AGENDA ITEM 8-A
ACTION ITEM
TO:
CHAIRMAN ZIMMERMAN AND THE VRE OPERATIONS BOARD
FROM:
DALE ZEHNER
DATE:
DECEMBER 20, 2009
SUBJECT: AUTHORIZATION TO EXTEND AMENDED OPERATING/ACCESS
AGREEMENT WITH CSXT
RECOMMENDATION:
The VRE Operations Board is being asked to recommend that the Commissions
authorize the Chief Executive Officer to execute an extension of the existing Amended
Operating/Access Agreement with CSXT to July 31, 2010.
BACKGROUND:
The VRE has an Operating/Access Agreement with CSXT related to VRE operations in
the Fredericksburg to Washington corridor. That agreement, entered into in 1994, has
been amended and extended several times, most recently this past June, with an
agreed upon extension to January 31, 2010. A further extension is being requested at
this time to provide sufficient time to complete negotiation of a new agreement.
Since December 2005, numerous negotiation sessions have been held with CSXT
representatives on the terms of a new, long-term agreement. Preliminary agreement
was achieved in a number of areas to include:





Term of the agreement
Change in method of calculating the annual escalation
Incentive agreement for improved on time performance
Additional CSXT supervision in the VRE operating territory
Approval of infrastructure improvements at VRE facilities
1
Progress has slowed, however, due to a failure to reach an agreement on the level of
liability coverage. CSXT continues to insist on including a higher level of liability and
terrorism coverage in the new agreement. Although we were able to cap commuter rail
liability at the state level, the legislation does not provide protection from gross
negligence claims or claims of third parties, i.e. nonpassengers. Therefore, CSXT and
Norfolk Southern continue to press for higher liability insurance coverage. Currently,
VRE has $250 million in coverage. An extension of the current agreement is needed
while this issue is resolved.
FISCAL IMPACT:
Funding for the CSX track access fee has been included in the FY 2010 and FY 2011
budgets, including an escalation of 4%.
2
TO:
FROM:
DATE:
RE:
CHAIRMAN ZIMMERMAN AND THE VRE OPERATIONS BOARD
DALE ZEHNER
DECEMBER 18, 2009
AUTHORIZATION TO EXTEND AMENDED OPERATING/ACCESS
AGREEMENT WITH CSXT
RESOLUTION
8A-12-2009
OF THE
VIRGINIA RAILWAY EXPRESS
OPERATIONS BOARD
WHEREAS, the Commissions currently have an amended Operating/Access
Agreement with CSXT relating to VRE operations in the Fredericksburg to Washington
corridor, with said agreement extension ending on January 31, 2010; and,
WHEREAS, staff is currently engaged in ongoing discussions with CSXT concerning a
new agreement and does not anticipate conclusion of these discussions prior to the
expiration of the Amended Operating/Access Agreement; and,
WHEREAS, a proposal to extend the existing agreement to July 31, 2010, without any
changes to the current agreement is expected from CSXT; and,
WHEREAS, the purpose of this extension is to allow time to negotiate and resolve the
outstanding liability issues relating to a new agreement; and,
WHEREAS, necessary funding has been incorporated into the FY 2010 and FY 2011
budgets to allow VRE to continue its operations over CSXT tracks via this contract
extension.
NOW, THEREFORE, BE IT RESOLVED THAT, the VRE Operations Board
recommends that the Commissions authorize the Chief Executive Officer to execute an
extension of the existing Amended Operating/Access Agreement with CSXT to July 31,
2010.
3
AGENDA ITEM 8-B
ACTION ITEM
TO:
CHAIRMAN ZIMMERMAN AND THE VRE OPERATIONS BOARD
FROM:
DALE ZEHNER
DATE:
DECEMBER 19, 2009
SUBJECT: AUTHORIZATION TO EXTEND AMENDED OPERATING/ACCESS
AGREEMENT WITH NORFOLK SOUTHERN
RECOMMENDATION:
The VRE Operations Board is being asked to recommend that the Commissions
authorize the Chief Executive Officer to execute an extension of the existing Amended
Operating/Access Agreement with Norfolk Southern to July 31, 2010.
BACKGROUND:
VRE has an Operating/Access Agreement with Norfolk Southern (NS) relating to VRE
operations in the Manassas to Washington corridor. That agreement, entered into in
1999, has been amended and extended several times, most recently this past June,
with an agreed upon extension to January 31, 2010. A further extension is being
requested at this time to provide sufficient time to complete negotiations of a new
agreement.
Following detailed negotiation sessions with Norfolk Southern representatives, an
agreement in principle was reached on all contract items with the exception of liability
coverage. The Operations Board and Commissions approved these terms at their June
and July, 2005 meetings respectively, and authorized execution of a new agreement
that conformed to each of those items.
Subsequent to the Commissions’ action, however, it became clear that an agreement
on the level of liability coverage could not be reached and the contract could not be
executed. Norfolk Southern insists on including $500 million in liability and terrorism
coverage in the new agreement. Currently, VRE has $250 million in coverage. An
extension of the current agreement is needed while staff continues to attempt to resolve
the insurance issue.
FISCAL IMPACT:
Funding for the Norfolk Southern track access fee has been included in the FY 2010
and FY 2011 budgets, including an escalation of 4%.
2
TO:
FROM:
DATE:
RE:
CHAIRMAN ZIMMERMAN AND THE VRE OPERATIONS BOARD
DALE ZEHNER
DECEMBER 18, 2009
AUTHORIZATION TO EXTEND AMENDED OPERATING/ACCESS
AGREEMENT WITH NORFOLK SOUTHERN
RESOLUTION
8B-12-2009
OF THE
VIRGINIA RAILWAY EXPRESS
OPERATIONS BOARD
WHEREAS, the Commissions currently have an Operating/Access Agreement with
Norfolk Southern related to VRE operations in the Manassas to Washington corridor,
with said agreement ending on January 31, 2010; and,
WHEREAS, staff has reached an agreement in principle on many substantive items
relating to a new agreement following detailed negotiation sessions with Norfolk
Southern representatives; and,
WHEREAS, a proposal to extend the existing agreement to July 31, 2010, without any
changes to the existing agreement is expected from NS; and,
WHEREAS, the purpose of this extension is to allow time to negotiate and resolve the
outstanding insurance issues relating to a new agreement; and,
WHEREAS, necessary funding has been incorporated into the FY 2010 and FY 2011
budgets to allow VRE to continue its operations over Norfolk Southern tracks via this
contract extension.
NOW, THEREFORE, BE IT RESOLVED THAT, the VRE Operations Board
recommends that the Commissions authorize the Chief Executive Officer to execute an
extension of the existing Amended Operating/Access Agreement with Norfolk Southern
to July 31, 2010.
3
AGENDA ITEM 8-C
ACTION ITEM
TO:
CHAIRMAN ZIMMERMAN AND THE VRE OPERATIONS BOARD
FROM:
DALE ZEHNER
DATE:
DECEMBER 18, 2009
RE:
AUTHORIZATION TO AMEND VRE TARIFF TO MODIFY THE
YOUTH FARE POLICY
RECOMMENDATION:
The VRE Operations Board is being asked to authorize the Chief Executive
Officer to amend the VRE tariff to reflect changes to the youth fare policy to allow
for an increase in the age of children riding free with a fare paying adult from age
6 to age 10 and to decrease the age limit for those youths receiving the youth
fare discount from age 21 to age 18.
BACKGROUND:
As part of the ongoing FY 2011 VRE budget process, VRE staff reviewed
potential policy changes that could be made to enhance revenue without having
a critical impact on ridership or service. Accordingly, in September 2009, the
Chief Executive Officer sought and received authorization from the VRE
Operations Board to solicit comments related to a proposed modification to the
youth fare policy.
At the November 2009 meeting, the Chief Executive Officer brought forth a
recommendation to eliminate the 50% discount for youths age 11 to 21 and to
increase the age limit for children who ride free with a fare paying adult from age
6 to age 10. The Operations Board, after public comment and discussion,
deferred action and requested VRE staff return with a revised proposal, keeping
in mind the concerns and also taking into consideration the budget
recommendation for FY 2011.
Several alternatives were subsequently
considered and discussed with the citizens who spoke at the Operations Board
meeting.
VRE staff is now recommending that effective February 15, 2010 the youth fare
mirror the procedures of the other discounted passes. Under this process,
youths requesting a reduced fare would first need to apply for a VRE reduced
fare ID card. The youth would then need to be present when tickets are
purchased at one of the 5 vendors currently selling discounted tickets. In
addition to preserving the discount for the majority of our youth, issuance of a
reduced fare ID will provide VRE with a better idea as to how many youth are
purchasing discounted fares.
FISCAL IMPACT:
VRE staff estimates that the recommended amendment will result in an increase
in annual fare revenue of approximately $20,000.
2
TO:
FROM:
DATE:
RE:
CHAIRMAN ZIMMERMAN AND THE VRE OPERATIONS BOARD
DALE ZEHNER
DECEMBER 18, 2009
AUTHORIZATION TO AMEND VRE TARIFF TO MODIFY THE
YOUTH FARE POLICY
RESOLUTION
8c-12-2009
OF THE
VIRGINIA RAILWAY EXPRESS
OPERATIONS BOARD
WHEREAS, as part of the ongoing FY 2011 VRE budget process, VRE staff
reviewed potential policy changes that could be made to enhance revenue
without having a critical impact on ridership or service; and,
WHEREAS, the Chief Executive Officer sought and received authorization to
solicit comments related to a proposed modification to the youth fare policy; and,
WHEREAS, children age 6 and under currently ride free with a fare paying adult,
the proposal would increase the age to 10 and under; and,
WHEREAS, youths age 11-21 can currently purchase tickets at a 50% discount,
the proposal is to reduce the age limit for those youths receiving the discount
from age 21 to age 18.
NOW, THEREFORE, BE IT RESOLVED THAT, the VRE Operations Board
authorizes the Chief Executive Officer to amend the VRE tariff to reflect changes
to the youth fare policy, effective February 15, 2010, to allow for an increase in
the age of children riding free with a fare paying adult from age 6 to age 10 and
to decrease the age limit for those youths receiving the youth fare discount from
age 21 to age 18.
3
AGENDA ITEM 8-D
ACTION ITEM
TO:
CHAIRMAN ZIMMERMAN AND THE VRE OPERATIONS BOARD
FROM:
DALE ZEHNER
DATE:
DECEMBER 18, 2009
