Dulles Metrorail Silver Line Phase 2: Fairfax County Parking Garages & WMATA Surcharge Agreement

County of Fairfax, Virginia

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Dulles Metrorail Silver Line Phase 2: Fairfax County Parking Garages &

WMATA Surcharge Agreement

Tom Biesiadny, Todd Wigglesworth, Joe LaHait, and Erin Ward

Board Transportation CommitteeJune 10, 2014


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Presentation Outline

I. Silver Line Project Funding and Status of Parking Garages

II. Background on WMATA Surcharge Agreement

III. Amendments Required to WMATA Surcharge Agreement

IV. Total Project Estimate and Funding Status

V. Plan of Finance

VI. Timeline and Summary


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I. SILVER LINE PROJECT FUNDING & STATUS OF PARKING GARAGES


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Silver Line Phase 2 Memorandum of Agreement – Parking Garages

• Funding plan agreement reached between USDOT, Commonwealth of Virginia, Fairfax County, Loudoun County, MWAA, and WMATA

• Fairfax County approved in November 2011• Counties agreed to “use best efforts” to relieve the rail

project of the five parking garages– Fairfax: Herndon and Innovation Center (formerly Route 28)

• County staff has developed a financial strategy to pay for the garages.


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Ownership of New Parking Garages• Until the Dulles rail project, WMATA owned (or will own) all

the parking facilities at the five Metrorail stations in Fairfax County (Vienna, Dunn Loring, West Falls Church, Huntington and Franconia-Springfield)

• With the Dulles project, Fairfax County has taken on a greater role in the development and ownership of the parking facilities at the new Metrorail stations (Wiehle-Reston East, Herndon and Innovation Center)

• For Wiehle-Reston East and Herndon, the County

purchased the property for these facilities in the mid-1990s and developed satellite park-and-ride lots

• At the Innovation Center Station, the County secured the

land for the parking garage through a proffer

• By retaining ownership of the parking facilities, the County controls future joint development on the sites and retains all the revenue from those joint developments


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Changing the Parking Surcharge• The current parking fee at WMATA parking facilities consists of two parts; a

base fee used for operation and maintenance costs, and a surcharge which is used to pay debt service on several Metrorail station parking garages

• Since the three new Dulles rail parking garages in Fairfax County will be owned by Fairfax County, there is a need to change the existing surcharge arrangement

• WMATA agreed to negotiate an amendment to the Surcharge Implementation Agreement to make the Phase 2 facilities at Herndon and Innovation Center part of that agreement

• Allows parking fees and surcharge revenues to offset debt service costs for the financing of these two parking garages

• In addition, the MOA clarified the definition of “parking facilities” to include the parking structures and related equipment and facilities related to the associated Phase 2 transit stations


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II. BACKGROUND ON WMATA SURCHARGE AGREEMENT


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Surcharge History • The concept of a parking surcharge was developed by Fairfax County and WMATA to

fund additional Metrorail parking spaces• The County and WMATA use the revenues from the surcharge at all five of the Fairfax

County stations, plus one in Arlington and one in Alexandria, to pay debt service on bonds issued by the EDA for new parking garages at the Vienna and Huntington Metrorail Stations

• Original surcharge agreement executed in 1989; amended in 1999• WMATA collects surcharge on top of base parking fee and credits it to the account of a

jurisdiction that will use it to provide Metrorail parking facilities• County provided revenue bond financing through the EDA that was supported by

parking surcharge fees from seven facilities in or near Fairfax County• WMATA pays the debt service using the surcharge funds• Ownership of the existing parking garage facilities transfers from EDA to WMATA upon

the completion of the lease terms (e.g. debt paid off)


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Current Surcharge Fee Structure

Station Parking Capacity

Parking Fee to Customer

Base Revenues to

WMATA

Revenue to Surcharge

Account

Huntington 3,617 $4.75 $3.50 $1.25West Falls Church 2,009 $4.75 $3.75 $1.00Dunn Loring 1,326 $4.75 $3.50 $1.25

Vienna 5,169 $4.75 $3.50 $1.25Franconia 5,069 $4.75 $3.50 $1.25Van Dorn 361 $4.75 $4.25 $0.50East Falls Church 422 $4.75 $3.75 $1.00

Total 17,973

Total rate will increase on July 1, 2014 from $4.75 to $4.85. The base rate will increase by $0.10. There will be no increase in the surcharge.


