AGENDA ITEM 10-A
ACTION ITEM
TO:
CHAIRMAN BULOVA AND THE VRE OPERATIONS BOARD
FROM:
DALE ZEHNER
DATE:
AUGUST 19, 2011
RE:
REFERRAL OF PRELIMINARY FY 2013 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 2013 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 2013 VRE Operating and Capital
Budget is attached for review.
VRE staff met with the CAO Taskforce in June and again in August to discuss
jurisdictional budget issues and concerns, and to review current VRE projections.
The most significant issue for FY 2013 is the potential for a major reduction in
federal support for transit, reflected in both the formula funding that comes
directly to VRE and the funding that comes to VRE through the state. Although
the preliminary budget does not reflect a major reduction to federal funding, VRE
staff is preparing alternatives to accommodate a possible decrease. As an
example of the potential order of magnitude, the six-year reauthorization bill
introduced in the House of Representatives assumed a 30% across the board
reduction to surface transportation funding. For VRE, a reduction of this size
would translate into a $4.5M annual decrease in formula funding and could
require significant increases in fares and subsidies plus major service reductions
to balance the budget.
DISCUSSION OF BUDGET BASED ON CURRENT LEVEL OF FEDERAL
FUNDING:
The FY 2013 preliminary budget totals $90.9 million. Assuming no change to
either fares or subsidy, $4.1 million of costs are currently unfunded. 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 2013 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.
2. Fare revenue of $33.2 million with no fare increase. Ridership is estimated
at 18,850 with service at the current level of 32 daily trains. Average daily
ridership in FY 2011 was 18,377. A decrease or other curtailment of the
federal transit benefit will affect this projection.
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.
4. Commonwealth capital funding is projected at the agreed upon amount for
the Spotsylvania third track and rail car projects. For all other projects,
primarily debt service, the match rate is estimated at 50%. The FY 2012
match rate for the majority of the capital projects was a blended rate of
53% for the projects which were funded. This projection will continue to be
reviewed over the next several months.
5. Commonwealth formula funding for operations of $6.9 million was
received in FY 2012. For FY 2013, $6.1 million is currently budgeted,
which staff believes is a good estimate at this time. This projection will
continue to be reviewed over the next several months.
2
6. Fuel expenses of $6.5 million are budgeted based on a per gallon cost of
$3.81. In light of recent improvements at the yards and the capabilities of
the new locomotives, projections of fuel usage will continue to be reviewed
over the next several months. 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. No new earmarks are expected in this budget cycle; the projections
include the Commonwealth’s commitment of funding for the Spotsylvania
third track and new railcar projects.
The major significant changes in the FY 2013 proposed budget compared to the
adopted FY 2012 budget are as follows:









$2.6M increase in fare revenue as the result of increased ridership
$830K increase in the state operating subsidy (NOTE: increase compared
to FY 2012 budget, actual FY 2012 award was higher than the FY 2013
estimate)
$1.8M increase in reserve/contingency based on the overall increase
between the two budget years
$1.1M increase to the retail sales commissions as WMATA moves from
Smart Benefits vouchers to electronic benefits; alternatives that will reduce
this amount are currently under review
$320K increase in repairs and maintenance to railcars for additional
COT&S work on the new gallery cars; included in the equipment
operations budget are the addition of deep car cleaning and on-site
support at the maintenance facilities
$605K increase to facilities maintenance for prior year deferred
maintenance and repairs and to reflect cost of additional station facilities
$445K contractual increase to Amtrak services (excluding access fees)
based on change to AAR index
$811K increase to Keolis based on change to CPI in accordance with the
contract
$702K net increase in other revenues/expenditures
FY 2013 BUDGET GUIDELINES (REVISED)
The budget guidelines have been revised in light of the discussion at the
Operations Board retreat in July and recent events at the federal level:
3
GUIDELINE #1: VRE staff will take all reasonable measures to sustain the
current level of overall service to the riders. Staff will attempt to expand services
when and if funding opportunities are identified.
GUIDELINE #2: The total jurisdictional subsidy has decreased for the last three
years, from $17,275,499 in FY 2009 to $15,943,917 in FY 2012. Subsidy
increases or decreases in FY 2013 and future years will be evaluated based on
changes to federal funding levels and the jurisdiction’s ability to replace federal
funding with fuel tax revenue or other sources of funding.
