, there are real good ones, chicago sky lane and northwest park lane in denver in particular are well maintained facilities and actually they put a lot of resource in and they care about what they are doing because they are getting the revenue and don't want to scare the people away, there are bad ones, i am not going to hide from that and that is the truth. and the express way, 125 did not go as well, and sh 130 in

texas went up for default on their loans and so that was another one, and highway 47 is a good one, but it is one of those ones where it is a concession, and the first 15 years, the concessioner really lost, the next five years, they made their money and got 70 more years to go, and so they look at that and say we give away too much. and so concessions can really, if you manage it right, the up sights may not make sense to an owner, and the parking that you may know about that and there was another one that was not a great deal and i hate to say it, it was not what a public vie vait partnership would be. >> the pennsylvania turn pike and those are actually both, the turn pike did not close, the legislature did not approve it, it was a good deal just not the dollar value that they were looking. and indiana, it was a situation, where they copied the standards and did not mode identify it to the specifickness of wra they were looking for and so things like

rest areas are completely left off and so nobody cares and not the way that you want to do things. >> availability much better track record and better way to go, the one that i personally was involved in and something that i am proud with is the light rail system and a lot of things to this, and there is the capitol in canada and closed in the 2013, and 2.9 billion dollars, and with a value of 4.9 billion and the largest in canadian history. and and we had a affordability and we hit it. and that was remarkable to do. and it was successful, and we started to break the ground and it was colder than san francisco. and it is going to be a while before they get in the ground and this year they will start to see that happen and one that is completed is the candle line in vancouver and here is something that had to get done prior to the olympics, so vancouver was behind it and

fully operational and running, the 595 corridor is the first availability in the u.s. and florida, and fast tracks is another one and successful in denver and that was done by pthree and light rail and right here in san francisco, the parkway is closed now and you are going to start to see the ability tift there and the bad there has not been a lot of bad and i am talking globally, on the availability payment, what happens on the occasion, is when you have financial crisis and certain enders underneath, and they may have problems, but they had the ability to replace them. but it is not a default, there has not been a lot of performance issue because they are having to incentivize to deliver. >> and one in particular in california and that has been studied to death and it is still a good transaction, and but i don't know if that was just put out to the public well enough so that everyone knew what they were getting into and i heard fantastic stuff today and letting the public know

what is going on whichever way that you decide to dow is going to help you. and on the development status, and there we go, sorry, and the yeah, the fbis and the eir was certified in 2004 and the supplement is planned for next year, and the design right now is in the neighborhood of around 30 percent, and you have already received a sign-off from high speed rail and cal trans, to accommodate that and the btx and it is now a regional priority as you all know, what has been recommended and i understand, where do you have and how do you start to

figure out which way is really best and so here are two things that we really think are at a my level and quick that you can get a better understanding and this is kind of part a is all kind of lumped together and one is to determine the analysis and so looking at each one of those procurement options and the subsets that may come to those and understand which one of those and sarah talked about the development that you guys have made on the wrist modeling and we will pick that up and we don't recreate it we pick it up and, what we call the enterprise risk and some of the policy risks that are associated with that and so we get a full plate. and we are also very big on well, okay that is great, we understand the risk and we can allocate those and we can mitigate those. >> and i reduce the risk premium of driving the value and the last thing that we do is create the value for the money study. and in the whole life, or in the construction depending on what method we have, we can compare one method to the other and delivering it a, to z, and what we do and what you find

and that is why the risk is so important is to understand, what you are transferring and how you are transferring it, and we are fortunate because we have the transactions that we can pull from and so that we are not recreating that we own a lot of cases if you do get, for example,, you know, the dbfm to work and it actually says that this is cheaper than traditional, by traditionally in the neighborhood of 5 to ten percent, and you say, that is generating value for money for me, and that would make sense to examine that to the fullest. and this is just an example and this is taken from another project and so don't, it is not mapped in any way against this project. and but we would like to sit down with all of the stake holders and the board and what are your goals and objectives, i called this as a consumer reports and kind of easy to understand, the public can understand it as well. each one of those methods measured against those goals

