Bacon's Rebellion

Democracy Thrives in Sunlight

Rail-to-Dulles Financing Lurches Forward

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by

James A. Bacon
in

The Metropolitan Washington Airports Authority approved today a multiparty agreement that outlines a new financing arrangement for Phase 2 of  the Rail-to-Dulles project. All the key parties chipped in to help reach the estimated $2.8 billion cost.

“This momentous vote guarantees that the most important transportation project in our region’s history will go forward, that we will be able to reduce costs and that drivers who use the Dulles Toll Road will see less steep toll hikes than originally planned,” said Charles Snelling, Chairman of the MWAA board.

Last week United States Transportation Secretary Ray Lahood had forged an agreement in principle to fund the project that, under the original protocol, would have stiffed Dulles Toll Road patrons with rates that could escalate to $20 or more over 20 years. The commonwealth of Virginia would contribute $150 million extra and the federal government would provide loan assistance to help Fairfax County, Loudoun County and the MWAA fund construction projects associated with the extension, such as the building of parking garages.

The Reston2020 blog provides analysis and the text of the Memorandum of Understanding here. The General Assembly must appropriate the state’s $150 million share in the 2012 session. That contribution is less significant than it sounds. Notes the blog:

This money will be used to defray interest costs, not the construction of the Metrorail line, in the five years following the appropriation.  In so doing, it will comprises merely 1-2% of the $10-$15 billion total debt servicing cost for the Silver Line over the next 40 years.

The Feds will provide Transportation Infrastructure Finance and Innovation Act (TIFIA) loan guarantees on up to $30 million. The MOU also contemplates various cost savings, such as reducing the size and scope of the Metrorail shop facilities at the Y-15 site at Dulles airport. Bottom line, concludes Reston2020, toll road users still could wind up with $12 to $13 full tolls by the 2040s, but that’s a lot less than feared and it’s also a long time away.

One sidelight: According to the MOU, “Virginia and MWAA have reached a separate agreement on the matter of Project Labor Agreements for Phase 2. Any Project Labor Agreement contemplated for the Project shall be consistent with applicable Federal statutory and regulatory requirements and Virginia law.” Getting a Project Labor Agreement, or PLA, which requires contractors and/or subcontractors to engage workers through a union hiring hall, was a prime objective of one of MWAA’s board members, Dennis Martire.

The wording of the MOU makes it totally unclear what agreement was reached. Will there be a PLA, or will there not? Inquiring minds would like to know.

— JAB

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11 responses to “Rail-to-Dulles Financing Lurches Forward”

  1. Hydra Avatar
    Hydra

    If this is the most important transportation project in the regions history, then why is such a large chunk of the cost being paid by the minority that uses the toll road?

  2. larryg Avatar
    larryg

    I’m sure it’s not true about the MAGNITUDE of the tolls but polls show some support – if there are going to be road tolls – that they go to pay for mass transit – the idea being that if some of the fellow drivers decided to take mass transit – it would be less congested others…

    Down in Fredericksburg – despite the subsidy of $20 per trip paid for commuter rail and funded from taxes on gasoline – there remains – above 50% support for doing that.

    In fact, one of the many suggestions is that one of the lanes of I-95 be converted to a METRO rail and paid for with tolls…..

    is there a recent poll of DTR drivers on the idea of their tolls going for Metro?

  3. Groveton Avatar
    Groveton

    This is another episode in the enduring “Inbred Descendants of Pocahontas” daytime drama.

    Like Sean Connaughton, MWAA is actually trying to get something done in an environment where the political class almost never gets anything done.

    Mr. Connaughton bull rushed the 20 year old RT 29 bypass into reality and MWAA is using one of its few available revenue sources to fund Phase 2 of Rail to Dulles.

    Meanwhile, perhaps well intended groups like The Piedmont Environmental Council and the Southern Environmental Law Center (both based in Charlottesville) oppose virtually all progress.

    In the middle of this chaos is our own answer to the Occupy Wall Street crowd – Jim Bacon. Jim’s many articles are erudite, articulate and misplaced. Just as the Occupy Wall Street crowd should march south and join the correct occupiers (namely, Occupy Congress), Jim should point his sharp edged keyboard at the General Assembly (aka The Clown Show).

