Board Transportation Committee (BTC) Meeting
Time: 12:00 p.m. - 1:00 p.m.
Datae: May 7, 2013
Location: Rooms 9 & 10, Government Center
- Approval of the Minutes of the January 15, 2013, Meeting
- Introduction of Ms. Helen Cuervo, P.E., VDOT Northern Virginia District Administrator
- Dulles Metrorail Silver Line: Phase 1 and 2 Status and Funding Updates (TIFIA) – Mark Canale (FCDOT), Len Wales (DMB), and Joe LaHait (DMB)
- Dulles Rail Bus Service - Tom Biesiadny, Paul Mounier, Dwayne Pelfrey, and Christy Wegener (FCDOT)
- Update on Tysons Ramp Study Recommendations – Eric Teitelman and Seyed Nabavi (FCDOT)
- New Business
Members in Attendance
Supervisor Jeff McKay (Chair), Chairman Sharon Bulova, Supervisor John Cook, Supervisor John Foust, Supervisor Michael Frey, Supervisor Penny Gross, Supervisor Pat Herrity, Supervisor Gerald Hyland, and Supervisor Linda Smyth.
Supervisor Catherine Hudgins
Transportation Advisory Commission (TAC) Members in Attendance
Jeff Parnes, Jenifer Joy Madden, and Ed Tennyson.
Robert A. Stalzer (Deputy)
Call to Order
Supervisor McKay called the meeting to order at 12:05 p.m.
Approval of Minutes of Previous Meeting
The minutes of the January 15, 2013, meeting were approved unanimously without any changes.
Dulles Metrorail Silver Line: Phase 1 and 2 Status and Funding Updates (TIFIA)
Tom Biesiadny, Director, Fairfax County Department of Transportation (FCDOT), Mark Canale, Dulles Rail Coordinator (FCDOT), Len Wales, Department of Management and Budget (DMB), and Joe LaHait (DMB) briefed the Board on the status of the Dulles Rail project and the Transportation Infrastructure Finance and Innovation Act (TIFIA) loan application.
Mr. Biesiadny provided an overview of the presentation and TIFIA. Mr. Biesiadny stated that staff will bring four Action Items on the Dulles Rail project to the Board next week. He noted that Fairfax County staff had been waiting for actions from USDOT regarding the application for TIFIA loan, but USDOT staff had been busy implementing the new TIFIA provisions included in the Federal Surface Transportation program reauthorization. Due to the departure of U.S. Secretary of Transportation Ray LaHood, it is advantages for the County to make as much progress on the application as possible before he leaves office in May 2013.
Mr. Canale gave an update on Phase 1 and Phase 2 of the project. The construction of Phase 1 is at 90 percent complete. Final design, utility relocation, and track work were all done (100 percent complete). The first delivery of rail cars is scheduled for February 2014 and work is being done to finish the stations. The revised budget is $2.9 billion and the expenses to date are $2.2 billion. The County share for Phase 1 is $467.8 million and received $150 million from the State. It is estimated that the Silver Line will be in service by December 31, 2013.
Supervisor Frey asked about the delivery of rail cars in February 2014 when service is expected to run in December 2013. Mr. Canale responded that the delivery was delayed due to the impact of the tsunami in Japan. WMATA will use spare cars to run the service. Supervisor Frey asked about the kind and condition of those cars. Mr. Canale stated that staff does not have the answer now. Mr. Biesiadny added that the current rail car order includes replacement of the 1000 series rail cars, and they will be used until the new cars arrive.
Supervisor Frey asked if the system is stretching too thin and whether it can cover the car shortage problem or not. Mr. Biesiadny responded that WMATA thinks that they can handle the car needs in the short term.
Mr. Canale provided an update on Phase 2 of the project. He said that the Metropolitan Washington Airport Authority (MWAA) received five bids for the stations and rail line contract, including the Innovation Center (Route 28) Station. The cost estimate for Phase 2 is $3.09 billion, and the County’s share is estimated to be between $433 and $498 million. Phase 2 is estimated to be complete by the summer 2018 and will be operational by late 2018.
Mr. Biesiadny went over the request for Board’s action on staff recommendations related to TIFIA. Joe LaHait, County Debt Coordinator, went over the TIFIA financing overview. Due to USDOT Secretary Ray LaHood departing, response time for document process has to be accelerated. He further explained that TIFIA is a loan, not a grant, and that all parties would be looking at the repayment structure and the loan agreement.
He said that the primary benefit of the TIFIA loan is not the interest rate, which correlates to the 30-year Treasury note. He emphasized that the primary benefit is the loan repayment deferral option for five years after project completion, giving the Phase II tax district time to build up equity, and the Commercial and Industrial Property Tax (C&I) funds a deferral of debt service payments. Alternatively, if the County were to seek an open market loan, the County would pay a higher interest rate, make debt service payments immediately, and have a significantly higher total cost over the life of the loan as compared to TIFIA.