GUIDELINE #3: VRE had three fare increases between July 2008 and July 2009
and kept fares level in FY 2011 and FY 2012. Fare increases will be evaluated as
the budget process continues, with consideration given to changes to federal
funding levels, a preference for biennial increases and comparison to relevant
indices.
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 the most expeditious progress
on high priority capital projects to maintain current assets and to 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 projects 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 of the sale of capital assets.
GUIDELINE #7: A review will be undertaken of VRE’s debt levels 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 2013 BUDGET:
4
Additional draft budgets will be formulated during the fall and reviewed with the
CAO Budget Task Force resulting in a balanced budget by November 2011.
Attached are the following:


FY 2013 Sources and Use
FY 2013 Summary Budget
5
TO:
FROM:
DATE:
RE:
CHAIRMAN BULOVA AND THE VRE OPERATIONS BOARD
DALE ZEHNER
AUGUST 19, 2011
REFERRAL OF PRELIMINARY FY 2013 VRE OPERATING AND
CAPITAL BUDGET TO THE COMMISSIONS
RESOLUTION
10A-08-2011
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 2013 Operating and Capital Budget; and,
WHEREAS, staff recommends a budget built on an average daily ridership of
18,850 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 2011; and,
NOW, THEREFORE, BE IT RESOLVED THAT, the VRE Operations Board
refers the preliminary FY 2013 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 2011 meeting for
consideration and referral to the Commissions for adoption in January 2012.
6
AGENDA ITEM 10-B
ACTION ITEM
TO:
CHAIRMAN BULOVA AND THE VRE OPERATIONS BOARD
FROM:
DALE ZEHNER
DATE:
AUGUST 19, 2011
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
$297,000, plus a 10% contingency of $29,700, for a total amount not to exceed
$326,700.
BACKGROUND:
Over the past year, VRE’s 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 is deploying several initiatives to reduce repair cycle times, improve rolling
stock reliability, reduce fuel consumption, and lower overall life cycle
maintenance costs. Through this task order STV would provide on-site support
for audits and analysis to ensure VRE meets or exceeds established initiatives.
This task order will monitor 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 first task order issued for this effort.
included in the FY 2012 operating budget.
2
Funding for this project is
TO:
FROM:
DATE:
RE:
CHAIRMAN BULOVA AND THE VRE OPERATIONS BOARD
DALE ZEHNER
AUGUST 19, 2011
AUTHORIZATION TO ISSUE A TASK ORDER FOR ON-SITE
SUPPORT AT VRE MAINTENANCE FACILITIES
RESOLUTION
10B-08-2011
OF THE
VIRGINIA RAILWAY EXPRESS
OPERATIONS BOARD
WHEREAS, VRE has a contract with STV, Inc. for Mechanical and Engineering
Consulting Services; and,
WHEREAS, VRE is transitioning 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 rolling stock reliability, 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 initiatives.
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 $297,000, plus a 10% contingency of $29,700, for a
total amount not to exceed $326,700.
3
AGENDA ITEM 10-C
ACTION ITEM
TO:
CHAIRMAN BULOVA AND THE VRE OPERATIONS BOARD
FROM:
DALE ZEHNER
DATE:
AUGUST 19, 2011
RE:
AUTHORIZATION TO AMEND THE CONTRACT FOR THE
FREDERICKSBURG
STATION
INFRASTRUCTURE
REPAIRS
PROJECT
_____________________________________________________________________
RECOMMENDATION:
The VRE Operations Board is being asked to authorize the Chief Executive Officer to
amend the contract with Trinity Construction Group for the Fredericksburg Station
Infrastructure Repairs project by up to $60,000, for a total amount not to exceed
$2,158,442.
BACKGROUND:
In the summer of 2007, VRE staff performed a bridge and station condition assessment
at the Fredericksburg VRE Station. The structure supporting the VRE and non-VRE
platforms at the station had become a hazard for pedestrians walking below them due
to falling debris. The findings were documented in a report that provided various repair
options as well as the basis for designing station renovations.
