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Written by Chris Walker
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Tuesday, 13 April 2010 |
A fiscal train wreck for Fairfax County—a $400 million annual drain on the County and its residents and businesses.
The first complete compilation of the real costs of the Silver Line to our localityThe real total cost of the Silver Line for Fairfax County is composed of several elements:
1. WMATA Subsidy.
Currently Fairfax County gives WMATA $105 million a year as its share of the regional subsidy. This is 13.5 % of the $775 million contributed by the compact jurisdictions.
Fairfax currently is charged for 5.5 stations. When the Silver Line is built out, 8 stations will be added to Fairfax’s total, bringing the total to 13.5 stations. This will make Fairfax the second largest jurisdiction in terms of stations, and the second largest in terms of both population and assumed ridership in the whole system—ahead of the Maryland counties, and only behind the District of Columba.
Assuming that ridership is proportionate to the existing Fairfax per station figures, Fairfax’s share of the WMATA subsidy will rise to 22%.
The Silver Line will increase WMATA’s operating deficit by $120 million a year (Environmental Impact Statement estimate). At today’s numbers plus the Silver Line addition, the deficit would then be $900 million for FY 2012.
22% of $900 million is about $200 million. Thus, the Silver Line will double Fairfax’ yearly obligations to WMATA, adding a minimum of $100 million (and rising) to the general budget of Fairfax each and every year for the future.
This figure does not include the cost of any capital campaign or special assessments for Metro Matters or other campaigns. Since the base system requires $10 billion in upgrades, Fairfax’ share of this would be $2.2 billion.
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Written by Christopher Walker
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Tuesday, 05 January 2010 |
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http://www.fairfaxtimes.com/cms/story.php?id=835
The recent approval by the Fairfax County Board of Supervisors of the Dulles Rail Phase II tax district without any public discussion of alternatives for the overall rail financing structure leaves inequity issues unresolved.
While the greatest inequities will result from excessive reliance on Dulles Toll Road revenues to fund a majority of rail construction costs, the present rail tax district structure, if unchanged by Fairfax County, will result in ongoing inequitable taxation for eastern Reston Phase I tax district property owners. The Board of Supervisors needs to act now to remedy this inequity.
In January 2002, the Landowners Economic Alliance for the Dulles Extension of Rail was formed to "determine whether there will be a tax district to finance all or a portion of Fairfax County's share of the cost of the Metrorail extension to [Washington] Dulles [International] Airport, what the boundaries of that district should be, and what the level of tax assessment should be."
In mid-2003, citing low population density and the excessive cost per rider projected based on a then-estimated $4 billion capital cost for the 23-mile rail project, the Federal Transit Administration decided against Dulles Rail funding beyond Wiehle Avenue in Reston. The Virginia Department of Rail and Public Transit elected to phased construction. Lacking assurances that rail would ever be built westward from Wiehle Avenue to Dulles Airport, the Herndon Town Council voted not to join the Dulles Rail Tax District in November 2003.
In February 2004 -- without first notifying any Dulles Corridor property owners in writing -- LEADER, dominated by Tysons Corner property owners, hastily established the Phase I Dulles Rail Special Tax District to the Wiehle Avenue area. The Reston part of this tax district was included with the geographically separate Tysons Corner economic center over the objections of Reston property owners.
Since July 2004, Fairfax has collected more than $120 million in Dulles Rail taxes from Phase I tax district commercial property owners at the rate of 22 cents per $100 assessed valuation. Reston Phase 1 district properties have been taxed for the last five years, even though some office buildings are located farther from the proposed Wiehle Avenue station than similar properties now included within the Phase II tax district.
More than $2 billion of the projected Phase I Dulles Rail capital costs, including four stations, will be incurred in Tysons Corner where owners will be the primary beneficiaries of the rail project. Since March 2005, the Tysons Corner Task Force has worked with the Board of Supervisors and county staff to create a Tysons Corner "Vision Plan" mixed-use urban center including quadrupled property densities and the prospects for vastly increased property values there. In Reston, by contrast, steps to amend the current Comprehensive Plan were delayed repeatedly until December 2009. The newly created Reston Master Plan Task Force is dominated by the interests of major institutional property owners from the Phase II tax district and Western Alliance for Rail to Dulles.
WARD secretly negotiated with Fairfax County in recent months so that Phase II property owners will be taxed at only a nickel per $100 rate initially and subsequently will be taxed at a maximum rate of 25 cents per $100 of assessed value. Properties in the Phase II district will not be subject to increases in the county "C & I District" (commercial and industrial) tax rate surcharges. By contrast, Phase I district owners are subject to a current 22 cents per $100 tax rate, a planned 29 cents per $100 tax rate and a statutory maximum of 40 cents per $100 of assessed value.
To establish a unified tax district for Reston, the Reston portion of the Phase I tax district should be included in the Phase II district. A lower tax rate for the Dulles Corridor than for Tysons Corner would reflect the less intensive development planned for the Reston-Herndon area.
A separate Phase I Tysons Corner tax district with a higher total tax rate than in the Dulles Corridor makes sense given the different circumstances.
To remedy the current inequity, the tax money that has been paid into Fund 121 from Reston Phase I rail district owners should be rebated until the conditions for all properties in the Dulles Corridor are equalized. Not to do this is unfair and discriminatory.
Before issuing any bonds secured by these tax districts or further collection of taxes from either Phase I or Phase II, the boundaries should be redrawn as outlined above. This may be done administratively since it does not require a revote of either of the tax districts.
Alternately, it could be accomplished by polling the current landowners in the Reston portion of the Phase I district as to whether they wish to join Phase II.