    Decades of political corruption in Washington with politicians of all stripes taking handouts from any and every special interest group has led to the long recession. This should be good for the Occupy Wherever movement since all 435 of the “real villains” are conveniently located in a single building on Capitol Hill in Washington, DC. If the Occupy Wherever movement ever figures this out and Occupies Capitol Hill I will personally bring donuts and coffee to them every morning.

    In Richmond things are somewhat different. Our General Assembly members lack the ambition and intellect to be corrupt. Instead, they are simply inept. Almost 30 years of transportation policy mismanagement has now led to a situation where the only path to progress comes from men and women of action inflicting the policy equivalent of blunt force trauma on the Commonwealth. These are not the Descendants of Pocohontas. They don’t have Roman numerals after their names. They don’t wear bow ties and they don’t belong to the Country Club of Virginia. Instead, they are people who have simply said’ “Enough!” to the Clown Show. They are doing through aggressive action what the Clown Show has been unable and unwilling to do through the normal legislative process.

    Good for them.

    And shame on Jim Bacon, the PEC, the SELC and all the other critics who can’t figure out where the real problem lies.

    101 years ago there must have been people like Jim Bacon, the PEC and the SELC. Because there was also a guy who I imagine to be like Sean Connaughton. Here’s what he had to say back in 1910:

    ” It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat. “.

  4. TaxPig Avatar
    TaxPig

    “All the key parties chipped in to help reach the estimated $2.8 billion cost.”
    Where does this come from. Read 2.0 of the Recitals .

    WHEREAS, the estimated capital cost of Phase 2 is now $3.825 billion, up from an estimate of $2.5 billion as reported in the Funding Agreement; and….

    WHEREAS, the Parties recognize the need to modify the scope, design andfinance plan for Phase 2 to reduce costs to a level closer to the original $2.5billion cost estimate and recognize the need and opportunity to work cooperatively to accomplish that goal;…

    I’m no economist so check my math was $2.5billion , is now $3.825 billion, am I missing how that is a savings?
    Don’t be fooled by this propaganda push to make people think this a scheme is a done deal. These public announcements from LaHood and Co. are a desperate move to shape public opinion, all fluff and NO substance. Does anyone else notice that they ralease no real information on costs?
    It is amazing that the Phase 2 agreement is being rushed though with:

    1. Preliminary engineering not complete;
    2. No information of the details of the $3.825 billion cost (a $500–$600 million increase in the last three months);
    3. No amounts showing how much the counties would have to finance including garages and access roads;
    4. No feasibility study
    5. No commentary on why Federal and State guidelines (EIS ) are being ignored;
    6. No debt and debt service schedule that would be repaid only with tolls;
    7. No toll and revenue forecasts and analysis of the impact of additional traffic on free roads.

    The Board chose to act without adequate information and public input.
    We are witnessing the railroading/fleecing of Virginia, Loudoun and Fairfax. The wealthy developers are licking their chops as they eye the windfall that is about to be handed to them.
    Wake up people. Go to http://www.LoudounOptOut.com and take the one question survey.

  5. James A. Bacon Avatar
    James A. Bacon

    Thanks for the analysis, TaxPig. You raise excellent points. I truly wish I had more time to dig into the Rail-to-Dulles fiasco. Keep on the heat, and please add your commentary to future posts of Bacon’s Rebellion on this topic.

  6. larryg Avatar
    larryg

    Whether it’s Charlottesville or Northern Virginia or Fredericksburg, I am forever puzzled by the “blame someone else” sentiment for not doing the very simple thing of asking the people of a region via referenda if they want to self-fund something that is promoted as a benefit to everyone in the region.

    Why do the drivers on the DTR have to be the only ones who will pay for Dulles metro?

    Word is that at the Federal level – we are now spending twice as much for transportation than we take in – in fuel taxes and the long knives are coming out and transit is the target.

    seems to me..that if any metro area wants/needs transit – that it’s a question to put to the people in that region – not the poor smuck in Kansas or Farmville.