Mr. LaHait went over the details of the funding for Phase 1 and 2. Fairfax County’s share for the project is 16.1 percent or $1.06 billion. The project is eligible for 33 percent TIFIA loan or $1.9 billion. The County’s proposed share of the TIFIA funding is $475 million. USDOT requested that Fairfax County keep a minimum AA category credit rating. The County has to submit a complete plan of finance for TIFIA, standard demographic, tax assessment, and economic information. USDOT requires $100,000 from each funding partner for credit processing down payment.
Mr. Biesiadny stated that the 12.5 cents per $100 for C&I tax will generate approximately $51 million annually. Mr. LaHait explained in detail the County’s plan of finance for using TIFIA funding for Phase 2. He said that staff recommendation is to use the C&I fund to back the tax district for credit enhancement, and to include a Moral Obligation of the County general fund if the AA category rating is not achieved with the C&I funds alone.
Len Wales, County Debt Manager, stated that there are not many alternatives to fund the project besides the two tax districts. He reviewed the options. He stated that the tax districts and the C&I funding are the two best viable options at this time. Mr. Biesiadny stated that staff is looking for other potential funding options like NVTA and the TIGER grants.
In closing, Mr. LaHait said that staff recommends that the Board approve the preliminary TIFIA allocation, the County credit pledge, request credit ratings from bond rating agencies, approve the $100,000 down payment and review short term financing options.
Supervisor McKay asked about the financial implications if the County makes the pledge of moral obligation. Mr. LaHait responded, in staff’s assumption, the County probably doesn’t need it, because the County could achieve the AA category without it.
Supervisor McKay asked if the funding from NVTA and TIGER grants were available, would it help, since the County does not have to use the C&I funds. Mr. Biesiadny replied that staff recommends the Board apply for the funding for the Route 28 Station through the TIGER program, and that in doing so will reduce the obligation for the station and the toll road. The basic tax districts will remain, but it will help the C&I funds.
Supervisor McKay stated that this presentation is needed to open the discussion before the May 14 board meeting. Supervisor Foust thought it is a good plan and asked staff to explain the benefits and the analysis. Mr. Wales responded that TIFIA is one of the many alternatives. The benefit of a loan repayment deferral option is substantially better than other alternatives. Supervisor Foust asked about the premium. Mr. Wales explained that it is an allocation between the Federal agencies, and not a cost to the County. Supervisor Foust asked about the parking garages and whether we are saving or not. Mr. Wales replied that the County’s share of 16.1 percent is still under review. The bid for the garages will not be placed for another several years, and the County doesn’t have the answer since MWAA has not bid the rest of the construction projects yet. We have to submit the loan with the cost estimated numbers.
Supervisor Foust asked about the $1.2 billion and the Route 28 Station. Mr. Biesiadny stated that the Route 28 Station is estimated to cost $89 million, and if it could be funded by other sources, it will reduce the $1.2 billion. Mr. Wales stated that the Route 28 Station will be built by MWAA.
Supervisor Cook asked about the chances of the TIFIA loan not being approved by USDOT, and the plan to repay the short-term loan. Mr. LaHait stated that he felt very confident that the loan be awarded. The TIFIA is part of the original memorandum of understanding (MOU). The plan is that we will pay C&I allocations with TIFIA, then the tax districts.
Supervisor Frey raised his concerns about the quick turnaround timing for an important decision. Mr. Biesiadny said that USDOT was delayed in responding back with the details of the loan, due to the federal surface transportation program reauthorization, and that the departure of Secretary LaHood forced the quick turnaround. Loudoun County and MWAA Boards had acted to approve seeking an advisory credit rating and are waiting for Fairfax County to move the project forward. Mr. Canale detailed the delay from USDOT and noted that the County received the notification in the middle of March 2013, responding to the County’s letter of September 2012. The County is reacting to the federal government’s instructions, and they are implementing new instructions.
Supervisor Frey asked about the options if the County doesn’t receive the TIFIA loan. Does the County borrow from someone else? Mr. Wales responded “yes”, and he emphasized that the County would not receive similar interest rates or benefits on the open market and should take this opportunity.
Supervisor Herrity stated that he wanted to see the alternative plan and reminded the Committee that the County would still have to pay the interest after a five year period. He was concerned about the issue with “air rights”. Supervisor McKay stated that the issue with air rights will be on the agenda for a future meeting.
Dulles Rail Bus Service
Mr. Biesiadny stated that in the handouts there is a memo and maps of the proposed Fairfax Connector bus routes associated with Phase 1 of Dulles Rail. Dwayne Pelfrey was introduced as the new Division Chief for Fairfax Connector. Christy Wegener provided the update on the new routes for Herndon, Reston, McLean, Vienna, and Tysons. Staff had several public meetings and received hundreds of comments from citizens. Staff made adjustments to the proposed routes based on their inputs. Staff will bring this item to the Board for approval on June 4, 2013. Mr. Biesiadny noted that the funding for operations above the current level will come from the new transportation funding that NVTA will send to the County. There were questions related to the operation of specific routes.
Update on Tysons Ramp Study Recommendations
Staff handed out copies of the update on the Tysons Ramp Study Recommendations.
The meeting was adjourned at around 1:10 p.m.