Christopher W. Walker, founder,
Dulles Corridor Users Group and Phase I rail tax district property owner
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Written by Christopher W. Walker
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Wednesday, 16 December 2009 |
Dulles Rail's price tag in line with Boston's ‘Big Dig'
The Dulles Corridor Users Group recently completed an analysis projecting that the Dulles Metrorail extension will incur $22 billion in life cycle costs for planning, construction, financing and operation during the next 40 years. This amount is similar to the most recent cost estimates for Boston's infamous "Big Dig." The estimated $5.3 billion Dulles Rail capital cost is comparable to the current expansion costs of the Panama Canal.
Construction of the 11.5-mile first phase of the 23-mile Dulles Rail extension, managed by the Metropolitan Washington Airports Authority, is under way from Falls Church to Reston with a projected completion date of 2013 and an estimated cost of $3.2 billion, including interest expenses during construction. The second phase from Reston via Washington Dulles International Airport to Loudoun County is planned for completion in 2016 at a comparable cost.
The Big Dig was estimated in 1985 to cost $2.8 billion -- similar to initial cost estimates for Dulles Rail. But by 2006, Big Dig capital costs had increased to more than $14.6 billion, and with interest expenses, the total cost will exceed $22 billion. The high final cost of the Dulles Rail project -- almost $1 billion per mile -- is partly due to excessive reliance on Dulles Toll Road revenue bonds to be issued by MWAA but not backed by its full faith and credit or that of Virginia and Fairfax and Loudoun counties. Accordingly, the after-tax net cost of the financing currently planned is $5 billion higher than if a regional sales tax had been used for the local share of financing, as has occurred elsewhere for similarly sized rail projects.
This extra cost is a total waste. It is what happens when a politically unaccountable authority (MWAA) is allowed to bypass long-established provisions in the Virginia Constitution, which require funding for such a project to be based on legislative approval or a voter referendum to adopt new taxes and added bonded indebtedness.
Although Dulles Rail is considered a project of regional and national importance, as structured presently, the lion's share of project costs -- some $20 billion, or more than 90 percent, plus most cost overruns -- will be funded by residents and businesses of Fairfax and Loudoun counties. According to an August 2009 MWAA Bond Prospectus, tolls on the Dulles Toll Road will have to exceed $1 per mile, or more than $10 each way, by the 2040s in order to repay debt incurred for rail construction and Dulles Toll Road improvements.
By contrast, the Big Dig, Maryland's Intercounty Connector and most major road and rail projects elsewhere in the country are financed with broad-based regional taxes that have received approval either by voters in a referendum or by elected officials accountable to their constituency.
Dulles Rail will provide little increase in private or public transport mobility for most residents and businesses in the Dulles Corridor. Even rail proponents admit that most residents of the Dulles Corridor will continue to commute by automobile. At least the Big Dig project allows 250,000 cars and buses a day to move more quickly through the downtown Boston area. The rail project will be an economic albatross unduly burdening local businesses and residents for decades to come.
The Dulles Rail project is currently the subject of two state lawsuits and one federal lawsuit challenging the authority of MWAA to raise tolls, in essence taxing Toll Road users for a rail project that most will be unable to benefit from.
Christopher W. Walker
Founder
Dulles Corridor Users Group
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Written by Rob Whitfield
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Wednesday, 11 November 2009 |
For immediate release-November 18, 2009
Reston, Virginia
The life cycle cost of the Dulles Rail Extension exceeds
that of Boston's infamous
Big Dig, according to calculations released
today by the Dulles Corridor User's Group.
The Silver Line's 40 year cost, including financing, is now
estimated at $22 billion, compared with the $14.6 billion cost for the Big Dig.
The Big Dig was originally priced at $3.5 billion.
The Silver Line now is projected to cost double the amount
of the Panama Canal expansion and will lose money every year, unlike the Canal,
which will produce a profit. Because of this high cost, new riders that the
Silver Line will attract could enjoy a chauffeured Rolls Royce at less taxpayer
expense.
The high cost of the projected Dulles Rail extension is
partly the result of the expensive method of financing, using revenue bonds
issued by the Metropolitan Washington Airports Authority, which has a low
credit rating and high borrowing costs. Accordingly, the after tax net cost of
the financing currently proposed is $5 billion more than it would be had a
regional sales tax been used, as is usually the case with rail projects. "This
extra cost is total waste", according to Christopher W. Walker, head of the
Group. "This is what happens when a politically unaccountable authority
attempts to bypass the requirements in the Virginia Constitution to obtain
voter approval of new taxes and bonded indebtedness which enjoy lower financing
costs."
The other difference, according to Walker, is that the
lion's share of the cost of the Silver Line will fall on Fairfax County
residents and businesses- 93% of the $22 billion cost, or $20 billion locally.
"In contrast, the Big Dig, Maryland's Intercounty Connector, and rail projects
elsewhere in the country are treated as regional improvements and are financed
with broad based regional taxes that have received approval either by voters in
a referendum or by elected officials accountable to their constituency".
Of the 13 Board members of the Airports Authority, only 5 live
in Virginia. By statute, they are nonelected.
"Unfortunately, the Silver Line will provide no measurable increase
in mobility for either private or public transport," said Walker. "It is an
economic albatross that is totally unnecessary and will not reduce congestion.
At least with the Big Dig, 250,000 cars and buses a day are moving more quickly
through the Boston area. And the Big Dig is free to users-no tolls forever."
The Dulles Corridor financing scheme is currently the
subject of two state lawsuits and one federal lawsuit.
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To read the financial discovery statement, click here.
For more information, contact Rob Whitfield at 703 655 0246
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Written by Julia O'Donoghue - Reston Connection
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Friday, 18 September 2009 |
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Read more of the above article...
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Written by Julia O'Donoghue - Reston Connection
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Friday, 18 September 2009 |
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Read more of the above article...
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