Reston Spring

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Thursday, December 22, 2016

Another RA Tetra fail: Mediaworld informs the RA Board it can not come to terms with RA on the independent Tetra review.

As the letter from Mediaworld President Sridhar Ganesan below indicates, Mediaworld has not been able to negotiate a reasonable $1 contract with RA to review the Tetra acquisition as approved by the Board months ago.  The letter highlights Mediaworld's continuing willingness to carry out the work under less restrictive and risky terms as discussed in the last Board meeting, but so far RA has been unable to present such a contract.

RA overshoots May Tetra budget for 2016 by $29,000.

After finally admitting that renovations for Tetra were over budget by $430,000 in May, RA put in place a new budget--new revenue stream, new cost estimates, top to bottom, and six months later RA expects to be another $29,000 over its new Tetra budget--an additional seven percent in seven months, including nearly $6,000 over its renovation budget.

In the end, Tetra's $902,000 net cash flow loss cost each RA member household about $41 this year alone.  

At its December 19th meeting earlier this week, the Fiscal Committee received its November financial report on Tetra (see p. 11) mandated by the RA Board.  What it shows when you cut through all the details is that RA will spend more than $29,000 over the 2016 budget it set for itself just seven months ago.  Here's a spreadsheet that summarizes that report:

Several observations are possible by looking at this table:
  • RA was absolutely horrible at budgeting program revenues for Tetra with revenues coming in at less than half the $175,000 budgeted.  This was clearly not a serious effort at budgeting, merely an exercise at calculating revenue potential assuming virtually every open minute of every day was scheduled with some revenue generating activity.
  • Tetra's net operating loss was more than five times greater than had been budgeted in large part because of the horrible revenue forecast.  The cost underruns are roughly proportional to the revenue underruns.
  • RA clearly had a contract with the general contractor for interior work because there is no variance in cost over the year.  Given that the first expenditures under this contract were made in February 2016 and completed by July, RA knew that this $504,000 contract was more than double the $250,000 forecast in RA's voting guide a year earlier.  Still, it chose not to disclose this huge cost overrun until after the 2016 RA Board elections in March--a huge assist to incumbents running for re-election (Eve Thompson and Dannielle LaRosa)--as we suggested in our proposed independent audit agenda.
  • All told, RA spent nearly one million dollars on Tetra this year ($984,929) which was actually under budget, but only because the lack of program revenues meant a lack of program costs.  This is hardly anything RA should be proud of.  
Aside from the horrible mishandling of the Tetra purchase and renovation, this cash flow analysis suggests that RA can not put together a reasonable budget for a new activity over even a short period of time.  Clearly, more work is in order to straighten out RA's house--as well as Tetra.  

Friday, December 16, 2016

Independent Review of Reston's Lake House Questioned, Reston Connection, December 14, 2016

The Reston Connection has a good article on the continuing saga of the Tetra review contract negotiation in its latest edition.  Here's how it begins:
The Reston Association Board of Directors met on Dec. 7 to discuss contract issues with the company that was selected to review the association’s handling of the Lake House, a property acquisition and renovation that went over budget and has yielded revenue shortfalls ever since it was purchased in July 2015 for $2.6 million.
"We are trying to get this done as soon as possible,” says Sridhar Ganesan, CEO of MediaWorld Ventures, LLC and president of the Reston Citizens Association.
His company agreed to conduct the review for a $1 fee and was selected in September by a special committee that solicited and screened proposals for the RA. The contract is still being negotiated two-and-a-half months later. . . .
Click here to read the rest of this article,

Tuesday, December 13, 2016

The Peanut Gallery Perspective: A Summary and Comment on the RA Board Meeting to Discuss Continuing Difficulties in Signing a Tetra Review Contract

On Wednesday, December 7, 2016, the 75th anniversary of the surprise Japanese attack on Pearl Harbor, the RA Board of Directors held a special meeting to, as the agenda stated, conduct an “Executive Session to Discuss Contract issues with MediaWorld, the Tetra/Lake House Review Designee.”  During the course of that meeting, Board member Eve Thompson referred to the five community members there as the “peanut gallery.”  She was quickly rebuked by Board member Sherri Hebert, who noted they were RA members whom the Board represented.  Nonetheless, in the absence of streaming or videotaping of the meeting and knowing full well that the minutes will not reflect the full substance of the meeting, we thought it would be useful to present a detailed summary and occasional commentary from the peanut gallery’s perspective.