and objective and where it sitses, where you will get the solid fwox you will get the strongest and you are achieving the most amount of objectives helps you then get a tangent and not just the numbers but the human aspect and the real aspect of this delivery method and these are two things that we would say we would recommend for you to say go forward with this kind of analysis and you become more informed of what it will be and how it could work, and with that i will stop and i will be happy to answer any questions that you may have. >> thank you. >> we do actually appreciate the speed. eny know. >> but it was a lot of information, so i do appreciate that. >> why don't we start with, just it is a question, and it is, it is probably something to be studied, but curious if you had initial thoughts? >> so, with dtx, connecting

with the cal train system. which it appears that it will be electrified before dtx happens and so the board has made a decision for it to be designed build. a few months back. and i am curious with the concept of the availability approach and then the dbfm, and you know, how does, how does that, how does the maintenance and coordination work in the repayments, and i am curious as to your, again, your initial thoughts because i know that we have to talk it through. and you know if it makes sense to isolate segments of the whole corridor to support the approach, verses is this something that then requires some level of coordination or commitment for the rest of the quarter? >> yes. let me maybe explain this and i hope that this answers the

question, and if it does i will elaborate more, the availability payment let me start with the maintenance first and it makes the three components and that is what makes it important to understand, one it is the routine maintenance and the second part of it is the asset preservation, and the third thing that is important is what we call the expiree, criteria, you do not let any of those three go, there is a payment mechanism and the criteria that i just spoke of in the routine and are mapped to what we called non-conformance points if you don't and you are not keeping it open and available, that is where you will get the dings and your money comes down. and the coordination now, you talk about with, you know, lt cs and the overhead system and everything. and this will be part of that and it will be criteria that has to be maintained and sag,

and the apology and the amount that have you to have and the reliability of that. and we have to be spelled out, up front and so, you, it is more advantageous for you as an owner if you go to the dbfm route to have one entity be responsible for the entire footprint, because when something breaks down you go to one source and they will have the specialists and smf the best in the world to do this to fix that problem as opposed to having individual contracts. does that answer your question? >> from 4th and king there is a dtx and unless that changes, the cal train joint powers authority is a different public body than we are.

they are running the trains are you saying 245 that there would be a separate owner and contract for the last half mile of the train line than from fourth and king to kill g*il roy? >> no, so they are going to switch from design build to dbfm. >> i don't believe that is what you are saying >> help me out, somebody. >> so, george, the director lee, is represents the cal train joint powers board that oversees, the cal train system from gill roy to san francisco. and directors and the cal train board of directors last fall approved a particular delivery method for cal train

electrickfiation, what they arrived was a design build approach. and we, of course, are not there yet and we are still investigating different methods and we are trying to fund the cal train extension and our jurisdiction is just from currently fourth and king to the transit center. it is expected to be completed in 2019 which will be earlier than we expect complete our downtown extension and at the earliest i think that we had it in 2022 or 24 and after the electrickfiation is done in 2019. and so, that is the context. and so director lee was asking about director lee now that i gave him the context, if you could request the question again. >> okay, so, don't feel pressure to have an answer, and i, i think that it is a complicated matter that we will have to think through very hopefully. is with our design build

approach and if we develop our contractor prokurments over the next year, we will be contemplating what to do with the m, it is not a dbfm, but it is a db and we are not only contemplating. and it was already contracted out and so my challenge or the complexity here is the dpx, and and it does not have the utility in terms of the operations and maintenance, it is hooked to cal train and we have two separate entities so when we make a deal like this, whether we like it or not, are married and so, i want to understand the implications as to, and i think that we are still doing this and charming the feesbility of it and if there was enough merit to try to understand that complexity and how that ties in or does not tie-in. >> and i apologize and i understand the question better

now. and sorry for the confusion, that i had. but it is a very important one. and it is really where the lines of response kind of seize or continue through and there are ways to do that. when we did ottowa we had a situation where the main one, and the stop line, right? that was run by the city, if you would and the yard was run by the private entity but the shops were run by the city and then when you get on the main line it was city operations, that did that and one of the things that was talked about was if you tied into the line and not that this matters which is the electrified lines of canada, is could you have the same operator and maintainer there. run the ottowa system. and one thing that would need to be looked at. and from the standpoint, do you as cal train maintain through

