Wednesday, January 16, 2013
U.S. Secretary of Transportation Ray LaHood expressed optimism a federal loan would be approved to help finance the $5.5 billion Silver Line rail project, funding that would help slow down projected toll rate increases on the Dulles Toll Road.
“This is one of the first [projects] under the new TIFIA loan program that was passed by Congress in transportation bill, which gave us an enormous amount of money, almost $2 billion over the next two years,” LaHood said. “I would say right now things look good.”
Tolls on the Dulles Toll Road are currently set to finance roughly half the Silver Line’s cost.
After swearing in two federally appointed members to the board of directors of the agency that oversees the Silver Line’s construction, the Metropolitan Washington Airports Authority, LaHood praised the authority’s work to overhaul its ethics, hiring, and contracting practices. Last year an audit by the Department of Transportation revealed a litany of shady dealings at MWAA.
“Since then MWAA has done everything that we have asked them to do,” LaHood said. “That included passing new travel and ethics policy for its board and staff, terminated contracts with former board members and employees that are not competitively bid, adopt employment and nepotism restrictions, improve board transparency, began to make quarterly acquisition reports and forecasts to the [U.S. DOT], and approve an amendment to the lease with DOT to give us oversight of MWAA policies and procedures permanently.”
This progress is a factor in determining whether MWAA will receive a loan through the TIFIA (Transportation Infrastructure Finance and Innovation Act) program.
Last year Virginia Congressman Gerry Connolly (D) said he expected the loan could amount to 25 to 30 percent of the project’s cost. When asked on Wednesday how large a TIFIA loan would be for the Silver Line, LaHood declined to speculate, and he offered no estimate on when the final decision would be made.
“You’re the only one that would really care about that, and I’m not going to get into the details about the loan application,” LaHood said. “We are working with MWAA on this and as soon as we finalize the work we will announce what percent we’re going to give and how much money it involves.”
Drivers who use the Dulles Toll Road also care about how much funding the Silver Line may receive. Additional funding would bring down the projected toll rates, currently scheduled to rise over the next four decades.
Tolls on the road increased on January 1. The full, one-way toll increased by 50 cents to $2.75. To the commuter who takes the road every day, that will amount to an extra $260 in 2013. The tolls are scheduled to increase again in January 2014 by another 75 cents.
MWAA CEO Jack Potter said he’s also optimistic MWAA would receive the additional funding.
“We are working very closely with the Department of Transportation, Loudoun County, Fairfax County to put our application in and we are very positive of a good outcome,” Potter said. “I’d like to get as much as we possibly can.”
Potter has been lobbying for more state funding. Virginia lawmakers have approved only $150 million for the Silver Line so far. On Monday Potter met Virginia Secretary of Transportation Sean Connaughton as well as a group of lawmakers who control the purse strings in Richmond.
“I am very much focused on output. The output is dollars coming to the rail project,” Potter said. “How the Commonwealth generates those dollars is strictly Commonwealth business. I am strictly focused on the output of $300 million dollars or more that could come to the rail project.”
In a major transportation funding plan unveiled earlier this month, Governor Bob McDonnell proposed using sales taxes revenues to provide $300 million for the Silver Line over three years. That plan, however, is expected to face opposition in the General Assembly among lawmakers who say the rail project should not compete for general fund revenues normally used to pay for education and public safety.
Thursday, November 15, 2012
The agency managing the largest public rail expansion in the nation voted to increase tolls on a Virginia highway in part to help fund construction of the Silver Line.
On Wednesday, the Metropolitan Washington Airports Authority unanimously approved raising the full, one-way toll on the Dulles Toll Road to $2.75 effective January 1, an increase of $.50. In January 2014 toll will increase to $3.50.
The toll increases are a major part of the financing plan for the Silver Line extension to Dulles International Airport, a 23-mile, $5.5 billion project whose first phase is scheduled for completion late next year. The MWAA board put off a decision to increase tolls again in 2015 because of the possibility of obtaining additional state and/or federal dollars.
MWAA has two avenues to secure additional funds: Virginia’s General Assembly, which has provided only $150 million to date, and the federal TIFIA (Transportation Infrastructure Finance and Innovation Act) loan program.
