AGENDA ITEM 8-E
ACTION ITEM
TO:
CHAIRMAN ZIMMERMAN AND THE VRE OPERATIONS BOARD
FROM:
DALE ZEHNER
DATE:
DECEMBER 18, 2009
SUBJECT:
REFERRAL OF THE REVISED FY 2010 AND RECOMMENDED
FY 2011 VRE OPERATING AND CAPITAL BUDGET OPTIONS
TO THE COMMISSIONS AND LOCALITIES
RECOMMENDATION:
The VRE Operations Board is being asked to adopt the revised FY 2010 VRE
Operations and Capital Budget and the recommended FY 2011 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 2011 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 11th to present their final
recommendations and discuss VRE responses to those recommendations.
DISCUSSION:
The major assumptions in the FY 2011 budget are as follows:
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Jurisdictional subsidy is reduced to $16,070,309, a decrease of $306,659
compared to the FY 2010 level.
Projection of an average daily ridership of 16,200 passengers.
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Continuation of the 30-train operation, with the conversion of train 312 to
revenue service.
Projected fare revenue of $28,100,000, with no fare increase.
Capital matching funds from the State of 35% of the non-federal share,
compared to 73% in FY 2010, the latest reduced amount.
State operating funds of $7.7 million, compared to $8.2 million in FY 2010,
which is the latest reduced amount. The original adopted budget for FY
2010 was $9.1 million.
Fuel estimated at $2.70/gallon for a total cost of $4.5 million.
Federal formula funds are used for $1.0 million of equipment maintenance
costs and $1.25 million of debt service costs for the 50 railcars which was
programmed for state and local support only in prior years.
The capital budget includes the following system capital initiatives for FY 2011:
(local match is funded)
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Facilities infrastructure - $100,000
Broad Run maintenance facility - $728,000
Fare collection upgrade - $400,000
Additional Railcars - $250,000
Rolling stock modifications - $1,019,000
Capital Projects Contingency - $158,000
Mid-day storage - $1,709,000
Capital fleet expansion - locomotives - $6,090,000
Approved earmarks for FY 2011 (requires no local match):
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Broad Run parking deck - $2,920,000
Brooke and Leeland parking - $1,600,000
Lorton platform projects - $1,250,000
Additional locomotive funding (bonus obligation) - $4,125,000
Material expenditure line item changes are noted below; adjustments are in
comparison to the FY 2010 adopted budget.
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Insurance expense decrease of $580,000 as a result of a reduction in the
need for deposits to the Insurance Trust Fund.
Funding of $200,000 for one marketing campaign. All campaigns were
suspended in December 2008 and no campaigns are budgeted for FY
2010.
Fuel is projected at a slight decrease of $193,000 due to the use of
wayside power which reduces fuel consumption.
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Repairs and Maintenance – Railcars/Locomotives/Facilities increased by
$495,000, primarily due to the phase-in of required 4-year periodic
maintenance (called COT&S) for the new Gallery cars as they reach
specific vehicle mileage targets.
Taking into consideration the annual indexing of costs from year to year,
contract costs for operations and maintenance in FY 2011 are lower than
the same services in FY 2010 by $735,000.
The budget also includes a six-year financial forecast for the period FY 2010
through FY 2016. A six-year forecast was prepared that includes a 4% fare increase
and a 4% subsidy increase in years FY 2012 – FY 2016.
REVISED FY 2010 CAPITAL AND OPERATING BUDGET
The FY 2010 budget has been revised to reflect current projections for revenue
and expenses. The major changes are as follows:
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The State operating grant is decreased by $902,000 to reflect the two
rounds of state operating budget cuts.
State capital grants are increased by $3.7 million to reflect a higher match
rate than originally budgeted.
VRE’s federal formula grant was higher than budget by $607,000 to reflect
a higher federal formula allocation award plus $49,000 for additional
Amtrak access fees
Amtrak increased by $461,000 due to higher than budgeted expenditures
CIP expenditures are increased by $760,000 to reflect the higher federal
formula allocation.
Equipment operations are increased by $200,000 to accommodate
increased locomotive maintenance costs.
Various expenses categories are increased by $204,000 to reflect actual
expenditure levels, primarily for vendor commissions and access fees.
Use of $400,000 of Mafersa proceeds is removed from the operating
budget; these funds were used to balance the FY 2011 budget when the
state estimated a 17% capital match rate in December 2008.
The contribution to restore the balance in the insurance trust fund is
increased by $400,000 to reduce the need for contributions in FY 2011.
A reserve of $1.0 million is provided to match future state or federal
earmarks for the purchase of locomotives.
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TO:
FROM:
DATE:
RE:
CHAIRMAN ZIMMERMAN AND THE VRE OPERATIONS BOARD
DALE ZEHNER
DECEMBER 18, 2009
REFERRAL OF THE REVISED FY 2010 AND RECOMMENDED
2011 VRE OPERATING AND CAPITAL BUDGET TO THE
COMMISSIONS AND LOCALITIES
RESOLUTION
8E-12-2009
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 2011 Operating and Capital Budget within the guidelines
developed in concert with the jurisdictional chief administrative officers; and,
WHEREAS, staff recommends a budget built on an average daily ridership of
16,200 and 30 trains with the conversion of train #312 to revenue service; and,
WHEREAS, service termination at L’Enfant will be brought back to the
Operations Board as a policy decision and the leasing of vehicles for contract
operations will be reconsidered.
NOW, THEREFORE, BE IT RESOLVED THAT, the VRE Operations Board does
hereby recommend that the Commissions adopt the revised FY 2010 and
recommended FY 2011 VRE Operating and Capital Budget and forward the FY
2011 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 does also
recommend 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 2010 and FY 2011; and,
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BE IT FURTHER RESOLVED THAT, the VRE Operations Board additionally
recommends that the Executive Director of NVTC be authorized to submit to the
Commonwealth the approved budget as part of the FY 2011 state aid grant
applications.
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