Agenda Item 8-A
Action Item
To:
Chairman Cook and the VRE Operations Board
From:
Doug Allen
Date:
September 18, 2015
Re:
Authorization to Execute a Contract for Elevator
Rehabilitation or Replacement at Franconia-Springfield and
Rippon Stations
Recommendation:
The VRE Operations Board is asked to authorize the Chief Executive Officer to execute a
contract with Nichols Contracting, Inc. of Sandy Spring, Maryland for elevator rehabilitation
or replacement at Franconia-Springfield and Rippon stations in the amount of $1,078,480,
plus a 10% contingency of $107,848, for a total amount not to exceed $1,186,328.
Background:
In recent years, the frequency of failures and required maintenance service calls have
increased for the two elevators at the Franconia-Springfield station and the elevator at the
Rippon station, creating an inconvenience to VRE riders. The failures are due to aging
elevator cabs and associated equipment. The project scope of work includes the
modernization of elevator cabs, controls, support structures and systems.
On March 20, 2015, the VRE Operations Board approved a request to issue an Invitation for
Bids (IFB) for the Elevator Rehabilitation or Replacement at Franconia-Springfield and
Rippon Stations project. A mailing list of fifty-seven (57) prospective Bidders was
established for the solicitation to ensure access to adequate sources of services.
Additionally, the IFB was posted on eVA.
On July 24, 2015, an IFB was issued and bids were due on August 24, 2015.
Only one (1) response was received. The staff conducted a survey to determine why only a
single Bid was received and is satisfied with the result.
The following reasons were given for why Bidders did not respond to the solicitation:

Current workload does not allow time for additional projects;

Lack of manpower;

Pricing obtained from prospective subcontractors was not competitive;

Steel supplier was unable to provide pricing prior to the due date for Bids; and,

Considerable amount of effort is required to address the level of rust observed at the
site visits.
Staff has certified the price is fair and reasonable.
The bid abstract is as follows:
Bidder
Bid Amount
Nichols Contracting, Inc. of Sandy Spring, MD
$1,078,480.00
The Contract includes the modernization of three (3) passenger elevators to be completed
as follows:

Franconia-Springfield Station East Elevator (Elevator No. 1) - One hundred and
twenty (120) calendar days from the date set forth in the written Notice-ToProceed.

Franconia-Springfield Station West Elevator (Elevator No. 3) - One hundred and
fifty (150) calendar days from the date set forth in the written Notice-To-Proceed.

Rippon Station Elevator - One hundred and twenty (120) calendar days from the
date set forth in the written Notice-To-Proceed.
Fiscal Impact:
The total cost of this project is funded with Federal FY 2016 State of Good Repair formula
grants (5337), matched with state and local funds.
2
Virginia Railway Express
Operations Board
Resolution
8A-09-2015
Authorization to Execute a Contract for Elevator Rehabilitation or
Replacement at Franconia-Springfield and Rippon Stations
WHEREAS, the elevators at the Franconia-Springfield and Rippon stations have
experienced increased failures and required maintenance service calls due to aging
elevator cabs and associated equipment; and,
WHEREAS, the project scope of work includes the modernization of elevator cabs, controls,
support structures and systems; and,
WHEREAS, the VRE Operations Board in March 2015 approved issuance of an Invitation
for Bids (IFB) for the Elevator Rehabilitation or Replacement at Franconia-Springfield and
Rippon Stations project; and,
WHEREAS, VRE advertised an Invitation for Bids on July 24, 2015; and,
WHEREAS, on August 24, 2015, one response was received; and,
WHEREAS, subsequent to a review of the references and financial stability, VRE staff
recommends the VRE Operations Board award a contract to Nichols Contracting, Inc. of
Sandy Spring, Maryland;
NOW, THEREFORE, BE IT RESOLVED THAT, the VRE Operations Board does hereby
authorize the Chief Executive Officer to execute a contract with Nichols Contracting, Inc. of
Sandy Spring, Maryland for elevator rehabilitation or replacement at Franconia-Springfield
and Rippon stations in the amount of $1,078,480, plus a 10% contingency of $107,848, for
a total amount not to exceed $1,186,328.
Approved this 18th day of September 2015
______________________________
John C. Cook
Chairman
____________________________
Paul Smedberg
Secretary
3
Agenda Item 8-B
Action Item
To:
Chairman Cook and the VRE Operations Board
From:
Doug Allen
Date:
September 18, 2015
Re:
Authorization to Execute a Contract for Replacement of
Platform Canopies, Gutters and Downspouts at L’Enfant and
Leeland Road Stations
Recommendation:
The VRE Operations Board is asked to authorize the Chief Executive Officer to execute a
contract with Elite Sheet Metal Works, Inc. of Beltsville, Maryland for replacement of
platform canopies, gutters and downspouts at L’Enfant and Leeland Road stations in the
amount of $286,400, plus a 10% contingency of $28,640, for a total amount not to exceed
$315,040.
Background:
The platform canopies, gutters and downspouts at several VRE stations were installed
many years ago. Due to years of exposure to the elements, these items at the L’Enfant and
Leeland Road stations have experienced rusting, leaking, peeling and flaking. The scope of
work for the IFB includes the replacement of canopy roofing, gutters and downspouts at
both stations. Similar replacements at additional stations will occur in subsequent years as
necessary to maintain optimal performance and appearance.
On March 20, 2015, the VRE Operations Board approved a request to issue an Invitation for
Bids (IFB) for the Replacement of Platform Canopies, Gutters and Downspouts at L’Enfant
and Leeland Road Stations project. A mailing list of thirty-five (35) prospective Bidders
was established for the solicitation to ensure access to adequate sources of services.
Additionally, the IFB was posted on eVA.
On July 31, 2015, an IFB was issued and bids were due on September 3, 2015.
The bid tabulation is as follows:
Bidders
Bid Amount
1. Elite Sheet Metal Works, Inc. of Beltsville, MD
$286,400.00
2. CHU Contracting, Inc. of Chantilly, VA
$299,000.00
After review of the bids, it was determined that Elite Sheet Metal Works, Inc. was the
lowest responsive-responsible bidder.
Staff has certified that the price is fair and reasonable.
The Contract includes the replacement of platform canopies, gutters and downspouts at
two stations to be completed as follows:
L’Enfant Station – Thirty (30) calendar days from the date set forth in the written
Notice-To-Proceed.
Leeland Road Station – Thirty (30) calendar days from the date set forth in the
written Notice-To-Proceed.
Fiscal Impact:
The total cost of this project is funded with Federal FY 2016 State of Good Repair formula
grants (5337), matched with state and local funds.
2
Virginia Railway Express
Operations Board
Resolution
8B-09-2015
Authorization to Execute a Contract for Replacement of
Platform Canopies, Gutters and Downspouts at
L’Enfant and Leeland Road Stations
WHEREAS, the platform canopies, gutters and downspouts at several VRE stations were
installed many years ago; and,
WHEREAS, these items at the L’Enfant and Leeland Road stations have experienced
rusting, leaking, peeling and flaking; and,
WHEREAS, the scope of work includes replacement of canopy roofing, gutters and
downspouts at both stations; and,
WHEREAS, the VRE Operations Board in March 2015 approved issuance of an Invitation
for Bids (IFB) for the Replacement of Platform Canopies, Gutters and Downspouts at
L’Enfant and Leeland Road Stations project; and,
WHEREAS, VRE advertised an Invitation for Bids on July 31, 2015; and,
WHEREAS, on September 3, 2015, two responses were received; and,
WHEREAS, subsequent to a review of the references and financial stability, VRE staff
recommends the Operations Board award a contract to Elite Sheet Metal Works, Inc. of
Beltsville, Maryland;
NOW, THEREFORE, BE IT RESOLVED THAT, the VRE Operations Board does hereby
authorize the Chief Executive Officer to execute a contract with Elite Sheet Metal Works,
Inc. of Beltsville, Maryland for replacement of platform canopies, gutters and downspouts
at L’Enfant and Leeland Road stations in the amount of $286,400, plus a 10% contingency
of $28,640, for a total amount not to exceed $315,040.
Approved this 18th day of September 2015
______________________________
John C. Cook
Chairman
____________________________
Paul Smedberg
Secretary
3
Agenda Item 8-C
Action Item
To:
Chairman Cooke and the VRE Operations Board
From:
Doug Allen
Date:
September 18, 2015
Re:
Referral of Preliminary FY 2017 VRE Operating and Capital
Budget to the Commissions
Recommendation:
The VRE Operations Board is asked to authorize the Chief Executive Officer to refer the
Preliminary FY 2017 VRE Operating and Capital Budget to the Commissions for their
consideration, so 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 2017 VRE Operating and Capital Budget is attached for
review. The Budget Key Issues considered by the Operations Board in July are also
provided as an attachment. Since July, VRE staff has met with the CAO Taskforce to discuss
jurisdictional budget issues and concerns and to review current VRE budget projections.
During the FY 2017 budget year, VRE will operate 32 daily revenue trains and continue our
safety and customer service outreach programs. The capital budget for FY 2017 will focus
on state of good repair of equipment and facilities and replacement of the mid-day storage
facility. Five expansion railcars will be received during the fiscal year and an additional
nine will be under construction.
The major budget issues for FY 2017 are adequate and timely funding of the replacement
facility for mid-day storage of rolling stock equipment, and meeting required and necessary
increases to operating expenses.
Discussion:
The FY 2017 preliminary budget totals $119.8 million. The budget includes a 5% subsidy
increase with no fare increase and has a current net unfunded amount of $2.8M. 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. Fare revenue: Fare revenue is budgeted at $39.4 million with no fare increase
recommended. A fare increase of 4% occurred at the beginning of FY 2016. Ridership
is estimated at 19,900 Average Daily Riders (ADR) with service at the current
budgeted level of 34 daily trains (32 revenue trains). ADR in FY 2015 was 18,547.
2. Jurisdictional subsidy: The subsidy is currently budgeted at $17.25 million, a 5%
increase from FY 2016, which is the amount included in the Six-Year Financial
Forecast. The last subsidy increase was in FY 2013 and the recommended amount of
$17.25 is approximately equal to the amount paid in FY 2009.
3. Federal funds: Congress approved a short term extension to the current
transportation authorization through May 2015. All indications are the full
reauthorization will provide approximately $27M in formula funding for VRE in FY
2016 or about $900k less than the amount budgeted. The FY 2017 preliminary
budget is based on the most recent funding level of $27M.
4. State operating funds: Commonwealth operating assistance of $9.2 million was
received in FY 2016. The FY 2017 preliminary budget is based on $9.0 million.
5. State capital funds: Commonwealth capital funding is currently projected at either:
a) 16% of the total project cost, when used as match to 80% federal funding; or b)
one of the three funding tiers of 68%, 34% or 17% of gross project costs, regardless
of the amounts of federal funding assigned to the project. State match for the
replacement of the mid-day equipment storage facility is budgeted at the 34% level.
6. Access fee funding: Since FY 2015, DRPT has allowed VRE to apply for multiyear
agreements for track access fee reimbursement. For FY 2017, reimbursements are
currently being estimated at a level similar to FY 2016, with an 84% combined rate
for both federal STP funds allocated through the state and a state capital match.
2
7. Capital program: Capital needs have been identified and prioritized and funding
sources have been considered within the available federal formula funds and existing
allocations through CMAQ, NVTA regional funds or other sources. The multi-year CIP
will also include needed projects for which funding has not yet been identified. The
largest capital expense is $21.8M for the equipment storage project. An annual
capital reserve contribution of $3 million is also included.
8. Contractual increases: The CSX access fees have an annual contractual increase of
4%. Access fees paid to Norfolk Southern are based on changes to the AAR, a
nationally published index of railroad costs, and increases to Amtrak access fees for
FY 2017 will be based on a three year average of their annual costs, inflated to the
budget year. Currently, Norfolk Southern and Amtrak increases are budgeted at 4%.
The bulk of the Keolis contract costs increase by the annual change to the CPI,
currently budgeted at 3%.
9. Fuel costs: Fuel expenses of $5.2 million are budgeted based on a per gallon cost of
$3.25.
10. Staff changes: VRE staff recommends adding four FTE employees to various
departments. As VRE has grown in size and complexity and as regulatory and
performance requirements have increased, staff resources have not kept pace. The
FY 2016 budget included three new permanent positions and the replacement of
three contract positions with VRE staff positions. The following additional positions
are included in the FY 2017 preliminary budget:

Finance and Administration – Associate Accountant - Responsible for
various accounting functions, including accounts payable, payment and card
processing and providing vital accounting and administrative support for
other finance staff. The position is needed due to the expanding workload
and duties within the finance and human resources functions within VRE.

Facilities – Facilities Specialist – Responsible for assisting with management
of scheduled maintenance, repairs and state of good repair projects at all
station and equipment maintenance facilities. With additional VRE stations,
expansion of existing stations and additional equipment facilities coming online, additional VRE staff support is required.

Project Implementation – Project Manager - A licensed engineer who will
manage the final design and construction of VRE capital improvement
projects. The number and complexity of VRE capital projects is increasing as
a result of System Plan 2040. An additional Project Manager is needed to
handle the workload in a timely and effective manner.
3

Project Implementation – Project Administrator - Responsible for
administration of project controls (schedule and budgets), quality control,
invoicing, procurement coordination, and routine reporting for VRE capital
improvement projects as well as management of minor planning and design
projects. The number and complexity of VRE capital projects is increasing as
a result of System Plan 2040. The addition of a Project Administrator is
needed to handle the workload in a timely and effective manner.
More detail on these positions will be provided as part of the presentation at the Board
meeting. The preliminary cost of the four positions is $500k.
The major significant changes in the FY 2017 proposed budget compared to the adopted FY
2016 budget are as follows, including those issues discussed in more detail above:
Revenue:
 $821k increase in Jurisdictional Subsidy as described above

$480k increase in Fare Revenue due to the projected level of ridership

$1.6M decrease in Other Sources, primarily one-time funds used for local match to
capital projects and one-time expenditures. One-time funds will be included in
future drafts of the FY 2017 budget, as appropriate.

$19M decrease in grant funds for CMAQ and REF projects included in the FY 2016
budget and the 68% funding received from the state for the railcar project; these
decreases are offset by a decrease in project costs.

Decrease of $900,000 to the budget for federal formula funds, as noted above.

Increase of $900,000 to the $8.1M budgeted in FY 2016 for state operating
assistance. (Actual amount received in FY 2016, as noted above, was $9.2M.)
Operating and capital expenses:
 $1.2M increase related to the estimated ongoing operating costs of the PTC system.

$500k increase for the four positions noted earlier in this memorandum.

$945k for contractual increases for train operations and maintenance, mid-day
services and access fees.

$255k increase in Facilities Maintenance for contractual and utility cost increases.
4

Increases of $200k in safety and security for enhanced security contracts; $639k in
IT for additional professional services and computer equipment upgrades; and
$200k for increased costs for credit card processing related to fare media purchases.

The total capital budget is projected at $34.4 million. Projects include:
o $3.9 million for facilities infrastructure lifecycle maintenance
o $4.9 million for equipment life cycle maintenance
o $600k for replacement of security cameras
o $21.8 million for mid-day and overnight train storage
o $210k for security enhancements/associated transit improvements (a 5307
grant requirement)
o $3.0 million annual contribution to the capital reserve
Fiscal Impact – FY 2017 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 2016.
Attached are the following:



FY 2017 Key Budget Issues
FY 2017 Sources and Use
FY 2017 Summary Budget
5
Virginia Railway Express
Operations Board
Resolution
8C-09-2015
Referral of Preliminary FY 2017 VRE Operating and
Capital Budget to the Commissions
WHEREAS, the VRE Master Agreement requires the VRE Operations Board submit to the
Commissions a preliminary fiscal year budget by September 30 each year; and,
WHEREAS, the VRE Chief Executive Officer has provided the VRE Operations Board with
the preliminary FY 2017 Operating and Capital Budget;
NOW, THEREFORE, BE IT RESOLVED THAT, the VRE Operations Board refers the
preliminary FY 2017 Operating and Capital Budget to the Commissions for their
consideration; and,
BE IT FURTHER RESOLVED THAT, the VRE Operations Board recommends 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 2015 meeting for consideration and referral to the
Commissions for adoption in January 2016.
Approved this 18th day of September 2015.
_______________________________
John C. Cooke
Chairman
____________________________
Paul Smedberg
Secretary
6
FY 2017 Key Budget Issues
The key issues described below apply to the development of the FY 2017 Budget and CIP
and to the six-year financial plan, which provides a consolidated financial projection over a
multi-year time frame.
Key Issue #1: Level of service: Some trains are currently at or over 100% capacity. Planned
service improvements include the new Fredericksburg line train (fall 2015, in conjunction
with the opening of Spotsylvania Station – revised from original) and the lengthening of peak
trains as additional railcars are received.
The addition of the Fredericksburg line train scheduled to begin service in fall 2015
(revised from original) is expected to somewhat mitigate the overcrowding and the
capacity issues at stations further up the line. The service will run with the legacy gallery
railcars until additional new railcars are available mid-way through FY 2016. Five railcars
were ordered in FY 2015 and an additional nine are budgeted in FY 2016. These additional
14 cars along with related infrastructure improvements to stations and storage yards will
allow for the lengthening of existing peak trains and the conversion of a “deadhead” train
on the Manassas line to revenue service in FY 2017.
Key Issue #2: Maintenance and Replacement of VRE Assets: Federal formula funds
devoted to maintaining transit assets in a “State of Good Repair” are expected to provide for
the ongoing capital cost of maintaining VRE assets over their life-cycle. However, replacement
of the fleet at the end of the expected useful life of the equipment will require additional
funding mechanisms.
The federal priority under MAP-21 of maintaining transit systems in a “State of Good
Repair” has been included in the current versions of the next transportation authorization
and the funds to adequately maintain equipment and facilities will be available from this
source. The recently completed asset management strategy for facilities will be used to
refine the costs included in the FY 2017 budget and CIP for this group of assets.
Because VRE’s current fleet of railcars and locomotives were purchased during a
compressed time period, the replacement of the fleet at the end of its useful life is projected
to be needed during a five-year period beginning in FY 2030, at an estimated cost of
approximately $450M. Although this need falls well beyond the projection period in the
annual budget and CIP, this issue was highlighted in the longer-term Financial Plan
forecast.
7
Key Issue #3: Midday Storage: The construction of alternate midday storage facilities will
require a significant funding commitment over the next several years.
VRE is currently hampered by limited midday track space at Union Station and must
deadhead one trainset daily back to the Broad Run yard. In addition, the current contract
with Amtrak includes provisions for Amtrak to reclaim VRE’s current storage space at the
Ivy City yard for their own use during the next several years. As a result, VRE must proceed
expeditiously to both increase midday train storage beyond what is currently available and
to fully replace the storage yard now used at Ivy City.
A substantial portion of available federal formula funds were devoted to this project during
the six-year time frame covered by the FY 2016 – FY 2021 CIP. However, recent cost
projections indicate that additional funding will need to be identified.
Key Issue #4: Capital improvements to support the VRE System Plan: Capital
improvements needed to meet the expected demand for VRE service and to increase railroad
infrastructure capacity in the VRE service territory require the identification and
commitment of funds beyond those currently available to VRE.
During FY 2014 the Operations Board and Commissions endorsed the VRE System Plan,
which provides for the logical, incremental expansion of VRE infrastructure and service.
The Financial Plan will detail VRE’s ability to maintain and expand service based on current
and future fiscal restraints. An important component of future capital needs is the
commitment to ensure the development of the railroad infrastructure in the CSXT territory.
NVTA regional funding continues to be available on a discretionary basis for certain VRE
capital projects, but only for those located within the NVTA jurisdictions, which has
highlighted the need for funding sources in the non-NVTA area served by VRE.
Key Issue #5: VRE staff level: VRE needs the staff resources necessary to operate and
administer the commuter rail system safely, efficiently and in compliance with all federal and
state requirements.
Since inception, the administration and oversight of the commuter rail system has been
accomplished by a relatively small permanent staff, supplemented at times with assistance
on a contract or temporary basis. As the system itself has grown and developed, along with
a continuing increase in internal and external requirements, the staff level has not kept
pace. The FY 2016 budget included three new permanent positions and the replacement of
three contract positions with VRE staff positions. While the new positions have helped
address needs, the FY 2017 proposed budget is expected to include the need for further
additional staff resources.
8
Key Issue #6: Jurisdictional subsidy and the need for additional funding sources: The
VRE service currently must be supported within the confines of jurisdictional budget
constraints. The Financial Plan forecast is the first step in quantifying the need for additional
ongoing funding sources to support the commuter rail service.
The subsidy level in FY 2017 will be evaluated based on a variety of factors, including
contractual increases, expected changes to state and federal funding levels and the
jurisdiction’s ability to contribute using fuel tax revenue or other sources of funding. The
FY 2016 six-year financial forecast projected a subsidy increase of 5% for FY 2017. VRE
will work with jurisdictional staff on formulating future subsidy levels and will fully utilize
all existing other funding sources.
The total jurisdictional subsidy of $16.4 million has been flat for the last four years and the
level has not changed appreciably over the last seven years. The limitations of the reliance
on jurisdictional funding and the need for alternate ongoing funding will be addressed
through the Financial Plan forecast, as noted above.
9
FY17 Sources and Use
Leases
LEVEL OF SERVICE FOR FY17
34 trains
16,850,000
16,850,000
19,700 average daily riders
Total Access Fees
SOURCES OF FUNDS
|-----------------STATE -----------------|
USES OF
FUNDS
Operating Expenses
FARE
INCOME
78,635,562
39,370,000
INTEREST
25,000
MISC
LOCAL
SUBSIDY
OTHER
SOURCES
200,000
15,366,562
0
OTHER
SOURCES
-
STATE
OPERATING
9,000,000
Amtrak
NS
CSX
Total
6,340,000
3,480,000
7,030,000
16,850,000
|----------------FEDERAL------------------|
STATE
CAPITAL
STATE
STP
5,729,000
5307/5337
8,425,000
OTHER
TOTAL
520,000
78,635,562
Non-Operating Expenses:
Operating Reserve
Debt Svc (Gallery IV) (11 Cabcars)
Debt Svc 60 Railcars (Local)
Debt Svc 60 Railcars (Fed/State/Local)
54,000
1,931,357
110,442
4,673,071
Non-Operating Summary
6,768,870
Total Expenses (Subtotal)
85,404,432
Capital Projects:
Equpment Life Cycle Maintenance
Facilities Infrastructure Lifecycle Maintenance
Security Cameras
NY Ave. Mid-day Train Storage
Enhancement Grant - Security
Assoc. Transit Improvements
Capital Reserve
4,900,000
3,933,000
612,000
21,771,000
105,000
105,000
3,000,000
Capital Project Summary
34,426,000
54,000
77,254
110,442
186,923
39,370,000
25,000
200,000
428,619
309,017
747,691
-
15,795,181
0
-
9,000,000
196,000
157,320
24,480
870,840
4,200
4,200
3,000,000
-
-
-
1,056,708
6,785,708
3,738,457
8,425,000
784,000
629,280
97,920
7,402,140
16,800
16,800
4,257,040
0
-
-
8,946,940
54,000
1,931,357
110,442
4,673,071
1,545,086
5,283,542
-
6,768,870
5,803,542
-
85,404,432
3,920,000
3,146,400
489,600
13,498,020
84,000
84,000
-
21,222,020
4,900,000
3,933,000
612,000
21,771,000
105,000
105,000
3,000,000
-
34,426,000
CMAQ/REF
CMAQ Summary
0
TOTAL
119,830,432
39,370,000
25,000
200,000
-
0
-
0
-
0
0
-
0
0
-
20,052,221
FY17 subsidy
surplus (deficit)
16,428,800
(3,623,421)
FY17 Subsidy (incld.+ 5%)
Suplus (deficit)
17,250,240
(2,801,981)
10
0
-
9,000,000
15,732,648
Soft Capital Projects
Debt Service 11 Cabcars
Access lease funding
Local only
Debt Service 60 Railcars
Fed/State/Local
Debt Service 60 Railcars
Fed/State/Local
Debt Service 60 Railcars
Grant & Project Management
Grant & Project Management
Subtotal
Capital Projects/Earmarks
Federal Cap Program
8,425,000
Program
1,931,357
16,850,000
110,442
1,947,113
2,725,958
650,000
24,214,870
34,426,000
58,640,870
27,025,562
Funding
5337
SSTP/State
5337
5307
5307
-
0
0
0
0
119,830,432
Federal Amt
1,545,086
8,425,000
1,557,690
2,180,766
520,000
State Amt
309,017
5,729,000
311,538
436,153
6,785,708
8,946,940
15,732,648
21,222,020
35,450,562
FY17 Summary Proposed Budget
GL Account
FY16 Operating
FY16 Capital
FY17 Operating
FY17 Capital
Changes
% Chg
Revenue:
Fare Revenue
Miscellaneous Revenue
Jurisdictional Subsidy
Other Sources
Federal/State Subsidy - Operating
Federal/State Subsidy - Capital
Operating/Capital Reserves
Interest Income
38,890,000
165,000
12,991,760
330,000
28,979,851
Total Revenue
82,116,611
3,437,040
1,285,000
50,092,960
-
740,000
20,000
54,815,000
39,370,000
200,000
12,993,200
30,014,251
25,000
82,602,451
4,257,040
30,168,960
-
34,426,000
480,000
35,000
821,440
(1,615,000)
1,034,400
(19,924,000)
(740,000)
5,000
1%
21%
5%
-100%
4%
-40%
-100%
25%
(19,903,160)
Operating/Non-Operating Expenses:
Insurance/Reserve/Mobilization
Executive Management
Chief of Staff/Public Affairs
Marketing
Office of Development
Operations and Communications
Budget and Finance
Communication and Information Technology
Engineering and Construction
Facilities Maintenance
Procurement
Equipment Operations
Safety, Security, and Emergency Preparedness
PRTC
NVTC
Train Operations
Amtrak
Maintenance of Equipment
Amtrak Access Fees
Norfolk Southern Access Fees
CSX Access Fees
5,090,091
1,095,000
459,000
402,200
1,568,500
2,047,250
3,116,000
1,627,000
718,800
4,316,900
459,000
11,176,500
830,500
104,000
80,000
15,060,000
4,640,000
5,871,000
6,390,000
3,340,000
6,960,000
Total Operating/Non-Operating Expenses
75,351,741
CIP Expenditures
Debt Service/Allowance for Doubtful Accts
6,764,870
Total CIP and Other Expenditures
6,764,870
54,815,000
82,116,611
54,815,000
Grand Total Expenses
Difference by Fund
5,516,462
1,134,500
539,500
423,200
971,150
1,992,500
3,496,500
2,266,000
885,100
4,686,650
479,000
11,603,500
1,096,500
104,000
80,000
15,505,000
4,975,000
6,035,000
6,340,000
3,480,000
7,030,000
-
78,639,562
54,815,000
-
34,426,000
(20,389,000)
0
6,764,870
34,426,000
(20,389,000)
85,404,432
34,426,000
(17,101,179)
6,764,870
-
-
Total Difference
-
11
426,371
39,500
80,500
21,000
(597,350)
(54,750)
380,500
639,000
166,300
369,750
20,000
427,000
266,000
445,000
335,000
164,000
(50,000)
140,000
70,000
3,287,821
(2,801,981)
(2,801,981)
(2,801,981)
(2,801,981)
8%
4%
18%
5%
-38%
-3%
12%
39%
23%
9%
4%
4%
32%
0%
0%
3%
7%
3%
-1%
4%
1%
Agenda Item 9-A
Information Item
To:
Chairman Cook and the VRE Operations Board
From:
Doug Allen
Date:
September 18, 2015
Re:
New Spending Authority Report
On May 15, 2015, the VRE Operations Board approved increasing the Chief Executive
Officer’s spending authority from $50,000 to $100,000. It was resolved that any purchase
of greater than $50,000 would be communicated to the Board as an information item.
No procurements, contracts or purchases greater than $50,000 were made on the CEO’s
sole authority during the months of June or July. In August, two purchase orders and one
Independent Contractor Agreement were issued within the CEO’s new spending authority.
They were as follows:

