U.S. Transportation Secretary Foxx Announces $1.28 Billion Loan for Phase Two Silver Line to Dulles, August 20, 2014

U.S. Transportation Secretary Foxx Announces $1.28 Billion Loan for Phase Two Silver Line to Dulles

DOT 78-14

WASHINGTON – U.S. Transportation Secretary Anthony Foxx today announced the closing of a $1.28 billion Transportation Infrastructure Financial Innovation Act (TIFIA) loan to the Metropolitan Washington Airports Authority (MWAA) for construction of Phase Two of the Metrorail Silver Line extension.
Work will begin at the Wiehle Avenue Station, where Phase One work ended, and includes construction of 11.4 miles of track from Wiehle Avenue to Route 772 in eastern Loudoun County.  Six new stations will also be constructed along the way – Reston Town Center, Herndon, Innovation Center, Washington Dulles International Airport, Route 606 and Route 772, and a new Service and Inspection Yard at Dulles International.

“The first phase of the Silver Line has been an overwhelming success, and we look forward to ensuring the second half is just as successful, with the help of this $1.28 billion loan from the federal government,” said Secretary Foxx.  “When complete, the Silver Line will help residents and visitors get where they need to go safely, quickly and affordably. It’s the kind of project we’d like to see more of, and one way to do that is  if Congress will support our GROW AMERICA Act to provide long-term funding for transit systems, roads and bridges nationwide.”

Secretary Foxx joined other U.S. Department of Transportation officials along with state and local elected leaders last month to celebrate the opening of the first phase of the Silver Line, which represented the largest expansion of Metrorail service in 20 years.  The first phase extended Metrorail service from the East Falls Church Metrorail station through the large Tysons Corner employment and retail center to the Wiehle-Reston East Metrorail station in the Reston area of Fairfax County.  Metro announced that during its first week of service alone, nearly 220,000 trips were taken. 

The Silver Line is being constructed by MWAA and operated by the Washington Metropolitan Area Transit Authority (WMATA). The new line is expected to serve approximately 85,700 daily riders by 2030.
“Completion of the Silver Line project will provide a critical link to Dulles International Airport and gives residents in the rapidly growing Northern Virginia region more transportation options,” said Sylvia Garcia, Chief Financial Officer and Assistant Secretary for Budget and Programs.

This delivers part of an approximately $1.87 billion combined commitment of TIFIA loans for Phase Two of the Silver Line extension to Loudoun County, which represents the largest TIFIA assistance for a single project in the program’s history.

The Obama Administration’s GROW AMERICA Act is a $302 billion, four-year national vision for an aging transportation network and a growing population. The GROW AMERICA Act would invest $72 billion in public transportation alone to address the urgent transit challenges facing urban, suburban and rural communities, in addition to providing $4 billion for TIFIA that can support approximately $40 billion in innovative financial assistance for infrastructure projects.

The TIFIA credit program is designed to fill market gaps and leverage substantial non-federal investments.  Each dollar of federal funding can provide up to $10 in TIFIA credit assistance and support up to $30 in transportation infrastructure investment.  Since its launch, the TIFIA program has helped 46 projects turn almost $18.5 billion in U.S. Department of Transportation assistance into more than $69.5 billion in infrastructure investment across America.

# # #

Wednesday, August 20, 2014

Is this the answer to Silver Line TIFIA funding . . . or anything?

In a post on the apparent deal reached by the House Ways & Means Committee to assure as short-term fix to financing the Highway Trust Fund (and, therefore, providing $2 billion in TIFIA financing for the Silver Line), Len Burman at the Tax Policy Center (a joint effort of the Urban Institute and Brookings) calls it a "stupid tax trick."  Here is some of what he has to say:

. . . Tomorrow (July 10), his (Chairman Dave Camp, House Ways & Means Committee) committee will consider a proposal to partially pay for topping up the highway trust fund with a cynical budget gimmick called “pension smoothing.”

