AGENDA ITEM 10-A
ACTION ITEM
TO:
CHAIRMAN BULOVA AND THE VRE OPERATIONS BOARD
FROM:
DALE ZEHNER
DATE:
DECEMBER 16, 2011
SUBJECT: REFERRAL OF THE REVISED FY 2012 AND RECOMMENDED
FY 2013 VRE OPERATING AND CAPITAL BUDGETS TO THE
COMMISSIONS AND LOCALITIES
RECOMMENDATION:
The VRE Operations Board is being asked to adopt the revised FY 2012 VRE
Operating and Capital Budget and the recommended FY 2013 VRE Operating
and Capital Budget, and refer them to the Commissions for their consideration
and subsequent referral to the jurisdictions for their formal review and adoption.
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 was submitted for review at the August VRE Operations Board meeting.
Since that time, it has been discussed at numerous meetings of the CAO Task
Force. The CAO Task Force met on December 8th to present their final
recommendations and discuss VRE responses to those recommendations.
DISCUSSION:
The major assumptions in the FY 2013 budget are as follows:
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Jurisdictional subsidy of $16,428,800, an increase of $484,882 or 3%
compared to the FY 2012 level. A payment by Spotsylvania County of the
amounts waived in prior years will be a mid-year credit to the other
jurisdictions.
Fare increase of 3% and a projected average daily ridership of 19,000
passengers, which in combination increases projected fare revenue by
$3.9 million over the FY 2012 adopted budget amount to a total of
$34.5M.
A reduction in federal formula funds for capital projects based on a
reduction to VRE’s FY 2012 award plus an additional 1% decrease in
anticipated FY 2013 funding. Final projections continue to be decided at
the congressional level.
Continuation of a 32-train operation (30 revenue trains).
Capital matching funds from the State of 50% of the non-federal share for
new projects.
State operating funds of $6.1 million, compared to $5.3M budgeted in FY
2012. Actual award for FY 2012 was $6.9M.
Fuel estimated at $3.25/gallon for a total cost of $5.6 million.
The capital budget includes the following system capital projects for FY 2013,
including required local match:
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Spotsylvania third track - $8.2M (completion of funding required for
$20.3M project)
Fare collection upgrade - $1.8M (completion of funding required for
estimated cost of purchase and installation of new fare collection system
– options will be reviewed after requirements study is completed)
Rolling stock (railcars) - $5.5M (second year of funding for multi-year
project to purchase 15 replacement Gallery rail cars)
Material expenditure line item changes are noted below; adjustments are in
comparison to the FY 2012 adopted budget.
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Fuel budget has increased by $790k based on an average per gallon cost
of $3.25 compared to the FY 2012 adopted budget per gallon estimate of
$2.70.
Retail sales commissions in Budget and Finance were increased by
$675,000, based on WMATA’s discontinuation of the Smart Benefits card.
This has caused the bulk of the ridership to purchase tickets through the
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Commuter Direct system, which has a higher commission rate based on
the higher level of service required.
Equipment maintenance increased by $500k to reflect additional oversight
for the equipment maintenance contract and higher than anticipated costs
for the required ten year periodic maintenance (COT&S) for the remaining
older Gallery railcars.
Keolis contract costs are budgeted at a net increase of $710,000 to reflect
a 3.5% increase to the 12-month October CPI, in accordance with the
contract requirements.
Access fee costs increased by $1.1 million to reflect an estimated
increase to the AAR index for the first quarter of calendar 2012 for Amtrak
and the contractual increase of 4% for CSX and NS.
The budget also includes a six-year financial forecast for the period FY 2013
through FY 2018. A six-year forecast was prepared that includes a 4% fare
increase in FY 2015 and FY 2017 plus a 0% subsidy increase in years FY 2014 –
FY 2018.
REVISED FY 2012 OPERATING AND CAPITAL BUDGET
The FY 2012 budget has been revised to reflect current projections for revenue
and expenses. The major changes are as follows:
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Fare revenue is increased by $2.4M based on current ridership projections
to $33.0M.
The State operating grant is increased by $1.5 to reflect the actual higher
grant award.
Access fee reimbursement decreased by $600k based on transition to
state funding of match to federal access fee grant; state match will not be
available until older grant funds are depleted.
State capital grants are increased by $17.0 million and federal capital
grants by $15.6M to reflect the following:
o Additional funding provided through DRPT for the Spotsylvania
third track ($4.6M) and purchase of replacement rail cars ($17.6M)
o STP (formerly bonus obligation) funds for locomotives ($3.0M)
o VDOT/locally administered project funds for the Alexandria tunnel
($7.4M)
Use of capital reserve for additional match for Spotsylvania third track, rail
car projects ($2.2M), and additional capital needs ($1.5M)
Increase of $1.0M for higher cost per gallon of fuel
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TO:
FROM:
DATE:
RE:
CHAIRMAN BULOVA AND THE VRE OPERATIONS BOARD
DALE ZEHNER
DECEMBER 16, 2011
REFERRAL OF THE REVISED FY 2012 AND RECOMMENDED
2013 VRE OPERATING AND CAPITAL BUDGETS TO THE
COMMISSIONS AND LOCALITIES
RESOLUTION
10A-12-2011
OF THE
VIRGINIA RAILWAY EXPRESS
OPERATIONS BOARD
WHEREAS, the VRE Master Agreement requires that the Commissions be
presented with a fiscal year budget for their consideration at their respective
January 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 FY 2013 Operating and Capital Budget within the guidelines
developed in concert with the jurisdictional chief administrative officers; and,
WHEREAS, VRE staff recommends a budget built on an average daily ridership
of 19,000 and 32 trains.
NOW, THEREFORE, BE IT RESOLVED THAT, the VRE Operations Board does
hereby recommend that the Commissions adopt the revised FY 2012 and
recommended FY 2013 VRE Operating and Capital Budgets and forward the FY
2013 budget to the local jurisdictions for inclusion in their budgets and
appropriations in accordance with the Master Agreement; and,
BE IT FURTHER RESOLVED THAT, the VRE Operations Board recommends
that the Executive Directors of both PRTC and NVTC submit to the
Transportation Planning Board of the National Capital Region and to the Federal
Transit Administration or other federal agencies, the appropriate Transit
Improvement Program and grant applications for FY 2012 and FY 2013; and,
BE IT FURTHER RESOLVED THAT, the VRE Operations Board recommends
that the Executive Director of NVTC be authorized to submit to the
Commonwealth the approved budget as part of the FY 2013 state aid grant
applications.
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