In June 2010, the Operations Board authorized the award of a construction contract to
Trinity Construction Group in an amount not to exceed $1,958,442. Construction began
in August 2010 and all work within this original scope has been completed.
The original project scope was limited to the amount of available funding provided via a
federal earmark. However, construction costs completed to-date continue to be lower
than anticipated, allowing a second phase of additional work to be performed within the
existing budget. The first phase of additional work was authorized by the Operations
Board in April 2011 when $140,000 was authorized for additional concrete repairs over
Princess Anne and Caroline streets.
This next phase of additional work will address areas requiring additional concrete and
miscellaneous metal repairs outside of the original project scope. Funding for this
contract amendment is an earmark that cannot be used for other projects in the VRE’s
CIP.
FISCAL IMPACT:
With this action, adding $60,000, the total project authorization will be $2,158,442.
Funding for this project is included in VRE’s Capital Improvement Program as part of
the Fredericksburg rail station project. Funding is provided via a federal earmark with
state and local funds used as match. With the execution of this contract amendment,
this earmark will be exhausted.
TO:
FROM:
DATE:
RE:
CHAIRMAN BULOVA AND THE VRE OPERATIONS BOARD
DALE ZEHNER
AUGUST 19, 2011
AUTHORIZATION TO AMEND THE CONTRACT FOR THE
FREDERICKSBURG
STATION
INFRASTRUCTURE
REPAIRS
PROJECT
RESOLUTION
10C-08-2011
OF THE
VIRGINIA RAILWAY EXPRESS
OPERATIONS BOARD
WHEREAS, the structure supporting the VRE and non-VRE platforms at the
Fredericksburg VRE station has become a hazard for pedestrians walking below due to
falling debris; and,
WHEREAS, work to rehabilitate the structure began in August 2010 and all components
of the original scope of work have been completed; and,
WHEREAS, additional funding remains in the grant allowing areas outside the original
scope of work to be completed such as supplementary concrete and miscellaneous
metal repairs.
NOW, THEREFORE, BE IT RESOLVED THAT, the VRE Operations Board authorizes
the Chief Executive Officer to amend the contract with Trinity Construction Group for
the Fredericksburg Station Infrastructure Repairs project by up to $60,000, for a total
amount not to exceed $2,158,442.
AGENDA ITEM 10-D
ACTION ITEM
TO:
CHAIRMAN BULOVA AND THE VRE OPERATIONS BOARD
FROM:
DALE ZEHNER
DATE:
AUGUST 19, 2011
RE:
AUTHORIZATION TO
ENGINEERING
AND
IMPLEMENTATION
ISSUE A
DESIGN
TASK ORDER
WORK
FOR
FOR
PTC
________________________________________________________________
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
engineering and design work for Positive Train Control (PTC) implementation in
the amount of $123,000, plus a 10% contingency of $12,300, for a total amount
not to exceed $135,300.
BACKGROUND:
The Rail Safety Improvement Act of 2008 mandates the implementation of PTC
by 2015. VRE is working with CSX and NS to align our efforts with their PTC
implementation plan(s). The projected phase-in for the territory VRE operates in
for CSX is 2013. This is the more aggressive project of the two host railroads.
The characteristics of PTC are:




Train separation or collision avoidance
Line speed enforcement
Temporary speed restrictions
Rail worker wayside safety
Because the PTC regulation was in effect when VRE began the procurement of
new locomotives, VRE accounted for the installation of PTC equipment on each
unit. Since VRE’s fleet of cab cars were procured prior to 2008, the cab cars do
not have the same provisions as the new locomotives.
As such, STV will provide the necessary engineering and design work to install
on-board PTC equipment in the cab cars. STV will also oversee the installation
of the on-board PTC equipment once VRE procures the required equipment and
installation services at a later date.
FISCAL IMPACT:
This is the first task order issued for this effort. Funding for this task order is
included in the FY 2006 federal formula grant. Match is provided using state and
local funds.
