Will Kempton, CEO of the Orange County Transportation Authority, told the audience about the use of "availability payments" that have been used to fund a major transportation project in San Francisco to improve Presidio Parkway, which is the southerly approach to the Golden Gate Bridge. The current parkway is structurally and seismically deficient, but the project's cost has kept it on the back burner. The California Department of Transportation, which Kempton led before moving to OCTA, has recently engaged a private partner to develop, finance, build, operate, and maintain Presidio Parkway over the next 30 years. Caltrans will make a $173 million payment on substantial completion of the work, then an annual payment over the next three decades as funding is available.

Availability payments are best used by state transportation departments for nonrevenue-generating projects such as free highways, Kempton suggested.

Kempton then discussed the 91 Express Lanes in Orange County, which are dynamically priced. This means the cost to drive in the express lanes varies by time of day, with rates set each quarter to ensure the lanes are correctly priced to allow speedy traffic flow. The lanes were originally privately financed, but OCTA bought them in 2003 for $207 million and now manages them. The lanes take in $43 million a year in toll collections, he said. Orange County is now taking a look at extending the 91 Express Lanes and building other tollways.

Regina McElroy, director of the Federal Highway Administration's Office of Innovative Program Delivery, then told session attendees about the various innovative financing options her agency offers and supports. These include Build America Bonds, private activity bonds, the Transportation Infrastructure Finance and Innovation Act, and the Railroad Rehabilitation and Improvement Financing program. FHWA also supports states that want to engage private-sector partners to finance transportation projects, she said.

TIFIA has supported about $7 billion in credit thus far to 21 projects while RRIF has issued 24 loans totaling $900 million. McElroy noted the great importance of TIFIA: "The [public/private partnership] projects done in this country in the last several years, what you see is they have to have TIFIA to go forward."

But TIFIA is oversubscribed -- there are too many states applying for limited federal loan dollars. FHWA recently received 39 letters of interest for TIFIA funds but was only able to fund four projects, McElroy said. The amount requested this year is $13 billion -- nearly twice the total of what TIFIA has been able to support to date.

Projects that meet U.S. Transportation Secretary Ray LaHood's five national transportation goals are favored in the TIFIA application process, she said. These priorities include economic competitiveness, livability, sustainability, and state of good repair.

McElroy concluded by noting that while financing tools are important, "It's also important to have revenue tools. I don't care how many financing strategies you have out there, if you don't have a way of paying it back, it's going to be a problem. Revenue is very much the constraining factor."

Finally, Bryan Grote, principal at Mercator Advisors, discussed different approaches that could be used to establish a national infrastructure bank. Grote said at the start of his presentation that an infrastructure bank will not be everything for everybody.

"This is not a comprehensive funding solution to a funding problem that is the root of our crisis," he cautioned.

He went on to ask questions audience members should consider such as how is a national infrastructure bank going to be organized? Who is going to control how the money is disbursed? How will the bank be capitalized? Should the bank focus solely on transportation projects, or should broader infrastructure needs be eligible such as energy, telecommunications, and water?

Grote concluded his remarks by citing numerous issues that have yet to be resolved by congressional proponents of a national infrastructure bank. These questions are important to answer, he said, since the bank has the potential to capitalize $125 billion worth of infrastructure projects for a $20 billion net impact on the federal government budget -- a return of more than 6 to 1 on the federal investment.