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Additional Parking Fee Information

• The surcharge amount is different, because the base parking fee is higher at rail stations inside the Beltway

• Arlington and Alexandria agreed to include the surcharge at their Metrorail station parking lots


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Previous Surcharge FinancingYear Item Facility Purpose

1989 Lease Revenue Bonds Huntington Debt Service

1990 Lease Revenue Bonds Vienna I Debt Service

1998 Refinanced Bonds Huntington & Vienna I Debt Service

1999 Lease Revenue Bonds Vienna II Debt Service

2005 Refinanced Bonds Vienna II Debt Service

2010 Lease Revenue Refunding Bonds

Huntington & Vienna I Defeasance of Outstanding Debt

WMATA and the County also utilized cash from the surcharge account for items such as: design of Vienna II and West Falls Church; design and construction of expansion parking at Huntington

The only debt that remains is Vienna II which is scheduled to be paid off in 2020


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Surcharge Credit Structure

• Existing Parking Revenue Bonds achieved a AA+ • County’s Moral Obligation provides that in the event of a shortfall in

surcharge revenues resulting in a draw on the debt service reserve securing EDA’s Bonds, the County will, from its general fund and subject to appropriation, restore the deficiency in the debt service reserve

• The County has never had to supplement the surcharge revenues to pay debt service.

• Current draft plan of finance for Herndon and Innovation Center Station Parking Garages assumes the same or similar credit enhancement


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Parking Fee Financial Summary • All parking fees projected to generate $10m annually

– Existing surcharge generates $5m annually • Less $2m annually for debt service on Vienna which is outstanding through 2020; • cumulative balance approximately $19m

– New Silver Line Garages (Herndon and Innovation Center) total parking fees are projected to generate $5m annually

• Wiehle-Reston East Parking Garage– Annual parking revenues will be used in combination with ground rents to offset debt

service for Wiehle-Reston East bonds issued in July 2011• All surcharge and County owned parking fee revenues will be earmarked for

debt service and operating and maintenance (O&M) • Stable and versatile funding source – proven through financing and cash

contributions to parking garages• Current surcharge will expire, if there is no more debt outstanding to pay (e.g. it

will be done in 2020 when Vienna II is retired)• Annual parking and surcharge revenues and cumulative surcharge balance are

essential to finance County parking garages at Herndon and Innovation Center


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III. AMENDMENTS REQUIRED TO WMATA SURCHARGE AGREEMENT


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Proposed changes to Surcharge Agreement

• Creation of a Fairfax Metrorail Parking System to consist of the Wiehle, Innovation Center, and Herndon parking structures, surface lots, and related facilities and improvements, and future parking spaces the County may develop for Metrorail patrons

• Fairfax will set parking rates for spaces within its system; WMATA does not have approval authority; all fees go to the County

• Fairfax may use the parking revenues for improvement and expansion of parking for Metrorail patrons at Metrorail stations in Fairfax County, whether the parking is owned and controlled by Fairfax or WMATA, and at parking facilities in the County that provide remote parking for Metrorail patrons


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Proposed changes to Surcharge Agreement Continued

• WMATA will continue to set parking rates for WMATA controlled spaces; which include – a base fee, which WMATA uses for O & M, and – a surcharge, at a rate established by WMATA as requested by the

County• Proposed Agreement requires WMATA to transfer surcharge revenues to

the County:– Existing surcharge account balance (approximately $19m) minus a

reserve for Vienna II (max of $2M) will be transferred to the County upon execution; reservation is for amounts WMATA owes for up to 12 months of Vienna II rent/debt service payments

– Thereafter, WMATA transfers surcharge revenues to the County monthly, after it has reserved amount sufficient to pay next 12 months of Vienna II rent payments


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Proposed changes to Surcharge Agreement Continued

