CAO Task Force
Review/Recommendations
FY 16 VRE Preliminary
Budget as of 12-4-2014
Executive Summary
December 10, 2014
CAO Task Force Recommendations






Supports maintaining the total jurisdictional subsidy at $16.4 million (Option 1). Total fuel tax
revenues which support VRE subsidies in the PRTC jurisdictions are projected to decline
considerably in FY 15 and FY 16.
Supports a 4% fare increase beginning July 1, 2015 (FY 16). Offsetting revenue is needed due to
reductions in budgeted state operating assistance of $2.2 million from FY 15.
Supports the addition of 6 positions (of which 3 in equipment operations are cost neutral replacing
contract positions). VRE has not added a position which was not cost neutral since FY 2008. VRE’s
total budget has increased from $64.4 million in FY 08 to $128.8 million in FY 16. The CIP during
the same time period has increased from $5.6 million to $46.3 million accounting for about 2/3rds of
this total increase. During this time there have been increases in the scope and complexity of federal
reporting (both FRA and procurement) requirements and in the volume of purchasing (Sr. Contract
Specialist/Financial Analyst/Security Specialist positions).
The current system plan 2040 is unconstrained. VRE needs to develop a constrained system plan
that balances what the jurisdictions can commit to fund with the fare increases the riders are willing
to bear. The constrained system plan should show basic needs and then system expansion projects.
The appropriate amount of a local capital contribution by the jurisdictions is unknown. VRE needs
to better define the operating and capital costs of the system plan before asking the jurisdictions to
commit funding over the six year plan.
Facility and programmatic costs of capital projects need to be included in six year plan projections.
Absence of these costs understates six year plan estimates of expenses and subsidy
Date: 12/17/2014
1
VRE FY 16 Proposed Budget
 Total Enterprise Budget (Operating/Non-Operating/Capital)
$128,431,611 an increase of $442,010 or 0.3% over the FY 15
adopted amount of $127,989,601
 FY 16 Operating Expenses (excludes non-operating costs such as debt
service, operating reserve and capital items) totals $75,401,741 an
increase of $1,091,542 or 1.5% over the FY 15 adopted amount of
$74,310,199
 FY 16 Non-Operating Expenses totals $6,714,870 a decrease of
$554,532 or (7.6%) over the FY 15 adopted amount of $7,269,402
 FY 16 Capital budget totals $46,315,000 an decrease of $95,000 or
0.2% over the FY 15 adopted amount of $46,410,000
Includes $8.8 million in CMAQ/REF funding
Date: 12/17/2014
2
FY 16 Budget - Expenditures

Increase of 6 FTE’s – Three FTE’s in Equipment Operations are cost neutral


three FTE’s in accounting, contract administration and safety & security
Additional Fredericksburg line train
 Funded for 9 months in FY 15
 Additional net cost for the remaining three months in FY 16

$305K.
$473K
Other major expenditure increases over the FY 15 adopted operating budget
include:



Repairs & Maintenance - Locomotives (includes shipping)
Repairs & Maintenance – Railcars
Repairs and Maintenance
 Custodial and snow removal
 Stations – Non-Routine Maintenance
 Yards – Non-Routine Maintenance
 24/7 Coverage for yard security at both yards
 Additional office rental space
 Salaries & Benefits:
 2% placeholder COLA in FY 16
Date: 12/17/2014
$415K
$360K
$150K
$120K
$ 80K
$105K
$120K
$101K
3
FY 16 Budget – Reductions
 Reductions in Expenditures from FY 15 Adopted
 Mobilization Costs (one-time) Rail & Equipment




Operations
Lease of Railcars
Diesel Fuel
Budgeted Operating Reserve Transfer
Insurance
Date: 12/17/2014
$2M
$821K
$622K
$554K
$250K
4
Fare Citations – Sept 13 – Aug 14
Date: 12/17/2014
5
Fare Citations
Date: 12/17/2014
6
State Operating Assistance
 FY 15 actual state operating assistance received was slightly
more than $9 million
 FY 16 state operating assistance estimated at $8,100,000
 Estimated reduction from FY 15 actual is approximately 10% due to
declining Mass Transit Fund revenues projections from DRPT
Date: 12/17/2014
7
Federal & State Capital Assistance
VRE CIP excluding CMAQ/Capital Reserve Contribution/Project development
FY 15
Adopted
Federal Formula Funding (5307/5337)**
State Capital
Local Match
Capital Reserve/ Prior Year Surplus*
Total Capital Program
$23,996,000
$13,068,200
$1,123,800
$832,000
$39,020,000
% FY 15
Total
61%
33%
3%
2%
100%
FY 16
Proposed
$15,355,800
$17,813,160
$437,040
$945,000
$34,551,000
% FY 16
Total
44%
52%
1%
3%
100%
Change
FY15/16
($8,640,200)
$4,744,960
($686,760)
$113,000
($4,469,000)
Percent
Change
-36.0%
36.3%
-61.1%
13.6%
-11.5%
* FY 15 inlcudes $832,000 from capital reserve; FY 16 includes $945K from FY 14 surplus
**FY 15 includes $1,520,000 from prior year federal funds

In FY 15 – a total of $1.96 million in local monies leveraged $39 million in capital
projects

In FY 16 – a total of $1.4 million in local monies leverages $34.6 million in capital
projects
Date: 12/17/2014
8
FY 16 CIP
 FY 16 CIP funds the following $46.3 million in projects:
 9 Railcars - $23.6M
 Facilities Infrastructure – $5.4M
 Equipment Storage – $3.4M
 Life Cycle Maintenance - $1.9M
 Security Enhancements - $100K
 Transit Enhancements - $100K
 Capital Reserve Contribution - $3M
 Lorton Platform (CMAQ) - $1.5M
 Rippon Platform (CMAQ) - $2.3M
 Brooke/Leeland (REF) 2ed Platform - $5M
Date: 12/17/2014
9
FY 16 CIP- Capital Reserve
 Capital Reserve Contribution - $3 million per year




Source of Funds – 100% Local Subsidy
Completion of projects that require further funding
Source of additional local match if necessary to show local commitment
Advance projects related to Phase II of System Plan
Limited federal & state funding for project development
Examples (order of magnitude) include:




Unforeseen issues with Environmental Impact Statement for the Long Bridge may
require additional investments (up to $1M)
Development of FTA Core Capacity application (up to $1M)
CSX Fredericksburg 3rd track project ($4M -$15M)
Potomac to CP VA corridor in the District ($3M - $15M)
 Projects not eligible for or suited to grant funding
Date: 12/17/2014
10
FY 16 CIP – Capital Reserve
 Capital Reserve – Uncommitted Balance




End of FY 13 - $3.4 million
End of FY 14 - $8.6 million
End of FY 15 - $13.1 million (approx.)
End of FY 16 - $16.1 million (approx.) with $3 million in local capital
contribution
FY 16 estimate does not include any additional contribution from FY 15 surplus
(if available)
FY 16 does not include approximately $1 million in capital reserve funding
budgeted in FY 15 that will not be need for start up costs for a new rail operator
Most of the capital reserve contributions from FY 08 through FY 14 have come
from surplus funds
 How much capital reserve is enough?
 VRE has indicated that it will prepare a financial plan in 2015 that better
defines operating and capital needs
Date: 12/17/2014
11
Jurisdictional Subsidy History
Jurisdictional Subsidy
$20,000,000
25,000
$18,000,000
A
20,000 v
e
r
a
15,000
g
e
$16,000,000
R
i
d
e
r
s
10,000
h
D
a i
i p
5,000
l
y
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
$0
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
30
32
32
32
32
30
30
30
30
30
32
32
32
34
34
Trains Trains Trains Trains Trains Trains Trains Trains Trains Trains Trains Trains Trains Trains Trains
Local Subsidy
Date: 12/17/2014
ADR
12
Juris Subsidy- Option 1 No Increase
Proposed
FY 2016
Budget Based
on 10/1/14 Survey
Actual
FY2015
Subsidy
Net Change
$
Alexandria
Arlington
Fairfax County
Fredericksburg
Manassas
Manassas Park
Prince William County
Stafford County
Spotsylvania
$133,894
$195,897
$4,847,285
$439,366
$766,491
$576,699
$5,309,674
$2,855,607
$1,303,888
$133,894
$195,897
$4,852,953
$581,244
$686,944
$401,762
$5,485,334
$2,689,391
$1,401,382
$0
$0
($5,668)
($141,878)
$79,547
$174,937
($175,660)
$166,216
($97,494)
0.00%
0.00%
-0.12%
-24.41%
11.58%
43.54%
-3.20%
6.18%
-6.96%
0.81%
1.19%
29.50%
2.67%
4.67%
3.51%
32.32%
17.38%
7.94%
0.81%
1.19%
29.54%
3.54%
4.18%
2.45%
33.39%
16.37%
8.53%
Total
$16,428,801
$16,428,801
$0
0.00%
100.00%
100.00%
Date: 12/17/2014
Net Change Percent of
% FY 16 Subsidy
Percent of
FY 15 Subsidy
13
Juris Subsidy Option 2 - 2.3% Increase
Proposed FY 2016
Budget Based
on 10/1/14 Survey
Actual
FY2015
Subsidy
Net Change
$
Net Change
%
Alexandria
Arlington
Fairfax County
Fredericksburg
Manassas
Manassas Park
Prince William County
Stafford County
Spotsylvania
$136,907
$200,305
$4,920,392
$456,122
$785,497
$589,830
$5,424,430
$2,932,764
$1,352,553
$133,894
$195,897
$4,852,953
$581,244
$686,944
$401,762
$5,485,333
$2,689,391
$1,401,382
$3,013
$4,408
$67,439
($125,122)
$98,553
$188,068
($60,903)
$243,373
($48,829)
2.25%
2.25%
1.39%
-21.53%
14.35%
46.81%
-1.11%
9.05%
-3.48%
Total
$16,798,800
$16,428,800
$370,000
2.25%
Date: 12/17/2014
14
Jurisdictional Subsidy – 5 Yr History
Subsidy
FY 12
FY 13
FY 14
FY 15
FY 16
Alexandria
Arlington
Fairfax County
Fredericksburg
Manassas
Manassas Park
Prince William County
Stafford County
Spotsylvania
$129,944
$190,117
$4,876,961
$420,566
$817,993
$566,504
$5,859,007
$2,505,805
$577,020
$133,894
$195,897
$4,511,265
$339,064
$642,662
$441,702
$4,761,324
$1,892,640
$3,510,352
$133,894
$195,897
$4,747,684
$427,728
$757,804
$574,709
$5,748,203
$2,529,281
$1,313,600
$133,894
$195,897
$4,852,953
$581,244
$686,944
$401,762
$5,485,334
$2,689,391
$1,401,382
$133,894
$195,897
$4,847,285
$439,366
$766,491
$576,699
$5,309,674
$2,855,607
$1,303,888
Total
$15,943,917
$16,428,800
$16,428,800
$16,428,801
$16,428,801
Date: 12/17/2014
15
Proposed Fare Increase
 Option 1 - 4% fare increase or Option 2 – 2.3% fare increase
 Average Daily Ridership is 19,300 under either option
Fiscal
Year
% Fare
Increase
Adopted
ADR
Actual
ADR
% Over/
Under
System
OT P
--
Notes
90% OT P Fredericksburg line; 91% Manassas
line
86% OT P Fredrericksburg line; 94% Manassas
line
2002
4.00%
10,000
11,547
15.5%
2003
0.00%
13,100
13,231
1.0%
--
2004
4.00%
14,100
14,534
3.1%
86.8%
2005
6.00%
15,000
15,086
0.6%
86.1%
2006
2.75%
15,600
14,667
-6.0%
78.6%
2007
6.00%
17,400
13,647
-21.6%
84.8%
2008
0.00%
15,200
14,662
-3.5%
85.2%
2009
10.00%
14,700
15,754
7.2%
88.6%
2010
6.00%
15,600
16,673
6.9%
87.6%
2011
0.00%
16,200
18,377
13.4%
87.2%
Added train 300; lengthened consists, step up
fare reduced to $5 per trip
2012
0.00%
17,350
19,088
10.0%
95.3%
Federal T ransit Benefit decreased to $125
month in Jan 12
Step up fare reduced to $3, added 1 car to
Fredericksburg and 2 cars to Manassas lines;
T ransit Benefit increased to $240 mo Jan 13
2013
3.00%
19,000
18,878
-0.6%
95.8%
2014
4.00%
20,100
18,119
-9.9%
93.8%
2015
0.00%
19,200
2016
4.00%
19,300
Date: 12/17/2014
P oor OT P due to CSX trackwork
Federal T ransit Benefit Increased to $230
month in March 09
T ransit Benefit reduced Jan 2014 to $130 mo
Additional 8 car train to Fredericksburg begins
in FY 15
Spotsylvania Station opens in July 2015;
Amtrak step up fare increases from $3 to $5
16
PRTC Fuel Tax Estimates
 Total PRTC jurisdictional fuel tax revenue estimates (FY 15-FY 20) have
decreased considerably compared with the projections used in the FY 15
adopted budget
 Total fuel tax revenue decreased by $24 million or 14.3% from $168.7 million
to $144.7 million
 Nationwide gasoline consumption is down approximately 5% since 2006 even
though the economy has grown 25%
Change is due to increased use of electric/hybrid cars, changing driving
patterns resulting in fewer miles and more fuel efficient cars
 Energy Information Administration predicts that nationally the average price of
gasoline will be below $3.00 per gallon in 2015
 Gas prices down $0.60 since last Spring
Date: 12/17/2014
17
PRTC Fuel Tax Estimates
Fuel Tax Revenues
Budget to Actual
Twelve Months Ended June 2014
Prince William County
Stafford
Manassas
Manassas Park
Fredericksburg
Spotsylvania*
Total
FY14 YTD
Budget
15,247,882
5,186,886
1,430,666
941,227
1,792,676
4,361,503
28,960,840
FY14 YTD
Actual
15,989,841
4,946,890
1,505,494
908,209
2,138,616
9,410,212
34,899,262
Variance
%
5%
-5%
5%
-4%
19%
116%
21%
Variance
$
741,959
(239,996)
74,828
(33,018)
345,940
5,048,709
5,938,422
* includes $3.5M adjustment for revenue received in prior years in FY 14
Date: 12/17/2014
18
PRTC Fuel Tax Estimates
 Consumption (forecast by Taxation) price, and changes in jurisdictional
shares impact revenue projections
 Statewide consumption is forecast to decrease slightly from FY 14 to FY 15
and then increase
 Four of the six PRTC jurisdictions adjusted share of the total PRTC fuel tax
revenue decreased from
FY 13 to FY 14






Prince William
Stafford
Manassas
Manassas Park
Fredericksburg
Spotsylvania
52.65%
17.91%
4.94%
3.25%
6.19%
15.06%
50.47%
15.65%
4.88%
2.94%
6.66%
19.40%
 The combination of lower prices and smaller share of the total resulted in
all jurisdictions estimated revenue decreasing from FY 15 with the
exception of Spotsylvania
Date: 12/17/2014
19
PRTC Fuel Tax Estimates
Updated Projections (with NYMEX pricing as of 12/04/14) for Use in FY 16 Budget
FY15
$2.77
12,321,886
3,820,834
1,191,417
717,780
1,625,991
4,736,370
24,414,278
Price per Gallon
Prince William
Stafford
Manassas
Manassas Park
Fredericksburg
Spotsylvania
Total
FY16
$2.53
11,464,352
3,554,926
1,108,501
667,826
1,512,831
4,406,745
22,715,181
FY17
$2.56
11,726,766
3,636,297
1,133,874
683,113
1,547,459
4,507,614
23,235,123
FY18
$2.59
11,996,530
3,719,947
1,159,958
698,827
1,583,057
4,611,307
23,769,626
FY19
$2.67
12,631,332
3,916,789
1,221,338
735,806
1,666,825
4,855,317
25,027,407
FY20
$2.70
12,889,582
3,996,869
1,246,308
750,849
1,700,904
4,954,585
25,539,097
FY18
$2.98
14,644,423
4,981,607
1,374,044
903,977
1,721,728
4,188,889
27,814,668
FY19
$2.95
14,696,604
4,999,357
1,378,940
907,198
1,727,863
4,203,815
27,913,777
FY20
$2.95
14,784,783
5,029,354
1,387,214
912,641
1,738,230
4,229,038
28,081,260
88,846,151
30,222,879
8,336,181
5,484,331
10,445,540
25,413,544
168,748,626
(1,895,201)
(1,032,485)
(140,906)
(161,792)
(37,326)
725,547
%
%
-12.8% (15,815,703) -17.8%
-20.5% (7,577,217) -25.1%
-10.2% (1,274,785) -15.3%
-17.7% (1,230,130) -22.4%
-2.1%
(808,473) -7.7%
17.2%
2,658,394 10.5%
Total
73,030,448
22,645,662
7,061,396
4,254,201
9,637,067
28,071,938
144,700,712
Projections Used in FY15 Budget (with NYMEX pricing as of 11/26/13)
FY15
$3.24
15,236,014
5,182,849
1,429,552
940,495
1,791,281
4,358,108
28,938,299
Price per Gallon
Prince William
Stafford
Manassas
Manassas Park
Fredericksburg
Spotsylvania
Total
Difference
Prince William
Stafford
Manassas
Manassas Park
Fredericksburg
Spotsylvania
(2,914,128)
(1,362,015)
(238,135)
(222,715)
(165,290)
378,262
Amount Difference
FY16
$3.11
14,804,644
5,036,110
1,389,078
913,867
1,740,565
4,234,719
28,118,983
%
-19.1%
-26.3%
-16.7%
-23.7%
-9.2%
8.7%
(4,524,021) -15.6%
(3,340,292)
(1,481,184)
(280,577)
(246,041)
(227,734)
172,026
FY17
$3.03
14,679,683
4,993,602
1,377,353
906,153
1,725,873
4,198,975
27,881,639
%
-22.6%
-29.4%
-20.2%
-26.9%
-13.1%
4.1%
(5,403,802) -19.2%
Date: 12/17/2014
(2,952,917)
(1,357,305)
(243,479)
(223,040)
(178,414)
308,639
%
-20.1%
-27.2%
-17.7%
-24.6%
-10.3%
7.4%
(4,646,516) -16.7%
(2,647,893)
(1,261,660)
(214,086)
(205,150)
(138,671)
422,418
%
-18.1%
-25.3%
-15.6%
-22.7%
-8.1%
10.1%
(4,045,042) -14.5%
(2,065,272)
(1,082,568)
(157,602)
(171,392)
(61,038)
651,502
%
-14.1%
-21.7%
-11.4%
-18.9%
-3.5%
15.5%
(2,886,370) -10.3%
Total
(2,542,163) -9.1% (24,047,914) -14.3%
20