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RCA: Use $150M on Costs, Not Interest

Advocacy group says Virginia should not spend on finance costs for Metrorail Phase 2.

The Reston Citizens Association is urging Virginia Gov. Robert McDonnell to use the $150 million it has pledged to help pay for construction of Phase 2 of the Silver Line as a down payment on the capital construction costs rather than as payments against interest on MWAA revenue bonds needed to finance the rail line extension.

In a letter to McDonnell, RCA President Colin Mills says "in using the $150 million to help pay down the interest payments on MWAA’s forthcoming revenue bonds for the Silver Line’s Phase 2, the payments will contribute much less than $50 million—maybe as little as $30 million—to Phase 2’s overall $3 billion capital cost.”

Mills calls for the State of Virginia to use the $150 million dollars—payable in three annual $50 million increments—as capital payments for the construction while Phase 2 of the line is being built. By reducing the debt needed on Phase 2 by $150 million, it would lower the total bond payment cost to Dulles Toll Road users by more than $500 million—more than $300 million after 3 percent inflation—over the next four decades. That is a far more cost-effective application of state transportation funds, RCA says.  

The entire text of the letter is a PDF attached to this article.

Terry Maynard, Reston 2020 and RCA Board of Directors member says the group's concern is that the state and MWAA will raise toll rates - which is not a good long-term solution.

“Our concern is that the state and especially MWAA will prefer to use the $150 million to incrementally increase toll rates in the very short term without regard to the most cost-effective solution," said Maynard. "While the MWAA approach— which is being considered by its Board of Directors — has a great political optic in preventing tolls from doubling to $4.25 one-way next year, applying the $150 million as a down payment on Phase 2 could save toll road users hundreds of millions more over the longer term by applying them to pay construction costs.  

"Moreover, the MWAA stair-step toll increase approach still means that toll rates will triple to $6.75 in 2018 as planned. Why wouldn’t Virginia and MWAA want the scarce funds to have their maximum impact? To do otherwise wastes taxpayer money and hurts toll road users more.”

Reston2020 co-chair Tammi Petrine says reducing toll increases is of "utmost importance."

“The place to start is to do the right thing now with state funding," she said. "That means taking a longterm view in maximizing any reduction in the projected nearly nine-fold increase in tolls on the 80,000 Northern Virginians who use the Dulles Toll Road daily. Virginia and MWAA have to stop playing political games and use public funds in a responsible manner that will most ease the huge costs toll road users face."

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T-Bird July 12, 2012 at 07:21 PM
Bob, your confusing the issue. That artice was about MWAA applying for a $1.7 billion TIFTA loan, which is absurd. I am not the least bit surprised, and the board is even worse it seems. We, I thought, were talking about the RT 28 station and the shunting of responsibility for that station to Fairfax. A TIFTA loan for that would be reasonable. As for the use of the term "boondoggle", it was in the context of describing the underground station at Dulles, and not the entire project. Although I wouldn't use the term, I would agree that the underground station idea was vain and short sighted. MWAA wanted a Lexus and had money for a Honda, and just expected us to not notice. Bulovia did a good job in taking them to task on that one, and made a very out-of-charater public show of it. So no Bob, you can't make it up, but you sure can take it out of context when it suits you.
Bob Bruhns July 13, 2012 at 01:43 PM
So let me see if I understand, T-Bird. You advocate that Fairfax County and Loudoun County should finance Dulles Rail infrastructure with Tifia Loans? http://www.fhwa.dot.gov/ipd/tifia/ Are you aware that we might have to, you know... pay those loans back? With interest? (Surprise!!!) Along with the repayments for the Great Big Bond we will be floating to pay down the Dulles Toll Road tolls when riots break out as drivers abandon the Toll Road and jam side roads for miles every day? (Surprise!!!) And along with the payments we will be making to help WMATA pay their rather huge Maintenance and Capital Needs costs? (Surprise!!!) And along with the payments we will be making to expand the Rosslyn Tunnel when people get tired of the delays that will result from shuffling the Orange, Blue and Silver Lines through it? (Surprise!!!) Not to mention the construction costs that we WERE told about...
T-Bird July 13, 2012 at 04:16 PM
Yes Bob, I am aware of the definition of a loan. That's why it's not called the TIFTA Grant. The rest of your commentary is just assumptions. You assume that people will not pay. Being from NY as I am, where tolls are much higher, I would not assume that. Frankly, I think the Toll Road was vastly underpriced. I mean 50 cents? I would call $5-$7 a reasonable toll for Dulles to 66. And a higer rate may actually relieve the congestion a bit. You also make the undelying assumption that the rail, once working, will not relieve any of the existing congestion. Again, I don't think this is true. Although again I say that I think a VRE style service would have been more attractive in terms of getting people to give up their car. AQs for maintenance costs, MWAA didn't have enough to do proper maintenance as it was. The Red line crash should have shown you that. So an increase in maintenance funding should be welcome. As for the tunnel, that is a seperate huge undertaking that would, frankly, happen anyway eventually. The overriding truth Bob is that Fairfax and points west desprately need more rail service. The reason why those cars are clogging all your roads is because there are no alternitives, not the other way around. And this seems to serve where they anticipate the most development. I would've thought an extension of the Orange line down 66 would have been better served, but nobody asked me. And, like it or not, the toll road is a source of funding.
T-Bird July 13, 2012 at 04:21 PM
Bob, I don't think anybody is saying that the Silver line is the solution to all of the regions traffic problems. They are fools if they do. But it is a major start to changing the transit dynamic of this area that, if you hadn't noticed, does not work already and it's only going to get worse if we do nothing. The next thing is doing something about the 66 corridor. And then, somebody is going to think long and hard about Rt 7 and possibly making it a limited access highway for most of it's span. One thing at a time Bob, and we'll get there.
Bob Bruhns July 13, 2012 at 08:54 PM
I wish that this region had not jumped to rail without using a dedicated-road bus backbone first. Such a system could have carried a lot more people to and from a lot more places than this one rail line, at much lower cost. And, it would have reserved future rail routes, and prepared business zones there, for the time when rail might actually become appropriate. Instead, not only did we jump the gun, but we also paid nearly two times what the rail system should have cost! That's a lot of wasted money, and now we will be paying for that mistake, plus interest on the money we have to borrow in order to make that mistake, for generations. The arguments in favor of this blunder are a little like saying, "Oh it makes sense to buy a home, so it doesn't matter what the home costs." Wrong... Yes, maintenance on Metro would definitely be a good idea. However, since its region could not pay for that, maybe the story about Metro as a big economic boon needs to be reviewed. Based on the maintenance and Capital Needs shortfall that WMATA has now, it is evident that the supporting tax zone needs to grow faster than the rail footprint, meaning that Metro simply doesn't pay for itself - not only in terms of its ridership not fully funding it, but even in terms of its local region failing to fully fund it. Will we have to fund our own area's maintenance and capital needs, AND the maintenance and capital needs of the other areas as well? I wouldn't call that good, T-Bird.

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