Those in attendance included five RA community members, the five members of the Mediaworld team selected to carry out the Tetra review, Eric Carr who headed the Board-appointed Tetra Review Committee contractor selection team and committee member Janine Greenwood, all the members of the Board of Directors, and RA attorney Ken Chadwick.  Not present was CEO Cate Fulkerson. 

Maybe most importantly, after the pro forma call to order, opening remarks, and adoption of the agenda, the five community members there all commented on the agenda.  Specifically, they all condemned the proposed use of an executive session (where there would be no community witnesses) to discuss the Tetra review contract issues.  Attached are the comments of Irwin Flashman and Reston 20/20’s statement is posted on this blog.  James Dean focused the need for an open discussion to preserve the credibility of the contracting effort, Ambassador Dennis Hays highlighted the ebbing and flowing of the Board’s seeming willingness—currently ebbing--to conduct a thorough, credible review of the missteps in the Tetra acquisition and renovation process, and Alison Kamat worried that the prolonged contracting process would continue into next year’s RA Board elections unless the contract issues were quickly resolved.  All of them advocated unequivocally for an open meeting that evening to discuss the issues that were preventing the signing of a $1 contract with Mediaworld to carry out the work.

Thereafter, Vice President Mike Sanio moved that the Board move into executive session to discuss the contract issues with Mediaworld.  The motion was seconded by Eve Thompson.  In the ensuing discussion of the motion, only Board member Eve Thompson—looking at Chadwick—said she thought there would be some benefit from an executive session.  Neither President Ellen Graves nor Mike Sanio said anything substantive regarding the merits of the motion.  All the other members of the Board, with varying degrees of enthusiasm, saw little merit in an executive session and much credibility added to the initiative by an open discussion of the contract issues.   The motion to move to executive session was defeated by a near unanimous vote with only Graves abstaining.

Mediaworld and retired World Bank economist Dick Stillson led off the discussion of the issues by highlighting the need for the contractor’s independence to assure the credibility of the product they created.  He highlighted three specific terms in the 17-page contract that undercut this independence: 

  1. Mediaworld's notes and internal communications were to be considered RA's property
  2. RA could decide who could and could not be on the team.
  3. RA had the authority to modify the report the team submitted and publish it.

Thompson responded that the Tetra review product needed to be credible and, therefore, Mediaworld should not be allowed to change its contract team.  Team member John Higgins, 18-year Treasurer for RA and a former Board member, responded that Mediaworld had no intention of changing the team membership although they may need to bring in someone for specialized expertise.  Mediaworld CEO Sridhar Ganesan objected that contract language allowed RA to remove a team member; that should be Mediaworld’s decision.  Stillson highlighted that, if an employee misbehaved, RA could bring it to Mediaworld's attention and they could dismiss the team member--or RA could cancel the contract. But RA can't pick and choose Mediaworld’s team members and still characterize the effort as independent.

Greenwood raised some extreme hypothetical examples of potential misbehavior by a team member (e.g.—misogynistic comments to RA staff) and suggested RA should be able to terminate their involvement in such cases.  Mediaworld team member Jill Gallagher, a consultant with years of experience managing contracts with non-profits both as contractor and client, added that there were no scenarios in the contract, just the demand for blanket authority to dismiss team members.  She added that, in her experience, the draft contract was not a statement of trust in Mediaworld.  

In an interlude, Chadwick noted that there had been ample time to work out the issues on the contract, and that he had offered several times to meet with Ganesan.  He had never said there was a line in the sand.  Ganesan responded that a memo Chadwick sent was the “red line.”  Chadwick added that he was here to facilitate the contract, which is why they were having the Board meeting.  Danielle LaRosa, Board Treasurer, added her concern about the time it was taking in a comment to Ganesan.  Thompson later added that RA members are sensitive about the delays in the contract, seeing it as Board-driven, but it is really two-sided.  (Note:  Actually, the delays have been driven by RA’s highly restrictive 17-page draft contract and unwillingness to discuss, much less negotiate, its terms at least until this meeting.)