On August 11, 2015, a purchase order was issued to Walco Electric Company in the
amount of $100,000. This is a blanket purchase order that will allow mechanics to
send traction motors to the vendor for repair and return services as needed.

On August 3, 2015 VRE issued a Request for Quotes for seven 55 inch weatherproof
LCD video monitors for the Spotsylvania Station. Seven quotes were received and
on August 13, 2015, VRE issued a purchase order to SDF Professional Computers,
Inc. of Greenville, NC in the amount of $50,393.

On August 25, 2015, VRE executed an Independent Contractor Agreement
amendment with Thomas Frawley increasing the amount from $43,200 to $97,200.
Mr. Frawley is a railroad shop and yard specialist working on behalf of VRE to
develop plans for expanding midday and overnight train storage facilities and to
facilitate associated coordination with Amtrak.
2
Agenda Item 9-B
Information Item
To:
Chairman Cook and the VRE Operations Board
From:
Doug Allen
Date:
September 18, 2015
Re:
2015 Customer Service Survey Results
VRE conducted its annual customer service survey on board all northbound VRE and
Amtrak cross-honor trains on the morning of May 6, 2015. The survey gives riders an
opportunity to evaluate VRE operations and system performance. We received 5,831
completed surveys, which is approximately 61% of the riders that morning.
There are year to year improvements in more than half of the rated categories. Train Crew
performance was rated higher in nearly every category this year with an overall
performance rating of 94%, up from last year’s record high of 92%.
Only nine of the categories were rated lower than last year and most of those had only a
one point drop. We also recognize there are areas where with opportunities to improve.
These include: Quality of Website (New website to launch this fall), and Timeliness and
Quality of Train Talks.
Riders were asked what was most important to them. The top two responses remained:
1. On Time Performance (OTP) – 20.6% of respondents
2. Cost – 20.4%
These were followed by:
3. Frequency of Service – 14.2%
4. Lack of Seats - 10.6%
5. Wifi – 10.4%
79.6% of respondents told us that our service was the same as or has improved over the
past year, while only 2.4% said service level has declined. The other 18% had no comment.
The overall rating for our service has remained flat for three years at 88%.
We are very pleased with the positive scores we receive from our passengers and maintain
our commitment to continuous improvement. Service enhancements such as the new
website, VRE Mobile, the Spotsylvania Station, and the new Fredericksburg Line train are
examples of our commitment to constant improvement of the service and passenger
experience. Future planned improvements include projects like Automatic Passenger
Counters, Parking Counters, and improved platform informational displays.
The survey results are illustrated in the attached summary and full results are available at
www.vre.org as downloadable Microsoft Word or PDF files.
2
2015 VRE Customer Service Survey Results
Customer Service:
1 Responsiveness of VRE Staff
2 Friendliness of VRE Staff
2011
85%
83%
2012
88%
89%
2013
89%
88%
2014
90%
89%
2015
90%
90%
VRE Follow-Up to Delays or Problems
50%
Lost and Found
68%
Usefulness of Rail time
72%
Timeliness of E-mail Responses
51%
Quality of E-mail Responses
56%
Timeliness of Social Media Responses
Quality of Social Media Responses
Quality of Information in RIDE Magazine
Quality of Website
74%
Timeliness of Website Information
67%
Timeliness of Train Talk
65%
Quality of Train Talk
69%
Overall Communication with Passengers
67%
Train Crew Members:
2011
1 Are Knowledgeable About VRE Operations
83%
2 Are Helpful
84%
3 Are Courteous
83%
4 Make Regular Station Announcements
75%
5 Make Timely Delay Announcements
68%
6 Check Tickets Regularly
78%
7 Present A Professional Appearance
91%
8 Overall Crew Performance
85%
VRE Operations:
2011
1 Convenience of Schedules
59%
2 On-time Performance
62%
3 Cleanliness of Trains
89%
4 Cleanliness of Stations
83%
5 Communication between VRE Staff & Riders
71%
6 Automated Telephone System
59%
7 Reliability of Ticket Vending Machines
51%
8 Ease of Buying a Ticket
70%
9 Ease of Using SmartBenefits
61%
10 Station Parking Availability
56%
11 Public Address System On Train
52%
12 Public Address System On Platform
45%
13 Timeliness of Platform Information
40%
14 Personal Security at Station & On Train
63%
15 Safety of Train Equipment
79%
16 Station Signage
67%
17 Lighting at Morning Station
79%
18 Lighting at Evening Station
79%
19 Traffic Circulation
49%
20 Level of Fare for Quality and Value of Service
63%
21 Overall Service Quality
78%
*Percentages represent ratings of "excellent" or "good"
61%
70%
77%
58%
65%
65%
69%
80%
62%
67%
68%
68%
79%
64%
68%
75%
69%
65%
67%
72%
2012
90%
90%
89%
82%
76%
78%
93%
90%
2012
59%
85%
91%
84%
77%
67%
58%
75%
63%
57%
58%
51%
50%
68%
84%
71%
82%
82%
53%
61%
84%
75%
70%
68%
70%
77%
2013
92%
90%
89%
84%
78%
81%
93%
90%
2013
62%
89%
93%
88%
81%
72%
58%
79%
70%
66%
64%
58%
58%
75%
87%
76%
85%
85%
58%
67%
88%
74%
70%
71%
72%
76%
2014
93%
92%
91%
85%
81%
86%
94%
92%
2014
60%
84%
93%
87%
82%
73%
56%
77%
71%
65%
64%
62%
61%
76%
88%
77%
86%
86%
57%
64%
88%
69%
68%
78%
63%
67%
65%
69%
65%
72%
69%
66%
69%
75%
2015
93%
93%
92%
86%
82%
86%
95%
94%
2015
61%
84%
94%
88%
83%
74%
64%
80%
75%
68%
65%
62%
60%
78%
90%
78%
87%
86%
58%
65%
88%
3
4
5
6
7
8
9
10
11
12
13
14
15
Agenda Item 9-C
Information Item
To:
Chairman Cook and the VRE Operations Board
From:
Doug Allen
Date:
September 18, 2015
Re:
Financial Plan Discussion
VRE staff and our consultants, the PFM Group, have been working on the development of a
long term strategic planning model since February 2015. At the July 17, 2015 Operations
Board meeting, the PFM Group provided a presentation on the operating and capital costs
associated with the implementation of System Plan 2040 and a range of other system
alternatives. Because of time constraints, the presentation was not completed and the
Board did not have the planned discussion.
At the Operations Board meeting on September 18, 2015, PFM and VRE staff will provide a
summary of the information prepared for the July Board meeting. The purpose of the
discussion will be to develop a consensus regarding the future service profile for the
system and the desired next steps.
The key conclusions from the financial forecasting effort are summarized below:

