Brainstorming Session

1. Brainstorming Session Executive Workshop Renewing California�s Infrastructure October 26, 2007

2. Key Stakeholders CA Government Entities Governor�s Office State Legislature State Agencies like Caltrans, water resources department Local Govt. Entities like Riverside Transport Regional transit agencies like Bart, Caltrain Unions Public employee unions like PECG Construction Unions like Carpenters Also building trades council General Taxpayers Electorate care about social and economic fairness Potential Users care about the �value� for ex toll road etc

3. Key Stakeholders Large Contractors like Kiewit, Granite EPCs like Bechtel, Fluor, etc. International infra developers - ACS infrastructure, Cintra, Ferrovial (Spain) Think Tanks - Keston Institute USC, CFEE Bond Rating Organizations Investor Community like Goldman, JP Morgan, Macquarie Consulting Community � PWC, KPMG, E&Y Big city mayors Environmental Groups like environmental defense- Michael Rapogle

4. Key comments Most stakeholders are reactive rather than proactive Anti-corporate sector bias: Profits = rip off Public efficiency = private efficiency Foreign firms = evil

5. Public Policy Issues Depolitization to adminstrative entity vs. embracing politics in legislature Government�s role in control of PPP � What entity should move them forward? External shocks could destroy perfect policy proposal Goal setting - Prioritizing efficiency vs. cost effectiveness vs. social equity Which sectors should be prioritized? What level of risk transfer will be desired or required?

6. Public Policy Issues Fragmentation of CA government creates governance problem for �Partnership CA� entity Most quasi-independent state agencies have large boards in which appointments and/or membership is divided among legislative leaders and state elected officials In California, it is very difficult to create uniformity of purpose (as in a joint stock corporation or a parliamentary government)

7. Public Policy Proposals Partnership BC-type advisory body to help public sector design, analyze and negotiate good PPP agreements Fixed to AB2660 to make more effective as to the type of projects already covered Use carbon emissions auctions to finance infrastructure spending Avoids opposition motivated by budget substitution in general budget Move decision to approve user fees out of the legislature to an outside authority

8. Communication Strategy Developing Strategy Agree on what we want What do key stakeholders think? Link what we want to what key stakeholders want Show people that Costs are lower Quality as at least as good PPPs are not atypically prone to employing the poor/middle-class and illegal immigrants!

9. Communication Strategy Verbiage - Don�t �privatize�; �partner with� Don�t �sell off assets� to pay bills Don�t use �P3�; use �Alternative Finance� Don�t use �buy-side/sell-side� use �public party/private party� Move focus from �build more infrastructure� to �build-operate-maintain more effectively� Be inoffensive; maintain foresight; avoid strong opposition

10. Communication Strategy Frame issue as the need for �growth vs. cost� Competition in selecting service provider Transparency in project approval process User fees necessary to reduce congestion, and to improve efficiency of transportation systems Build support regionally and locally Demonstrate Values of Accountability, Transparency, Discipline

11. Communication Strategy P3s are sources of: International best practice Innovation A test bed of ideas and new sources for public development A way to ensure lifecycle costing Compare to the success of international experience