Updated 8/25/17
Quick Link to the SIQ: ROR CPRA RFQ and Statement of Interest– FINAL 8.3
Frequently Asked Questions: FAQs 8.25
For those interested in being added to the contact list, please contact [email protected]
Listen to an interview on Delta Dispatches with Charles Sutcliffe from the Governor’s Office of Coastal Activities on Financing the 2017 Master Plan.
Informational Session, Thursday, August 17, 10am
Greater New Orleans, Inc., 1100 Poydras St #3475, New Orleans, LA 70163
Agenda:
I. Welcome– Greater New Orleans Inc.
II. Introduction and Project Overview– Restore or Retreat
ROR Presentation Finance Session
III. Overview of Coastal Funding– Governor’s Office of Coastal Activities
IV. Project Plans and Resources– Coastal Protection and Restoration Authority
V. Question and Answers
FAQs available soon!!
GOCA, CPRA and ROR staff will also be available before and after the event for one-on-one opportunities to ask questions.
Making the Most of an Unprecedented Opportunity: Funding Louisiana’s Coastal Program
Funding a coastal protection and restoration program by first having to suffer through a catastrophe is an extremely painful and unsustainable way to work toward resilience. That being said, because of the disasters Louisiana has endured and thanks to the State’s widely-respected Coastal Master Plan, Louisiana has been entrusted with the financial resources, around $10 billion over the next 15 years, to implement a suite of the most significant projects in its $50 billion plan.
The majority of the funds, nearly $8 billion starting in 2010, have resulted from the Deepwater Horizon oil spill. From emergency and “early” restoration funding, to settlements by Anadarko, MOEX, Transocean, and finally the criminal, civil, and natural resources damages due to be paid by BP, Louisiana will be receiving large payments through 2032. Over that same period the state will also begin seeing much larger revenues from the Gulf of Mexico Security Act (GOMESA). These Outer Continental Shelf revenue sharing payments will contribute another $1.5 to $1.9 billion ($116-$140 million annually) toward crucial coastal projects depending on the fluctuations in the price of oil and the application of the federal formula.
Louisiana’s Coastal Protection and Restoration Authority (CPRA) translates this and other income into projects. As more revenues are made available, CPRA is able to implement more ambitious projects. Last year the CPRA was excited to complete its largest restoration project ever, the Caminada Headlands, a project that over two phases cost more than $200 million. Soon, CPRA hopes to be moving multiple projects with anticipated costs of over $300 million forward at once. While expensive, these projects are expected to provide landscape-scale benefits for the coast. Already moving ahead are major saltwater control projects along the Calcasieu Ship Channel in Cameron Parish and the Houma Navigation Canal in Terrebonne; thousands of acres of marsh and ridge restoration in the Terrebonne and Barataria Basins; barrier island and nesting island restoration; and two, long-studied sediment diversions along the Mississippi River.
But just because CPRA can match the projected price tags of these essential projects to a total anticipated dollar amount, complications still abound. On the revenue side, each oil-spill related funding stream has its own list of restricted uses, its own payout schedule, its own process for getting funding decisions approved, and finally, its own method for actually drawing down those dollars. On the project side, CPRA must determine which projects to build when, coordinate permitting and engineering and design timelines, and then factor in the length of construction to draw a map of the financial needs of the agency. Along the way these project schedules must be matched up with the cash flow to support them.
CPRA’s project teams and engineers have been working extremely hard to make sure the agency’s plans match the availability of the income to support its project goals. However, CPRA is openly acknowledging that it does not have the right type of expertise in-house to fully consider the financial and economic aspects of its implementation plans. What are the options if project choices change, or if the cash flow and project expenditures don’t line up? When multiple large projects are in construction at once, can CPRA’s anticipated revenues keep up? What are the on-the-ground costs or benefits of moving projects around to fit the cash flow situation? Can GOMESA money be used in the short term to fill in gaps in that cash flow? Should the State bond out some of these revenues, if so, how much and when? Are the expenses of bonding worth the time gained by being able to build projects more quickly? Are there other financial tools, like environmental impact bonds, that should be utilized? Basically, can CPRA pay as it goes, or by utilizing the bond market or other types of debt issuance, can it achieve even more of its land building and flood reduction goals with the same level of investment?