Regardless of the service profile:
o Operating expenses will escalate and additional revenue will be needed for
VRE to be financially balanced over the long term.
o A significant level of capital investment is required that cannot be handled
with currently identified capital funding sources.
o NVTA funding has created an imbalance among the VRE jurisdictions in the
ability to identify funding sources for VRE related capital needs.

Raising fares to close the financial gap is not a viable solution on its own.

Higher ridership associated with enhanced service levels could defray some of the
future operating and capital costs.

VRE needs additional dedicated revenue beyond the sources which exist today, even
to maintain the status quo.
The following additional materials are provided:

VRE Financial Plan Analysis
o Appendix A – charts showing the average additional operating revenue
needed for each scenario and the total additional capital revenue needed for
each scenario
o Appendix B - charts showing the additional average annual revenue needed
to meet both operating and capital needs and to create a financially balanced
plan
o Appendix C - an updated version of the presentation prepared for the July
17, 2015 Operations Board meeting, which includes the underlying
assumptions for service level, ridership, operating expense and capital
expenditures imbedded in each scenario
2
VRE Financial Plan Analysis
September 18, 2015
VRE and PFM have been working on the development of a long term strategic
financial planning model since February 2015. The primary objective of this
effort was to provide a financial forecast (revenue, operating expense and
capital expense) to match varying operational and service profiles that VRE
might pursue in its efforts toward implementing its System Plan 2040. Five
scenarios were developed for evaluation.
The purpose of this report is to summarize the forecasted financial results and
primary conclusions that have come from evaluating each of these scenarios.
Scenario Descriptions and Key Findings
Based upon discussion with the Operations Board at their May 15, 2015
meeting and discussions with VRE executive, finance, planning and operating
staff, five scenarios were developed, as described on the following pages.
The underlying assumptions for service level, ridership, operating expense
and capital expenditures imbedded in each scenario are detailed in the three
attachments to this memo. Attachments A and B are a series of bar charts, and
Attachment C is an updated copy of the presentation offered to the Operations
Board at the July 17, 2015 meeting pertaining to this topic. Since the time of
the presentation, additional data has been incorporated in the model. None of
these enhancements substantially alter the outcomes and conclusions in this
memo or previously.
Since the presentation on July 17, 2015, VRE staff have made estimates of
potential discretionary funding that could reduce the unfunded capital
expenditures. These estimates were of various types and include: 1) funding
from discretionary sources such as NVTA and CMAQ, based on historical
experience; 2) DRPT funding of the 3rd track project; and 3) receipt of major
capital investment grants from FTA without which certain large-scale projects
could not be implemented (Long Bridge and Gainesville-Haymarket
extension).
Baseline of Financially Constrained Scenario:
The Baseline Scenario is a financially constrained scenario that demonstrates
what operations would look like with no additional resources beyond 3% fare
and subsidy increases in alternating years. The scenario starts with a
forecasted amount of constrained revenue and then illustrates the operational
impacts of reducing operating expenses and service to match the constrained
revenue. Given the operational nature of this scenario, it was developed
outside the model. Operationally, this scenario results in the unwinding of
VRE’s service, trains being taken out of service and raises concern regarding
VRE’s financial obligations to meet the federal interest in its equipment.
Key Findings for Baseline Financially Constrained Scenario: This scenario
requires a repeating pattern of service reductions to stay within the available
revenue. Service reductions would cause overcrowding, eventually leading to
fewer riders using VRE. The scenario showed VRE ceasing operation by 2033
under this alternative, even with the 3% subsidy and fare increase every other
year.
Ridership Equal Scenario:
This scenario keeps VRE service and ridership levels as they are currently.
Local subsidy escalates at 3% every other year, yet operating costs still exceed
operating revenue. Financial balance is achieved by raising fares to the level
necessary to eliminate any gap between revenue and expense.
Key Findings for Ridership Equal Scenario: This scenario achieves fiscal
balance for operations primarily through higher fares (fares increase to over
$20 in FY40 (in current year dollars)). Such fare increases would likely change
VRE ridership’s profile. This scenario could result in deferred boarding and
shifting subsidy burden to outer jurisdictions. Although operating revenue
and operating expense are balanced, this scenario has future capital
requirements of $2.6B, approximately $770M of which is funded, $1.4B is
assumed to be available from other parties, and $500M remains unfunded.
The unfunded projects are primarily related to match contributions for the
Long Bridge and system projects such as the replacement of rolling stock.
VRE would continue to serve around 19,000 daily riders in this scenario.
Natural Growth Scenario:
This scenario reflects VRE continuing to serve our base market and the
“natural” growth in the region that is expected, based on Metropolitan
Washington Council of Governments cooperative forecasts of regional growth
in population and employment. This is achieved with longer trains, longer
platforms, more parking and expanded rail yards. The Natural Growth
scenario assumes fares and the local subsidy grow at 3% in alternating years.
Key Findings for Natural Growth Scenario: Average additional annual
operating revenue would be needed ($5.2M in the near term, defined as
FY2016-FY2030, to $15.5M in the longer term, FY2031 to FY2040) primarily
for contracted train operations and access fees. The future capital
requirements for this scenario would be $3.2B, primarily for track and signal,
station and parking, and rolling stock investments. Of this $3.2B,
approximately $800M is funded, $1.5B is assumed to be available from other
parties, and $870M remains unfunded. It is important to note that $2.6B of
this capital requirement represents core capital projects that would be
required regardless of the scenario chosen. Even though the number of trains
remains at 32 peak-oriented trips per day, ridership levels would increase to
over 30,000 riders per day in the out years because of the increased capacity.
Modified Service Expansion Scenario:
This scenario builds off the Natural Growth scenario and reflects some of the
System Plan 2040 service recommendations such as adding peak trains
(eventually doubling the number of daily trains to 64) and the GainesvilleHaymarket extension. Even assuming that fares and the local subsidy grow at
3% every other year, this scenario forecasts a need for additional operating
revenue to achieve financial balance.
Key Findings for Modified Service Expansion Scenario: Average additional
annual revenue would be needed ($5.4M in the near term to $20M in longer
term) primarily for contracted train operations and access fees. The future
capital requirements would be $4B, primarily for track and signal, station and
parking, and rolling stock investments. Of this $4B, approximately $820M is
funded, $2B is assumed to be available from other parties, and $1.3B remains
unfunded. The increased capacity with more frequent trains and lengthened
span of service, including more frequent midday service and reverse peak
service, along with the Gainesville-Haymarket extension would result in
approximately 45,000 daily riders.
System Plan 2040:
This scenario forecasts the financial outcomes expected with the full
implementation of VRE’s System Plan 2040. Assuming that fares and the local
subsidy grows at 3% every other year, this scenario forecasts a need for
additional revenue to achieve financial balance.
Key Finding for System Plan 2040 Scenario: Average additional annual
revenue needed would be similar to the previous scenario ($4.2M in the near
term to $16.5M in longer term) primarily for contracted train operations and
access fees. This scenario needs slightly less additional operating revenue
compared to the Modified Service Expansion scenario because the higher
ridership generates more fare revenue. The future capital requirements
would also be similar (to the Modified Service Expansion scenario) at $4.1B,
primarily for track and signal, station and parking, and rolling stock