• When Vienna II bonds are paid off, facility lease terminates and all surcharge revenues are transferred to the County monthly with no reservation by WMATA

• Fairfax can use surcharge revenues, for planning, development, financing, construction, operation, maintenance, insurance, improvement and expansion of parking for Metrorail patrons at Metrorail stations, whether the parking is owned and controlled by Fairfax or WMATA

• Proposed agreement extends life of the surcharge arrangement – current agreement will terminate when the Vienna II bonds are paid


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Ordinance Amendment for Parking Fees

• Related “housekeeping” measure required by state law.• Chapter 82, Article 5, Section 82-5-39, of The Code of Fairfax County

governs parking at WMATA owned/operated garages• Amendment prepared to expand Section 82-5-39 to Metrorail Parking

Facilities owned or controlled by the County (i.e., the Silver Line Garages)– June 3—County Board authorized advertisement of public hearing – July 1— County Board Public Hearing

• Amendment allows County to regulate those parking areas in the Metrorail system that are or will be owned or controlled by the County, including setting parking fees


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IV. TOTAL PROJECT ESTIMATE AND FUNDING STATUS


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Current Funding Status forPhase 2 Parking Garages

Herndon Innovation Center

TOTAL

Total Project Estimate

$56,700,000

$60,850,000 $117,550,000

Less FY 2013 Carryover

-1,500,000

-1,900,000 3,400,000

Less FY 2015 Budget

-2,300,000

-2,300,000 4,600,000

Less FY 2016 (HB 2313 Local)

4,000,000

4,000,000 8,000,000

Net Balance (Bond Sale)

$48,900,000

$52,650,000 $101,550,000


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V. PLAN OF FINANCE


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Plan of Finance Items• Parking garages currently in the WMATA system and part of the surcharge

agreement to generate $5m approximately (assuming Vienna II paid off)• County will own and maintain three new Silver Line garages

– Parking fees will be collected by WMATA and transferred to the County (less processing fee)

– Herndon and Innovation Center are expected to generate approximately $5M annually

– Wiehle-Reston East parking fees will be combined with ground rents to offset debt service for bonds issued for construction in 2011 and O&M costs

• Both surcharge and County owned parking fee revenue sources will be utilized for debt service and O&M

• Same credit structure used for previous County / EDA parking garage revenue bonds


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VI. TIMELINE AND SUMMARY


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Date ItemMay 9, 2014 USDOT Awards TIFIA LoanMay 27, 2014 MWAA turns over Phase 1 to WMATAJune 10, 2014 Board Transportation CommitteeSummer 2014 Expected start of Phase 1 Passenger/Revenue ServiceSummer / Fall 2014 Targeted closing on County TIFIA loan with USDOT

Fall 2014 County and WMATA action on Amendments to Surcharge Agreement; County to notify MWAA of status of County parking garages

Fall 2014 County / Bond Counsel to initiate Bond Validation ProcessDecember 2014 Deadline to notify MWAA on status of Parking GaragesWinter 2016 Bond Sale Construction to begin on Parking GaragesLate 2018 Targeted opening of Phase 2 Passenger/Revenue Service, Parking

Garages

Timeline


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SummaryCurrent Surcharge Agreement New Surcharge Agreement

WMATA Owns Land used to Build Garage County Owns Land used to Build Garage

County Finances Parking Structure County Finances Parking Structure

WMATA Collects Parking and Surcharge Fees

WMATA Collects Parking and Surcharge Fees, and Transfers them to the County

WMATA Pays Debt Service with Surcharge Fee through a Lease Agreement

County Pays Debt Service on New Structures

WMATA Pays all O&M Costs with Base Fee County Pays O&M Costs on County Owned Facilities

WMATA Owns Land and Structure once all Debt is Paid

County Owns Land and Structure

Joint Development Benefit through WMATA Capital Formula (Approx. 16%)

Joint Development Benefit (100% County)

Date post:	09-May-2015
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Dulles Metrorail Silver Line Phase 2: Fairfax County Parking Garages & WMATA Surcharge Agreement

News & Politics