the dtx it would be something to study and all of the risks as well as a cloth to balance and i don't have a true answer and i can tell you that where in the past we have made those slice and those delineations to make sure that we eliminate the confusion and the lines of what is responsible for party a or b and whatever way we want to do that can be done, the industry can handle that very well. by, as long as we are clear in saying that i want you to take care of that. >> and if i could, i think that i just need to ask the board members really. and if the study moves forward with the feesbility, it seems like there should be a component where it is more of a agency owners dialogue or discussion about what types arrangements make sense so that it could feed in, or provide a framework. >> absolutely. >> for the feesbility study because it is more of an

owner's discussion, i think. >> right. >> and it needs to be a big part of that almost, pre, prep3. >> sure. >> assessment. >> one of the things that we do which may help you is that we like to do a governorans document, whether it is p3 or whatever because that itself, talks to the heart of what you are asking, who is going to be managing what aspects of it. and to what degree. and that then, helps us launch forward, with our stud j and be able to evaluate, and so i think that would be a recommendation that i would make to the board so appropriately, if that would help you then to say, okay, who is doing what is how do we want to do it and to what degree. >> thank you. >> and i think that just a follow up with both director metcalf and director lee, i am curious and this is not a question for you this is more for the staff and maybe, something that i would suggest. as we look at the p3 and the

design build maintenance and the build maintenance evaluation, i do think that it is important for us to evaluate the pros and cons of combining dtx with cal train electrickfiation and of course, having that discussion with the agency, and what it will take to make that happen. as we continue on, because i think that there are two very complicated because also, very important and high value projects. and those agencies are considering and while, their time lines might not exactly match, i think that it is worthy of that discussion. director reiskin is and then harper. >> yeah. thank you, and thank you for bringing this forward, and i think that this is absolutely the discussion that we need to be having. and i think that this presentation was extremely helpful. and it is very, very grateful for how you laid this out and walked through, and i think that the direction that is generally, i mean, the way that we want to go, but the exact

same question and just to we discussed this a little bit last time and you have got, one system coming up to fourth and king and another one continuing, this is not, a stand alone, asset that we are talking about. which i think would be a major consideration. and in evaluating the delivery method, particularly when we are talking about the long term, and then, when you bring in, the m, or the oand m, you are really bringing in the long term and i think that what this discussion has done is it really starts to surface that the larger governorans question and so i am glad to hear that evaluating the governor nans is part of that and i don't think that is something that we as tjpa can do by ourselves and i think that it has to be done with the cal train, joint powers forward and so that will need be to a joint exercise exploring up to perhaps, what the chair has suggested as maybe at some point these things need to, and that there

are physically together and maybe governor ans wise and maybe delivery wise and i think that now is the time to start looking at that and so i very strongly, support that. that stream of work and analysis, and discussion between at least the two boards, if not, others that i don't know, where if the mtc or other kind of regional bodies might have a role in helping this. and i was also, wondering whether we see a role for fta and fra in advising through their pmos, on maybe not so much on governor ans, but at least on the delivery method part and be even between from the design build to cma risk and to design build and kind of maybe leaving from design build off to the governor ans discussion and i am wondering if we see the potential value in the pmos or otherwise.

>> yeah, the fra and fta have guidelines and they have not done a lot of pthree to get to the extreme and i don't know if they have done it, and they have done the design build work that i am aware of and it has been more of the traditional than anything else director. so, i think that because they are a vital partners you will, and there is going to be some of what i called the strings shs and that are attached and we want to make sure that we are partners with them and so when you talk about talking to the two boards, i think that that is right but also, your other funding partners as well and because, it is collaborativive as you make it early and get all of those agreements then the industry, itself understands that the public understands it and just eliminates a lot of confusion. >> yeah, i think that there will be a lot of benefit in that and in terms of the evaluation some of the existing projects it seems like it women be premature to call them a success or not. if they are not even build or let alone were a benefit accrue

over many years it might be a little bit premature, i think that it was great the way that you laid that out. and then, i guess, the kind of the process, question, whereas you said, already more or less of 30 percent we should have our environmental done this year, but, what are you thinking in terms of the decision making time line? well, that is why we wanted to bring this first discussion to the board. and because, chair person kim is absolutely correct, that the discussion with cal train and we have been in discussions with them and high speed rail is critical, because we are not a stand alone project. we are connected to the downtown extension and we want to work with them and joint partner with them and we have had these discussions with the san francisco ta. and they certainly have expressed that they concur that we need to be working together. and so in terms of process, which is a question that i was

