Dulles Metrorail Silver Line: Status Report and Transportation Infrastructure Finance and Innovation Act (TIFIA) Funding Update Fairfax County Board of Supervisors Transportation Committee May 7, 2013

1. Dulles Metrorail Silver Line:
Status Report &
Transportation Infrastructure
Finance and Innovation Act
(TIFIA) Funding Update
Transportation Committee
Fairfax County Board of Supervisors
May 7, 2013

2. Presentation Outline
• Phase 1 Status Report
• Phase 2 Status Report
• Transportation Infrastructure Finance and
Innovation Act (TIFIA) Funding Update
• Recommendation of Preliminary TIFIA
Allocation
• Requirements from Funding Partners
• Phase 1 Plan of Finance – Closeout
• Staff Recommendations
• Timeline
2

3. Phase 1 – Status Report
Construction: 90% Complete
Final Design: 100% Complete
Utility Relocation: 100% Complete
Property Acquisition: All rights of entry obtained
Track Work: 100% Complete
Stations:
• McLean – 80%
• Tysons Corner – 75%
• Greensboro – 65%
• Spring Hill – 65%
• Wiehle – 84%
• First Delivery of Rail Cars – February 2014
• Wiehle Garage: 88% Complete
• Garage Substantial Completions: July 19, 2013
• Roadway Improvements (ROD): 67% complete
• August/September 2013 completion
Status
•
•
•
•
•
•
• Revised Budget Authorized: $2.905B
• Expended to Date: $2.2B
• County Phase 1 share: $467.8M
• Tax District Funds: $400M (Funding Gap =
$67.8M)
• Fairfax County share of Project expenditures through
fourth quarter 2012 = $369.1M
• $150M received from Commonwealth
Budget
(as of April 24, 2013)
• Substantial Completion: September 7, 2013
• WMATA Testing and Acceptance: August – December
2013
• West Falls Church Yard Completion: December 2013
• Sound Box and Tail Track: November 2013
• Estimated Passenger Revenue Service: December 31,
2013
Schedule
• Entire 3rd Rail energized for Metrorail train testing.
• Tunnel Clearance – No issues per WMATA
• All five stations under construction with efforts on
mechanical, electrical, plumbing, and station finishes
• Phase 1 Maintenance and Land Conveyance process
ongoing:
• Fairfax County will retain ownership of Kiss
and Ride at McLean
• Fairfax County will operate through an
easement Kiss and Ride at Spring Hill Station
• Regional planning effort underway for Phase 1 bus
service (Fairfax Connector, WMATA, Washington Flyer,
PRTC, Loudoun Transit)
• Fairfax County 2nd round of Public Meetings
ongoing
• Ask Fairfax online chat completed
Current Milestones – Past 30 Days
3

4. Phase 2 – Status Report
• Packet A Price Proposals Opened – April 19, 2013
• Project estimate Packet A = $1.4B - $1.6B vs. $1.177B
low bid
• Positive impact on toll rates = $300M (est.)
Status
(as of April 24, 2013)
Station included in Packet A bid.
•
County using its best efforts to mitigate
some station costs on south side. (ROW,
alternative site work funding, and
improved site layout for: garage, bus
bay, and kiss/ride design. )
Station cost will have to be funding either in
part or whole per the funding agreement
(County funding agreement share 16.1%).
County also pursuing funding from TIGER
Grants and NVTA
Innovation Center (RT 28) Station
•
•
•
• Cost Estimate: $3.093B
• Cost Estimate with value engineering and
alternative funding for garages & Innovation
Center Station: $2.7B
• Cost to build garages in Fairfax County: $105M
est.
• Fairfax County share for Phase 2 ranges from
$433M – $498M, Tax District capped at $330M
Budget
• Packet A Contract Award: May 2013
• Packet A Notice to Proceed: June 2013
• 5 Bid Packages:
• Packet A - Rail Line, Station, and Systems
(includes Innovation Center Station)
• Packet B – Yard and Shop
• Packet C (may not be issued) – Parking
Garages
• Packet D – ROW
• Packet E – Utilities
• Fairfax County working to fund & construct Herndon
and Innovation Center garages outside of project
• Financial Plan status:
• Transportation Sub Committee May 7, 2013
• BOS May 14, 2013
• Substantial Completion: Summer 2018
• Revenue Operations: Late 2018
Schedule
• FTA oversight of Phase 2 under discussion:
Ongoing
• TIFIA Letter of Interest submitted: Ongoing
• WMATA Art in Transit: Selection: Ongoing
• Reston Town Center Tunnel Design under review
by WMATA and MWAA
Current Milestones Past 30 Days
4