Ganesan noted that he has a number of other ongoing contracts, largely out of the country, and he is not waiting by the phone for a call to set up a meeting.  He added that he would be glad to share phone and email logs to show Mediaworld hadn’t be dragging its feet. He suggested Chadwick have more flexibility in suggesting meeting times.  He added that he wanted to move forward and, that once signed, the team would have a schedule that it would meet for delivery of the review. 

Hebert, waving a signed RA contract with Quantum Governance (QG) (who conducted a study for RA on ethics), noted that QG contract served the same kind of purpose as the one being negotiated with Mediaworld—and it was only four pages long.  Moreover, all the issues that were being raised in this meeting had been covered in just one paragraph in the QG contract.  In both cases, RA was looking for process improvement, so why shouldn’t the QG contract serve as model for the one with Mediaworld.  She added, the more the Board controls this, the worse the optics.   Her question and comments were excellent, undermining just about every argument for a 17-page contract with myriad restrictions, caveats, and penalties.

Board member Ray Wedell picked up on Hebert’s comment, noting that Mediaworld had been picked after a rigorous review among several qualified competitors, so RA needs to get the contract sign and leave them alone.  Trust them to do their job and deal with any issues as they come up.

Board member Julie Bitzer wondered about the issue of Mediaworld indemnifying RA.  Ganesan responded that MW should be indemnified by RA.  Hebert noted that the QG contract had one sentence on the matter indemnifying QG except in cases of gross negligence and willful misconduct. 

Following up on a question from Graves, “What do you mean by internal communications?,” the discussion then turned to whether the Mediaworld team’s internal notes and communications were their property or needed to be turned over to RA.  Stillson noted this meant communications within the team.  LaRosa turned to team member Higgins and asked, “Are auditor’s notes and communications their property?”  Higgins responded that the notes were the auditor’s.  Hebert asked the same about legal notes to Chadwick, who responded they were the attorney’s.   In fact, no one in the room could identify a contract in which a contractor’s internal notes and communications were the property of the client. 

Gallagher then took up the issue of confidentiality.  She noted that the contract needed to note (a) that the team was working with confidential documents and (b) that those should not be shared.  But this contract called for individual members of the team to be personally libel for any mishandling of RA’s documents, an unprecedented demand.   Ganesan followed up by noting that the team members are quite willing to sign a confidentiality agreement.

Gallagher added that she has never before received a 17-page contract in her extensive contracting experience.  She said it felt as long as an inter-agency agreement established for with four US departments.  It took her two days to read the document thoroughly and redline the areas needing changes.  Moira Callaghan, another Mediaworld team member, asked rhetorically whether RA’s “standard” contract was 17 pages long. 

Thompson responded that “we were clear that the team needed to have credibility.”  She expressed specific concern about former RA Treasurer John Higgins’ role on the team.  “What I’m hearing is that you are not going to be like a contractor we hire.”  She added, “My concern is we need a real deal report at the end of this.”  Her remarks followed a statement she made early in the discussion that Mediaworld must meet all the requirements of a “standard” RA contract—“the same contract used by RA on every occasion”—triggering Callaghan’s query above--and, yet, it also must meet special requirements to be credible because the team is comprised of RA members.  We find the two comments remarkably inconsistent. 

In response, Hebert noted that the members don’t care about the contract.  Thompson responded that Mediaworld shouldn’t get special treatment.  (Yet that is exactly what the draft contract does by imposing numerous unique restrictive clauses.)  Ganesan asked that RA just give Mediaworld a standard contract.  Moreover, Stillson responded, if Thompson had any doubts about their professionalism, she should look at the time they took to review and comment on the draft contract.   He had noted earlier that, while RA owned their product, the team members’ names and reputations would be on it.