In a nutshell, here’s what it does: Companies can postpone contributions to their pension funds. This means that their tax deductions for pension contributions are lower now, but the actual pension obligations don’t change, so contributions later will have to be higher—by the same amount plus interest. In present value terms (that is, accounting for interest costs), this raises exactly zero revenue over the long run.

Let me say that again using all capital letters to express my frustration.

THIS $6.4 BILLION REVENUE PROVISION RAISES NO REVENUE OVER THE LONG RUN!!!

In fact, it could cost the government money if underfunded pension plans can’t meet their future obligations and the Pension Benefits Guarantee Corporation must step in. . . .

Pretending to raise revenue, while adding to our long-run fiscal woes and undermining the retirement security of American workers seems like the worst possible option.

Here is the link to the full post.  

According to Bloomberg News, the proposal also calls for other measures to generate the funding required.  "The House and Senate proposals both generate nearly $11 billion, according to the JCT summaries. They include customs fees, changes to pensions that lower companies’ short-term contributions, and revenue from a leaking underground storage tank fund."

Yes, folks, as usual, Congress can't see past the next election cycle in planning anything for our country.  And why not sock it to workers' pensions a decade or so from now when one's vote on this proposal is long forgotten--yet there is still another election in front of each Congressman.

Congress just can't solve a problem without making things worse these days.

The Silver Line has a TIFIA funding commitment, but what if there isn't any?

OK, it's called the "Highway Trust Fund" and it's going belly up as early as August if Congress doesn't act to fund it.  And "TIFIA" funds, even those for mass transit projects, come from the Highway Trust Fund.  But there's more...

Here is how Kriston Capps at CityLab reports the situation:

 The Obama administration is outlining the steps it will take if the Highway Trust Fund runs out of funds, a doomsday scenario that looms just weeks away. 

Since April, the U.S. Department of Transportation has warned that the trust used to fund state transportation projects is running out of money. Unless Congress takes action to replenish the Highway Trust Fund, the administration expects that it will be exhausted by the end of August.

Today, according to the Huffington Post's Sam Stein, Department of Transportation Secretary Anthony Foxx outlined the drastic measures that the administration will be forced to take if Congress does nothing.

“This cliff is coming," Foxx said, according to the report. "I’ve been saying it for six months and I’m worried that we may find ourselves running over it."

 DOT authorities predict a shortfall for the Highway Trust Fund—which was established in 1956 to finance the U.S. Interstate Highway System—to manifest in the last days of August. Before that happens, DOT will implement a "cash management plan" to parcel out federal reimbursements for state outlays, starting Aug. 1.  . . .

The news is slightly less grim for the Mass Transit Account—or more ambiguous, anyway. DOT hasn't yet implemented a cash-management plan for mass-transit reimbursements. But Sec. Foxx's letter to the states on the Mass Transit Account notes that disaster on that front is merely delayed: This account is predicted to reach a crisis point in October.

Congress can take action at any time to avoid the transit cliff and keep payments to the states moving on time. In February, the Obama administration outlined a four-year, $302 billion transportation reauthorization proposal. In April, the administration sent the plan to Congress. But neither lawmakers nor administration officials have shown great enthusiasm for raising federal gas taxes—now, or at any point since 1993. . . . .

Click here for the rest of this article. 

As we understand it and have reported previously, DOT says the following: 

(TIFIA is) Funded by contract authority and reimbursed from the Highway Account of the Highway Trust Fund, to remain available until expended. Funds are subject to the overall Federal-aid obligation limitation.

If that's the case, then the US Congress has four weeks to find funds for the Highway Trust Fund or SOMETHING--and we don't know what--is likely to happen to DOT's commitment to provide two billion dollars in TIFIA financing for the Silver Line.  The longer Congress doesn't do anything, the more severe the consequences are likely to be.  In a worst case scenario, it could mean that MWAA has to issue all its $2 billion Phase 2 construction debt at market rates.  If that occurs, it could mean a roughly fifty percent increase in tolls above those expected using low-rate TIFIA financing for Dulles Toll Road users over the next four decades culminating in $18 tolls instead of $12 full one-way tolls at mid-century.

