AGENDA ITEM 9-A ACTION ITEM TO: CHAIRMAN COVINGTON AND THE VRE OPERATIONS BOARD FROM: RICH DALTON DATE: AUGUST 17, 2012 RE: REFERRAL OF PRELIMINARY FY 2014 VRE OPERATING AND CAPITAL BUDGET TO THE COMMISSIONS RECOMMENDATION: The VRE Operations Board is being asked to authorize the Chief Executive Officer to refer the Preliminary FY 2014 VRE Operating and Capital Budget to the Commissions for their consideration, so that the Commissions, in turn, can refer these recommendations to the jurisdictions for their review and comment. BACKGROUND: In accordance with the VRE Master Agreement, which outlines the process for annual budget approval, the preliminary FY 2014 VRE Operating and Capital Budget are attached for review. VRE staff met with the CAO Taskforce in August to discuss jurisdictional budget issues and concerns and to review current VRE projections. The most significant issue for FY 2014 will be to understand the impact on VRE of the provisions of MAP-21, the new federal transportation funding legislation. Additionally, federal funding for access fee reimbursement provided through the state of Virginia decreased materially in FY 2013 which will impact the budget in FY 2014, and the state is developing proposals that are anticipated to alter their funding formulas for both operating support and capital projects. DISCUSSION: The FY 2014 preliminary budget totals $98.5 million with the addition of a 10 car train on the Fredericksburg Line in January 2014, following the completion of the L’Enfant storage track, and the lengthening of two existing trains. Assuming no change to either fares or subsidy, $4.7 million of costs are currently unfunded. Without the addition of the new train mid-year, the total budget would be $96.2 million, with the unfunded portion at $3.3 million. As in the past, VRE will submit a balanced budget to the jurisdictions in the beginning of December for evaluation prior to submission to the Operations Board later that month. Both revenue and expenses are still under review and these projections are expected to change considerably over the next several months. The assumptions used in preparing the preliminary draft are as follows: 1. As noted above, federal formula funding in FY 2014 and future years is based on the amount of funding actually received in FY 2012; approximately $17M of program funds are used primarily for debt service and capital improvements. Staff has not yet received final funding amounts for FY 2013. 2. Fare revenue of $37.4 million with no fare increase. Ridership is estimated at 21,200 with service at the increased level of 34 daily trains, with the addition of the Fredericksburg Line train. Average daily ridership in FY 2012 was 19,088. 3. Contractually set increases in access fee expenses of 4% will occur for Norfolk Southern and CSX. Amtrak contract increases are based on changes to the AAR, a nationally published index of railroad costs, and the bulk of the Keolis contract costs increase by the annual change to the CPI. The current budget increase for both Keolis and Amtrak is a 5% increase from the actual budget for FY2013. 4. Commonwealth capital funding is projected at the match rate of 50%. The FY 2012 match rate for the majority of the capital projects was a rate of 55% for the projects which were funded. This projection will continue to be reviewed over the next several months, particularly in light of proposed changes to the state funding formula to incorporate performance measures as part of the funding allocation process. 5. Commonwealth formula funding for operations of $9.3 million was received in FY 2013. For FY 2014, $7.2 million is currently budgeted, which staff believes is a conservative estimate at this time. The state had several sources of one-time funding in FY 2013 which will not re-occur in 2 FY 2014, which results in the estimated decrease. This projection will continue to be reviewed over the next several months, also in light of proposed changes to the state funding formula. 