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The Northern Virginia Transportation Authority Implementation of HB 3202

July 12, 2007

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NVTA

The Northern Virginia Transportation Authority (NVTA)

• Created by the Virginia General Assembly on July 1, 2002

• The Authority is charged with:

– Developing a regional transportation plan;– Develop regional priorities and policies to improve air

quality; and– Serving as an advocate for the transportation needs

of Northern Virginia

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• Update to NoVA long-range transportation plan.

• Approved by NVTA on September 14, 2006.

• Endorsed by all nine of its member jurisdictions.

Some of the key study findings include:• Even with CLRP investments travel conditions worsen.

• TransAction 2030 identifies $16.6 billion in improvements to road and transit network, over 25 years.

• Even with this investment, highway mileage operating with one hour or more of stop-and-go (congested) conditions under the 2030 CLRP network would be reduced by only two-thirds.

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Conclusions from TransAction 2030:

• NoVa’s elected leadership reached consensus on investment priorities based on the approved set of evaluation criteria.

• The solution for NoVa’s congestion problems needs to be multimodal.

• NoVa needs a minimum of $700 M a year (in 2005 dollars) in additional funding beyond current allocations, for the next 23 years, to implement the TransAction 2030 Plan.

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HB 3202 Overview

• General Assembly approved HB 3202 on April 4, 2007.

• Bill authorizes Northern Virginia to collect seven taxes and fees to be used for transportation purposes.

• If NVTA adopts all of the taxes and fees, could raise more than $300 million annually for transportation.

• Overall, funds must be distributed to projects and services benefiting the localities proportionally, based on where the funds were raised.

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HB 3202 Overview Con’t

• 40% of funding goes directly to locality in which funds are raised to be spent on urban, secondary and transit systems or projects in TransAction 2030 at the locality’s discretion.

• Remaining 60% of funding to NVTA for: • debt service on any bonds issued; • $50 M per year for Metro capital expenses; • $25 M per year for VRE capital and operating

expenses;• Regional transportation projects.

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Authorized Taxes & Fees

Tax/Fee Authorized Rate

• Grantor’s/Congestion Relief fee 40¢/$100 valuation

• Motor Vehicle Rental Tax 2% of rental rate

• Transient Occupancy Tax 2% of room rate

• Safety Inspection Fee $10/year

• Sales Tax on Auto Repairs 5% on labor

• Annual Regional Registration Fee$10/year

• Initial Vehicle Registration Fee 1% of value

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Grantor’s Tax (Congestion Relief Fee)

• Description: Tax applied to the sale price of property in the NVTA region. Tax is paid by the seller.

• Rate: 40¢/$100 valuation

– Example: On the sale of a $400,000 home, the tax is $1,600.

• Estimated Funding: $171 million annually

• Collection: Clerk of Courts. Same as existing tax. Specified in law.

Authorized Taxes & Fees

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Authorized Taxes & Fees

Motor Vehicle Rental Tax • Description: Tax applied to the rate of rental cars in the NVTA

region.

• Rate: 2% of total rental rate

– Example: On a $39.99 rental, the tax is $0.80

• Estimated Funding: $9 million annually

• Collection: By rental car company and transmitted to Department of Motor Vehicles. Same as existing tax. Specified in law.

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Authorized Taxes & Fees

Transient Occupancy Tax • Description: Tax applied to the rental of hotel rooms in the NVTA

region.

• Rate: 2% of total rental rate

– Example: On a $99 room, the tax is $2.00

• Estimated Funding: $25.3 million annually

• Collection: Proposed: By lodging establishment. Transmitted to localities; then to NVTA. Same as existing tax.

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Authorized Taxes & Fees

Safety Inspection Fee

• Description: Fee for annual state vehicle safety inspections conducted in the NVTA region.

• Rate: $10 per year

• Estimated Funding: $16.2 million annually

• Collection: Proposed: Collection by service station. Transmitted to State Police or directly to NVTA.

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Authorized Taxes & Fees

Sales Tax on Auto Repairs • Description: Sales and Use tax on the labor associated with

automotive repairs.

• Rate: 5% of labor charges.

– Example: On $200 in labor charges, the tax is $10

• Estimated Funding: $33.2 million annually

• Collection: Service station. Transmitted to Department of Taxation. Specified in law.

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Authorized Taxes & Fees

Regional Registration Fee

• Description: An annual fee for the registration of vehicles within the NVTA region.

• Rate: $10 per year

• Estimated Funding: $17 million annually

• Collection: Proposed: Department of Motor Vehicles

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Authorized Taxes & Fees

Initial Vehicle Registration Fee • Description: A one-time registration fee on the purchase of

vehicles, based on the purchase price, or vehicles registered in Northern Virginia for the first time.