Even with a Congressional election coming up in November and virtually every Congressional district affected by a cut off of road and transit funds, Congress' pathetic impotence in passing legislation--certainly any requiring new revenues--over the last several years gives us little confidence that new funds will be forthcoming and Dulles Toll Road users will receive some financial relief.

MWAA's FY2013 TIFIA Financing Application

Below is the full text of MWAA's application for low-interest TIFIA financing that was recently approved by the US Department of Transportation.  MWAA has not yet made the document public and apparently intends not to do so until its negotiations on the business terms of the financing are finalized.   We offer it without comment, but we welcome public comments on the application which we will gladly post as comments below or as separate posts on this blog. 

   MWAA Silver Line TIFIA Application 2013

Major Rail Issures Remain Unresolved, Rob Whitfield, Fairfax Times, May 30, 2014 (UPDATED)

Rob Whitfield, Dulles Corridor Users Group, wrote a detailed letter in last week's Fairfax Times noting that there are several important unresolved issues in the financing of the Silver Line.  A breakdown in any of these issues could result in a failure to obtain $1.9 billion in low-cost TIFIA financing, and thereby undercut the reductions in tolls that MWAA, elected officials, and others have been recently been pounding their chests about.  We present below his letter with the updates highlighted in red. 

Despite all the hoopla about the Metropolitan Washington Airports Authority (MWAA) turning over control of Dulles Rail Phase 1 to the Washington Metro Area Transit Authority (WMATA), several major unresolved issues remain:

 

1. We have yet to see the proposed business terms and conditions for the Dulles Rail Transportation Infrastructure Finance and Innovation Act (TIFIA) loan. A U.S. Department of Transportation official said last week that the public would not be allowed to see the agreement until after all terms have been negotiated and an agreement signed. This exemplifies the approach of former House Speaker Nancy Pelosi to government actions: “We have to pass the bill so that you can find out what is in it.”

 

The TIFIA Program is governed by the Federal Credit Reform Act of 1990 (FCRA), which requires the U.S. Department of Transportation to establish a capital reserve, or “subsidy amount,” to cover expected credit losses before it can provide TIFIA credit assistance. Congress places limits on the annual subsidy amount available.

 

Moving Ahead for Progress in the 21st Century Act (MAP-21) authorizes $750 million in FY 2013 and $1 billion in FY 2014 in TIFIA budget authority from the Highway Trust Fund (HTF) to pay the subsidy cost of TIFIA credit assistance. An MWAA financial advisor for the Dulles Rail project indicates that the capital reserve required is typically only 10% of the total TIFIA credit assistance amount. He expects closure before September 30, 2014 but if a delay in closure occurs, given the potential for the HTF to run out of funds later in 2014, the public should not assume that TIFIA credit assurance for Dulles Rail is a certainty, particularly at levels needed to complete the Dulles Rail project by 2018.

2. MWAA has yet to fund any of its 4.1 percent Dulles Rail capital cost share from Airport Revenues. Over five years have passed since Phase 1 construction started and months since Phase 2 work commenced. Chairpersons Bulova and York plus Virginia officials have yet to demand a specific MWAA payment plan. The 2007 Capital Cost Funding Agreement provided no proposed schedule for MWAA payments to be made. Where were our politicians?

Based on what was revealed at the MWAA Board meeting last month, it appears that some airlines are balking at the proposed use of Passenger Facility Charges at Reagan National to pay for MWAA’s share of Dulles Rail capital costs. Similar concerns exist at Dulles International Airport where passenger charges are the highest in the region and among highest in the entire USA.

 

3. The capital costs of Phase 2 within Dulles Airport will be at least $1 billion, including two stations. MWAA’s share of project cost obligations set by the 2007 “agreement” remain under $250 million while the future costs for Dulles Toll Road(DTR) users will skyrocket from 2006 projections made by MWAA - TIFIA notwithstanding. Why have our political leaders not demanded that MWAA and WMATA pay a fair share of overall capital costs? Is subsidizing those who live and work inside the Capital Beltway more important to our politicians than the thousands of dollars in additional tolls to be paid with after tax funds by those who must rely on the Dulles Toll Road for commuting?