going to ask for your guidance on and director lee and in particular, a representing cal train, we could start to start the discussion at the staff level as to how we go about working with george, and looking at this governorans question and we have a leasing agreement with transit for phase one of the transit center which addresses how we work with ac transit and you know, what the roles and responsibilities are and we are looking to have something simply with cal train and once we had it funded and another one with high speed rail which addressed things like who is going to be responsible for maintenance and operation and what was going to be their share of why did the passenger facility charge to help with the maintenance and operation, and we had it fully funded and with your on governorans and our director lee has a different suggestion and i am

happy to defer to the cal train on this. >> but i think that it is good. and i didn't know that the time was going to be today. >> and and i think that it is good. and in a key agency we should bring in is, the high speed rail authority and we have not yet had our own governorans discussions with us yet because they are busy in the central valley. and whatever discussions that we make, it has got to be linked with it from the high speed rail. and i think that it would be, and i think that the three agencies should get together. and at least that staff level get that discussion started. and the other thing that i wanted to offer up just so that i am transparent and we are and the jpb is supportive of making dtx happen as soon as possible.

and as well as really the nine or the nine agencies that assigned the cal train early investment program and the electrickfiation program and you if you look at that document, being not only scraped up every dollar for the first incremental program but they signed up for being the advocates for the rest of the system to the high priority to the project and so there were nine agencies that are invested in the out come and the expediting the dtx project as well as high speed rail and without a doubt because they don't have a landing they are not landing a fourth and king and going straight to the ttc, and so i think that the three core may be a good start and the rest of the nine is probably appropriate, and then, some i am sure that it is the whole world. >> and then, the other thing

that i did want to offer up to the group, and the cal train staff i don't think that has been here for a long time and i am not sure that the last time that they were here, and i am not sure with the board meetings and if it makes sense for maybe cal train to come with high speed rail and to layout for you to sort of where we are at with the program, and i will tell you what makes the gpb nervous about this partnership which we have to explore. and it is not so much that the partnership, we think the closer partnership and the more integrated partnership is bad and we are obsessed with delivering the electrified service. >> and whatever ideas wants to come out, and we want to be fulfill that commitment and it does not get delayed as any

typical agency would worry about. and it would be happy to come and sort of layout for you our key milestones that we are trying to strive for and we will explore the integrated partnership to meet the sort term goals and the longer term think and on this project as well as the blended system ultimately happening later. >> and it was part of the request or the discussion with director cap len is to have on the cal train and the high speed rail and of course, the san francisco planning department and at various points to understand, >> thank you director. and i will agendaize with the chair person's concur ans a presentation by cal train and defer to you as well and if you want high speed to rail and joinly present to the board all of the work that you have done because i know that a lot has been done and is being done and it is all integrated and connected to what we are doing and it would be good to hear

from cal train, and so again, that has been done for february. >> did you have more? >> i just want to a discussion about it at some point and i think that you said, and we are going to start in the roles and responsibilities and we would need to do that quite a bit sooner, and a concept of operations for phase two as you are starting to develop from phase one. and is something along with the respectful of main nens responsibility is kind of needs to proceed, the delivery discussion if we are going to come mri plate an m, as one of the options and that would need to happen quite a bit sooner and i would urge that i hear the concern and nobody wants to slow down the electrickfiation but i do think that it is time, to bring all of these and to bring at least the three streams together for discussion and particularly for both con settlement of operations and governorans which will inform

each other. >> and so what we will do is we will have the discussion at the staff level with cal train as well as high speed rail on the governorans component, maintenance and operations, and there are suggested that the o, part should be one and you should have one operate forethe entire rail and the dtx component. and we will have it at least on the staff level and i don't, we don't have funding right now, for that. but we will work with the ta for their suggestions and comments on how maybe we can, if we are going to need to do an extensive study or what that stud j entails i am not too shir, but we will at least have the preliminary discussion. >> not just on the o, and the m, but the b as well. >> absolutely. which we have been having those discussions but yes. >> director harper? >> yeah, i will be brief, because i just would echo what has been said, the governorans level is the big deal and getting enough altitude up to