  7. TMT Avatar
    TMT

    There is no way that Fairfax County taxpayers would have approved a referendum to build the above-ground Silver Line on a no-bid contract basis with the private parties (e.g., Bechtel) not kicking in a dime. Keep in mind that this is the specific deal that was approved by the CTB and endorsed by the Fairfax County BoS. Also, there is no way that regular Dulles Toll Road users would have accepted substantially higher tolls to fund the Silver Line when the evidence (the Final EIS) did not demonstrate there would be any significant improvement in traffic congestion on the DTR. Indeed, Fairfax County DOT has demonstrated the DTR must be widened to handle the higher volume of traffic that will be generated by Tysons Corner. What went wrong?
    Several years ago, the Federal Transit Administration (FTA) changed its funding standards for transit. The Silver Line would not pass the new standard as it did not provide sufficient traffic reduction for the total cost. Senator John Warner obtained legislation that grandfathered the Silver Line under the old, more lenient standard. But the Silver Line still would not pass the old standard. So everyone with their hands in the public’s pockets freaked and successfully lobbied the Bush administration to fund Phase I. So Phase I construction proceeded. But that does not change the fact that the project is not economically sound. Moreover, good sources tell me that Bechtel is running over MWAA on change orders and cost overruns. Add in a project labor agreement, and we have quite a financial mess on our hands.
    Then keep in mind that for Tysons to grow to 84 million square feet up from today’s built 46 MSF and allowable 72-73 MSF under the old Comp Plan, we need $1.7 billion in road and non-rail transit improvements in and around Tysons. That figure is at least 15% too low according to a major road builder. Let’s say we soon get to $2 billion in needed transportation infrastructure for Tysons.
    There is no way Fairfax County voters will approve $2 billion in G.O. bonds for Tysons alone. There needs to be more transportation improvements throughout the county. So let’s double the $2 billion to $4 billion. Then we need to add the costs for all the other infrastructure to support Tysons, e.g., schools, fire, police, library, sewer, water, etc.
    Is there a plan for raising this money? Nope. The BoS has asked the Planning Commission to recommend options by springtime. Meanwhile the landowners and developers have proposed rezonings that would surpass the 84 MSF that requires the billions of dollars of infrastructure. This is not the Clown Shows fault. This is all Fairfax County’s doings.

  8. Groveton Avatar
    Groveton

    Let’s go back to first principles.

    In a state addicted to a strict implementation of Dillon’s Rule, the state legislature holds the cards. With all consuming power must come all consuming accountability. Until power is broadly de-evolved to localities all essential responsibility for state government policy must rest with the General Assembly. Where success may be seen, the General Assembly may take credit. Where failure is evident, the General Assembly must take responsibility.

    Transportation policy in Virginia is a catastrophic failure. Ergo, the general Assembly must assume responsibility for that failure. All other hyping and hyperbole is simply the avoidance of accountability from the one entity which is ultimately accountable – The Clown Show in Richmond.

    Freezing the gas tax in cents per gallon since 1986 is an almost suicidal dereliction of duty by the General Assembly. It is gross incompetence. It is culpable negligence.

    The 25 year legacy of idiocy foisted by the General Assembly on the citizens of Virginia has now reached the breaking point. Virginia’s transportation situation, especially in growth areas, is a full blown catastrophe. It is inhibiting Virginia’s ability to prosper in the evolving economy and creating a situation where people will not remain in Virginia’s few areas of economic opportunity.

    The possibility of reasoned and measured planning and public discourse has passed. The transportation crisis has passed the point of being decided within long cycle human development pattern and smart growth rhetoric.

    It is now do or die.

    A few courageous people and organizations have stepped into the cataclysm created by 25 years of Clown Show neglect.

    Sean Counaghton is one person. He has made the political compromises necessary to make the Rt 29 bypass happen. He will next turn his attention to the Rt 460 matter.

    While Tim Kaine fumbled the ball with unconstitutional plans, Bob McDonnell and Sean Counaghtin have taken action.

    Speaking of Timid Tim … he punted the entire Rail to Dulles issue to another entity with some balls … namely the Metropolitan Washington Airport Authority. Unlike the entrenched clowns in Richmond the MWAA is actually trying to make progress. Yes, they have only a limited hand of cards to play. They control a few assets such as the Dulles Toll Road. And they are playing the cards they have been dealt aggressively. However, it should always be remembered that they are playing those cards because the clowns and cowards in Richmond simply walked away from the problem.