6. Fuel expenses of $6.6 million are budgeted based on a per gallon cost of $3.75. Because the cost of fuel also impacts the fuel tax revenue which many of the jurisdictions use as the source of funding for the VRE subsidy, a revised fuel tax projection for the PRTC jurisdictions will be prepared in the fall. 7. One CMAQ project is budgeted for the Lorton Platform extension in the amount of $2 million. The major significant changes in the FY 2014 proposed budget compared to the adopted FY 2013 budget are as follows: $2.9M increase in fare revenue as the result of increased ridership $1.1M increase in the state operating subsidy. $2.2M decrease in the federal subsidy for access fees. $900K increase in reserve/contingency based on the overall increase to the size of the budget between the two budget years $320K increase to facilities maintenance for prior year deferred maintenance and repairs and to reflect the cost of additional station facilities $870K increase in fuel due to projected price per gallon and the addition of the 10-car Fredericksburg train $360K contractual increase to Amtrak services (excluding access fees) based on change to AAR index $2.0M increase to Keolis based on change to CPI in accordance with the contract and including the addition of the 10-car Fredericksburg train $840K increase in access fees, including the additional 10-car Fredericksburg train $1.5M net increase in other revenues/expenditures In the development of the FY 2014 budget, staff reviewed numerous options for additional service through both lengthening of existing trains and the addition of new trains. The current proposal, to lengthen two existing trains and add a 10 car train on the Fredericksburg line mid-year, is based on an evaluation of passenger needs, costs, and the availability of rolling stock and mid-day storage. Based on the discussion at the Board meeting in June, staff will review the fare indexing policy that was originally developed in FY 2009, revise it as needed and present it as part of the FY 2014 proposed budget. 3 FY 2014 BUDGET GUIDELINES The budget guidelines have been revised in light of the discussion at the June 2012 Operations Board meeting: GUIDELINE #1: The priority in the FY 2014 budget will be to sustain the current level of overall service to the riders. In addition, various capacity expansion and/or growth scenarios to expand service will be developed and presented, in conjunction with their cost implications. GUIDELINE #2: The total jurisdictional subsidy has decreased over the past four years, from $17,275,499 in FY 2009 to $16,428,800 in FY 2013, with decreases from FY 2009 to FY 2012 and a 3% increase in FY 2013. Subsidy increases or decreases in FY 2014 and future years will be evaluated based on changes to federal and state funding levels and the jurisdictions’ ability to replace grant funding with fuel tax revenue or other sources of funding. GUIDELINE #3: VRE had three fare increases between July 2008 and July 2009 and another increase in FY 2013. Fare increases will be evaluated as the budget process continues, with consideration given to changes in grant funding levels, a preference for biennial increases, and comparison to relevant indices. A fare indexing policy will be presented to the Board for their consideration as part of the budget process. GUIDELINE #4: The first priority for capital improvements will be to adequately maintain equipment and facilities to support current service levels. The Capital Improvement Program (CIP) will be developed to ensure the most efficient use of all funding sources (federal, state, and local) and to emphasize high priority capital projects to maintain current assets and prepare for growth as funding allows. GUIDELINE #5: Fuel hedging strategies will continue in order to provide greater predictably in budgeting for diesel fuel costs. GUIDELINE #6: Funding will be provided to maintain VRE’s level of working capital at an amount no less than two months of operating costs. This level is consistent with the reserve goals of other transit agencies and will allow VRE to efficiently meet its obligations during the course of the year as well as make orderly accommodation for significant shortfalls. In addition, a capital reserve will be maintained to provide local match for earmarks and to fund smaller capital projects and/or those for which grant funds are unavailable. Funding for the reserves will be provided by surplus funds at year-end and, for the capital reserve, proceeds from the sale of capital assets. 4 GUIDELINE #7: The review of VRE’s debt levels will be continued in order to develop debt parameters and guidance as to the appropriate balance between debt and “pay as you go” financing for major capital acquisitions FISCAL IMPACT – FY 2014 BUDGET: Additional draft budgets will be formulated during the fall and reviewed with the CAO Budget Task Force resulting in a balanced budget by December 2012. Attached are the following: FY 2014 Sources and Use FY 2014 Summary Budget 5 TO: FROM: DATE: RE: CHAIRMAN COVINGTON AND THE VRE OPERATIONS BOARD RICH DALTON AUGUST 17, 2012 REFERRAL OF PRELIMINARY FY 2014 VRE OPERATING AND CAPITAL BUDGET TO THE COMMISSIONS RESOLUTION 9A-08-2012 OF THE VIRGINIA RAILWAY EXPRESS BOARD OF DIRECTORS WHEREAS, the VRE Master Agreement requires that the Commissions be presented with a preliminary fiscal year budget for consideration at their respective September meetings prior to the commencement of the subject fiscal year; and, WHEREAS, the VRE Chief Executive Officer has provided the VRE Operations Board with the preliminary FY 2014 Operating and Capital Budget; and, WHEREAS, staff recommends a budget built on an average daily ridership of 21,200 average daily riders; and, WHEREAS, subject to the direction provided by the Operations Board, the budget will be updated with additional ridership and cost data and further refined through the CAO Budget Task Force review during the fall of 2012; and, NOW, THEREFORE, BE IT RESOLVED THAT, the VRE Operations Board refers the preliminary FY 2014 VRE Operating and Capital Budget to the Commissions for their consideration; and, BE IT FURTHER RESOLVED THAT, the VRE Operations Board recommends that the budget be forwarded to the jurisdictions for further formal review and comment; and, BE IT FURTHER RESOLVED THAT, VRE staff is directed to consider and address comments by the jurisdictions and to forward a final recommended budget to the VRE Operations Board at the December 2012 meeting for consideration and referral to the Commissions for adoption in January 2013. 6 FY14 VRE - Source and Use Budget Worksheet LEVEL OF SERVICE FOR FY 2014 34 trains 21,200 average daily riders Leases 14,845,000 Amtrak 5,795,000 Recapitalization Total Access Fees 14,845,000 NS CSXT Total 3,090,000 5,960,000 14,845,000 SOURCES OF FUNDS |-----------STATE -----------| USES OF FUNDS Operating Expenses 71,823,749 FARE INCOME 37,400,000 INTEREST EQUIP RENT AND MISC 60,300 166,000 LOCAL SUBSIDY OTHER STATE SOURCES OPERATING 14,062,949 0 7,200,000 STATE CAPITAL 2,742,500 |----------------FEDERAL------------------| STATE SSTP 5307/5309 9,360,000 832,000 EARMARK/ OTHER - TOTAL 71,823,749 Non-Operating Expenses: Operating Reserve Debt Svc (1998 Bond) Debt Svc (Gallery IV) (11 Cabcars) Debt Svc 8 Railcars (Fed/State/Local) Office Loan 1,889,248 6,907,331 0 1,931,357 0 70,236 Debt Svc 60 Railcars (Local) Debt Svc 60 Railcars (Fed/State/Local) 110,442 4,645,429 0 1,889,248 3,453,666 0 193,136 0 70,236 0 110,442 464,543 0 1,889,248 6,907,331 0 1,931,357 0 70,236 0 110,442 4,645,429 3,453,666 193,136 0 0 0 1,545,086 0 464,543 3,716,343 Non-Operating Summary 15,554,043 0 0 0 6,181,270 0 0 4,111,344 0 5,261,429 0 15,554,043 Total Expenses (Subtotal) 87,377,792 37,400,000 