• Rate: 1% of total vehicle value.

– Example: On a $20,000 vehicle, the tax is $200.

• Estimated Funding: $64.6 million annually

• Collection: Proposed: New car purchase – dealer; move in from other state – Department of Motor Vehicles; Move in from elsewhere in Virginia – first contact, DMV or local government.

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Project List Criteria

• A list of immediate, short-term project needs was developed for an initial NVTA bond issuance.

• These projects are:

– Balanced across regions and modes.

– Consistent with the region’s transportation plans, including Transaction 2030.

– Ready to Go

– Short-term priorities of the jurisdictions

• They improve congestion, safety, and/or transit capacity or service.

• Most are included on NVTA’s list of short-term priorities for the 2007 General Assembly session.

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Project List Allocations

Transit Projects $ 39,208,820

Multi-modal Projects $ 6,246,000

Highway Projects $ 56,545,180

TOTAL $102,000,000

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Transit Projects

Project Title Funding

• The Crystal City/Potomac Yard Transit Improvements $11,458,820 (Arlington County and Alexandria)

• Richmond Highway Public Transportation Initiative $10,000,000

• Purcellville Park-and-Ride Lot $ 1,400,000

• Route 15 Park-and-Ride Lot $ 1,000,000

• Escalator Canopy at Huntington Metrorail Station $ 2,000,000

• Upgrade of station signage at 20 Virginia $ 6,100,000 Metrorail Stations

• Upgrade of platform at West Falls Church and Vienna $ 3,500,000 Metrorail Stations

• VRE Locomotives $ 3,750,000

TOTAL $39,208,820

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Multi-modal Projects

Project Title Funding

• Wilson Boulevard improvements; $ 2,000,000 Oakland to Randolph (Phase II)

• Old Dominion Drive Multi-modal Improvements (Phases 2-5) $ 1,500,000

• Improvements at Chain Bridge Road (Route 123) $ 2,500,000 and Eaton Place

• Citywide sidewalk replacement and construction $ 246,000 (Falls Church)

TOTAL $ 6,246,000

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Highway Projects

Project Title Funding• Intersection improvements at Lee Highway and Harrison Street $ 800,000

• Fairfax County Parkway/Fair Lakes Parkway and $28,850,000 Monument Drive Interchange

• Pacific Boulevard between Nokes Boulevard and Severn Way $ 2,600,000

• Complete Battlefield Parkway between Route 621 and $ 3,000,000 New Bridge

• Intersection improvements at Loudoun County Parkway $ 230,000 and Evergreen Mills Road

• Bull Run Post Office Road Improvements $ 1,500,000

• Traffic calming on Route 50 at Village of Aldie $ 915,180

• Maple and Main Intersection Improvements (Purcellville) $ 1,150,000

• Route 28 Overpass in Manassas $ 2,000,000

• Intersection improvements on Manassas Drive in Manassas Park $ 350,000

• Prince William Parkway widening from Hoadly Road $14,900,000 to Old Bridge Road

TOTAL $56,545,180

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July 12th Actions

• NVTA is considering many actions today in order to implement HB 3202.

• Some proposed actions to note: Adopting each of the taxes and fees;

Approving short-term project list;

Resolution of intent to issue debt for short-term projects; and

Authorizing the filing of a bond validation suit on July 13, 2007.

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NVTA Initial Bond

• Full Name of Bonds: Transportation Facilities Revenue Bonds, Series 2007

• Maximum Principal Amount: $130,000,000 (Current projection is $129,975,000)

• Purpose: To fund issuance and financing costs, capitalized interest, required reserves and short-term projects.

• Security: Pledge of "Pledgeable NVTA Revenues," which means all revenues received by NVTA from the seven regional taxes and fees, net of (i) costs of collection and NVTA administrative costs, (ii) any revenues from toll facilities and (iii) the 40% distribution to Member Localities. The Bonds also may be secured by debt service reserve fund.

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NVTA Initial Bond

• Maximum interest rate: True interest cost of 6.0% (current projection is 5.8%).

• Maximum Term: 31 years (current projection is 25 years)

• Final Details: Before the Bonds are sold, NVTA must adopt another resolution to approve the final terms and conditions of the Bonds and method of their sale (that is, competitive or negotiated).

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Overlapping Debt

• NVTA’s debt should not negatively affect local credit ratings

• NVTA debt will be not be classified as “overlapping debt” by Moody’s

• Overlapping debt is not an inherently negative credit factor & only one of a multitude of broad factors

considered during credit analysis.

• Historically, rating agencies have not downgraded credit ratings due to overlapping debt.

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Questions?