2
TO:
FROM:
DATE:
RE:
CHAIRMAN BULOVA AND THE VRE OPERATIONS BOARD
DALE ZEHNER
AUGUST 19, 2011
AUTHORIZATION TO ISSUE A TASK ORDER FOR
ENGINEERING
AND
DESIGN
WORK
FOR
PTC
IMPLEMENTATION
RESOLUTION
10D-08-2011
OF THE
VIRGINIA RAILWAY EXPRESS
OPERATIONS BOARD
WHEREAS, VRE has a contract with STV, Inc. for Mechanical and Engineering
Consulting Services; and,
WHEREAS, VRE is mandated to implement Positive Train Control by the Rail
Safety Improvement Act of 2008 by 2015; and,
WHEREAS, VRE procured the fleet of cab cars prior to the Rail Safety
Improvement Act of 2008 and modifications must, therefore, be made to this
equipment; and,
WHEREAS, STV will provide engineering design work to accommodate the
implementation of the required on-board PTC equipment.
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 engineering and design work for Positive Train
Control implementation in the amount of $123,000, plus a 10% contingency of
$12,300, for a total amount not to exceed $135,300.
.
3
AGENDA ITEM 10-E
ACTION ITEM
TO:
CHAIRMAN BULOVA AND THE VRE OPERATIONS BOARD
FROM:
DALE ZEHNER
DATE:
AUGUST 19, 2011
RE:
AUTHORIZATION FOR GRANT BILLING SUPPORT SERVICES
_____________________________________________________________________
RECOMMENDATION:
The VRE Operations Board is being asked to authorize the Chief Executive Officer to
amend the existing personal service contract for grant tracking and billing support
services by $10,000, for a total amount not to exceed $60,000, and to conduct a
competitive procurement and thereafter execute a new personal service contract for
grant tracking and billing support services in a cumulative amount not to exceed
$150,000 over a period of three years.
BACKGROUND:
In February 2010, the VRE Chief Executive Officer awarded a personal service contract
to an independent contractor to perform grant tracking and billing support services in an
amount not to exceed $50,000. VRE utilized this approach to supplement VRE and
PRTC staff resources to ensure the timely and accurate billing and reporting of federal
grants, which nearly doubled in size between FY 2010 and FY 2011. Although the bulk
of this increase was the result of numerous grants for the locomotive replacement
project, the complexity of billing and reporting state and federal grant revenue has
increased considerably over the last several years, taxing available staff resources. The
use of an independent contractor provides flexibility because the services are used only
when needed.
Based on anticipated needs, it is being recommended that the current authorization limit
be increased by $10,000, to complete the current contract scope, and thereafter
conduct a competitive solicitation. Following the completion of this solicitation, the
contract would be awarded in a cumulative amount not to exceed $150,000 over a
period of three years.
FISCAL IMPACT:
Funding for this contract has been included in the FY 2012 – 2015 operating budgets,
with actual expenses reimbursed with grant funds as available.
TO:
FROM:
DATE:
RE:
CHAIRMAN BULOVA AND THE VRE OPERATIONS BOARD
DALE ZEHNER
AUGUST 19, 2011
AUTHORIZATION FOR GRANT BILLING SUPPORT SERVICES
RESOLUTION
10E-08-2011
OF THE
VIRGINIA RAILWAY EXPRESS
OPERATIONS BOARD
WHEREAS, in February 2010, the Chief Executive Officer awarded a personal service
contract for an independent contractor to perform grant tracking and billing support
services in an amount not to exceed $50,000; and,
WHEREAS, VRE staff recommends additional authority for continued grant tracking and
billing support services; and,
WHEREAS, based on anticipated needs, it is being recommended that the current
authorization limit be increased by $10,000, to complete the current contract scope, and
thereafter conduct a competitive solicitation; and,
WHEREAS, following the completion of this solicitation, a new contract would be
awarded to an independent contractor.
NOW, THEREFORE, BE IT RESOLVED THAT, the VRE Operations Board authorizes
the Chief Executive Officer to amend the existing personal service contract for grant
tracking and billing support services by $10,000, for a total amount not to exceed
$60,000; and,
BE IT FURTHER RESOLVED THAT, the VRE Operations Board authorizes the Chief
Executive Officer to conduct a competitive procurement and thereafter execute a new
personal service contract for grant tracking and billing support services in a cumulative
amount not to exceed $150,000 over a period of three years.