 

4. MWAA next month plans to select the contractor for a $260 million Dulles Maintenance facility to be built for maintenance and storage of not only 128 Silver Line Series 7000 railcars being paid for by MWAA (mostly from DTR funds) but at least one half of the 300 (planned 420) additional Series 7000 railcars to be delivered to WMATA over the next five years.

Officials from MWAA, WMATA and USDOT have been asked repeatedly for over two years, when, if at all, are MWAA and WMATA going to negotiate for WMATA to pay for its share of facility capital costs. Nobody wishes to acknowledge responsibility for this matter.

5. MWAA has yet to fulfill certain terms of its January 2006 proposal to the Commonwealth to “Operate the Dulles Toll Road and Build Rail to Loudoun County.” An audit should be conducted to confirm compliance by MWAA with all provisions of the 2006 proposal.

 

6. MWAA plans to lease land for development adjacent to the two Metrorail stations on Dulles Airport property. This land is leased from the federal government. MWAA intends for 100 percent of revenue generated to be used solely to defray Dulles Airport expenses--with no revenues to be used to offset DTR tolls needed for MWAA Dulles Corridor Enterprise bonds. A MWAA Board member helped negotiate revisions to Federal Aviation Administration Congressional funding provisions. It appears possible that MWAA will be able to use its powers to benefit airport development on terms detrimental to development of nearby land whose owners pay property taxes. MWAA claims it pays fees in lieu of taxes but no independent accounting of the adequacy of such fees appears to have occurred.

 

These issues, and others, must be resolved BEFORE Virginia funds the proposed $300 million in further financial assistance, approved by the Virginia General Assembly in 2013, to offset proposed toll cost increases. Remember, in 2006. MWAA claimed that no further assistance would be needed from the Commonwealth for the Dulles Rail project. Various MWAA officials in office prior to 2010 lied repeatedly to Virginians about costs and funds needed from DTR users. Why should we expect that the lies won’t continue, particularly because the MWAA Board is controlled by D.C. and Maryland political appointees who don’t give a flying fig about the costs for Virginia taxpayers who live and work in the Dulles Corridor.

 

The failure of nearly ALL Virginia politicians, both Democrats and Republicans, to address these matters in a timely manner is the last straw in the series of outrageous failures in accountability by everybody involved in Dulles Rail during the last decade. Maybe it reflects the culture of corruption that pervades most political actions in Richmond and Washington, D.C. as well as those taken by many or most Northern Virginia elected officials.

 

Last Friday the Dulles Corridor Advisory Committee met. In the past DCAC members have acted as a rubber stamp to MWAA proposals.  Unfortunately, DCAC members continued to shirk their obligations to those who live and work in the Dulles Corridor as they have since 2006 by not insisting on answers to these issues.

 

Rob Whitfield, Dulles Corridor Users Group

Will the bankruptcy of the US Highway Trust Program affect the Silver Line's TIFIA financing?

The short answer:  We don't know for sure, but it certainly looks like it will.  Implication:  If no new funds are found for the Highway Trust Fund (HTF) by August, TIFIA financing will not be available and future tolls on the Dulles Toll Road could explode as earlier forecast, including increases as soon as next year.

A few weeks ago, all the area politicians were ecstatic that the Department of Transportation had approved the joint application of MWAA, Loudoun, and Fairfax counties for a TIFIA loan totalling about $1.9 billion for the construction of the Silver Line.  The loan would substantially reduce by about one-third the grotesque forecast growth in Dulles Toll Road tolls to more than $18 per one-way trip by mid-century (about $7.75 in 2013 dollars--more than double the current toll).  Moreover, all the parties were gleeful that the loan would preclude the need for any toll increases before 2019 because TIFIA's loan terms permit deferring payments for five years. 

Unfortunately, reality has intervened as TIFIA's funding source, the HTF, is expected to be insolvent in August.  Here's how DOT's summary of TIFIA describes its funding:

(TIFIA is) Funded by contract authority and reimbursed from the Highway Account of the Highway Trust Fund, to remain available until expended. Funds are subject to the overall Federal-aid obligation limitation.