In wrapping up the discussion, Sanio expressed concerned about the failure to meet the deadline, the need to provide a credible product, and he thanked the Mediaworld team for stepping up.  He then moved for the Board to go into executive session.  Board member Lucinda Shannon questioned whether they could give guidance to counsel in open session.  Graves said no.  Bitzer said the executive session should be to give RA attorney Chadwick guidance so RA could move forward, a comment seconded by Hebert who added that it shouldn’t Chadwick’s opportunity to give the Board guidance.  The motion to move to executive session was approved with three “nay” votes and the public session ended.

Sunday, December 11, 2016

County Transportation Department will recommend Transportation Service District tax Option #12 to Board Transportation Committee

In its planned presentation to the Board of Supervisors acting as the "Board Transportation Committee" this Tuesday, December 13, FCDOT will recommend that the Board adopt Option #12, a Transportation Service District (TSD) for Reston's station areas with a tax rate of $0.021/$100 valuation.  This tax will apply to all property owners in the station areas, including residents.

Below is the full FCDOT presentation.  The recommendation is highlighted on p. 16.

Although the initial tax rate would be set at $0.021/$100 valuation, there is absolutely no restriction on the Board raising that rate (just like property tax rates) as transportation improvement costs rise.  Moreover, as assessed property rates rise, the cost to residents will increase with appreciation.  (Note:  As we documented just last month, early estimates of major roadway improvement costs routinely double and triple in a very short period of time.)

Despite FCDOT's assertion of broad endorsement of this tax, no community representative from the Metro station areas has served on the Reston Network Analysis Group (RNAG).  The only Restonian who lives in these areas serving on the RNAG is a stakeholder representative who is a paid representative of Boston Properties as Executive Director of the Reston Town Center Association.  This is truly taxation without representation.

Thursday, December 8, 2016

Reston 20/20 Statement on the Need for an Open Session to Discuss the Issues Delaying the Signing of the Tetra Review Contract with Mediaworld

Fairfax County working group finally acknowledges shrinkage in office space per worker.

The following is the text of an e-mail Reston 20/20 co-chair Terry Maynard sent to Board of Supervisors Chairman Sharon Bulova today concerning Fairfax County's first official recognition that the space per office worker is shrinking and the tremendous implications that belated decision has on planning.  

Dear Chairman Bulova,

I was pleasantly surprised in reading the report of the County Board-appointed Fairfax County Building Repositioning Working Group, "Office Building Repositioning and Repurposing:  Fairfax County Building Repositioning WorkgroupReport," the brief section (p. 9) with the subject title.  It specifically states,
A significant trend occurring nationally and affecting the office market in Fairfax County is that the average amount of leased space per employee is shrinking.  This is attributed to more efficient office design, increased ease of teleworking, and hoteling, all of which result in many types of work being done in locations other than the traditional office environment.  Average footprints are anticipated to shrink from 225 usable square feet (USF) per person in 2010 to 150 USF per person by 2017, a reduction of 40 percent.
This is exactly the message I conveyed to you several times more than three years ago in questioning why Fairfax County planners continue to use 300 gross square feet (GSF) for office space planning purposes.  (These letters and related articles are available on the Reston 20/20 blog.)  By our calculation, Usable Square Feet (USF) used in this report is approximately two-thirds of the value of GSF.  In this case, the County's implicit planning assumption is that there is about 200 USF/office worker--slightly lower than the 2010 average laid out above, but 25% higher than the expected USF/worker next year. 

To be consistent with that expected average next year, the Fairfax County GSF/office worker planning assumption would have to drop to no more than 225 GSF/office worker.  This is, in fact, the planning metric used by Arlington County, which dropped its space per office worker planning assumption from 250 GSF/worker to 225 GSF/worker a couple of years ago.  With office space per worker continuing to shrink, you might even want to use a planning assumption of 200 GSF/office worker.