    As always, the “come here lately” NIMBYs pull their collective heads out of the sand to whine about any planned progress. No plan is perfect, no spreadsheet sufficiently detailed. These are largely the same people who fled failing cities like Detroit when the going got tough. They will flee Northern Virginia if and when their gutless handiwork is allowed to come to fruition.

    Then, of course, there are those of us who were born here, work here, intend to stay here and hope our children will remain here. We lack the hit and run mentality of those who fled Cleveland, Pittsburgh, Buffalo and other places only to take temporary refuge in Northern Virginia before fleeing again to greener pastures elsewhere. We are willing to pay today for improvements which will make our community great in the future. We were here when the nattering nabobs of negativism said that the Beltway was unnecessary and that Metro would never be finished. We will be here when our community is a thriving community with the improvements being accomplished by the McDonnell Administration and the MWAA.

    To the rest of you … get out! Leave today. I’ll pay for your gas if you promise never to return. You ran away from problems in Detroit and Philadelphia and you’ll run away from problems here. Just leave now. We were fine before you came and we’ll be fine after you are gone.

    Don’t wait for the budget committee to cut federal funding – leave now.

    In fact, you would probably be much happier in Richmond. They never make any progress there either.

  9. larryg Avatar
    larryg

    well, at the end of the day these things are true.

    1. – the Dillon Rule does not prevent / prohibit NoVa from going forward with it’s own transportation planning – and funding for it – for their region.

    2. NoVa citizens have the biggest responsibility for self-determination of Metro unless of course one wants to adopt the Old Va Clown Show point of view that Richmond knows better than NoVa – what is good for NoVa.
    what say NoVa?

    Blaming Richmond for the METRO mess, as TMT points out is amusing.

    3. – the standard “libtard” view of things like METRO is that Govt must act because people can’t or won’t or actually will oppose – so you need to have a “strong” govt to move things forward… and of course the ability to tax to fund it.

    Groveton – you are a curious sort.

    You seem to take pride in NOT being a libtard but man are you ever one on some matters….

    😉

  10. TMT Avatar
    TMT

    I have followed Dulles Rail for a number of years and fairly closely. I am not sure that home rule power for Fairfax County would have made any significant difference in where Dulles Rail sits today. Funding comes from four basic sources: federal, state, local and MWAA. For Phase I, the feds provided $900 M. Fairfax County put in $450 M max, which is from the special commercial property tax district. The state put in $50 M and, through the CTB, allowed MWAA to impose whatever tolls are necessary to pay for the rest of the project. At one time, there was a belief, based on a letter from Tony Griffin to Pierce Homer, Fairfax County would pay for some cost overruns through general funds or G.O. bonds. John Foust says that letter is no longer operative, as the DTR users are on the hook for the rest. Personally, I am not sure. I don’t think this financing would have been any different had Fairfax County enjoyed home rule.
    One might argue that home rule would have produced more money from the state. I don’t see how that follows. Moreover, Fairfax County officials were more than happy with the CTB’s decision to dump the costs on the Toll Road users. Of course, when the extremely high tolls became an issue in an election year (2011), County officials panicked.
    With home rule and broader taxing authority, I don’t think Fairfax County would levy a new tax or increase existing taxes for rail. As it stands, Dulles Rail will not be easily accessed by many in the county. There was no bidding of a tunnel option. Many people see rail as chiefly benefiting Tysons landowners, who had their liability capped. And Fairfax County will need to use tax revenues for the roads and other public facilities needed in Tysons. I think that, with home rule, Dulles Rail would be essentially the same place as it is today.

  11. larryg Avatar
    larryg

    I would speculate that WITHOUT Fed and State tax dollars that METRO would be a hard row to hoe via home rule.

    basically the premise is that because NoVa is a cash cow for Va that it “deserves” taxes from folks in Kansas and Farmville to pay for it’s transit.

    but the irony is that the “cash cow” in NoVa’s case is none other than the Federal Govt which..by the way ALSO subsidizes it’s employees to ride METRO and VRE to the tune of a couple hundred dollars a month – more taxes from the guy in Kansas to “help” the poor govt workers trying to commute to their jobs.

    I can understand, with some clarity, why the anti-govt forces have started to run amok of late…..

    but I still don’t understand how Groveton blames all of this on Richmond.

    😉

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