5. Request Board Approval of
Staff Recommendations
• Approve the Preliminary TIFIA Allocation of $1.9b
amongst the Funding Partners, with County to receive
$475m
• Approve the County Credit Pledge of the C & I Fund and
the Phase 2 Tax District to TIFIA; Potential use of Moral
Obligation from General Fund to meet AA Category
Rating mandated from USDOT
• Request Credit Ratings from the bond rating agencies to
comply with TIFIA Credit Review ($90,000)
• Approve the $100,000 down payment required from the
County to move forward in the TIFIA Letter of Interest
(LOI) review process
• Review short term financing options to cover the $67m
for balance of County contributions for Phase 1. This will
be paid off with receipt of TIFIA funds
5

6. Transportation Infrastructure
Finance and Innovation Act
(TIFIA) Status Update Recommendation of Preliminary
TIFIA Allocation
6

7. TIFIA Financing Overview
• Federal credit assistance in the form of direct loans
(not grants) to finance surface transportation projects
of national and regional significance
• USDOT Secretary LaHood departing & accelerated
turnaround time for documents
• Improved access to capital markets, flexible
repayment terms, and potentially more favorable
interest rates than can be found in private capital
markets for similar instruments
• Loan Repayment Deferral Option - 5 years after
project completion (2023)
• Alternatively – conduct open market bond sale & debt
service payments immediately
7

8. Silver Line Cost Allocation –
Funding Partners
Funding
Partner
Dulles Toll Road*
% Share TPE Baseline
75%
$ Share TPE Baseline
Funding Partner
Total
(TPE Baseline +
Garages)
Other –
Garages
$4,262,763,750
-
$4,262,763,750
Fairfax
16.1%
915,073,285
146,721,000
1,061,794,285
Loudoun
MWAA –
Aviation Funds
4.8%
272,816,880
168,413,000
441,229,880
4.1%
233,031,085
-
233,031,085
$5,683,685,000 $315,134,000
$5,998,819,000
Total
100.00%
* Includes $900m from FTA New Starts (16.1%), $275m from Commonwealth (4.9%). Net to
Dulles Toll Road is 54%. Allocation assumes the add’l $150m + $300m for Phase 2 will be used to
pay interest on Dulles Toll Road Revenue Bonds, not direct project costs.
8

9. Silver Line Total Project Estimate Fairfax County Costs 16.1%
Phase 1
Total Baseline
County Share @ 16.1%
Less Tax Districts
Net County due
Phase 2
Total
$2,905,685,000
$2,778,000,000
$5,683,685,000
467,815,285
447,258,000
915,073,285
(400,000,000)
(330,000,000)
(730,000,000)
$67,815,285
$117,258,000
$185,073,285
$80,959,000*
$80,959,000
65,762,000*
65,762,000
$146,721,000
$146,721,000
Garages
Herndon-Monroe
Route 28
Total Garages
TOTAL (Baseline + Garages)
$467,815,285
$593,979,000
$1,061,794,285
*Per 100% P/E and consistent with MWAA documents; County believes costs will be lower and in the process of
a feasibility study
9

10. TIFIA Allocation:
Funding Partner Consensus
• December 2012 – Per USDOT Project Will Remain
Eligible for 33% TIFIA Loan or $1.9b ($5.9b * 33%)
Funding Partner
Fairfax
Funding Partner
Total Project Cost
TIFIA
Allocation
$1,061,794,285
$475,000,000
Loudoun
441,229,880
200,000,000
MWAA – Aviation Funds
233,031,085
-
Dulles Toll Road
Total
4,262,763,750
$5,998,819,000
1,304,610,270
$1,979,610,270
• Meets MWAA goal of $1.2-$1.4b for the Toll Road
• Counties maintain equity of TIFIA allocation equal to
45% Total Project Cost
10