The Highway Account is the account specifically expected to go belly up this summer in light of declining gasoline tax revenues, which have been eroding for years.

Business Insider takes a look at what our completely dysfunctional US Congress might do to address the issue.  As these excerpts suggest, it is not optimistic:

The fundamental problem is that gasoline taxes alone are no longer enough to finance the Highway Trust Fund, due to declining fuel use across the U.S. However, neither the White House nor Congress wants to raise those taxes, and there is a disagreement about how to fill the fund without them.

Simply put, spending on transportation and infrastructure now exceeds gas taxes taken in. During recent testimony before the Senate Finance Committee, Joseph Kile, the assistant director for microeconomic studies at the congressional budget office, laid out two politically painful potential solutions — either cut spending in the fund's two accounts by 30% and 65%, or raise the gas tax by 10 to 15 cents per gallon.
In an election year, both options are non-starters. The gas tax hasn't been raised since 1993. Though increasing these tariffs seems like the most logical solution to most analysts, it won't have a chance before the midterm elections. Kile said Congress could also shift money from the rest of the federal budget to the Highway Trust Fund, which seems like the most politically palatable option.

When he issued his dire warnings Wednesday, Obama advocated for his solution to the fund fiasco — a four-year, $302 billion transportation and infrastructure plan. Warning the "cupboard will be bare," he urged Congress to act on his plan — but that too seems unlikely. Obama's plan would require about half the cost to be paid for by closing corporate tax loopholes and through other changes Republicans have long resisted. . . .

And just Monday, Bond Buyer reports that Senator Barbara Boxer, Democrat from California, has introduced a new Transportation Bill.

The draft transportation bill released Monday night by a Senate committee calls for $242.4 billion of federal funding for highway projects over six years and would authorize $1 billion a year for the popular Transportation Infrastructure Finance and Innovation Act credit enhancement program.  (Emphasis added.  Also note that the $1B to be authorized works as a reserve and leverages about ten times a much in TIFIA loans or about $10B.)

The Senate Environment and Public Works Committee plans to vote Thursday on the highway bill, which keeps federal funding for highways through fiscal 2020 at fiscal 2014 levels plus inflation. The committee is expected to approve the bill this week. . . .

Then the bill must pass the full Senate and, oh yes, the Republican-controlled House before President Obama may sign it into law.  So we are a long way from filling the pot that TIFIA draws from. 

In a recent discussion among regional Congressional officials in a meeting led by Senator Tim Kaine, Kaine seemed to agree that Silver Line TIFIA financing would not be forthcoming absent an infusion of funds into the Highway Trust Fund.  According to an observer, there was great uncertainty as to whether Congress would be able to find a solution to the problem.

Stay tuned.

What's going on with the Silver Line (Part 2)? MWAA's TIFIA Loan Application

All of a sudden, there is a plethora of news articles about the Silver Line, some enthusiastic about progress, others concerned about further delays.  

In the next few paragraphs, I try to work through the various issues discussed in these articles and provide a bit clearer (but maybe no more accurate) picture of what’s going on with the Silver Line?  I post links to all the articles I reference so, if you want, you can draw your own conclusions.

Another string of local reporting has focused on the fact that the northern Virginia Congressional delegation reported that MWAA has been asked by the Department of Transportation to apply for a TIFIA loan.  Here is how the Federal Highway Administration (FHA) describes TIFIA:

The Transportation Infrastructure Finance and Innovation Act (TIFIA) program provides Federal credit assistance in the form of direct loans, loan guarantees, and standby lines of credit to finance surface transportation projects of national and regional significance. TIFIA credit assistance provides improved access to capital markets, flexible repayment terms, and potentially more favorable interest rates than can be found in private capital markets for similar instruments. TIFIA can help advance qualified, large-scale projects that otherwise might be delayed or deferred because of size, complexity, or uncertainty over the timing of revenues. Many surface transportation projects - highway, transit, railroad, intermodal freight, and port access - are eligible for assistance. Each dollar of Federal funds can provide up to $10 in TIFIA credit assistance - and leverage $30 in transportation infrastructure investment.