investments. Of this $4.1B, approximately $830M is funded, $2B is assumed to
be available from other parties, and $1.3B remains unfunded. The increased
capacity with the additional trains and lengthened span of service, including
midday service would result in approximately 52,000 daily riders.
To help with the comparison among scenarios, tables accompany this memo
that show the additional operating and capital funds needed by scenario and the estimated daily ridership associated with each scenario. A table is also
included that provides an estimate of the additional revenue needed on an
annual basis in order to meet a combination of the unfunded operating and
net, unfunded capital needs during the period reviewed.
Conclusions
Without intending to minimize the level of detailed analysis underpinning
each scenario, we offer the following key conclusions and takeaways from the
review of each scenario, individually and as a group:
A. Under any service profile, forecast growth in VRE’s operational
expenses is driven primarily by VRE’s contractual agreements with
its operator and the obligation to pay access fees to host railroads.
Taken together, these categories of cost were budgeted at $31.5 million
in VRE’s FY2016 budget, nearly 40% of its total operating expenses.
Whether VRE pursues an expansion of its service profile or continues
existing service levels, operating expenses will escalate. Even with a
multi-year plan for regular, modest fare increases and regular local
subsidy increases (such as 3% every other year), additional revenue will
be needed for VRE to be financially balanced over the long term.
B. Regardless of scenario, VRE has a core level of capital investment
that is significant. While each scenario has a differing level of capital
investment, all scenarios have a common universe of needed capital
investment totaling $2.6 billion that must be met over the period from
FY2016 to FY2040. This capital need is driven by the VRE-DRPT-CSX
MOU to complete a third main track between Washington, D.C. and
Fredericksburg (including expansion of the Long Bridge over the
Potomac River) and the need to maintain, renew and replace existing
rolling stock over the next 20+ years. VRE is able to fund approximately
$2.2B of the $2.6 billion, on average, between the various scenarios,
using estimates of both federal formula funds and the funds provided by
other parties, including the funds committed by DRPT for the 3rd track
project. However, the core amount of capital expenditures cannot be
fully defrayed with existing sources of funds alone. Moreover, there is a
significant imbalance between the capital funds available for projects
within the NVTA region and those outside the NVTA region. This
imbalance constrains the ability to implement needed capital
improvements in non-NVTA jurisdictions and limits the funds available
to the system as a whole.
C. Raising fares to close the financial gap is not a viable solution on its
own. Ridership Equal assumes that fares are raised to close the financial
gap, resulting in an average fare of $20.56 incurred in FY40 (in 2016
dollars, vs. the current average fare of $7.90) and a reduction in
ridership due to expectations regarding the elasticity of demand. The
other scenarios are based on every other year fare increases of 3%;
however, to close the annual operating financial gaps in the Modified
Service Expansion and System Plan 2040 scenarios using fare increases
alone, average fares would need to be raised to $15.04 and $13.81,
respectively. While these levels of fare increases eliminates financial
deficits for operations, it also drives VRE’s fare box recovery ratio to
68% and would tend to skew the ridership away from those who do not
have transit benefits or are otherwise particularly sensitive to fare
levels. Moreover, VRE has not consistently implemented multiple fare
increases over a short period of time as contemplated by the financially
balanced versions of these two scenarios; in practice, a significant rate
rising regime could result in lower ridership than what the model’s
demand elasticity assumption contemplates.
D. Higher ridership due to enhanced service levels could defray
future operating & capital costs. As noted above in A and B, VRE faces
escalating costs even under the status quo. The financial forecasts for
enhanced service levels in the Modified Service Expansion and System
Plan 2040 scenarios illustrate that VRE could realize certain operating
economies of scale and generate additional revenue from new riders,
despite the higher capital expenditures needed to implement these
scenarios.
E. VRE needs additional revenue beyond the sources which exist
today, even if it is to maintain the status quo. Each of VRE’s existing
sources of revenue has its limitations. State and federal sources of funds
are outside of VRE’s direct control and subject to a wide range of
influencing factors. Local subsidies are limited by individual
jurisdictions’ ability to pay, and their need to balance their local budgets
to meet many competing priorities. Lastly, fares are driven by market
factors, and demand is elastic. A reliable and predictable revenue
stream is needed to meet a forecast of known escalating costs tied to
contractual obligations with VRE’s operator and the railroads. A new
revenue stream is also needed to fund a core amount of capital
expenditures necessary to maintain, renew and replace VRE’s
equipment to assure a state of good repair. A reliable and predictable
revenue stream for both operating and capital (equipment-related)
expenses would permit VRE to be financially sustainable over the long
term.
Next Steps
These scenarios portray different operating profiles that VRE may decide to
pursue and the attendant financial forecasts. The next step in the process is to
develop a consensus regarding the future service profile for the system and
develop a multi-year financial plan which is financially balanced reflecting
that vision. A key part of developing a balanced financial plan will entail the
identification and evaluation of potential new revenue streams beyond those
that VRE currently employs today.
Appendix A
The charts below show the average additional operating revenue needed for each scenario,
and the breakdown of total capital expenditures required to support the buildout of each
scenario.
Average Annual Operating Revenue Needed
$16,000
60,000
$14,000
52,240
$12,000
50,000
40,000
31,138
$8,000
$6,000
$4,000
30,000
$14,679
$12,797
18,822
$12,557
$11,238
$9,347
20,000
$9,116
10,000
$2,000
N/A
$2,523
$-
Ridership Equal
Natural Growth
Assuming 3% EOY Subsidy Growth --FY16-40
Modified Service
Expansion
Assuming 0% Subsidy Growth--FY16-40
$4,000
(millions)
$506
31,138
30,000
$2,000
$1,490
18,822
40,000
$1,266
$871
$2,500
50,000
$1,303
44,947
$3,000
$500
60,000
52,240
$3,500
$1,000
Ridership 2040
Total Capital Expenditures
(FY16-FY40)
$4,500
$1,500
System Plan 2040
$1,945
$1,947
$1,356
20,000
10,000
$767
$806
$823
$828
Ridership Equal
Natural Growth
Modified Service
Expansion
System Plan 2040
$-
-
Unfunded
Potentially Funded
Funded
Ridership 2040
(Riders)
(000s)
$10,000
(Riders)
44,947
Appendix B
The charts below show the average annual additional operating revenue and capital
expenditure funding needed for each scenario in order to create a financially balanced plan.
Total Average Operating Revenue and Capital Expenditure Funding Needed
70,000
60,000
52,240
60,000
40,000
40,000
31,138
61,874
30,000
18,822
10,000
61,234
30,000
(Riders)
(millions)
50,000
20,000
50,000
44,947
20,000
44,175
10,000
20,253
-
Ridership Equal
Natural Growth
Modified Service
Expansion
System Plan 2040
Average Annual Additional Operating Revenue and Capital Expenditures Needed
Ridership 2040
Average Operating Revenue and Capital Expenditure Funding Needed
70,000
60,000
52,240
60,000
44,947
50,000
40,000
40,000
31,138
9,347
30,000
30,000
20,000
10,000
52,118
50,636
18,822
20,253
20,000
34,828
10,000
-
Ridership Equal
Natural Growth
Modified Service
Expansion
System Plan 2040
Average Annual Additional Operating Revenue Needed
Average Annual Additional Capital Expenditures Needed
Ridership 2040
(Riders)
(millions)
50,000
9,116
11,238
Agenda Item 9-D
Information Item
To:
Chairman Cook and the VRE Operations Board
From:
Doug Allen
Date:
September 18, 2015
Re:
Draft 2016 Legislative Agenda
The VRE Operations Board is asked to provide comment on the draft 2016 VRE
Legislative Agenda. The Operations Board will be asked to take action in October
recommending a Legislative Agenda to the Commissions.
Background:
Annually, VRE prepares a Legislative Agenda to communicate VRE
Legislative priorities in coordination with the Commissions and local jurisdictional staff.
Advocacy positions related to specific federal and state legislation are presented.
VRE 2016 Legislative Issues
Federal Legislative Issues:
Issue 1: Congressional Approval of an extension to the deadline for Positive Train
Control (PTC) Implementation