Regional advocacy organization and Restore the Mississippi River Delta coalition partner, Restore or Retreat, is partnering with CPRA to find the financial and economic experts to help answer those questions and to provide the underlying strategy so this unprecedented funding opportunity is maximized for the benefit of the coast. The search for the right firm or team to lead this effort kicked off with a Statement of Interest and Qualifications last week and will be followed by an informational, pre-bid style meeting on August 17th at 10 a.m. at Greater New Orleans, Inc. in New Orleans.
One of the most crucial tests for Louisiana’s ability to shift from a reliance on disaster-related funding toward a more proactive, long-term funding approach is to show to its citizens and every potential funder that it can be a good steward of the funds it has already received. This means being transparent about its funding choices, translating those funds into projects whose results speak for themselves, and engaging financial experts when necessary to ensure that every dollar received creates maximum benefit for the coast.
The only thing worse than the Deepwater Horizon oil spill would be failing to make the most out of the revenues it has provided.
8/4/2017
Restore or Retreat Partners with CPRA on Coastal Restoration Financing Initiative
Report will provide a framework for efficiently funding critical restoration projects
Restore or Retreat (ROR) has announced a partnership with the Louisiana Coastal Protection and Restoration Authority (CPRA) to source expertise in areas of financing and economics to identify strategies to maximize the impact of near-term revenue streams for Coastal Master Plan projects. The project aims to create a financing structure for several specific Master Plan projects, develop repayment strategies from existing committed sources of revenue, as well as project economic benefits to the state and impacted communities by advancing restoration. As it launches the initiative, ROR is seeking a Statement of Interest and Qualifications from qualified individuals and entities.
Over the next 15 years, billions of dollars will be available for coastal protection and restoration, largely from the Deepwater Horizon global settlement as well as the increase in payments under the Gulf of Mexico Energy Security Act (GOMESA). As revenue sources vary greatly in terms of specific requirements and timelines, CPRA is welcoming assistance in identifying opportunities to align project implementation schedules with appropriate revenue streams and, if advisable, financial instruments like bonds.
“The CPRA has done a tremendous job understanding the engineering challenges of the land loss crisis and devising a plan to address that crisis in the most strategic and sustainable way,” said Restore or Retreat Executive Director Simone Maloz. “On the heels of the passage of the 2017 Coastal Master Plan, we want to transition from planning to large-scale implementation. To do that successfully, it will take the best utilization of financial instruments and economics to finance the nation’s largest ecosystem restoration effort. For that reason, this project is a critical first step to success.”
The Governor’s Executive Assistant for Coastal Activities, Johnny Bradberry, concurred, “Given our current set of project priorities, we very well may be able to pay as we go. However, if we can achieve efficiencies from a land building or flood protection point of view by utilizing traditional bonds or newer financial options, we need to be in a position to understand those benefits.”
Members of the CPR Financing Corporation welcomed this project as a crucial step forward. “Before the CPR Financing Corporation can approach the bond market, the State of Louisiana must first recommend that it is the appropriate course of action given its revenue streams and its project schedules,” said Chett Chiasson, CPR Financing Corporation member and Executive Director of the Greater Lafourche Port Commission. “This type of financial expertise is just what the State needs to make the most out of the funding they have available.”
The project will begin with a period to solicit interest and qualifications from financial services firms, consultant teams with financial expertise, and research institutions with finance experience. This phase will last until September 1. ROR and CPRA will then provide answers to interested firms regarding the needs of the state and the types of skills that will be required to submit proposals for the full scope of work. Restore or Retreat hopes to have results to share with CPRA in time to help inform the development of the FY 2019 Annual Plan.
Additionally, an informational session will be held at Greater New Orleans Inc. on August 17 at 10:00 a.m. Official documents related to this project can be found online at Restore or Retreat’s website, www.restoreorretreat.org/coastal-finance.