“Our project is, bar none, (one) of the more worthy projects in the country for TIFIA loan financing,” said MWAA Board Chairman Michael Curto in remarks to reporters after the agency’s vote. “We’ve seen the enhanced TIFIA loan program so we’re positioned well, given that the project is shovel ready. We’re ready to move."
Curto is not the only public official who has expressed optimism a federal loan with come through. However, MWAA has a lot of competition for TIFIA dollars. Nineteen major transportation projects totaling $27 billion are currently applying for loans, and Congress has authorized $1.75 billion for TIFIA 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 leaves fifty percent of the entire project’s cost on Dulles Toll Road users (75 percent of Phase II).
“We really want this to get built and succeed,” Maynard said. “We are pressing that all the money [MWAA] receives relieve the burden on toll road users.” Fairfax County residents have relayed their concerns to MWAA that drivers looking to avoid higher tolls will opt for already congested secondary roads, further clogging their communities with traffic.
Curto promised that MWAA will lobby Richmond for additional funding. He declined to criticize the McDonnell administration’s spending priorities, which have seen hundreds of millions of dollars allocated for highway expansions.
“We are going to reach out, work closely and hope to encourage the governor’s administration and the folks in Richmond that Dulles Rail should be the recipient of additional funds. As Secretary LaHood said, it is a model project,” Curto said.
Friday, September 07, 2012
Higher tolls are coming to the Dulles Toll Road next January. The question remains how high.
The public had its first chance to weigh in on projected toll increases at an open house Thursday night organized by the Metropolitan Washington Airports Authority (MWAA), the agency running the Silver Line rail project that will heavily rely on increased toll revenues for its financing.
The Silver Line is a 23-mile rail link connecting Washington, D.C to Dulles International Airport and beyond into the Virginia suburbs. Its projected cost is $5.5 billion.
Effective January, the one-way full toll would increase to $2.75, then to $3.50 in 2014, and $4.50 in 2015, under current toll projections. Rates would continue to rise two dollars every five years for the next four decades unless other sources of funding are secured to mitigate the toll increases.
“It’s ridiculous,” said Bayush Radadaya of Ashburn, who drives the Dulles Toll Road to work. “Right now I can afford it but once it doubles I cannot because gas prices are so much.”
Unlike a typical public hearing where residents take turns speaking into a microphone to a panel of officials, the event inside a high school cafeteria in Ashburn was informal. MWAA officials were on hand to answer questions, residents could read about the project on posters displaying charts and maps, and submit written comments into a cardboard box.
“You can throw a comment on a card but I’m not quite sure you necessarily have input,” said Pete Sabbatino of Ashburn. “The most input you are going to get is if someone read’s your comment card. It’s being dictated to you.”
The Airports Authority says public feedback will be taken seriously when establishing the new toll rates later this year.
“The benefit of the [open house] is that we have an opportunity to educate people about the project,” said MWAA CEO Jack Potter.
Toll revenues are projected to cover about 50 percent of the Silver Line’s total estimated $5.5 billion cost. The project was split into two phases; the tolls would cover 75 percent of Phase 2’s cost of $2.7 billion, under current projections.
Critics of the financing arrangement point to the lack of federal funding ($900 million for Phase 1, none for Phase 2) and relatively small contribution by the state of Virginia ($150 million). Potter says the airports authority is working to increase those figures, which would reduce the toll increases and give drivers a break. MWAA is requesting a loan under the Transportation Infrastructure Finance and Innovation Act (TIFIA) program.
“It’s a 2.4 percent loan versus what we’re able to get in the open bond market of about six percent, so that would significantly lower our cost for financing the debt,” said Potter, who said Virginia’s contribution of $150 enabled MWAA to delay the $4.50 one-way, full toll rate until 2015. It was originally projected to take effect next year.
To Loudoun County resident Daniel Davies, the plan to finance a rail project out of the pockets of car commuters is unfair.
“"The toll rates plus what the toll avoidance is going to do to our communities and the traffic along Route 7 and Route 28 is just going to be gridlock,” said Davies, referring to drivers who will dodge the higher tolls on the highway by clogging already congested local and state roads.
Davies said he opposes the Virginia state legislature providing any additional funding for the Silver Line because the state already handed over the Dulles Toll Road to MWAA, an asset valued at more than $3 billion during the administration of Gov. Tim Kaine.
Read more TN coverage of the Silver Line here.
Friday, July 27, 2012
(New York, NY - WNYC) Step right up, we've got money for loans. That was essentially today's message from U.S. Transportation Secretary Ray LaHood to states with large public transportation works in the planning. That includes rebuilding the Tappan Zee Bridge in New York, about which LaHood and his chief financial officer spoke positively, if vaguely.
“We have heard from very high officials in the state of New York about this project and we have directed them to the notice in the federal register,” said LaHood, referring to today's official announcement that the grant money is available.
In February, the state applied for a $2 billion loan for the Tappan Zee Bridge from the U.S. DOT fund known as TIFIA (Transportation Infrastructure Finance and Innovation Act). But TIFIA turned it down.
New York State Governor Andrew Cuomo has been undeterred. He continues to apply political muscle to the project: this week, he appointed a former TV anchorman as Special Advisor to the The Tappan Zee Bridge. But he has yet to explain how the estimated $5.2 billion cost of the rebuilding will be funded. Given the state's limited finances, it would seem to behoove the governor to scoop up some of that TIFIA cash.
TIFIA functions as the U.S. DOT's infrastructure investment arm. In the past, it has paid for projects like an upgrade to the Staten Island Ferry and an extension to the President George Bush Turnpike in West Texas.
The fund is newly infused with $1.7 billion from the recently enacted federal surface transportation bill. LaHood said that money can be leveraged into $17 billion worth of "loans, loan guarantees, and standby lines of credit to major infrastructure projects with the potential to create jobs and spur economic development and growth." That's a big jump up from the last round of $120 million, which was used to dole out $1.2 billion in loans.
U.S. DOT chief financial officer Chris Bertram said the department favors projects that have "a revenue source like a dedicated sales tax or, in the case of the Tappan Zee Bridge, tolls." He said that reassures the department it will be paid back.
Department spokesman Justin Nisly said the sooner a grant application is received, the sooner it will be dealt with. "We will begin evaluating letters of interest immediately, and announcements will be made on a rolling basis."
U.S. DOT will also launch a unit that will help state and local governments figure out how to finance their transportation projects. According to a press release, the Project Finance Center will act as a wise uncle to bureaucrats seeking "to analyze financial options for highway, transit, rail, intermodal and other surface transportation projects facing funding challenges."
Thursday, April 26, 2012
UPDATED WITH LETTER FROM FEDERAL GOVERNMENT New York State had been hoping that a third of the cost of the Tappan Zee Bridge replacement would be funded through a low-interest loan. But the federal government has taken a pass -- at least for this round.
State officials are maintaining that today's announcement is "very good news." Speaking at an Albany press conference, director of operations Howard Glaser said the bridge would still be considered in later rounds of funding.
"They advised us the Tappan Zee bridge would be one of the six large scale projects that will be considered in the second round," Glaser said. But Glaser acknowledged financing couldn't come until after congress passes a surface transportation re authorization bill, which many experts predict won't happen until after the November elections. And a letter supplied to Transportation Nation (at the end of the post) didn't mention a short list of six projects.
In February, the state sent the U.S. Department of Transportation a letter of interest, requesting a $2 billion TIFIA (for Transportation Infrastructure Finance and Innovation Act) loan for the massive bridge construction project.
The state had said that the total cost of the project would be about $5.2 billion, although a budget hasn't been finalized.
The TIFIA website says that the agency 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." It continues: "While limited TIFIA resources mean that not all of the LOIs can be selected, five projects are being invited to apply for credit assistance."
But state officials -- who have yet to release a financing plan for the project -- say the Tappan Zee bridge isn't out of it. "In this first round they only did $100 million total for the whole country," Glaser said. " Remember our application for the Tappan Zee alone is in excess of $2 billion. So those large sclae high profile projets will be a further round based on federally available funding. They can't fund these large programs right now."
Glaser said the Tappan Zee bridge funding would have to wait until Congress reauthorizes the transportation bill.
TIFIA loans are used for large-scale infrastructure projects that cost $50 million or more. Loans can't exceed 33% of project costs.
The letter to the state from the federal government didn't make any mention of a short list of six projects. Here's the letter:
John M. Bryan
Chief Financial Officer & Treasurer
Interim Chief Information Officer
Thank you for submitting a Letter of Interest (LOI) in response to the FY 2012 TIFIA Notice of Funding Availability. In response to the December 30, 2011 deadline, the Department received 26 LOIs seeking over $13 billion in credit assistance to finance an estimated $36 billion in infrastructure investment. The requested level of TIFIA financing is more than 10 times the level than can be supported given current program resources.
Each LOI has been evaluated against the TIFIA statutory criteria, and the Tappan Zee Bridge project performed well in our review. Unfortunately, the Department does not have sufficient budgetary resources to invite an application for your project at this time. In light of those constraints, the Department prioritized projects that could be accommodated within resource levels and required financing in the nearest time frame. However, if TIFIA budgetary resources are significantly increased as proposed in the President's Budget and the House and Senate reauthorization proposals, we will create an expedited review process for those funds. We encourage you to continue the planning and financial work necessary to move your project if and when that review process takes place. Please note that even with an augmented program, the level of TIFIA credit assistance may still be constrained, which could impact the amount available for the Tappan Zee Bridge project.
If you have any questions, please do not hesitate to contact me.
TIFIA Credit Program (HITJ)
US Department of Transportation
Thursday, July 07, 2011
(Washington, DC -- Todd Zwillich) House Republicans formally floated an outline of their 6-year transportation bill Thursday, promising to try for large cuts in highway funding and to send more influence over projects to the states.
GOP lawmakers presented the $230 billion bill as a way to fund critical transportation projects in lean economic times. Democrats promptly attacked it as inadequate and said it would not reach President Obama for a signature.
The most glaring top-line from Republicans’ bill is a major curb in federal highways spending. The bill caps spending from the Highway Trust Fund to what it takes in in taxes. That’s projected at right around $35 billion per year over six-year life of the bill. That would comprise a major cut in highway spending, which has been borrowing money from the rest of the government for years to fund new projects and upkeep. The American Recovery and Reinvestment Act, otherwise known as the stimulus, alone has spent about $63 billion on highway projects since 2009.
“We believe we can do a lot more with less,” said Transportation and Infrastructure Committee Chairman Rep. John Mica (R-Fla.) at the committee’s roll-out event on Capitol Hill.
The “more” part, Mica said, comes from streamlining how highway projects go from blueprint to blacktop. The bill pares back environmental review requirements and other clearances for new projects. It also overhauls or eliminates up to 70 programs that now funnel money into highway projects and instead focuses on sending money to states in the form of loans and infrastructure bank installments.
A GOP handout promoting the bill states that the average highway project would get completed in six years under the bill, compared with 15 years now.
All of this together, Mica said, would mean more, not less, money reaching projects.
“I think we can more than double the $35 billion we have in the Trust Fund,” he said.
Still the funding level is way below a $55 billion-per-year, two-year proposal put forward by Senate Democrats Wednesday. That points up a deep divide that many lawmakers think will be impossible to bridge in order to get a final bill. The transportation sector is now operating under Congress’s 8th temporary extension.
Republicans are also proposing to up the direct federal loans under the Transportation Infrastructure Finance and Innovation Act (TIFIA) to $1 billion and to give more control over the funds to state and local authorities. That’s good news for mayors like Democrat Antonio Villaraigosa, who chimed in by phone to offer his support.
Republicans are also gunning for changes in high-speed rail funding, including the very definition of “high-speed”. Trains funded under the bill would have to go at least 125 mph to qualify as high-speed, not the 110 mph used now.
View House Republicans 17-page bill outline here (http://republicans.transportation.house.gov/Media/file/112th/Highways/Reauthorization_document.pdf)
Actual text of the Republicans’ bill could be out in time for a scheduled hearing next Tuesday. But Democrats took little time to trash the GOP proposal.
Rep. Nick Rahall (D-W.Va.), called Mica’s bill a “road to ruin.". "It takes our nation in the wrong direction, backwards instead of forwards. Instead of putting America on a pathway to prosperity, this bill provides the necessary funds for transportation to half the country and tells the other half to wait around for the next time," said Rahall, the ranking Democrat on the Transportation and Infrastructure Committee.
Given the $20 billion-per-year gap between House Republicans’ 6-year bill and Senate Democrats’ 2-year bill, prospects of the GOP proposal surviving in its current form seem dim.
“I don’t think it goes anywhere,” Rep. Earl Blumenauer (D-Ore.), a member of the committee, said in an interview. “I don’t think six years of stability is worth setting bar so low that it’ll take us years to crawl back. I think what’s most likely is we’ll get probably a 2-year extension.