Bacon's Rebellion

Democracy Thrives in Sunlight

Defiant MWAA Resists Seating of McDonnell Appointees

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by

James A. Bacon
in

666, baby! The mark of the beast.

I missed this when it happened last week, but it’s never too late to comment… The Metropolitan Washington Airports Authority board won’t let a little thing like a new law passed by Congress and signed by President Obama encroach upon its autonomy. The board, which oversees management of the extension of Metro rail to Dulles airport, has retained legal council to resist increasing the size of the board from 13 seats to 17.

According to Charles Snelling, chairman of the airports authority board, the law is not operable until Virginia and the District approve changes to the “governing MWAA compact.” That comes by way of Dana Hedgpeth, the Washington Post‘s Dr. Gridlock.

Therefore, said Snelling in a letter to Rep. Frank R. Wolf, R-10, who authored the bill, the board will not seat two new board members appointed by Gov. Bob McDonnell last month. Wolf’s bill added two new seats for Virginia, and one a piece for Maryland and Washington, D.C. Wolf had argued that Virginia was under-represented on the board, which controlled not only Dulles and Reagan airports but the state-built Dulles Toll Road.

“They’re ruining the credibility of the airports authority by fighting this,” Wolf told Hedgpeth.”They’re ultimately going to lose. They’re just dragging this thing out.”

I’m amazed that this story isn’t far bigger. Maybe there’s a legal case to be made for Snelling’s position, but the MWAA is definitely coming across as combative and recalcitrant. The board opposed Wolf’s bill from the beginning, and this latest gambit looks like more foot dragging. Add to the MWAA’s legal resistance the lack of transparency in other areas — which I hope to find time to blog about in the future — and the authority comes across as an alien, undemocratic and oppressive beast that must be brought to heel.

— JAB

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6 responses to “Defiant MWAA Resists Seating of McDonnell Appointees”

  1. constructionandlaborguy Avatar
    constructionandlaborguy

    I share your concern. Why would MWAA bite the federal hand that could potentially fund this project? It makes no sense. Everyone knows the financing for this project is on thin ice and someone is going to need to kick in at least a billion dollars to make this project happen. MWAA is banking on the feds or some public private partnerships to make it happen and here they are again being uncooperative.

    In a related note, according to an MWAA release, tomorrow at 11:00 a.m. MWAA’s Finance Committee will be meeting to get an update from Wilbur Smith Associates (WSA). MWAA hired WSA a few years ago to produce a toll revenue study for the Dulles Toll Road.

    I believe it is the source of the data the media uses to report on future toll costs (those numbers are adjusted based on the latest cost estimate of the project).

    WSA is producing a new study for MWAA that projects toll revenue under the current market conditions. MWAA will use these findings to create financing models to fund a large portion of Phase 2 funded by the DTR tolls. When the study was commissioned, Phase 2 was expected to cost $2.5 billion. Now it has ballooned to at least $3.5 billion and the economy has changed. It will be interesting to see if the study results indicate the DTR toll revenue can sustain the financing models needed to move forward with the increased costs.

    I think the DTR revenue cannot sustain the increased costs of Phase 2, even after the recent funding agreement between the stakeholders. They need revenue from somewhere or they need to cut project costs. Basic economics.

    This piece points out that the Wilbur Smith Associates’ previous report makes some aggressive assumptions (again confirming that the financing fundamentals for this project make no sense): http://www.tollroadsnews.com/node/5617

    This sets the financial stakeholders up for some serious financing problems a few decades from now if these assumptions prove to be wrong.

    Take a look at figure 6-3 vs. Table ES-2. It shows the revenue streams and toll rates if MWAA enacts a modest vs. an aggressive toll hike. I think the aggressive toll hike won’t be enough to fund the new Phase 2 costs.

    Of course, once you get to the revenue maximizing point you lose revenue with any further raises in toll rates (less people take the toll road once you reach that price point). The study doesn’t mention that point, which is odd.

    Let’s keep an eye on how MWAA spins the WSA results.

  2. constructionandlaborguy Avatar
    constructionandlaborguy

    This is the original WSA study: http://www.metwashairports.com/file/traffic_study_2009.pdf

  3. Groveton Avatar
    Groveton

    Bacon:

    You are being duped. Frank Wolf was “front and center” when Tim “the Cowardly Lion” Kaine gave this project to the MWAA.

    http://www.drpt.virginia.gov/news/details.aspx?id=41

    Now, Kaine is running for the US Senate and the Republiclowns can’t find enough bad things to say about his decision to give the RTD project to MWAA.

    It is good to see Frank Wolf come out of his inter-election coma and actually do something. However, he may have been more credible in his complaints about the MWAA’s authority over RTD if he hadn’t elbowed his way into the publicity shot when the decision was announced by Tin Kaine.

    As for Virginia’s appointments to the MWAA board – who do you think appointed Dennis Martire – the labor union leader you rail against? Why, it’s the Governor of Virginia. Or, Mame Reilley? A Democratic operative with no observable experience in anything remotely related to transportation or business in general.

    I guess McDonnell wants to counter-balance the two Democratic hacks appointed by Kaine with two Republican hacks appointed by him.

    All rot starts in Richmond.

    I can see MWAA’s reasons for resisting more “help” from Richmond.

  4. larryg Avatar
    larryg

    I’d be curious as to how much money Richmond has taken from other Va taxpayers and sent to NoVa for Metro.

    I’m still flummoxed that Kaine gets blamed for sending money to NoVa.

  5. Groveton Avatar
    Groveton

    “I’d be curious as to how much money Richmond has taken from other Va taxpayers and sent to NoVa for Metro.”.

    I’d like to know how all the money flows through Virginia … for everything.

    I am not sure why this is so hard or such a difficult request for our betters in the General Assembly to understand.

    Where does the money in Virginia come from? Where is it spent?

  6. constructionandlaborguy Avatar
    constructionandlaborguy

    At the MWAA meeting today, the Wilbur Smith and Associates traffic and toll road revenue consultant said the traffic and revenues are similar to the amounts published in the 2009 report, but the new report won’t be ready until late winter of 2012.

    If you look closely at the MOA funding agreement signed by the Silver Line financial stakeholders in November, on page 11 it refers to the aggressive toll rates in table 6-3 on page 123 of the 2009 report as the estimates used to determine the DTR revenue stream needed to fund construction of Phase 2 of this project:
    http://www.metwashairports.com/file/traffic_study_2009.pdf

    This blog post from a toll road expert says MWAA’s estimates are problematic and put a lot of unhatched eggs in the long term estimate basket: http://www.tollroadsnews.com/node/5617
    Even with the outrageous toll rates, it could lead to long term financial disasters.

    Of course, these rates (whether they are poorly estimated or not) are just estimates until the numerous variables in this project are determined in 2012. MWAA needs to determine the PE construction estimates, the final Phase 1 costs, the financing vehicles and interest rates, the amount of federal and state funding and other variables etc. before they can determine how much they should hike the tolls to cover their share of the project.

    I predict that in order to get this project off the ground they will need to cut the scope of the project, find cost reductions by removing the mandatory PLA on the Phase 2 prime contractor, push more of the project onto localities, acquire more federal or state money, find private investors for public-private-partnerships of the garages and other parts of the project, or just plain fudge the truth and kick the can down the road for someone else to deal with at a later crisis point (or a combination of all of these ideas).

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