11. TIFIA Premium Projections
A
Funding
Partner
Fairfax
Loudoun
B
USDOT
Requested
Minimum
Credit Rating
AA Category
AA Category
Investment Grade
Dulles Toll Road (BBB Category)
Total
C
D
E (C * D)
Anticipated
TIFIA Premium
TIFIA
Allocation*
USDOT Premium
Subsidy
Allocation
2%
$475,000,000
$9,500,000
2%
200,000,000
4,000,000
12%
1,304,610,270
156,553,232
$1,979,610,270
$170,053,232
Premium allocation evaluated/ reviewed heavily by TIFIA office
when awarding project funding
* Assumes MWAA Aviation Funds receive no TIFIA Loan
11

12. TIFIA Status Update –
Requirements from Funding
Partners
12

13. TIFIA Financing
• Competitive Interest Rates that correlate to 30-Year
Treasury Note
• Flexible call options - prepay outstanding principal
• Potential future refunding opportunities
• USDOT Expected Ratings from Funding Partners
• AA Category Rating from Counties
• Investment Grade from Dulles Toll Road (MWAA)
• Pledge two County sources for Plan of Finance
• Commercial and Industrial Tax Fund
• Dulles Rail Phase 2 Tax District ($330 million)
• May be required to include Moral Obligation of the
County General Fund if AA Category Rating is not
achieved
13

14. USDOT Information Request –
April 2013
• Complete County Plan of Finance for TIFIA
• Commercial and Industrial Tax Fund
• Dulles Rail Phase 2 Tax District ($330 million)
• Indicative Rating Letter on the TIFIA Loan
• USDOT EXPECTS Counties to achieve rating in the AA Category
• Initial review from the Credit Rating Agencies ($90,000)
• Feasibility Study for Each Source of Credit Pledged
• MWAA Toll Road Study
• Counties expected to submit standard information: tax
assessment, economic, and demographic information
• Credit Processing Down Payment of $100,000 from each
funding partner
14

15. County Plan of Finance for TIFIA Commercial & Industrial Tax Fund
• Tax Rate of 12.5 cents per $100 of AV & generates
approximately $51m revenue annually
• Previously recommended to finance County project costs
outside of the two tax districts: Phase 1 ($67.8m) & Phase
2 ($117.3m)
• Planning Guideline for Long Term Forecasting:
• 50% of expenses for Tysons / Silver Line
• 50% of expenses for Remainder Countywide Projects
• Loan Repayment Deferral Option - 5 years after project
completion (2023)
• Redirect previously forecasted monies required for debt
service to fund other Countywide projects (equates to
approximately $70m total from 2014-2023)
15

16. County Plan of Finance for TIFIA Phase 2 Tax District $330 million
• Estimated stand alone current rating of this district likely “A”
Category, thus enhancement necessary
• Comparative Assessed Value 1/1/13: Phase 1 $11.4b vs. Phase 2 $7.5b
• Allow for growth district tax base / assessed value, similar to Phase
1 Tax District
• Phase 2 Tax Rate – 20 cents for FY 2014
• Initially began at 5 Cents in FY 2011, with 5 cent laddered increases
• Remain at this rate until rail service begins 2018, then ability to increase to
25 cents per Petition
• Accumulation of tax collections to provide for early repayment of
outstanding principal at regular intervals
• Staff recommendation that C & I Fund be used back this Tax District
for credit enhancement
• General Fund Moral Obligation may be needed to reach AA
Category if C & I Fund insufficient
16

17. Financing Dulles Rail - Alternate Options
Public Sector Sources
General
State/Feder Fund (Pay
al Funding
Go)
Cost of Financing /
Carrying Cost
(Lowest to High)
■
Length of Time to
Accrue Funds
(Sooner to Later)
•
General Fund Impact
(Low to High)
Impact on
Redevelopment
(Low to High)
Impact to G.O. Debt
(Low to High)
Ability to Meet Capital
Requirements
(High to Low)
Requires Third Party
Concurrence
(Degree of Difficulty)
■
♦
■
•
•
■
G.O. Bonds
C&I Funds
■
♦
♦
■
■
♦
■
■
■
■
■
♦
♦
♦
Low Impact and/or
Most Beneficial
♦
♦
■
♦
■
♦
♦
♦
Meals Tax
(Pay Go)
■
♦
■
■
■
■
•
Private Sector Sources
100% TIF
Service
Developer
Capped TIF District /CDA Contributions
•
•
♦
■
♦
♦
♦
■
■
♦
■
•
•
■
♦
■
■
■
■
♦
•
•
•
■
■
■
■
Medium Impact and/or of Concern
Other Potential Funding Options: NVTA & Federal TIGER Grants
•
•
High Impact and/or Most Difficult
17