Continue working with the Virginia Congressional delegation and other members of
Congress to extend the PTC deadline.

The Rail Safety Improvement Act of 2008 requires the implementation of
interoperable positive train control systems for passenger trains and trains carrying
hazardous materials by December 31, 2015.

VRE, as well as most commuter rail agencies and Class I railroads, are not able to
comply with the year-end deadline and need to request Congress extend the PTC
implementation deadline to allow time to achieve full implementation of PTC.

Unless Congress acts to extend the December 31, 2015 deadline, VRE will likely be
forced to cease service.
Issue 2: Commuter Benefits Equity

Advocate for legislation to make commuter benefits permanently equal to parking
benefits in the Internal Revenue Code.

On July 21, 2015 the Senate Finance Committee passed a tax extenders bill that
proposed to increase the commuter benefit from $130 to $250/month, retroactive
to January 1, 2015, extending through December 2016. The Senate bill was not
assigned a bill number before they left for recess.

U.S. Representative King (D-NY) introduced H.R. 990 that would permanently
extend the benefit at $235/month with an annual inflation
adjustment. Representative Holmes-Norton (D-DC) introduced H.R. 1046 a
$250/month plus inflation and permanent parity bill.

While VRE is supportive of both bills, H.R. 990 is revenue positive over ten years and
may have a greater chance of success in the House as H.R. 1046 affects the deficit.
Issue 3: Reauthorization of a Long-term Federal Transportation and Infrastructure
Authorization Bill

MAP-21, the current authorization law, expires October 29, 2015.

Support long-term, dedicated funding mechanisms that ensure the solvency and
supplement the Highway Trust Fund and its Mass Transit Account.

Support robust funding levels for Capital Investment Grants (New Starts & Core
Capacity) that may assist VRE in funding major capital expansion projects such as
third tracking on the Fredericksburg Line, extension of service to Gainesville –
Haymarket, and construction of a new or expanded Long Bridge over the Potomac
River from Virginia into Washington, D.C.
2
Issue 4: Commuter Rail Liability Insurance Limit


Work with the Virginia Congressional delegation and other members of Congress to
oppose the increase to the liability cap.
The U.S. Senate passed its version of a six year authorization bill which includes
language increasing the rail liability award cap from $200 million to $295 million
and index it to inflation.

The cost to VRE to increase its liability insurance from $250 million (the current
amount of insurance coverage VRE is contractually obligated to purchase) to $295
million is estimated at $225,000-$250,000 annually.

Beyond the increased operations costs of this proposed legislation, VRE host
railroads and peer agencies oppose the increased cap as it raises the potential for
ever larger and continuous costs and liability requirements for the industry.
Issue 5: Definition of the Northeast Corridor (NEC)

The existing legal definition of the NEC includes the District of Columbia as the
southern end of the corridor (49 U.S.C. 24102(5)), but operationally has not
included tracks south of CP Avenue where Washington Terminal Company (WTC)
territory begins. VRE currently contracts to run on WTC tracks and does not go
north of CP Avenue. The Senate passed H.R. 22 on July 30, 2015 with language that
appears to extend the NEC to encompass the WTC territory.

VRE is concerned that extending the NEC to encompass the WTC territory may
expose VRE to increased costs and complicate our ability to use the Surface
Transportation Board (STB) to intercede on issues regarding access to Washington
Union Station. (The STB does not have jurisdiction over Amtrak but does over the
WTC).

Staff proposes to work with the Virginia Congressional delegation and other
members of Congress to analyze the effects of this language and pursue options that
resolve VRE concerns.
State Legislative Issues:
Issue 1: Protective Floor for the Regional 2.1% Motor Fuels Tax

VRE will work with its parent commissions on the creation of a “protective floor” for
the regional 2.1% motor fuels tax. The existing regional 2.1% motor fuels tax
generated less revenue than expected due to the drop in fuel prices.
3

We support a “protective floor” similar to what the General Assembly provided for
the statewide fuels sales tax as part of HB 2313. The VRE member jurisdictions
where the 2.1% tax is levied have seen a drop in the tax yield of 25% in the past
year. Enacting a “protective floor” for the regional gas tax will provide an equitable
solution for dropping fuel prices and put the regional motor fuels tax in the same
posture as the statewide motor fuels tax.
Issue 2: Explore, Identify and Secure Additional VRE Capital and Operating Funding

As VRE implements the 2040 System Plan, it is developing an accompanying
Financial Plan that identifies capital and operating requirements needed to
implement the plan.

One of the key findings in the Financial Plan is the clear need for increased funding,
even without the proposed expansion of service.

The local jurisdiction members of VRE are financially constrained in their ability to
fund existing VRE operations and capital needs and will experience even greater
challenges in securing funding for operational and capital costs identified in the
System Plan. VRE needs to explore, identify and secure a long term, dependable
funding source for both existing and future operations and capital costs.

Options for increased funding will be pursued to fund future operating scenarios.
Issue 3: State Law related to Architectural and Engineering Term Contracting

Transportation District Commissions, such as NVTC and PRTC, are limited in their
ability to contract for Architectural and Engineering (A&E) services for multiple
construction projects (e.g. General Engineering Contracts) to $500,000 in any one
year period. Since all VRE contracts are on behalf of and in the name of our parent
Commissions, this limitation affects the ability to obtain these services for VRE.

Staff recommends pursuing an amendment to State law to include Transportation
District Commissions in existing exceptions to limits on contracting for A&E services
for multiple construction projects so that the sum of all projects performed in a oneyear contract term can increase from $500,000 to up to $6 million. The suggested
change to §2.2-4303.1.B.2 is insertion of the bolded language:
o 2. Any locality or any authority, sanitation district, metropolitan planning
organization, TRANSPORTATION DISTRICT COMMISSION, or planning
district commission with a population in excess of 80,000, or any city within
Planning District 8, the sum of all projects performed in a one-year contract
term shall not exceed $6 million and those awarded for any airport as
defined in § 5.1-1 and aviation transportation projects, the sum of all such
projects shall not exceed $1.5 million.
4
Agenda Item 9-E
Information Item
To:
Chairman Cook and the VRE Operations Board
From:
Doug Allen
Date:
September 18, 2015
Re:
Website Redesign Update
The redesigned VRE website will launch this fall. Staff will provide a presentation at the
September Operations Board meeting on the new website. VRE tasked Pulsar Advertising
(VREs marketing and communications firm) and its subcontractor, The Redmon Group,
with the following objectives for this effort:

Provide a creative, intuitive and user-friendly experience for VRE passengers across
varying devices (desktop, mobile, tablet) with a responsive design and create the website
with a mobile-first strategy with auto-detection capabilities for smartphones, tablets and
geo-location services

Provide easy and efficient access to the most requested service information and create
effective, compelling communications for breaking news, real-time alerts and important
information