60,300 166,000 20,244,219 0 7,200,000 6,853,844 9,360,000 6,093,429 0 87,377,792 Capital Projects: Facilities Infrastructure 500,000 50,000 0 0 742,900 5,000 115,400 0 0 0 0 50,000 0 0 742,900 5,000 115,400 0 0 0 0 400,000 0 0 5,943,200 40,000 923,200 0 0 0 0 500,000 0 0 7,429,000 50,000 1,154,000 0 0 0 - Rolling Stock Rolling Stock Mods Heavy Maintenance Repair Facility 7,429,000 50,000 1,154,000 Capital Project Summary 9,133,000 0 0 0 913,300 0 0 913,300 0 7,306,400 0 9,133,000 2,000,000 0 2,000,000 0 0 0 0 0 0 0 0 400,000 0 400,000 0 0 0 0 1,600,000 0 1,600,000 2,000,000 2,000,000 98,510,792 37,400,000 60,300 166,000 21,157,519 0 7,200,000 8,167,144 9,360,000 13,399,829 1,600,000 98,510,792 Program 1,931,357 14,845,000 110,442 4,645,429 - Funding 5307/5309 Equity Bonus 5307/5309 5307/5309 5307/5309 5307/5309 5307/5309 5307/5309 5307/5309 5307/5309 5307/5309 5307/5309 5307/5309 5307/5309 Federal Amt 1,545,086 9,360,000 3,716,343 380,000 292,000 80,000 80,000 - State Amt 193,136 2,742,500 464,543 3,453,666 6,853,844 1,313,300 8,167,144 Earmarks/Capital: Lorton Platform Earmark Summary TOTAL FY13 subsidy surplus (deficit) Federal Reimbursement rate (Access) Federal Reimbursement rate State Match Reimb rate MTF Cap State Match Reimb rate MT Cap State Earmark Match rate 65% 80% 50% 50% 20% Calculated Operating Reserve: 33% 23,701,837 16,428,800 (4,728,719) Soft Capital Projects Debt Service 11 Cabcars Access lease funding Local only Debt Service 60 Railcars Fed/State/Local Debt Service 60 Railcars Grant & Project Management Grant & Project Management 475,000 365,000 Construction Management Security Enhancements Signage Enhancements Debt Service 1998 Bonds 100,000 100,000 Subtotal Capital Projects/Earmarks Federal Cap Program 22,572,228 11,133,000 33,705,228 8,906,400 24,359,829 FY14 Summary Proposed Budget GL Account Operating Revenue: FY12 Operating Fare Revenue Miscellaneous Revenue Jurisdictional Subsidy Other Jurisdictional Subsidy Federal/State Subsidy Other Local Funds Interest Income 33,000,000 126,000 14,679,019 28,387,824 243,136 61,000 Total Revenue 76,496,979 FY12 Capital 1,264,898 45,997,100 3,595,848 50,857,846 FY13 Operating 34,500,000 126,000 15,808,999 29,319,262 60,300 79,814,561 FY13 Capital FY14 Operating 619,800 8,268,200 - 8,888,000 37,400,000 166,000 15,808,999 29,507,273 60,300 82,942,572 FY14 Capital 619,800 10,219,700 - 10,839,500 Changes 2,900,000 40,000 2,139,512 5,079,512 Operating/Non-Operating Expenses: Insurance/Reserve/Mobilization Executive Mgnt Passenger Support Services Public Affairs Marketing Planning Operations and Communications Budget and Finance Communication and Infomation Technology Construction and Capital Projects Facilities Maintenance Purchacing and Contract Administration Equipment Operations Safety, Security, and Emergency Preparedness PRTC NVTC Keolis Amtrak Amtrak Access Fees Norfolk Southern CSXT 5,621,352 615,008 719,080 162,236 587,176 1,037,798 733,865 2,552,218 917,172 705,354 3,035,397 275,753 10,923,587 427,132 117,000 70,000 17,546,044 3,652,000 5,380,000 2,940,000 4,740,000 Total Operating/Non-Operating Expenses 62,758,172 CIP Expenditures Debt Service 13,738,807 Total CIP and Other Expenditures 13,738,807 50,857,848 13,948,215 8,888,000 Grand Total Expenses 76,496,979 50,857,848 79,814,560 8,888,000 Difference by Fund Total Difference 6,383,645 631,689 746,569 177,773 598,661 1,274,417 773,194 2,960,979 1,120,557 778,252 3,549,447 294,034 9,793,982 463,556 144,000 70,000 18,008,591 4,097,000 5,640,000 2,950,000 5,410,000 - 65,866,346 50,857,848 - 7,610,302 823,000 795,300 191,000 608,125 873,750 1,661,000 2,752,000 1,273,000 892,500 3,870,000 324,500 12,083,000 472,500 102,000 80,000 19,947,020 4,459,000 5,795,000 3,090,000 5,960,000 - 73,662,997 8,888,000 13,948,215 - 0 - 11,133,000 2,245,000 (233,420) 13,714,795 11,133,000 2,011,581 87,377,792 11,133,000 9,808,232 13,714,795 - (4,435,220) 0 1,226,657 191,311 48,731 13,227 9,464 (400,667) 887,806 (208,979) 152,443 114,248 320,553 30,466 2,289,018 8,944 (42,000) 10,000 1,938,430 362,000 155,000 140,000 550,000 7,796,651 (293,500) (4,728,720) (4,728,720) (4,728,720) AGENDA ITEM 9-B ACTION ITEM TO: CHAIRMAN COVINGTON AND THE VRE OPERATIONS BOARD FROM: RICH DALTON DATE: AUGUST 17, 2012 RE: AUTHORIZATION TO AMEND THE VRE TARIFF TO REDUCE THE PRICE OF THE STEP-UP FARE RECOMMENDATION: The VRE Operations Board is being asked to authorize the Chief Executive Officer to amend the VRE tariff to reduce the price of the Step-Up fare from $5.00 to $3.00, effective November 1, 2012. BACKGROUND: At the March 2011 Operations Board meeting, the Board authorized a change in the VRE fare policy and amendment of the VRE tariff to reduce the price of the Step-Up fare in an effort to mitigate crowded conditions on VRE trains, effective May 1, 2011. The cost to a rider for a Step-Up ticket was reduced from $10.00 to $5.00. Passengers riding on Amtrak trains with a Step-Up ticket must also purchase a VRE multi-ride ticket (i.e., Monthly, 10-ride or 5-day ticket). Step-Up ticket sales (and resulting ridership) have more than doubled since the fare reduction was implemented, from about 3,520 tickets/month to 8,090 tickets/month. Based on ticket sales, that equates to an increase in ridership on Step-Up eligible Amtrak trains from about 170 trips/day to 388 trips/day. In July 2011, VRE staff was invited to participate in the Transit/TDM Working Group for the I-95 Express Lanes (formerly HOT lanes) Transportation Management Plan (TMP). The Working Group was tasked with identifying transit/TDM measures that could be implemented in the I-95 corridor to mitigate the construction-related impacts of the project and reduce the number of vehicles using the I-95 HOV and general purpose lanes during the construction of the Express Lanes. The transit/TDM strategies developed for inclusion in the TMP will be funded through the northern Virginia Regional TMP program budget. The TMP is funded for FY 2013 through FY 2015 to coincide with the Express Lanes construction schedule. The Transit/TDM working group identified eight strategies to mitigate the impacts of construction of the I-95 Express Lanes on travelers in the I-95 corridor, including a strategy to further reduce, or “buy-down”, the rider cost of the VRE Step-Up fare, from $5.00 to $3.00. It is projected additional VRE riders will take advantage of the Step-Up option and shift to the Amtrak trains, thereby freeing up capacity on VRE trains. New riders seeking to avoid traffic congestion on I-95 during the Express Lanes construction are also expected to be attracted to VRE and/or Amtrak trains. Since the majority of the Step-Up eligible trains are on the Fredericksburg Line, the fare reduction will have the greatest potential impact in the I-95 corridor. The fare change will be effective for the entire VRE system, however, so travelers on the Manassas Line and in the I-66 corridor stand to benefit as well. VRE currently pays Amtrak $10.00 per ticket for each VRE rider that chooses to use the Step-Up option; $5.00 of that is covered by rider fare revenue and $5.00 is covered by the VRE Operating Budget. Under the TMP Step-Up reduction strategy, VRE would continue to pay Amtrak $10.00 per ticket, with only $3 of that cost borne by the rider. VRE would pay $5/ticket from its Operating Budget. The TMP would fund the remaining $2/ticket cost. The TMP budget for the VRE Step-Up buydown strategy is $960,000 spread over FY 2013-FY 2015. The anticipated annual cost of the program and projected Step-Up ridership is shown in the table below: $10 fare per ticket (Prior to 5/1/11) $5 fare per ticket (Effective 5/1/11) $970,310 Step-Up Fare $3 fare per ticket (Projected) Incremental Increase FY13 Annual Total Paid to $422,145 $1,625,000 Amtrak ($10/ticket) Fare Revenue $422,145 $485,155 $487,500 VRE Operating N/A $485,155 $812,500 Budget Regional TMP Budget N/A N/A $325,000 Annual tickets sold 42,215 97,031 162,500 Average Amtrak 170 388 650 trips/day based on ticket sales Note: Financial data for the $10 Step-Up fare reflects the 12 months prior to $5 fare reflects actual FY2012 expenses and revenue. 2 Incremental Increase FY14 $436,460 $654,690 $1,563 $218,230 $2,345 $327,345 $216,667 43,646 175 $325,000 65,469 262 5/1/11; financial data for the It is anticipated that the additional riders that switch from VRE trains to Amtrak trains due to the reduced Step-Up fare will be backfilled by new riders on VRE trains. As a result, it is projected that the Step-Up program will be revenue-neutral to VRE if 70% of the additional riders switching to Amtrak trains are backfilled by new VRE riders or approximately 183 new trips/day. The northern Virginia Regional TMP (RTMP) Advisory Committee approved the I-95 Express Lanes TMP on July 31, 2012, including the VRE Step-Up Fare reduction strategy. The next step in implementing the TMP is to modify the VDOT-DRPT Interagency Agreement addressing the funding of the I-95 Express Lanes TMP transit/TDM strategies. DRPT will then issue an amendment to the master grant agreement with NVTC that covers VRE state funding to include the Step-Up buydown program funding. VRE staff is coordinating with DRPT and NVTC staff to execute the required agreements. In order to allow sufficient time to complete these steps, the proposed effective date for the reduced Step-Up fare is November 1, 2012. This will also allow time to coordinate a public information campaign for the Step-Up fare reduction and other I-95 Express Lanes transit/TDM strategies with VDOT and Virginia Megaprojects staff. FISCAL IMPACT: If implemented on November 1, 2012, the VRE cost for the program for FY 2013 would be $218,230 more than budgeted. While new riders on VRE trains are expected to backfill open seats, it will occur over a transition period and staff believes the net cost impact to VRE in FY 2013 to be approximately $100,000. These adjustments will be included in the revised budget for FY 2013. By FY 2014, staff estimates that new riders will have backfilled VRE trains sufficiently to result in no net additional cost to VRE. 3 TO: FROM: DATE: RE: CHAIRMAN COVINGTON AND THE VRE OPERATIONS BOARD RICH DALTON AUGUST 17, 2012 AUTHORIZATION TO AMEND THE VRE TARIFF TO REDUCE THE PRICE OF THE STEP-UP FARE RESOLUTION 9B-08-2012 OF THE VIRGINIA RAILWAY EXPRESS OPERATIONS BOARD WHEREAS, VRE riders possessing a multi-ride ticket can currently ride select Amtrak trains in conjunction with the purchase of a $5 Step-Up fare; and, WHEREAS, VRE was invited to participate as a member of the I-95 Express Lanes Transit/TDM Working Group in developing transit/TDM strategies to be included in the I95 Express Lanes Transportation Management Plan (TMP); and, WHEREAS, the TMP strategies are designed to mitigate the construction-related impacts of the Express Lanes project and reduce the number of vehicles using the I-95 HOV and general purpose lanes during the construction; and, WHEREAS, the I-95 Express Lanes TMP approved by the northern Virginia Regional TMP (RTMP) Advisory Committee on July 31, 2012, recommends reducing the VRE Step-Up fare from $5/ticket to $3/ticket to encourage commuters to shift from using I-95 to VRE and/or Amtrak trains during the Express Lanes construction; and, WHEREAS, reducing the rider’s cost of the Step-Up ticket is also anticipated to motivate additional VRE riders to take advantage of the Step-Up option and shift to the Amtrak trains, thereby freeing up capacity on VRE trains for new riders. NOW, THEREFORE, BE IT RESOLVED THAT, the VRE Operations Board authorizes the Chief Executive Officer to amend the tariff to reduce the Step-Up fare to $3 effective November 1, 2012. 4 AGENDA ITEM 9-C ACTION ITEM TO: CHAIRMAN COVINGTON AND THE VRE OPERATIONS BOARD FROM: RICH DALTON DATE: AUGUST 17, 2012 RE: AUTHORIZATION TO AWARD A CONTRACT FOR CONTAMINATED WASTE REMOVAL SERVICES _____________________________________________________________________ RECOMMENDATION: The VRE Operations Board is being asked to authorize the Chief Executive Officer to enter into a contract with Hepaco, LLC of Fredericksburg, Virginia, for contaminated waste removal services in an amount not to exceed $175,000. The contract term will be for a base year plus two, one-year options. BACKGROUND: On December 16, 2011, the VRE Operations Board authorized the issuance of an RFP for hazardous waste removal services. A request for proposals (RFP) was subsequently issued in June 2012. Two proposals were received in July 2012 from Hepaco, LLC and Vista Environmental Inc. Hepaco was unanimously chosen by the selection committee and is being recommended for award. The scope of services in this contract includes spill containment, hazardous and contaminated materials removal, blood-borne pathogen awareness training for the cleaning staff, and annual washing and cleaning of the locomotive drip pan system. The annual training and drip pan treatment are base contract services with spill containment, waste removal and other unscheduled duties requested on an as-needed basis. The contract will be for three years; a base year plus two option years, with the VRE CEO exercising the option years at his discretion. FISCAL IMPACT: Funding will be provided through the FY 2013 through FY 2016 operating budgets. 2 TO: FROM: DATE: RE: CHAIRMAN COVINGTON AND THE VRE OPERATIONS BOARD RICH DALTON AUGUST 17, 2012 AUTHORIZATION TO AWARD A CONTRACT FOR CONTAMINATED WASTE REMOVAL SERVICES RESOLUTION 9C-08-2012 OF THE VIRGINIA RAILWAY EXPRESS OPERATIONS BOARD WHEREAS, on December 16, 2011, the VRE Operations Board authorized the issuance of an RFP for contaminated waste removal services; and, WHEREAS, these services are used to remove hazardous and contaminated waste, conduct blood borne pathogen awareness training, and the annual cleaning of the yard drip pan system; and, WHEREAS, a competitive selection process was conducted and Hepaco, LLC was unanimously chosen. NOW, THEREFORE, BE IT RESOLVED THAT, the VRE Operations Board authorizes the Chief Executive Officer to enter into a contract with Hepaco, LLC of Fredericksburg, Virginia, for contaminated waste removal services in an amount not to exceed $175,000. The contract term will be for a base year plus two, one-year options. 3 AGENDA ITEM 9-D ACTION ITEM TO: CHAIRMAN COVINGTON AND THE VRE OPERATIONS BOARD FROM: RICH DALTON DATE: AUGUST 17, 2012 RE: AUTHORIZATION TO ISSUE A TASK ORDER FOR ON-SITE SUPPORT AT VRE MAINTENANCE FACILITIES ________________________________________________________________ RECOMMENDATION: The VRE Operations Board is being asked to authorize the Chief Executive Officer to issue a task order to STV, Inc., under the MEC V contract, to provide on-site mechanical process and audit support in an amount not to exceed $282,750, plus a 10% contingency of $28,275, for a total amount not to exceed $311,025. BACKGROUND: Over the past two years, VRE’s fleet equipment program has become extremely advanced and now includes state-of-the-art railcars and locomotives and advanced technology for equipment diagnostics and troubleshooting. At the same time, there has also been an increase in VRE’s mechanical activities. VRE continues to deploy initiatives to reduce repair cycle times, increase utilization and rolling stock reliability, reduce fuel consumption, and lower overall lifecycle maintenance costs. Through this task order STV will provide on-site support for audits and analysis to ensure VRE meets or exceeds established initiatives. The scope of this task order includes monitoring mechanical operations, rolling stock availability, and fleet performance on a daily basis. It will also include audits of equipment, both before and after routine maintenance and unscheduled repairs are performed by VRE contractors. All of this work will be completed while ensuring that VRE policies, procedures, and agreements are followed and documented. Finally, STV will audit VRE policies and Standard Operating Procedures to ensure compliance and then recommend modifications where needed. This work will be performed over a period of one year. FISCAL IMPACT: This is the second task order issued for this effort. Funding for this project is included in the FY 2013 operating budget. 