The TIFIA credit program may provide to States (including D.C. and Puerto Rico), localities, or other public authorities, as well as private entities undertaking projects sponsored by public authorities, three types of financial assistance:

·         Secured loans are direct Federal loans to project sponsors offering flexible repayment terms and providing combined construction and permanent financing of capital costs.

·         Loan guarantees provide full-faith-and-credit guarantees by the Federal Government to institutional investors, such as pension funds, that make loans for projects.

·         Lines of credit are contingent sources of funding in the form of Federal loans that may be drawn upon to supplement project revenues, if needed, during the first 10 years of project operations.

Here’s how Lori Aratani at  the Washington Post reported it:  “The Metropolitan Washington Airports Authority and two of its partners in the $5.6 billion rail project, Fairfax and Loudoun counties, have been asked by the Department of Transportation to apply formally for a federal loan — a sign that they are likely to receive the funds they have requested.”  Aratani goes on to report that the amount applied for is $1.9 billion, but it is actually just short of $2.0 billion—the one-third maximum allowed for TIFIA financed projects—for the total cost of the $6.0 billion Silver Line project, including the counties’ share.  

For more than a year, the FHWA and the “funding partners”—MWAA, Fairfax, and Loudoun counties—have been going back and forth following the funding partners' letter of interest to help assure than any loan application meets FHWA’s standards.  That's a lot of "re-do's" for a single project.  

That leaves us a little confused at the enthusiasm expressed by our elected officials, especially Rep. Gerry Connolly’s comment, reported by Aratani,  that the “announcement is a huge victory for Northern Virginia and commuters in the Dulles Corridor.”  Well, maybe; then again, maybe not. 

Actually, it appears several options are now on the table as the application's processing goes forward:

• FHWA could still reject the application it has invited the funding partners to submit.

• FHWA could provide a loan guarantee only, which would lower the interest rate paid on the debt MWAA and the counties will have to issue and thereby offer the opportunity for a slower growth in DTR tolls.

• FHWA could approve all or some part of a full $2.0 billion loan to the Metrorail project which would further lower interest costs and toll increases.   Don’t count on that happening anytime soon.

• There may be other options, but that’s all I can think at the moment.

Except for rejection, all of these TIFIA support options would reduce financing costs for Silver Line construction and ease the rate at which DTR tolls would increase.   Maybe surprisingly, the loan guarantee may offer the greatest reduction in toll increases if it is available for the full $6 billion cost of the line.  This would offer the “full faith and credit” of the US Government to the project and allow interest rates to drop substantially—by half or more—including existing debt for Phase 1. 

The near-term impact of such financing appears to be overstated in some reports, however.  Aratani reports, "Officials from the MWAA said the low-interest federal loan, combined with $300 million in funding from Virginia, could mean that tolls are likely to remain at current levels until 2018."  Actually, the promise made (OK, a promise by politicians) was that the $300 million from Virginia would obviate the need for toll increases through 2015 all by itself.  So a full loan could extend that to 2018, but that would be the less cost-effective way to handle the federal financing.  By our calculations, applying the loan's benefits in terms of reduced toll increases over the life of the debt would yield the lowest net present value cost to toll road users--rather than a big splash in the first three years or so.  

The Fairfax County Board of Supervisors caught by surprise on Metrorail--AGAIN!

Reporting on yesterday's Board Transportation Committee meeting concerning the Silver Line and TIFIA financing, the McLean Patch notes that, once again, the Fairfax County Board of Supervisors has been caught by surprise on something that they have ostensibly been working on for more than a year:  Applying for TIFIA financing! 

Now they have less than a week to complete the paperwork and they are stuttering and stammering!

Here's some of what William Callahan has to say in his Patch report:

Joe LaHait, the county’s debt coordinator, said if the county secured such a loan, approximately $1.3 billion would be allocated to the Dulles Toll Road. Toll Road users are currently on the hook for 75 percent of the $5.9 billion rail project and toll prices are expected to increase dramatically in the coming years.