Simplify way-finding through new visual elements and maps

Integrate with social media

Utilize a content management system that will reduce staff time required to update and
maintain the website and reduce operations staff time by providing self-service tools for
customers and information seekers

Design to be accessible for people with physical, sensory or cognitive disabilities

Compatible with major browsers (Internet Explorer, Firefox, Opera, Chrome and Safari)
with a load time of less than two seconds

Integrate a multi-language translator powered by Google Translate to translate pages
2
Agenda Item 9-F
Information Item
To:
Chairman Cook and the VRE Operations Board
From:
Doug Allen
Date:
September 18, 2015
Re:
Gainesville – Haymarket Update
An update on the progress of project development activities for the Gainesville Haymarket
Extension will be provided to the VRE Operations Board. Current activities include:
 Gainesville Haymarket Extension Planning and Environmental Services (AECOM
contract)
 House Bill (HB) 2 Project Application
Agenda Item 9-G
Information Item
To:
Chairman Cook and the VRE Operations Board
From:
Doug Allen
Date:
September 18, 2015
Re:
Management Audit Recommendations Update
At the January 16, 2015 meeting, the Operations Board accepted the Management Audit.
Included in the Management Audit Report were recommended improvements to VRE’s
organizational structure and practices, VRE’s functions and processes, and VRE Operations
Board oversight. Attached are the short-term (less than 12 months) actions recommended
in the report and their current disposition.
Since the July Operations Board meeting, the following action has occurred:
Recommendation: Develop annual meeting schedule of the VRE Coordination Committee
(VCC)/Chief Administrative Officers’ (CAO) Task Force, with meetings in both Woodbridge
and Alexandria to facilitate access by all member jurisdictions.
Action: A schedule of VCC/CAO Task Force meetings to be held at PRTC in Woodbridge has
been developed:




September 15, 2015 – 9am to 11:30am (VCC and CAO Task Force)
December 15, 2015 – 9am to 11:30am (VCC and CAO Task Force)
March 15, 2016 – 9am to 10:30am (VCC only – no CAO Task Force Scheduled)
June 14, 2016 – 9am to 11:30am (VCC and CAO Task Force)
The remainder of the meetings will be at VRE’s offices in Alexandria.
VRE MANAGEMENT AUDIT RECOMMENDATIONS
Short Term (less than 12 months)
Recommendation
Description
VRE Lead
Progress Update
Target Date/ Complete
Organizational Alignment with Strategic Develop a strategic business plan and financial plan to implement the
Plan
2040 System Plan and enhance other business processes, including
performance measures and a multiyear financial plan.
J. Swartz
Work on the financial plan has begun (Board update
at March meeting). A consultant Task Order Request
to support staff in development of the business plan
has been forwarded to the Management Audit
consultant team.
Business Plan: TBD
Financial Plan:
Capacity/Staffing to Support Strategic
Goals
D. Boxer
Hired additional Finance position and three
warehouse positions.
COMPLETE
D. Allen
First meeting was held on Monday, June 15th.
COMPLETE
VRE Structure and Practices
Relationship Between Executive
Directors and CEO
Oversight of VRE by Commisions
VRE Functions and Processes
Purchasing Cards
Procurement Protocals
Implement VRE staff changes as proposed in VRE management’s FY
2016 budget (including transfer of three employees from the rail
maintenance contractor to VRE) and implement a review of staffing
needs as part of the annual budgeting process.
Develop a schedule for regular roundtable discussions between the
Executive Directors, the VRE CEO, and chairs of each Commission and
the VRE Operations Board (or designee) to coordinate issues jointly
concerning VRE and the two Commissions.
Develop and deliver an informational presentation to each Commission
on members’ roles and responsibilities with respect to VRE in their
capacity as Commissioners.
Evaluate advantages and disadvantages of replacing its current credit
cards with purchasing cards.
S. MacIsaac
D. Boxer
Procurement staff analyzing
advantages/disadvantages; writing position paper.
October
New templates are under development
October
Job Descriptions
Update procurement templates to reflect new technologies and expand
use of blanket purchase orders.
Develop Job Descriptions/Classifications for New Staff Positions
A. Gotthardt Finalized for recruitment of new positions
COMPLETE
Training
Develop an annual schedule and guidelines for routine staff training.
A. Gotthardt Under development
December
CEO Evaluation
Legal Councel Review Periods
Document the process for CEO evaluation.
Document timeframes required for items commonly reviewed by legal
counsel to establish reasonable expectations for all parties of how long
reviews should take.
Identify assistant attorneys able to directly field inquiries from VRE staff.
A. Gotthardt Under development
J. Swartz
Reviewing information
TBD
October
S. MacIsaac
On-going
On-going
Examine staffing levels and opportunities to quarter legal staff at VRE.
S. MacIsaac
Reviewing information
September
Legal Councel Review by Assistant
Attorneys
Legal Staffing Levels
G. Hill
Under development
Establish Legal/VRE staff progress
meetings
Establish quarterly progress meetings between legal counsel and the
VRE management team.
J. Swartz
Agreed on one monthly in-person meeting in addition COMPLETE
to weekly conference calls.
Grant Reimbursement
Support PRTC in exploring options to streamline federal grant
reimbursements by better utilizing IT systems such as additional
features of the Microsoft SharePoint program to post a draw calendar
(including staff absences) so timing can be better coordinated between
VRE and PRTC.
As PRTC completes the implementation of a new financial management
system and addresses the noted deficiencies, provide support to PRTC
as needed. Provide a copy of PRTC’s periodic progress reports to VRE
Operations Board members as an information item, so that they are
kept abreast of progress towards resolution of this issue.
D. Boxer
On-going
On-going
D. Boxer
On-going
On-going
Audits
Work with external reviewers (to the extent that VRE is able) to optimize
the efficiency of file sharing and other protocols of the review. Continue
to examine additional steps to productively support external reviews,
including use of technology and additional staffing.
D. Boxer
On-going
On-going
Technology Management
Hire a senior IT manager-level position, as recommended in VRE
management’s FY 2016 budget, and consider the appropriate reporting
relationship for this hire.
Perform a detailed assessment of VRE technology needs to understand
where technology gaps exist.
C. Henry
Sr. IT Manager position hired
COMPLETE
J. Duque
Under development
TBD
S. MacIsaac
Presented in April
COMPLETE
S. MacIsaac
Board Item on May's agenda
COMPLETE
D. Boxer/S.
MacIsaac
Developed by Procurement with guidance from Legal COMPLETE
PRTC Financial System Progress
Technology Assessment
Operations Board Oversight
Board Involvement in Procrement
Provide annual briefing on procurement process.
Process
Procurement Authorization Thresholds Review and adopt recommended procurement authorization and
approval thresholds
Board Packets
Develop revised template for board agenda items regarding
procurements to provide more detail on the fiscal impacts of purchases
and the rationale for the selected procurement approach.
Board Calendar
Add an information item to each month’s Operations Board agenda that
summarizes major issues anticipated for the next month’s meeting, as
well as any known major items planned for discussion at subsequent
meetings over the next 12 months.
CEO Report
Augment the existing CEO Report by including a dashboard performance
summary, executive letter from the CEO, and additional performance
measures for each department tied to the organization’s strategic
business goals.
L. Lamb
A CY2015 Major Board Actions calendar and a
Recuring Annual Board Actions calendar have been
developed and presented to the Operations Board at
the February meeting.
B. Jungwirth Under development
COMPLETE
September
Board Orientation andTraining
Implement a full-day orientation program for new Operations Board
members. Develop comprehensive board orientation and training
materials.
Develop a mailing list to electronically disseminate notice of agendas
and meeting packets and other documents to local agency staff, other
interested stakeholders, and members of the public.
J. Swartz
Board Meeting Public Access
Public Access to VRE Operations Board Meetings: Investigate video or
audio recording meetings and posting video/audio online for access by
the public.
J. Duque
VRE IT staff are working with Commission staff to
October
investigate new technologies that would give VRE this
capability.
CAO Task Force/VCC Meetings
Develop annual meeting schedule, with meetings in both Woodbridge
and Alexandria to facilitate access by all member jurisdictions.
R.Dalton
Schedule complete
Dissemination of Board Information to
Stakeholders
Board Item on June's Agenda
L. Lamb
COMPLETE
COMPLETE
COMPLETE