Saturday, October 15, 2011

Calling on Loudoun Board of Supervisors to Establish an Oversight Committee

My friend Rob Whitfield, who probably knows more about Dulles Reil than any 10 other experts, has put together a resolution that captures many of the worst aspects of the Rail project. Hopefully the taxpayers and toll payers of Loudoun will start to see this project for the money BLACK HOLE it will be if they don't agree with the LoudounOptOut idea.

Resolution Calling on Loudoun Board of Supervisors to Establish an Oversight

Committee to Consider Dulles Rail Phase 2 Funding Issues

WHEREAS, the 11.5 mile extension of the Metrorail system from Reston to Dulles International Airport (Dulles) and into Loudoun County, with stops at Route 606 and Ryan Road, known as Dulles Rail Phase 2, has been planned for many years and  Loudoun County’s Master Transportation and Comprehensive Land Use Plans include provisions for Transit Oriented Development near the proposed stations; and

WHEREAS, despite years of planning and engineering design, the economic and financial feasibility for Dulles Rail Phase 2 has never been demonstrated by any entity, including the Federal Transit Administration, which rejected federal funding in 2002 due to lack of projected rail ridership demand in the Phase 2 service area; and

WHEREAS, the Phase 2 capital cost was estimated at $2.5 billion in 2007 when Loudoun County committed to a capital cost funding plan which would require the County to pay 4.8% of project capital costs and 4.8% of cost overruns on both Phase 1 and Phase 2; and further, the Metropolitan Washington Airports Authority (MWAA) which assumed responsibility for building Dulles Rail in 2006, announced in September 2010 that estimated Phase 2 costs had increased to $3.8 billion, a figure reduced to approximately $3.2 billion in Summer 2011 following various design changes; and

WHEREAS, the two stations and three mile rail extension beyond Dulles will require an estimated $300 million ($400 million if financed by bonds)  in Loudoun County funds for its capital cost share to be provided by an estimated annual $60 million increase in Business, Professional and Occupancy License (BPOL) taxes in the period 2013 to 2018; and Loudoun County’s share of total long term operating costs and deficits are projected to be $30 million annually increasing over time over $1 Billion; and

WHEREAS, reliable estimates of the projected operating revenues and expenses of this Rail project have not yet been provided by the Washington Metro Area Transit Authority, and the magnitude of long term operating fund subsidies required of Loudoun County under the WMATA compact have not been disclosed, but it is known that these funding demands will compete with other County expenses and projects, notably Schools; and

WHEREAS, due to the lack of federal and state funding for the Dulles Rail Phase 2 project, MWAA has relied on Dulles Toll Road tolls as a source of 75% of capital costs which will cause DTR tolls to rise to levels above $10 each way and result in adverse economic impacts for commuters, residents and businesses in Loudoun County, and

WHEREAS, given that no federal or state funding or credit enhancement has been provided to the Phase 2 project to date, the likely overall cost of capital for Phase 2 will be in the 7% to 8% range versus the 6% average cost of capital experienced so far in Phase 1; further, these financing costs are far higher than experienced elsewhere in Virginia for new transportation projects; moreover, due to current bond market conditions,  financial rating agencies are averse to high risk projects which has forced MWAA to delay further financing of the Dulles Rail project until 2012, reflecting growing concern as to the viability of this means of financing for the bulk of the costs; and

WHEREAS,  a 2002 study of the rail ridership potential to Loudoun County did not demonstrate support for construction or operation of rail transit locally in that only 5% of overall local travel demand is expected to be rail based when built; and

WHEREAS, for Dulles Rail Phase II, MWAA intends to mandate the use of union workers and wage provisions which will effectively preclude most Virginia contractors and businesses from participation in Phase II construction, with 96% of Virginia contractors ineligible to compete; and

WHEREAS, MWAA and Loudoun County have agreed that Loudoun County may opt out of Phase II and owe nothing for Phase I costs if the opt out is made within 90 days of 100% preliminary engineering completion, anticipated in early 2012; and

WHEREAS legitimate concerns exist about the rail ridership demand, feasibility, excessive capital and operating costs, viability and wisdom of this project, which will likely result in enormous increases to overall Loudoun County taxpayer and commuter costs and adverse consequences to political candidates in the future who failed to act to prevent excessive costs and government  waste

NOW THEREFORE BE IT RESOLVED, that the creation of an independent , non-partisan Oversight Committee to study the costs/benefits and feasibility of the Dulles Rail Phase 2 project; and consider the net effects of the project on future land use development, environmental impacts, future commuting patterns and current and future travel demands; so that proper study and analysis is completed in time to provide recommendations to the County Board prior to the Spring 2012 deadline for County rail funding decisions; and be it further

RESOLVED, that the people of Loudoun County call upon the Loudoun Board of Supervisors to establish an independent and non-partisan Oversight Committee on or before December 15, 2011 to further study these issues with the goal of the Committee providing guidance to the new Board of Supervisors prior to finalizing its agreement for funding Phase II of the Dulles Rail project.

If you would like a PDF of this or a copy of the Power Point, just leave a comment and ask.

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