But the quick turnaround — officials would have to finish the application in a week's time — is giving some supervisors pause. . .

And the DOT is on a tight schedule – the board would have to approve the loan application at its May 14 meeting.

“Loudoun and the Airports Authority have already taken their action, so we wanted to put you in a position to be able to move the project forward,” Biesiadny told supervisors.

Supervisor Michael Frey (R-Sully) took issue with the quick turnaround.

“We’re borrowing hundreds of millions of dollars,” Frey said. “We’re doing this in a week.”

County staff said the USDOT was slow in getting back to them with the precise details of the loan, which forced a tight timeline. 

WHAT!  You just can't make this stuff up!  If you did, who would believe it??

In fact, the schedule for every step of the TIFIA application and approval process is public knowledge, even posted on US DOT's website.  Why is it that Fairfax County--and Fairfax County alone--can't complete it's homework on time??

First, the Board couldn't (and hasn't) put all the funding together--much less the actual work--to complete the steps necessary to provide reasonable, safe, and efficient access to the new Wiehle Metrorail station despite being told what was needed five years ago.  

Now it can't complete an application for TIFIA financing in a timely manner. 

Words can not describe . . . .

Silver Line Update: Partners Await Fed Loan Decision, Ashburn Patch, May 2, 2013

Supervisors in Loudoun are counting on saving from a federal loan; express desire to engage MWAA on airport development.

• By Dusty Smith

The most notable elements of a presentation Wednesday about the second phase of Metro’s Silver Line were news that the project appears to be nearing final approval for a federal loan that will save Loudoun millions and concerns about potential development on Dulles International Airport property.  . .

Most recently, the federal government requested $100,000 from the project partners – MWAA, Loudoun and Fairfax County – to pay for a review of financial records. Newquist said she expected the partners to complete their presentation to TIFIA administrators by the end of May and receive a decision by the end of the year. When supervisors expressed dismay at the uncertainty of a final approval date, County Administrator Tim Hemstreet said he believed the project was on track for TIFIA approval now that it had entered the “application phase.” . . 

During the discussion, Supervisor Matt Letourneau (R-Dulles) said he wants to make sure the county pays close attention and engages MWAA about its plans on the Dulles International Airport property.

“Certainly presentations were made by Mr. Potter that he would wish to work with the county in a cohesive manner to develop the property,” Letourneau said, referring to MWAA president and CEO Jack Potter. “But there is still the concern that MWAA could move forward on their property and develop large-scale commercial, which would be competing with what’s happening on county property.” . . .

Click here for the rest of this article.

Although this discusses TIFIA financing issues in Loudoun County, they also apply to Fairfax County where the County has agreed to pay 16.1% of the Silver Line's construction costs.  The big winners if the Silver Line project receives TIFIA financing will be Dulles Toll Road users who are now accountable for over half the line's construction costs.  TIFIA financing would substantially reduce the debt service costs and, therefore, toll increases in the years ahead.  But tolls will still go up substantially even with TIFIA financing.

We would also note that at least one Loudoun County Supervisor has the same concern the RCA Board of Directors has expressed about unfair competition from MWAA in developing its property near one of the Loudoun County Metrorail stations. 

Eyes On Virginia For Additional Silver Line Funding, WAMU, December 2, 2012

Martin DiCaro reports:  

When the Virginia state legislature convenes in January, supporters of the Silver Line rail project will be looking to lawmakers in Richmond to help fund the $6 billion endeavor.

The Republican-majority in the House of Delegates and the administration of Gov. Bob McDonnell have been criticized for approving only $150 million for the second phase of the Silver Line's construction.

While the Metropolitan Washington Airports Authority is cautiously optimistic a federal loan will come through by the end of this year, it may not be enough to significantly reduce projected toll rate increases on the Dulles Toll Road, which are currently set to finance 75 percent of Phase 2's nearly $3 billion cost. So eyes are focusing on Virginia's legislature. . . .