2 TO: FROM: DATE: RE: CHAIRMAN COVINGTON AND THE VRE OPERATIONS BOARD RICH DALTON AUGUST 17, 2012 AUTHORIZATION TO ISSUE A TASK ORDER FOR ON-SITE SUPPORT AT VRE MAINTENANCE FACILITIES RESOLUTION 9d-08-2012 OF THE VIRGINIA RAILWAY EXPRESS OPERATIONS BOARD WHEREAS, VRE has a GEC contract with STV, Inc. for Mechanical and Engineering Consulting Services; and, WHEREAS, VRE is transitioning its fleet to state-of-the-art railcars and locomotives and advanced technology for equipment diagnostics and troubleshooting; and, WHEREAS, VRE is deploying several initiatives to reduce repair cycle times, improve utilization and reliability of rolling stock, reduce fuel consumption, and lower overall life cycle maintenance costs; and, WHEREAS, STV will provide on-site support for audits and analysis to ensure VRE meets or exceeds established initiative goals and objectives. NOW, THEREFORE, BE IT RESOLVED THAT, the VRE Operations Board authorizes the Chief Executive Officer to issue a task order to STV, Inc., under the MEC V contract, to provide on-site mechanical process and audit support in an amount not to exceed $282,750, plus a 10% contingency of $28,275, for a total amount not to exceed $311,025. 3 AGENDA ITEM 9-E ACTION ITEM TO: CHAIRMAN COVINGTON AND THE VRE OPERATIONS BOARD FROM: RICH DALTON DATE: AUGUST 17, 2012 RE: AUTHORIZATION TO SELL TWO LOCOMOTIVES RECOMMENDATION: The VRE Operations Board is being asked to recommend the Commissions authorize the Chief Executive Officer to execute a sales agreement for two GP40PH-2C locomotives with Goodloe Leasing, LLC, or the next highest proposer, for the amount stated in the confidential envelope provided to Board Members. BACKGROUND: In June of 2007, the VRE Operations Board authorized the Chief Executive Officer to pursue the sale of VRE locomotives as they were replaced with new equipment. VRE posted the sale of this equipment on the website and notified several potential purchasers of the sale. Since that time, of the 18 available units, VRE has sold three F40, three GP40, and ten GP39 locomotives. VRE subsequently received a proposal from Goodloe Leasing, LLC to purchase the remaining two GP40PH-2C locomotives. Negotiations have been completed and a sales agreement, mirroring those already approved by the Operations Board for equipment is being readied. The locomotives are not currently used for regular revenue service and are available immediately. FISCAL IMPACT: All sale proceeds will be reinvested in the purchase of rolling stock. 2 TO: FROM: DATE: RE: CHAIRMAN COVINGTON AND THE VRE OPERATIONS BOARD RICH DALTON AUGUST 17, 2012 AUTHORIZATION TO SELL TWO LOCOMOTIVES RESOLUTION 9E-08-2012 OF THE VIRGINIA RAILWAY EXPRESS OPERATIONS BOARD WHEREAS, in June of 2007, the VRE Operations Board authorized the Chief Executive Officer to pursue the sale of locomotives as they are replaced with new equipment; and, WHEREAS, Goodloe Leasing, LLC has submitted a proposal to purchase the two remaining VRE GP40PH-2C locomotives; and, WHEREAS, VRE has received no other expressions of interest for these locomotives. NOW, THEREFORE, BE IT RESOLVED THAT, the VRE Operations Board recommends that the Commissions authorize the Chief Executive Officer to execute a sales agreement for two GP40PH-2C locomotives with Goodloe Leasing, LLC in accordance with the confidential offer made by Goodloe, or to a proposer who hereafter submits an offer for a higher amount. 3