The County's continuing failure to address this reality has critical implications for planning the associated infrastructure, none possibly more important than transportation planning.  Right now, the FCDOT is hard at work in its Reston street planning effort (RNAG) and using the 300 GSF/office worker as one of its guidelines for calculating future traffic on Reston's station area streets and beyond.  This includes calculating office-driven traffic for the 29.7 million GSF of office space planned in these areas. 
  • At 300 GSF/office worker, that's 99,000 potential office employees.
  • At 225 GSF/ office worker, that increases to 132,000 potential office employees, a one-third increase.
  • At 200 GSF/office worker, that increases to 148,500 potential office employees, a 50% increase.
The one-third (33,000) increase in the number of prospective office employees at 225 GSF/employee will have a tremendous impact on traffic, transit, and other transportation means in Reston's station areas that is not now being considered.  So while FCDOT is planning to reduce Reston station area traffic standards from LOS "D" to an urban standard of LOS "E," the fact of the matter is implementation of the current plan will result in a massively gridlocked LOS "F."  Indeed, just as there will be one-third more potential employees, the potential costs of meeting any reasonable traffic standard are also likely to increase by at least one-third--actually substantially more as marginal costs tend to rise.

No doubt similar consequences will be felt in Tysons and other urbanizing areas of the County, aggravated by the recent passage of the FAR 5.0 ZOA.  Quite simply, the County can't afford to meet the infrastructure requirements the continuing use of this inaccurate planning assumption will create.

The Board, the Planning Commission, and Fairfax County's Department of Planning and Zoning need to step up to the adoption of realistic planning assumptions, probably also on dwelling unit size (increased to 1,200 GSF from 1,000 GSF in the Tysons and Reston planning efforts).  Otherwise, the County will experience gridlock nearly county-wide, inadequate school facilities, crammed public parks, etc. 

While you (and certainly not I) will not be around to see this massive planning failure occur, it will happen in the absence of sound planning.  I strongly urge you to take action now to assure that this doesn't occur for the sake of those--including our families--who will be living here long after we depart. 

In the meantime, I wish you the best of the holidays with family and friends and a happy, prosperous, and productive New Year.

Terry Maynard, Co-Chair
Reston 20/20 Committee

BCC:  Reston community leaders and local news outlets

Wednesday, November 23, 2016

Cost of Key Reston Station Area Road Improvement Projects to Double or Triple Board-approved Projections?

Monday, November 21, 2016

Is the County positioning itself to redevelop Hidden Creek golf course for high-density development?

In this video excerpt from last week's RA Board of Directors meeting, RA land use attorney John McBride briefs the Board on how the RNAG's pending "grid of streets" plan positions the County for taking land from the south end of Hidden Creek golf course for redevelopment.  About 6 minutes into this excerpt, McBride highlights a County-proposed street in the grid that would border the golf course, but the topography of the area would require the street to actually go through the golf course to American Way Way north of Plaza America.  The entire discussion takes about 12 minutes, but feel free to watch the balance of McBride's important presentation on Reston's future development.

As McBride states, Reston intends to remain a two golf course community, but this proposal would sabotage that goal if carried through.

Friday, November 18, 2016

Restonian's Detailed Analysis Destroys Alleged Grounds for Saint Johns Woods Higher Density Redevelopment

In the comprehensive and detailed analysis below, Reston resident John Mooney destroys developer Bozzuto's claim that its proposed redevelopment of Saint Johns Woods is consistent with the County's Comprehensive Plan and, specifically, the Reston Master Plan.   As he notes in his letter to County leaders, he identifies both general legal-policy concerns about the Bozzuto proposal's compliance with the Comprehensive Plan as well as concerns in four specific areas of non-compliance with the Reston Master Plan.  It is a well-written and well-documented analysis that warrants strong County and community attention.

Thursday, October 27, 2016

New County proposal calls for public schools in high-rise buildings.

The following article is re-printed in its entirety from the Annandale VA blog.  It reports Fairfax County's proposed policy plan amendment to put schools in high-rise buildings.  Of special note is the paragraph we have highlighted noting schools could be co-located "with other public uses, such as a library or a recreational center."  Could we see an FCPS school in the Town Center North government complex?

The public hearing for this ill-conceived and unvetted idea is November 1 at 4PM at the County headquarters.  