For the rest of this article, click here.  

For Mr. DiCaro's two-minute radio report, click here. 

Motorists Hit With 50-Cent Hike On Dulles Toll Road, WAMU, November 14, 2012

Drivers on the Dulles Toll Road will see a 50 cent bump in tolls.

. . . Motorists will pay higher tolls so MWAA can pay the cost of the Silver Line rail project to Dulles. A decision about raising toll rates in 2015 was deferred, because the airports authority is confident it will receive more funding for the Silver Line, either from the Virginia legislature or Congress, Board Chairman Michael Curto said after the vote.

MWAA has two avenues to secure additional funds: Virginia’s General Assembly, which has provided only $150 million to date, and the TIFIA (Transportation Infrastructure Finance and Innovation Act) loan program. . .

. . . But MWAA has a lot of competition for TIFIA dollars; 19 major transportation projects costing a total of $27 billion are currently applying for loans, and Congress has authorized $1.75 billion for TIFIA during the next two fiscal years. 

"The pool is very small compared to what the needs are just for our rail system," said Terry Maynard, a board member of the Reston Citizens Association, which represents 58,000 residents in a Fairfax County tax district. "It's going to be very hard to get a significant contribution.”

The association opposes not the Silver Line’s construction but its financing plan, which funds 50 percent of the project using Dulles Toll Road revenues. . . .

Click here for the rest of this article and the broadcast soundtrack.  

Va. Transportation Secretary hints at federal funds for Dulles rail, Loudoun Times, November 13, 2012

By Trevor Baratko

Securing federal funds for the second phase of the Dulles Corridor Metrorail Project looks “very promising,” Virginia Transportation Secretary Sean Connaughton said Tuesday.

“We’re working with [the Metropolitan Washington Airports Authority (MWAA)] and [Loudoun and Fairfax] counties on the TIFIA loan. We think that looks very, very promising,” Connaughton said at a Dulles Area Transportation Association event in Herndon. “Also, we’re looking at some options at the state level about the opportunity we may have to put some additional money into the project.” . . .

Click here for the rest of the story.

Letter: Reston 2020 Calls on LaHood, Local Partners to Use Any TIFIA Funding to Reduce Toll Road Users' Burden

Ltr to SecTrans & Funding Partners Re Use of TIFIA Funding

Metrorail Phase 2 Denied Opportunity to Compete for 2012 TIFIA Funding

In a press release late this afternoon, the Department of Transportation announced the five projects it has invited to compete for the very limited TIFIA funding available in FY 2012.  Phase 2 of the Silver Line is not among these "finalists." 

Here is the news release:

U.S. Department of Transportation Invites Five Projects to Apply for FY 2012 TIFIA Credit Assistance

In response to the Fiscal Year 2012 Notice of Funding Availability (FY 2012 NOFA), DOT received 26 Letters of Interest (LOIs) seeking more than $13 billion in credit assistance to finance approximately $36 billion in infrastructure investment across the country. While TIFIA’s limited resources mean that not all of the LOIs can be selected, five projects are being invited to apply for credit assistance. These projects include: the I-95 HOT Lanes project in Northern Virginia; the North Tarrant Express Segments 3a and 3b project in Tarrant County, Texas; the Port of Long Beach Gerald Desmond Bridge project in Long Beach, California; the SR 91 Corridor Improvements project in Riverside County, California; and the US 36 Phase 2 project, between Denver and Boulder, Colorado. The projects invited to apply are well aligned with the TIFIA statutory selection criteria. The invitation to apply does not guarantee that the project will receive assistance. The Department will evaluate each project to determine its creditworthiness and negotiate acceptable terms for providing credit support. Links to the press releases for the five projects invited to apply for TIFIA credit assistance are provided below.
Read the I-95 HOT Lanes Project Press Release
Read the North Tarrant Express Segments 3a and 3b Project Press Release
Read the Port of Long Beach Gerald Desmond Bridge Project Press Release
Read the SR 91 Corridor Improvements Project Press Release
Read the US 36 Phase 2 Project Press Release