Investment Alert: Metroline A Debacle by Design

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“...the thing’s gone south"
You can stop it if you call
your Supervisor NOW.

Congressman Frank Wolf sat on the Elizabeth Dole commission, established in 1984, that recommended the creation of MWAA. Led by prominent area residents committed to Northern Virginia's success, Wolf said, the authority’s triumphs, since its creation in 1987, “have been the reason that many of these companies have come to this region.”

But over the last several years, Wolf said, “the thing’s gone south.” Decisions are made in executive session. There’s no transparency. Its membership is no longer dominated by long time Northern Virginians. At Wolf's request, MWAA is being audited by the Office of Inspector General.

The Loudoun Supervisors (at least a few are), are digging in and asking some good questions. Pro-railer, Ralph Buona,  who should be a numbers guy seems think rail should be a GO because the idea has been  around for so long. In contrast, other Supervisors seem willing to give it a close look and judge it on its merits. Hooray for those reasoning minds on our Board. Big visions are great but 50 years of planning ought to count for nothing. If Metro to Loudoun doesn’t add up, then the Supervisors should KILL IT.

Before calling this puppy an investment, it needs to be analyzed closely. Look at the risk, cost, and gain. The pro-rail drumbeat is just starting out. It will try to imitate grassroots outcry, but don't be fooled. The "Rail Now" insiders are trying to bamboozle us, the restive people, into overlooking the nightmarish problems of this project.


The Loudoun "Rail Now" slogan is reminiscent of Nancy Pelosi’s famous endorsement of her pet project. Pass it NOW before you figure out what the real costs are. Trust us, they say, it will bring  prosperity to your county and hardly cost anything.

                                              Is that Stephen Fuller on the piano?

 If these Metro fans were calling the shots I think this is what we’d see at public input sessions.
Fun aside, a good investment decision requires adequate information and careful analysis of all of the pertinent facts.

Fact: Loudoun County is considering entering a binding agreement. The 3 key partners are.

Partner 1, Loudoun County presently in good financial condition but accumulating debt quickly.

Partner 2, MWAA, the construction manager, is a crony driven, unaccountable, union-friendly, nontransparent, bunch. " playing "...tone deaf politics, lack of accountability..." as Congressman Wolf puts it.

Partner 3, Metro, is in dire financial straits. "...past time for there to be some very substantial management changes at Metro" United States House of Representatives from MD Mikulski, and chronically underfunded.

What could go wrong? In the interest of time, I’m listing a series of quotes, comments, and general information to help inform others of the approaching perfect storm of disastrous consequences which will be the baggage  that comes if Loudoun opts into Metro to Loudoun. Check out the links to get an idea what's coming at us.

 RISKS  COSTS  GAIN

Friday, February 17, 2012, Wolf said, “...the thing’s gone south.” Decisions are made in executive session. There’s no transparency. Its membership is no longer dominated by long-time Northern Virginians. The panel's decision to build the Dulles Metro Station underground, adding $300 million to the project, almost killed funding for Dulles Rail Phase II — until it was overturned under pressure. That’s why, Wolf said, the U.S. Department of Transportation’s inspector general has 13 staffers working on an MWAA audit that he (Wolf) requested. “In the last four or five years, the thing just went astray,” he said. “Something’s gone wrong.”

“Fighting these straightforward and bipartisan changes to the board not only adds to MWAA's expenses, but continues what a recent Washington Post editorial said is ‘a virtuoso display of tone-deaf politics, at least partly as a result of the lack of accountability by the unelected, 13-member board that sets policy for the authority,’” Wolf wrote.

Gaping holes found in Dulles Rail revenue projections

Dulles Toll Road Estimates Disputed
“The legality of those tolls is still under dispute. A lawsuit filed by two Virginia residents arguing that the MWAA cannot legally toll the road....”