Wednesday, October 26, 2016

Proposed county policy would allow urban schools in high-density areas

Bailey's Upper Elementary School opened in a converted office building on Leesburg Pike.
The Board of Supervisors will hold a hearing Nov. 1 on a new policy to allow the development of “urban” or “vertical” schools in high-density areas or on parcels of limited size.

The policy change would also amend the Comprehensive Plan to allow the “co-location of schools with other public uses, such as a library or a recreational center,” and the “co-location of different levels of education and other types of programs in one structure.” The co-located entities would then be able to share facilities such as the cafeteria, gym, or auditorium.

In addition, the policy would permit the adaptive reuse of buildings, such as an office or commercial building, to be used for schools, early childhood education programs, and distance learning.

And because urban schools and schools on smaller lots won’t have as much land as traditional schools, the policy would allow converted rooftops and underutilized surface parking lots to be used for outdoor recreation.

The policy change is of particular interest in Mason District, which has overcrowded schools and a lack of land available for new buildings.

The new policy was hammered out over the past several months by the Fairfax County Planning Commission’s schools committee with input from Fairfax County Public Schools staff and school board. The Planning Commission endorsed the new policy Sept. 29.

“We’re not abandoning traditional school design,” said planning commissioner Timothy Sargeant (at large). “What we are doing is creating a new tool in the toolbox.”

The policy is aimed at “schools in activity centers where there is no land to build traditional schools,” said David Stinson, of the Facilities Planning Branch in the Department of Planning and Zoning (DPZ). Activity centers include Bailey’s Crossroads, Seven Corners, Tysons, Reston, and the Route 1 corridor.

The language in the plan calls for schools to have outdoor recreation space, Stinson says. “We’re not going to build a school without recreation space.”

The policy change is needed, the DPZ staff report states, because the existing plan language doesn’t provide flexibility for siting schools in urbanizing areas. The high cost of land in more dense areas is also an obstacle to the traditional school design.

Bailey’s Upper Elementary School in Seven Corners, which opened in fall 2014 in a converted office building, is considered a model for the type of urban schools that would be facilitated by the new policy.

The Mason District Council of Community Associations plans to discuss the proposed policy at its Oct. 26 membership meeting. Clyde Miller, secretary of the MDC and president of the Holmes Run Valley Citizens Association, is urging local community groups to oppose it.

By allowing schools in “surplus office buildings, in commercial areas, with outdoor recreation space confined to garage rooftops, and school sites reduced in size to the minimums allowed by the zoning ordinance,” Miller says, “the proposed policy threatens the quality of future public school facilities.”
Observers note there are numerous concerns with the Policy Plan amendment.  

First, unlike the rest of the County's Comprehensive Plan which is a suggested guideline, the Policy Plan is legally binding.  

Second, there are problems with high-rise buildings being used as public schools.  Comments by parents of students at Bailey's Upper ES to the Annandale blog note:
  • There is no outdoor PE provided for the elementary school students.  
  • There is no room large enough for a school assembly with all the students attending.  
  • The lunch room is so small, many lunch sessions have to be provided to feed all the kids.  
  • And it appears that in the event of a fire or fire drill, there is no space around the building for students to be evacuated.  Students must cross a busy street to evacuate the building.
Aside from those concerns, one wonders if the existing school districts would have their students poached to fill out the new schools.  Elementary schools that cannot provide outdoor PE are substandard.  One also wonders how Fairfax County can exempt itself from Virginia code for school buildings.

Monday, October 24, 2016

SIGN THE PETITION: Stop the TSD road tax on Reston Metro station area residents.

Reston 20/20 has posted a petition on to stop the planned imposition of a Transportation Service District (TSD) tax on property owners in Reston's Metro station areas.  Below is the text of the petition.  Please click on this link to and add your voice to the voices of other Restonians who are tired of added Reston taxes for worse public services.  

The Fairfax County Board of Supervisors will likely approve a Transportation Service District (TSD) creating an additional property value driven tax on all property owners in Reston's Metro station areas by the end of 2016.  The TSD's purpose, based on faulty assumptions, is to fill an alleged $350 million "gap" in tax revenues for improving roadways in the station areas as high-density development unfolds.