18. Fairfax County Portion
Remaining Dulles Rail Financing
Phase 1
Total Project Estimate (TPE)
County Share @ 16.1%
Less Tax Districts
Net County due
Total County Remaining
Financing Needed
*paid to date to MWAA
Phase 2
Total
$2,905,685,000
$2,778,000,000
$5,683,685,000
467,815,285
447,258,000
915,073,285
(400,000,000*)
(330,000,000)
(730,000,000)
$67,815,285
$117,258,000
$185,073,285
$67,815,285
$447,258,000
$515,073,285
18

19. Fairfax County Cashflow
Remaining Dulles Rail Financing
Source Funds
Amount Source Debt
Service
Comment
TIFIA
$67.8m C & I Fund
TIFIA
$117.3m C & I Fund
Phase 2 costs beyond $330m from
Phase 2 Tax District (2013-2018)
TIFIA
$289.9m Phase 2
Tax District
88% of Phase 2 Tax District’s $330m
(2013-2018)
Total TIFIA
$475.0m
45% Total County Project Cost
Phase 2 Tax
District Bond Sale
or Cash
Total Remaining
Financing
$40.1m Phase 2
Tax District
$515.1m
Balance Phase 1 costs beyond
$400m from Phase 1 Tax District;
TIFIA may be used to repay short
term financing (2013)
Phase 2 Tax District Bond Sale or
Cash Contribution (2018)
19

20. County Phase 1 Cost - $467m
• Phase 1 Tax District fulfilled $400 million obligation
• Establish a plan of finance to cover remaining $67m
to close out the County’s Phase 1 contributions
• TIFIA Funds are not expected until end of the
Calendar Year 2013 at the earliest
• County Staff and Financial Advisor review of short
term financing options to address the $67m:
• Use portion of County’s current $100m Line of Credit
• Bond Anticipation Note (BAN)
• Staff recommendation: Utilize the Line of Credit &
then pay off from receipt of TIFIA funds.
20

21. Recommendations – Consistent
with May 14th Board Item
• Approve the Preliminary TIFIA Allocation of $1.9b amongst
the Funding Partners, with County to receive $475m
• Approve the County Credit Pledge of the C & I Fund and
the Phase 2 Tax District to TIFIA
• Goal to receive AA Category Rating and assumes no Moral
Obligation
• Phase 2 Tax District to utilize $290m of Preliminary TIFIA &
seeking Moral Obligation (e.g. Credit Enhancement) from C &
I Fund
• Request Credit Ratings from the bond rating agencies to
comply with TIFIA Credit Review ($90,000)
• Approve the $100,000 down payment required from the
County to move forward in the TIFIA LOI review process
• Review short term financing options to cover the $67m for
balance of County contributions for Phase 1. This will be
paid off with receipt of TIFIA funds
21

22. Timeline
Date
Item
October 2012
MAP-21 Revised TIFIA Loan Notification (33% to 49%)
October 2012
Funding Partners Submits LOI USDOT TIFIA (@ 49%)
December 2012
TIFIA request to Funding Partners for more information
January 2013
Funding Partners discussion on TIFIA Allocation
April / May 2013
MWAA Awards Phase 2 Design-Build Contract
May 2013
Board Discussion on TIFIA Allocation
May 2013
Discussion with Bond Rating Agencies on County Credit for TIFIA
May 2013
Submit County materials to TIFIA
Summer 2013
County Interim Financing to cover balance of Phase 1 costs
December 2013
Targeted Closing on TIFIA Loan for Funding Partners
December 2013
Begin Service for Phase 1
Spring 2014
Refinance Interim Financing for balance Phase 1 costs
December 2018
Begin Service for Phase 2
22

23. Questions?
23