Washington’s Metro: Deficits by Design

p2 WMATA’s core funding, which must be appropriated from state and local governments annually, has been put at risk as the states of Maryland and Virginia, the District of Columbia, and surrounding local jurisdictions struggle with their own fiscal difficulties. This vulnerability is a major problem because, unlike virtually every other major transit system in the nation, WMATA receives no dedicated stream of revenue each year for capital or operational costs. 

p10 " ... the majority of the balance comes from direct subsidy payments from the localities, which must authorize these payments each year through their normal budgeting process. This differs sharply from how virtually all transit agencies throughout the country are funded.

p13 It has long been understood, meanwhile, that WMATA’s recurring fiscal struggles owe in large part to its lack of a dedicated funding source. Still, a crisis appears to be looming. Throughout the region, transportation revenues are becoming increasingly scarce. According to the Northern Virginia Transportation Commission, “Many local property
taxpayers are understandably concerned at the need to pay higher real estate taxes... because the state is not meeting its own targets for helping fund transportation.
Scott York is Supporting Rail Before Costs are Known

Dulles Toll Road Estimates Disputed
WASHINGTON — The funding entities “are putting too much reliance on a single [traffic and revenue] forecast ... Maynard said. “We need to have a second look at the forecast by a disinterested party before we commit Dulles Toll Road users to huge toll increases in the years ahead.”

Senator Black urges Loudoun Board Against Metro Phase 2

RISKS   COSTS   GAIN

Maryland workers outnumber Virginians on Dulles Rail project

Chamber Leaders Call On MWAA To Cut Rail Line Costs

The Dulles Rail Financial Disaster Continues

Examiner Local Editorial: Dulles Rail PLA insults Virginians, favors Big Labor

Tony Howard, President & CEO Loudoun County Chamber of Commerce
In a July 5 Letter to the Editor----Given that 90 percent of Phase 2 of the Dulles Rail Project is funded by Virginia's taxpayers, commuters and businesses, I can not fathom why a Loudoun Supervisor would support this type of discriminatory treatment against Virginia's contractors and construction workers.

Dulles tolls could double by next year.

Big Miss here: Metro Matters (System Capital Replacement) $ 5.5M
Page 39 Loudoun Annual Metrorail Costs business plan elegantly omitted  the nominal sum of about $100 million in Metro maintenance costs through 2020. Oops!
plan.

And here: LC Share of WMATA Debt Service $ TBD
...requiring the prime contractor to hire workers from a union hiring hall, the board substituted a 10-percent scoring bonus for bidders whose proposals contain a PLA. That bonus gives companies using a union workforce a significant advantage in the bidding process expected to take place later this year, and it could be sufficient to even deter many non-union contractors from submitting bids.

John Backus, managing partner of Reston-based New Atlantic Ventures says tolls are going to push traffic onto secondary roads, "and it’s frankly going to push startups off the Dulles corridor.”


RISKS  COSTS   GAIN? 



 Toll rate doubling ten months from now (Jan 1, 2013) will dump 18 million trips from the toll road onto other routes next year (p. 6) That's 18% of the traffic moving off the toll road (p. 26)
 • p. 8 Getting the $150million from Virginia would only postpone the toll hikes two years.
 • page 94 Shows that job/population growth
projection for Loudoun has been vastly overestimated

When each phase is completed, it will be turned over to WMATA (aka Metro Board)  to own and operate like the rest of the Metro area's subway system.

Metro pledges to address sexual harassment on system

 DC Reports Cite the Most Dangerous Metro Stations and Intersections
Though crime is down in Metro stations and on buses, the statistics are still startling.

Metro knew of brake problems for years, transit officials say

Report: Shady Grove project to bring in less than expected

Friday, December 11, 2009
"It's clearly past time for there to be some very substantial management changes at Metro," Barbara Mikulski delivered the most forceful criticism of Metro since a June crash in Northeast Washington that killed nine people. Since then, two workers were fatally injured in incidents on the tracks. And late last month, one Metro train smashed into another at a rail yard in Northern Virginia, injuring three workers and causing at least $9 million in damage.

D.C. Metro's struggle to communicate 'a deterioration of service'

Dulles Rail: Call it Kaine's Katastrophe w/video

Urban transit
Six Myths of Rail Transit by Randall O'Toole
Rail transit is not cost-efficient and it generally fails to attract significantly more riders than improvements in bus service. Yet rail advocates have many other arguments for why cities should build rail transit systems. Here are six popular, but erroneous, reasons that are often given for building rail lines—

Six myths of rail transit.

1. Economic Development

2. People Won't Ride Buses

3. Rails Avoid Congestion

4. Political Equity

5. It Works in Europe

6. Protecting the Environment

Thanks to Kaine, Dulles Toll Road commuters are now facing steeply escalating tolls that will reach as high as $10 one way by 2020.

Poem of the day dedicated to RB:

"Better to be an amateur  mathematician,

 than a shortsighted planner

or a crooked politician."

David LaRock, 
Hamilton