The Board will most likely approve a TSD that will add 1-3 cents to the property tax rate now experienced by station area property owners.  Moreover, three years of experience at Tysons with a similar TSD indicates that the Board will double or triple the rate within 3-4 years.

The added tax will not be difficult to absorb by developers who will see huge financial gains there in the coming years.   Estimates based on recent experience suggest commercial real estate profits will average more than a billion dollars per year in Reston's station areas over the next four decades--and County property tax revenues will grow right along with the growth in property values.

Unlike County and developers' coffers, however, station area residents will not see any revenue gain from the development that occurs there.  Nonetheless, they will have to pay this added property value-driven tax as property values and tax rates escalate.

Moreover, not only will they not derive any financial benefit from the tax like their commercial and county counterparts, they will actually experience worse traffic conditions by County intent.  Specifically, the County is lowering the performance standard for these roadways, including Reston's four key through north-south and east-west boulevards, from a Level of Service "D" to Level of Service "E."  That means peak period congestion there is likely to cause at least 55-80 second delays at each intersection.

There is no logical, ethical, or other valid reason why Reston residents should pay more road taxes for worse road service so others can profit even more from the arrangement.  Those who profit--real estate developers and the County--should pay the full burden of improving Reston station area roadways to accommodate the massive job and residential growth planned there.   The Board of Supervisors must not approve a Transportation Service District (TSD) for Reston's Metro station areas.
This petition will be delivered to:
  • Fairfax County Board of Supervisors
    Chairman Sharon Bulova
    Fairfax County Board of Supervisors

Sunday, September 18, 2016

RA expects to spend more than $1,000,000 on Tetra this year alone.

RA CEO Cate Fulkerson will report to the RA Board of Directors this Thursday on the financial situation of Tetra.  The bottom line of the costs to date and forecast until the end of the year is that RA expects to spend more than one million dollars on Tetra by the end of the year.  In broad terms, that includes:
  • $700K on renovation of the interior and exterior of the Tetra building.  That sum could have built a new building the size of the Tetra building.
  • More than $107K on operating expenses, some $95K comprises employee-related expenses.  In fact, we understand that RA has hired several full- and part-time employees to operate its programs there.
  • And, of course, there are always the mortgage payments which will total nearly $184K this year.

Below is the full RA spreadsheet with several rows added at the bottom (light blue and yellow) that bring some of these totals to the surface.  

To facilitate a comparison with RA’s “fact sheet” published March 2015 to help sell the referendum, here is the pro forma spreadsheet it offered then:

This total cost for the Tetra effort is more than double the total cost RA projected for Tetra in its March 2015 “fact sheet” on the Tetra purchase.   Here are the costs as RA projected them then and now:
  • Operating expenses would be $45,011 in 2016.  RA’s latest report puts operating expenses at $107,303—more than double RA’s “fact sheet” projection.
  • No program expenses because RA anticipated that the building would be leased back to Tetra developers through 2016.  Now RA anticipates $107,303 in operating/programming expenses for this year.
  •  Overhead expenses, including “existence cost” expenses and loan costs, were expected to reach $228,623 in the “fact sheet.”  They are now projected to grow slightly to $247,072 this year.
  • The big change, of course, is in the costs of renovating the Tetra building, which was in horrible shape, and the grounds.  Last year, RA put 2016 costs (in fact, the total cost) at $259,000.  That cost has now risen to $699,531.
The total projected costs in the "fact" sheet were  $487,623.

Yet somehow, despite losing the $100K lease on the Tetra building this year, RA is forecasting operating revenues of $171,753 this year.  That forecast program revenue comes from an RA effort to accelerate the renovation of Tetra to enable the launch of some programs as of about mid-year.   For what it’s worth, RA’s project income this month is down $20K from last month, and we expect similar cuts in projected income next month when RA reviews its forecasts to end of the year.  

The proverbial bottom line is that RA told Restonians last year that the “net cash flow” for 2016 would be a -$387,527.  Now RA is telling Reston the “net cash flow” for 2016 will be -$882,152—a 128% increase in losses.   And we frankly expect that the net cash flow will show greater losses by the end of year.  