RE:
AUTHORIZATION TO INDEMNIFY KEOLIS RAIL SERVICES
AMERICA DURING MOBILIZATION PERIOD
RECOMMENDATION:
The VRE Operations Board is being asked to authorize the Chief Executive
Officer to include a provision for full indemnification in the contract with Keolis
Rail Services America for operations and maintenance services.
The
indemnification would be for liability claims arising during the mobilization period
from December 2009 to June 30, 2010.
BACKGROUND:
On October 16, 2009, the VRE Operations Board recommended that the
Commissions award a five-year contract to Keolis Rail Services America for
operations and maintenance services. The insurance provisions of the RFP,
which are incorporated into the final contract, require Keolis to provide the first $5
million of railroad liability coverage for any claims arising from contract services.
VRE will indemnify Keolis for claims over $5 million. This provision differs from
the current operations contract in which VRE provides full indemnification to the
operator for all claims.
During the mobilization period, Keolis personnel will not be operating trains.
However, we expect that some number of new hires will need to be qualified on
VRE trains during the spring. These trains will be for training purposes only and
will not carry passengers. As such, railroad liability insurance is required during
the mobilization period. However, VRE believes that the risk of loss is minimal
compared to the cost of procuring separate coverage for this time period. Under
the contract, all railroad liability premium costs are passed through to VRE. The
estimated cost of independent coverage for Keolis during the mobilization period
is $350,000. Alternatively, VRE can add Keolis as an additional insured to VRE’s
current Insurance Plan at no additional cost. Based on the limited risk and short
period of time, VRE recommends this approach to providing coverage to Keolis
during the mobilization period.
Keolis is still required to provide $5 million of railroad liability insurance as of July
1, 2010, when they assume the operation and maintenance of VRE’s commuter
rail service.
FISCAL IMPACT:
The indemnification of Keolis Rail Service America during the mobilization period
will save up to $350,000 in insurance costs at little additional risk to VRE.
2
TO:
FROM:
DATE:
RE:
CHAIRMAN ZIMMERMAN AND THE VRE OPERATIONS BOARD
DALE ZEHNER
DECEMBER 18, 2009
AUTHORIZATION TO INDEMNIFY KEOLIS RAIL SERVICES
AMERICA DURING MOBILIZATION PERIOD
RESOLUTION
8D-12-2009
OF THE
VIRGINIA RAILWAY EXPRESS
OPERATIONS BOARD
WHEREAS, on October 16, 2009 the VRE Operations Board recommended that
the Commissions award a five-year contract to Keolis Rail Services America for
operations and maintenance services; and,
WHEREAS, the insurance provisions of the RFP, which are incorporated into the
final contract, require Keolis to provide the first $5 million of railroad liability
coverage for any claims arising from contract services; and,
WHEREAS, railroad liability insurance is necessary for Keolis during the
mobilization period; and,
WHEREAS, VRE finds the risk of loss minimal as compared to the cost of
procuring separate coverage for this purpose and time period.
NOW, THEREFORE, BE IT RESOLVED THAT, the VRE Operations Board
authorizes the Chief Executive Officer to include a provision for full
indemnification in the contract with Keolis Rail Services America for operations
and maintenance services. The indemnification would be for liability claims
arising during the mobilization period from December 2009 to June 30, 2010.
3
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:


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.






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)








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):




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.



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.
2


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:










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.
3
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,
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,
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.
4
AGENDA ITEM 9
CLOSED SESSION
TO:
CHAIRMAN ZIMMERMAN AND THE VRE OPERATIONS BOARD
FROM:
DALE ZEHNER
DATE:
DECEMBER 18, 2009
SUBJECT:
CLOSED SESSION
CLOSED S E S S I O N
Pursuant to the Virginia Freedom of Information Act (Section 2.2-3711A (7) of the Code
of Virginia), I move that the VRE Operations Board convene a closed meeting for the
purpose of consultation with counsel regarding the terms and conditions of a new
access and storage agreement with Amtrak.
Moved
Seconded
Vote
Unanimous
CERTIFICATION
The VRE Operations Board certifies that, to the best of each member's knowledge and
with no individual member dissenting, at the just concluded Closed Session:
1.
Only public business matters lawfully exempted from open meeting requirements
under the Freedom of Information Act were discussed; and,
2.
Only such public business matters as were identified in the motion by which the
Closed Session was convened were heard, discussed or considered.
Moved
Seconded
Vote
Unanimous