This is pathetic management of an unjustifiable project.  We hope that the “independent” audit team can provide some explanation of how Restonians were so badly misled by their leaders. 

Thursday, September 15, 2016

The Proposed Reston Transportation Tax is a Fraud

“The simplest explanation is usually the best one.”  Occam’s Razor

For the better part of a year, the Fairfax County Department of Transportation (FCDOT) has been trying to persuade a group of Restonians called the Reston Network Analysis Group (RNAG) appointed by Supervisor Hudgins that some or all of Reston homeowners need to pay an added tax to improve the road networks around the Metrorail stations.   

The need to improve the roads and intersections, FCDOT says, is obvious because of all the development that will be going on around these station areas in the decades ahead and, of course, Restonians should pay at least a share for those road improvements.  In fact, FCDOT continues, we have the model established in Tysons were residents are paying added taxes to help defray the costs of roadway improvements there. 

FCDOT is so convinced of the importance of Restonians paying an added property tax to help cover the cost of these improvements that it has offered up no less than ELEVEN different tax scenarios for the resident RNAG to consider.  

All of these 11 scenarios somehow relate to how the taxes at Tysons were developed, which is irrelevant to Reston unless, unbeknownst to us, whatever features the Tysons’ model(s) have are written on a stone tablet and brought down from the mountain top.   What about the models for other redevelopment areas such as Baileys Crossroads, Seven Corners, or the linear Highway 1 re-do in Mt. Vernon?  Reston is, in fact, its own beast with its own features, needs, opportunities, issues, and goals—and it is unclear that any of these characteristics are the same as they are in Tysons.   Yet FCDOT and RNAG have never taken a minute to examine these issues.  FCDOT has just presumed that whatever fits in Tysons will fit in Reston.  

Moreover, all eleven scenarios are complex involving different types of improvements, share splits between public and private (which, of course, don’t line up with citizens normal understanding of those two terms), residential versus commercial, and so on.  The only reason to introduce all these complications is to confuse the issue of who should pay for the roadway improvements by focusing on irrelevant issues.  It is very much like a three-card Monte or shell game:  Introduce a lot of motion (or commotion) and re-direct attention to confuse the mark. 

The bottom line is that there is no compelling reason that Restonians should pay any added property or other taxes whether through a tax service district (TSD) covering the transit station areas (TSAs) or a special tax district (STD—a la the Reston Community Center STD) covering all Reston. 

Using Occam’s razor, that a simple, straightforward explanation is the best one, we believe the best answer to financing the needed roadway improvements is, “Those who benefit financially from the Reston roadway improvements should contribute financially to their implementation.”  There are three parties to this effort:  The County, the developers, and the residents.

  • The County will benefit financially from new property tax and other tax flows (eg—sales tax revenues from new retail businesses) created by the new development in the TSAs.
  • The developers will benefit to the tune of billions of dollars from the added rent income from their new development as well as the continuing profits from existing development.
  • The residents will receive absolutely no financial benefit.
In contrast, Reston’s residents are guaranteed to see worse transportation capabilities.  FCDOT has guaranteed this by setting a lower standard for managing peak traffic flows that will not only hurt those who live in the TSAs, but those Restonians and others who travel to or through them.  Moreover, they are also guaranteed worse local bus transit service because FCDOT states that it will not increase local bus service, just move the existing routes around.  So, yes, the goal of the County is to make moving around Reston more difficult, but it still it wants to charge some or all Restonians a tax for this more limited capability.

The only reasonable and honest rationale for the new Reston transportation tax—again, using Occam’s Razor to look for a simple, straightforward explanation—is that the County Board wants to create a new property tax revenue stream that it can adjust, meaning increase, at its prerogative anytime indefinitely.   

In short, the elaborate financial calculations and manipulations by the FCDOT for the RNAG are simply a ruse—a straight-up fraud—to create a new property tax revenue stream for the County that is unlikely to be spent in full in Reston and will definitely make Reston mobility more difficult.  

Act to stop it while you can.   Write to: