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  • Board of Directors Meeting 1/25/2021
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Board of Directors Meeting   1/25/2021

Attachments
  • January 2021 Board Meeting Agenda.pdf
  • December 2020 Board Meeting Minutes.pdf
  • VPRA FY2022 Recommended Budget – CTB Transmittal.pdf
  • VPRA Employee Manual.pdf
  • Long Bridge Project Update.pdf
  • Resolution – FY22 Recommended Budget.pdf
  • Resolution – VPRA Human Resources Policy Manual.pdf
    • SPEAKER_13
    • 00:00:03
      Great.
    • 00:00:04
      Good morning, everybody.
    • 00:00:05
      Thank you for joining us with the January Virginia Passenger Rail Authority Board meeting.
    • 00:00:12
      Just a couple of reminders real quick.
    • 00:00:14
      Please do mute your devices to avoid any unnecessary background noise.
    • 00:00:20
      Our moderator does have the ability to mute anybody if you forget to go on mute, so just be aware of that as well.
    • 00:00:28
      Today's meeting is open for the public viewing and it is being recorded.
    • 00:00:33
      The recording will be available on our DRPT YouTube channel tomorrow, and a link will be posted to the DRPT website.
    • 00:00:41
      Should you have any technical difficulties during the meeting, please log off and try logging back into the meeting.
    • 00:00:47
      If you still experience issues, please contact our tech support, Michael Henderson.
    • 00:00:52
      What I would actually recommend is his number we can text out to you.
    • 00:00:59
      There will be a designated public comment period,
    • 00:01:02
      You can sign up ahead of time by emailing drptpr at drpt.virginia.gov.
    • 00:01:09
      You can share your feedback at that time or provide comments post-event at drptpr at drpt.virginia.gov.
    • 00:01:20
      And so now I will read a statement on November 19th, Governor Ralph Northam signed House Bill 5005, Virginia's revised biennial budget, which includes new language for meeting electronically.
    • 00:01:33
      In light of the continuing state of emergency declared by Governor Northam, we are conducting this feeding in a remote setting, keeping safety top of our mind and mitigating the impacts and spread of COVID-19.
    • 00:01:46
      So with that, I would like to ask for a motion to approve the minutes of the December meeting.
    • 00:01:54
      Hopefully you all had a chance to review those.
    • 00:01:57
      So I'd like, could someone, would anyone be willing to make a motion and a second for that?
    • 00:02:03
      I'll move.
    • 00:02:08
      Great.
    • 00:02:09
      Thank you.
    • 00:02:10
      Bridget, would you please do the roll call vote?
    • SPEAKER_14
    • 00:02:14
      Sure.
    • 00:02:14
      Ms. Butler, excuse me, Ms. Bulova?
    • SPEAKER_12
    • 00:02:18
      Here.
    • SPEAKER_14
    • 00:02:20
      Ms. Butler-Painter?
    • 00:02:22
      Here, aye.
    • 00:02:24
      Mr. Cardwell?
    • 00:02:28
      Ms. Dorsch?
    • 00:02:30
      Aye.
    • 00:02:31
      Mr. Fisette?
    • SPEAKER_12
    • 00:02:33
      Aye.
    • SPEAKER_14
    • 00:02:34
      Mr. Hall.
    • SPEAKER_12
    • 00:02:37
      Aye.
    • SPEAKER_14
    • 00:02:38
      Mr. Moorman.
    • SPEAKER_12
    • 00:02:40
      Aye.
    • SPEAKER_14
    • 00:02:42
      Ms. Moses-Ned.
    • SPEAKER_12
    • 00:02:44
      Aye.
    • SPEAKER_14
    • 00:02:46
      Mr. Nichols.
    • 00:02:50
      Mr. Sadeep.
    • SPEAKER_12
    • 00:02:52
      Aye.
    • SPEAKER_14
    • 00:02:53
      Mr. Spore.
    • SPEAKER_12
    • 00:02:56
      Aye.
    • SPEAKER_14
    • 00:02:57
      And Ms. Zimmerman.
    • 00:03:01
      Aye.
    • 00:03:02
      Thank you, Madam Chair.
    • 00:03:03
      That concludes the roll call.
    • SPEAKER_13
    • 00:03:09
      Great.
    • 00:03:09
      Thank you, Bridget.
    • 00:03:11
      So I'm going to start with a few updates.
    • 00:03:13
      We have a lot of items on our agenda this morning.
    • 00:03:18
      We will be getting an update from all of our committees.
    • 00:03:20
      We'll be talking about the budget that we are recommending for forwarding to our Commonwealth Transportation Board.
    • 00:03:29
      Hopefully all of you have had a chance to review the
    • 00:03:32
      VPRA Employee Policy Manual, our HR manual, which is something we would like to seek approval of today so that we can start moving forward with some key hires on that.
    • 00:03:46
      We'll be getting a presentation from Amtrak as well to give you all some more background about our partner in passenger rail that we work very closely with.
    • 00:03:55
      And we'll also be going through updates on some of the major procurements that we're working on
    • 00:04:02
      with our rail initiative at the moment.
    • 00:04:05
      But first, just an update, a report.
    • 00:04:07
      We are continuing to work through our agreements with CSX and Amtrak on our Transforming Rail in Virginia initiative.
    • 00:04:17
      We hope to have those completed very shortly.
    • 00:04:22
      We are still working through some outstanding issues.
    • 00:04:25
      We will be able to start briefing you on those when we have those in place.
    • 00:04:32
      That is something that we are working very hard on right now.
    • 00:04:35
      At our last board meeting for the Commonwealth Transportation Board, they did approve a procurement for preliminary engineering for Long Bridge.
    • 00:04:44
      You'll hear a little bit more about that from Mike McLaughlin later on.
    • 00:04:49
      In the governor's biennial budget amendments that were presented this year, he included a $50 million
    • 00:04:59
      set aside of general fund revenues for what we're terming our Western Rail Initiative, which would be extending a second train to Roanoke and also extending passenger rail from Roanoke to Christiansburg.
    • 00:05:16
      This is something that we've been working on with Norfolk Southern for quite a while.
    • 00:05:20
      We hope to have something, I think we're very close to having something that we will be able to move forward with.
    • 00:05:28
      We also have included an application in what's called the state's smart scale process, and that's the state's competitive program for allocating transportation funding.
    • 00:05:41
      We submitted an application for $50 million for that.
    • 00:05:45
      That has been included in the list of recommended projects that were provided to the CTB at our January meeting.
    • 00:05:54
      What will happen now is the board will
    • 00:05:57
      evaluate those recommendations.
    • 00:06:00
      We will also go out for public comment and then the board will make final decisions on those in May as part of our six-year plan process.
    • 00:06:09
      But I did want to make you all aware that that is out there and something that we are moving forward with right now.
    • 00:06:18
      On a few other updates regarding the Long Bridge and the Long Bridge Act of 2020,
    • 00:06:24
      We had to seek federal legislation that would allow the National Park Service to transfer property to the Commonwealth for the purpose of building the Long Bridge.
    • 00:06:36
      And unbelievably, right now, or maybe it is believable, but the Park Service has the ability to do that already for highway projects, but is not able to do it for rail projects.
    • 00:06:48
      So we actually had to seek legislation.
    • 00:06:50
      That did get signed into law on December 27th,
    • 00:06:54
      of this past year.
    • 00:06:55
      So again, that will allow the Secretary of Interior to convey property to either the Commonwealth or DC, about 4.4 acres of parks and service land.
    • 00:07:08
      And that does include land that is actually in the Potomac River as well for pilings, as well as touchdowns on either side of the river between Virginia and DC.
    • 00:07:24
      So that was good news for us.
    • 00:07:25
      We really appreciate all of the support that we had from our entire congressional delegation that supported that.
    • 00:07:33
      Our DRPT staff will begin updating our statewide rail plan this year.
    • 00:07:39
      The update itself is something that's required under the Federal Railroad Administration.
    • 00:07:47
      It is also something that's coordinated very closely with the state's Office of Intermodal Planning
    • 00:07:54
      which does the statewide V-Trans, which is our statewide transportation plan.
    • 00:07:59
      So our staff will begin updating that this year.
    • 00:08:01
      We will bring more updates on that to you as we move along.
    • 00:08:06
      It really will be taking our rail plan and updating it with changes that have occurred based in the rail industry, both on the freight and passenger side, and also reflecting some of the developments that we've had with our
    • 00:08:20
      the Transforming Rail in Virginia Initiative and our Western Rail Initiative as well.
    • 00:08:26
      We're also picking off a study right now.
    • 00:08:28
      This was based on some legislation that was included in the General Assembly's last year, which is asking DRPT to look at the Gainesville VRE extension.
    • 00:08:41
      And this is something that VRE looked at several years ago.
    • 00:08:45
      and we will be reviewing those cost estimates, both operating and capital cost estimates, and providing information to the General Assembly on that as well.
    • 00:08:57
      On the federal funding side, you probably are all very aware of the federal COVID relief funding package that came out several weeks ago.
    • 00:09:10
      Under that package, the states that do sponsor Amtrak intercity rail service, such as Virginia, will get a credit.
    • 00:09:19
      The credit itself will be going to Amtrak for about $174.9 million.
    • 00:09:25
      And so that will assist the states in offsetting some of our payments to Amtrak for our state supported service because of the revenue impacts due to COVID.
    • 00:09:39
      Again, very grateful to our federal delegation for supporting that as well.
    • 00:09:46
      So as far as Amtrak service goes, all of our routes are back in service with the exception of the one line from Richmond that originates in Richmond up to Washington, DC.
    • 00:09:59
      But all of our service from Newport News, Norfolk, and Roanoke is currently back in service again.
    • 00:10:03
      Ridership has been down.
    • 00:10:07
      It's down.
    • 00:10:08
      about 72% from where it was at this point last year.
    • 00:10:12
      But we are encouraged by some of the increases that Amtrak is seeing in overall growth system-wide.
    • 00:10:22
      We are participating in a Valentine's Day sale that Amtrak is promoting as well, which is going to be going from mid-February
    • 00:10:33
      and for a week and then also for travel that begins in January through August.
    • 00:10:39
      So it's a buy one get one free deal and something that we're sponsoring and promoting very heavily with Amtrak as well.
    • 00:10:46
      So those are the major aspects of my report.
    • 00:10:49
      I'm happy to take any questions if anybody has anything for me.
    • 00:10:57
      Okay.
    • 00:10:58
      Well, with that, I would like to go ahead and get started with some of our committee reports.
    • 00:11:03
      And Wick, I'd like to ask you to go ahead and give us an update on the Executive Director Search Committee.
    • SPEAKER_04
    • 00:11:13
      Surely, Jennifer.
    • 00:11:14
      So, the Search Committee met back on January 5th, and we reviewed the process with Greg Krauthammer, Krauthammer & Associates.
    • 00:11:29
      I think all of you know the position has now been advertised and Krauthammer is receiving all of the people, information on people who are interested.
    • 00:11:43
      I think there are a fair number of people interested.
    • 00:11:46
      And again, I would encourage anyone on the board who thinks that there's a good prospect for this position to relay that to Greg and Jennifer, if you haven't already.
    • 00:11:58
      done so yet.
    • 00:12:00
      The current plan, which is obviously somewhat tentative, is that we'll receive all of those, Greg will receive all of those applications in the first part of February, and he will go through a process, along with the search committee, of narrowing them down to some extent.
    • 00:12:22
      He will, I think, tell us about anyone who's applied, who
    • 00:12:28
      It at least seems to him is really not qualified, but we'll hear about that.
    • 00:12:33
      We'll go through that together once we winnow those numbers down to an acceptable number.
    • 00:12:41
      We're thinking four to six right now, but that will depend upon the number and the quality of candidates.
    • 00:12:49
      The committee itself will begin a process of a first round of interviews with those people, then to try to
    • 00:12:58
      narrow that pool down even further to two to three candidates.
    • 00:13:05
      Jennifer and I have been discussing exactly what the process will be, but we certainly want, when we get down to that final number, for everyone on the board to have a chance to see them and to ask questions.
    • 00:13:22
      And once we decide on our candidate,
    • 00:13:25
      will then start going through a negotiation process with them.
    • 00:13:31
      And our hope is, this is highly dependent on a lot of things, as you all know, but including when the final candidate is available to come to work.
    • 00:13:45
      But our hope and anticipation is we'll have a candidate in place by the 1st of June.
    • 00:13:53
      and maybe earlier, it might take a little longer.
    • 00:13:57
      But that's where we are.
    • 00:13:58
      It's well underway and I think we have a good search firm and I think we all on the committee feel good about where we are in the process.
    • 00:14:09
      So, Jennifer, did I leave anything out or does anyone else have questions?
    • SPEAKER_13
    • 00:14:15
      No, I think you summed it up pretty well.
    • 00:14:18
      But does anyone else have questions about the
    • 00:14:21
      process or where we are right now?
    • SPEAKER_11
    • 00:14:28
      Good job.
    • 00:14:30
      I just would like to say good report, Wick.
    • 00:14:36
      The selection of an executive director really is important in really setting the culture for the passenger rail authority.
    • 00:14:49
      I appreciate all the work that has been put into this process.
    • SPEAKER_04
    • 00:14:56
      Well, thank you, Sharon.
    • 00:14:57
      I think, you know, when you look at the principal duties of boards there to find and then replace, if necessary, sometimes for whatever reason, the leader of the organization to ensure that that leader and the people that he or she hires are setting the right corporate culture
    • 00:15:19
      and then to work on the strategic plan and make sure the capital is being allocated correctly.
    • 00:15:25
      And so I think this board is off to a good start on all of those.
    • SPEAKER_11
    • 00:15:30
      Agree.
    • SPEAKER_13
    • 00:15:35
      Great.
    • 00:15:36
      Thank you.
    • 00:15:37
      Any more questions for Wick?
    • 00:15:42
      All right.
    • 00:15:42
      Thank you.
    • 00:15:43
      Haseen, would you like to go ahead and start us with an update on the Finance Committee?
    • SPEAKER_07
    • 00:15:49
      Thank you, Madam Chair.
    • 00:15:51
      I'll be delighted to give a quick update on the first meeting of the Finance and Audit Committee, which took place on January 14th.
    • 00:16:03
      I'd like to thank the committee members for their full participation in the first meeting.
    • 00:16:10
      It was a quite worthwhile and productive meeting.
    • 00:16:16
      The core
    • 00:16:17
      Agenda item was the budget review and discussion.
    • 00:16:22
      One of the major elements of obviously the board is to oversee the budget for both operations and capital.
    • 00:16:33
      And Mr. Pittard will walk the board through details of the discussion at the meeting.
    • 00:16:41
      An important deadline for us to meet is to present the budget
    • 00:16:47
      to the Commonwealth Transportation Board by February 1st.
    • 00:16:51
      And after the discussions, we had quite a bit, attention to the budget was given by the committee.
    • 00:17:00
      And we recommend the budget with minor changes since we met to the board at the end of the discussion by Mr. Pittard.
    • 00:17:13
      We also talked about the logistical issues, building the capacity for financial management of the authority, and some of the topics that we discussed had to do with the financial banking, enterprise resource planning.
    • 00:17:31
      We're continuing to depend on the Department of Accounts accounting system for activities that the board, obviously as an independent board, we need to
    • 00:17:40
      have our own infrastructure to support the activities.
    • 00:17:45
      We talked about the selection of the audit firm, again, as one of the building the infrastructure for the authority.
    • 00:17:54
      The selection of the audit team is really the responsibility of auditor of the accounts, but they would certainly seek input from the finance and audit committee before the final decision is made.
    • 00:18:10
      and we also talked about some of the things that payroll processing, again, the payroll processing service that provides that to the state is, you know, going to be a short term dependency for us to be dependent on when we need definitely our own payroll system.
    • 00:18:30
      A lot of these capacity building and logistical decisions will certainly be made after the executive director is on board.
    • 00:18:40
      but with the help from DRPT, we're trying to set the stage for kind of a head start in some of these areas.
    • 00:18:52
      We had somewhat an extensive discussion about the quarterly financial reporting, which is extremely critical for us to communicate effectively with the board and the committee as well.
    • 00:19:05
      And that's under construction now.
    • 00:19:08
      I want to compliment
    • 00:19:09
      Steve and his team for having provided us with a good start for developing the budget and thinking about financial infrastructure for the authority.
    • 00:19:20
      As you will see from Steve's report that the authority has responsibility for the operating budget, the capital projects and capital grants.
    • 00:19:33
      You will see a proposed
    • 00:19:37
      budget for FY21, which is a partial year and the next fiscal year.
    • 00:19:43
      I need to preface this discussion by saying that with the good work that DRPT has done to support the committee at this point and the board, that a lot of work, continuing work needs to be done to finalize the budgets and it's only going to get improved.
    • 00:20:06
      over time as we learn more about how to construct this.
    • 00:20:10
      But certainly the board will be receiving quarterly reports of budget versus actual and will also present a forecast going forward at a minimum.
    • 00:20:22
      And we've invited the committee members and I will also invite the board members if you have any thoughts about how we should communicate as a committee with the board in terms of providing you with sufficient financial
    • 00:20:36
      information and updates, please do contact me or Steve will welcome any feedback that you have.
    • 00:20:47
      I'll ask the committee members if I left anything out of the discussion at the Finance and Audit Committee.
    • 00:20:53
      And I see all of our members, Ms. George and I'm missing Ms. Butler-Painter and
    • 00:21:07
      Mr. Jim Spur, they were quite a help to the committee to come before this board with the construction of the budget for FY21 and FY22.
    • 00:21:19
      Any comments from the committee members?
    • 00:21:24
      Any questions from the board on everything that I just presented to you?
    • 00:21:33
      If not, I'll turn it over to our very capable CFO of DRPT to walk you through the budget for FY21 and FY22.
    • SPEAKER_13
    • 00:21:50
      And thank you, Hussain.
    • 00:21:51
      Before Steve gets started, I will just, just so you know, we will have a motion at the end of Steve's agenda item as well.
    • 00:21:59
      regarding forwarding the budget to the Commonwealth Transportation Board.
    • 00:22:05
      But with that, I'll let Steve go ahead and get started on his presentation walking you all through the budget.
    • SPEAKER_03
    • 00:22:12
      Thank you, Madam Chair and Mr. Saadid.
    • 00:22:16
      I just want to spend a few minutes today taking you all through the budget document, which you all should have received, I think, January 9th, and then we sent an updated version
    • 00:22:28
      last week.
    • 00:22:31
      But the first thing to the next slide, if we may, the first thing I wanted to do was focus on, you know, back in December at our board meeting, we gave you a real bare bones budget.
    • 00:22:44
      It was really just the numbers.
    • 00:22:46
      And so I wanted to start by just taking you from that point to where we are today, what changed.
    • 00:22:56
      and obviously the biggest thing that changed is rather than just an operating budget from number wise and a capital budget number wise, we actually have more of a budget document now with a detailed page on each of the projects that are in the plan as well as an executive summary, I'll call it.
    • 00:23:23
      And in addition to that, in that detail, there is, I know last time there was a question about revenue sources.
    • 00:23:29
      So we did try to provide some information on revenues without going into great detail because we are still negotiating some of those agreements with our partners.
    • 00:23:42
      So that's the first biggest change.
    • 00:23:44
      The actual change, the detailed data,
    • 00:23:48
      On the capital grant side, if you're looking closely, you'll notice that there was an increase of about $25 million for the capital grants budget.
    • 00:23:59
      And that was due to our work to re-vet the projects that were there.
    • 00:24:05
      And what we found was there were three capital projects that we removed.
    • 00:24:11
      And what happened there is one of them was no longer, it was a BRE project with Lorton,
    • 00:24:18
      which due to the Transforming Rail Initiative, that project was no longer going to be needed.
    • 00:24:26
      And then two projects, we made a determination that the transit group had provided funding at DRPT to those projects, and at best for those two projects to stay with DRPT as far as managing them.
    • 00:24:40
      And they were projects at Washington Union Terminal.
    • 00:24:46
      In addition to that, there were also three projects that there were smart scale funds in future years that in our internal system, we don't record the future years of smart scale allocations until we get to that year to the board allocates in that year.
    • 00:25:07
      And so when we were going back and doing our review, we found that those future years allocations needed to be added.
    • 00:25:13
      So,
    • 00:25:15
      That's why you see three projects removed, but then three projects had additional funds, which was a net of $25 million of capital grant funding.
    • 00:25:26
      And the years that that impacts are 22 through FY 25.
    • 00:25:31
      And finally, the last change between the draft and final.
    • 00:25:37
      In the executive summary that was sent out on January 9th, there was a table on page four
    • 00:25:42
      that summarized the revenues of the passenger rail authority.
    • 00:25:46
      And that data had been picked up at a net level from the Transforming Rail Initiative.
    • 00:25:56
      And basically what I say was at a net level.
    • 00:25:59
      In that financial planning effort, we had picked up the VPRA revenues at 95% of their total to allow 5% for the administrative cost
    • 00:26:12
      of the Passenger Rail Authority.
    • 00:26:15
      And in the presentation and the executive summary was really looking at a gross MAC total level.
    • 00:26:22
      And I'll add, you know, so that table has been fixed.
    • 00:26:27
      It didn't impact any of the narrative at all.
    • 00:26:29
      It didn't change any of the tone and the points within the narrative.
    • 00:26:36
      Next slide, please.
    • 00:26:41
      So now I'm just going to quickly run through at a high level of budget and then I do have some slides that I'm going to focus on the revenue side once I get through the high level budget presentation.
    • 00:26:55
      So the main, this is just the high level summary of the FY22 budget, which is really what we're asking y'all recommending for your approval to submit to the CTB today.
    • 00:27:09
      and then we have a fiscal year 21 budget which I'll say is pro forma because obviously the board wasn't in existence for us to have created an FY21 budget.
    • 00:27:21
      But we did estimate one for comparative purposes here.
    • 00:27:25
      And I think I just want to focus real quick on the variances.
    • 00:27:31
      And the biggest one that I want to point out is the operational and this goes back to what
    • 00:27:38
      Chairman Mitchell has said earlier, there's a large increase you'll see in the operations.
    • 00:27:46
      Some of that, a small portion of that is the rail authority growing and adding staff, but the majority of that is the expenditures for operating the Amtrak operations.
    • 00:28:03
      What we did was we took the most conservative approach when we were developing this.
    • 00:28:07
      We didn't know at the time whether there would be a second stimulus bill or not, and obviously that has passed in late December.
    • 00:28:17
      But as of today, that $175 million referenced earlier, we don't know exactly how much of that will help us offset the operational cost of our train.
    • 00:28:28
      So we took an approach
    • 00:28:31
      a very conservative approach.
    • 00:28:32
      So the goal or the hope will be that this number is going to be a lot better as we go through FY22.
    • 00:28:41
      The second thing I want to point out here is obviously the capital grants and the capital projects both show an increase, and that's really just the natural progression of the projects, the underlying projects, in particular the TRV initiative
    • 00:29:00
      As it advances, we're going to be spending a significant amount more funds.
    • 00:29:06
      In the next slide, please.
    • 00:29:15
      As I was just saying, when you look at this, this is our six-year forecast of capital.
    • 00:29:21
      And here you see, as I was just mentioning, the capital projects.
    • 00:29:26
      You can see the progression and that's really the underlying project.
    • 00:29:30
      There's the TRV initiative and you see in FY25 a rather large jump and then in FY26 again.
    • 00:29:39
      And what that is, is that's the years of anticipated construction of the new Long Bridge.
    • 00:29:50
      And then on capital grants, I think the other thing to point out with capital grants is
    • 00:29:55
      The further out we get, most of the existing projects are anticipated to be completed.
    • 00:30:01
      So you see in FY26 and FY27, the value of those grants tailing off.
    • 00:30:09
      And in the future, I guess, you know, the board will need to determine the passenger rail authority to be determined, you know, a process for receiving additional requests for capital grants as we move forward.
    • 00:30:25
      in future years.
    • 00:30:29
      Next slide, please.
    • 00:30:32
      So now I just want to jump over and, you know, last time there was a very good question on how are we going to pay for such a large program.
    • 00:30:43
      As the last slide showed, $3.8 billion of projected capital expenditures over the next six years.
    • 00:30:54
      As we go through and we talk about that, there's several different revenue sources and we are currently working with a lot of these entities to finalize funding agreements as well as operating agreements with these different entities.
    • 00:31:14
      But I just, I do want to spend a minute and take you through this pie chart and just talk a little bit about each one of these.
    • 00:31:22
      So I'll start with the orange slice over here, and that's the revenues that are dedicated to the Passenger Rail Authority.
    • 00:31:30
      It's a little over $700 million.
    • 00:31:33
      About 20% of the total capital plan is coming from those dollars.
    • 00:31:40
      And what it is, is it's 7% of
    • 00:31:46
      the Commonwealth Transportation Fund, which was a new consolidated fund of all the different various transportation revenues from the FY20 General Assembly Session omnibus bill.
    • 00:32:01
      The next point, and I'm going to kind of go around this chart, in the purple slice that, and I don't know if you all recall, but in one of our earlier meetings, we talked about
    • 00:32:14
      there was a significant balance of funds from the prior rail programs prior to the passenger rail authority being established and the revenues being dedicated from the first slice I talked about.
    • 00:32:28
      And that's what this next little piece is, the 123 million is from those existing funds we have allocated 123 million dollars towards these capital projects.
    • 00:32:44
      and you may recall there was about $300 million of that funding.
    • 00:32:49
      The other, the remainder of that funding goes towards those capital grants is where those funds are allocated in case you're wondering.
    • 00:32:59
      The next revenue source is CTB controlled revenues and the primary item here, there were several of them, but the most significant is
    • 00:33:12
      The CTB has a fund called the Priority Transportation Fund.
    • 00:33:16
      And the primary revenue source there is, well, it's a portion of the Commonwealth Transportation Fund.
    • 00:33:25
      And also there are insurance premium taxes that are dedicated there.
    • 00:33:30
      And this fund is a fund where all the transportation debt is backed by that Priority Transportation Fund.
    • 00:33:37
      So its first call on its resources is to
    • 00:33:41
      to pay for the debt service needs of transportation.
    • 00:33:46
      But that being said, there have been excess funds in addition to those debt service needs, and the CTB has discretion as to how to allocate those.
    • 00:33:57
      And we've been very fortunate that the Commonwealth Transportation Board has chosen to allocate a significant number of dollars from those priority transportation funds.
    • 00:34:08
      In addition, there's also some
    • 00:34:11
      CTB-controlled CMAQ and RSTP funds, which they also provide the match to those funds that's also in this item.
    • 00:34:21
      The next item is VRE and NVTA, the Northern Virginia Transportation Association.
    • 00:34:30
      We've worked with VRE.
    • 00:34:33
      They have a dedicated source of funds called the Commuter Rail Operating and Capital Fund,
    • 00:34:40
      It's $15 million a year.
    • 00:34:42
      We work with them and they have tentatively agreed to provide that source of funds for 10 years and potentially work with us.
    • 00:34:53
      Well, it would be something they would do, but issue debt against half of that stream of funds to provide funding in these earlier years, especially when we get closer to 24 and 25.
    • 00:35:08
      I'll also add we had applied to NVTA, we got, I believe, a $25 million award.
    • 00:35:16
      And there was also an application that indicated we could come back and apply for funds in future years because they do have, you know, they have a lot of projects that they're having people apply for and so they can't always fund every project in the first round of applications.
    • 00:35:37
      The next source of funds is Amtrak.
    • 00:35:40
      Amtrak, and remember, this is just through FY 27.
    • 00:35:45
      Amtrak has actually committed $944 million for the full TRV initiative.
    • 00:35:52
      During this time frame, that comes out to the $650 million that they'll be providing.
    • 00:36:00
      I believe we're very close, Madam Chair can add to this, but I think we're very close to
    • 00:36:07
      having signed agreement with them.
    • 00:36:10
      I think the next 30 days we should be there.
    • 00:36:15
      But anyway, significant portion of that total initiative coming from Amtrak, about 25% when you look at in total.
    • 00:36:25
      And finally, well, there's two more here.
    • 00:36:27
      Finally, I-66.
    • 00:36:29
      We are looking at the toll funds from I-66 inside the beltway.
    • 00:36:35
      We're looking at those toll revenues
    • 00:36:37
      that the Commonwealth Transportation Board has authority to allocate.
    • 00:36:43
      So we are looking to utilize those funds and issue debt and FY 25 is the tentative plan for that debt issuance.
    • 00:36:54
      And that will fund about 25% of the total initiative for TRB.
    • 00:37:01
      And finally, there are some federal funds we had
    • 00:37:06
      We got a Fast Lane Award of $45 million about three years ago.
    • 00:37:12
      The genesis of the Transforming Rail in Virginia initiatives was the Atlantic Gateway project.
    • 00:37:23
      And we were able to receive $45 million when we applied back in 2017.
    • 00:37:30
      In addition, we just received a $14 million
    • 00:37:34
      award from the federal government to help with some of our passenger sidings that are in the TRV initiative.
    • 00:37:44
      And we'll move on to the next slide, which this slide shows the funding for the capital grants.
    • 00:37:54
      And I think here the main point, or the most important point, I think, for y'all as board members is
    • 00:38:04
      the new allocations amount.
    • 00:38:06
      So over this six-year window, and thinking back to that $300 million beginning balance, and I told you earlier that 123 million of that is dedicated to TRB.
    • 00:38:23
      Well, the remainder was dedicated to, as you can see, is dedicated to these other capital grants.
    • 00:38:32
      I think the most important thing here is, okay, what new projects that didn't exist at June 30th, what new projects are in this capital budget?
    • 00:38:42
      And there's about $8 million of new projects.
    • 00:38:45
      And it's for some station maintenance and some PTC activities over that six-year window.
    • 00:38:59
      And it totals about $8 million.
    • 00:39:02
      which is well within the total dollar value of revenues that we have.
    • 00:39:09
      And I'll talk just real quick about these other funding sources.
    • 00:39:12
      So when you see the largest pie piece of the pie here, it's really mostly smart scales.
    • 00:39:19
      A lot of these projects are Virginia Railway Express projects, and they have done very well and scored very well in the smart scale process.
    • 00:39:29
      and so when we see other sources, that's primarily smart scale funds.
    • 00:39:35
      Some of it is other funds that Virginia Railway Express is providing.
    • 00:39:42
      But that's, it's funds that the Rail Authority will need to work out agreements to receive the funds and then pass them through, so to speak, and decide the level of management of those funds.
    • 00:39:55
      So smart scale funds, for example, VDOT,
    • 00:39:59
      has those dollars.
    • 00:40:02
      I would envision an agreement with VDOT and the Passenger Rail Authority to receive those dollars and then a lot of these cases it's VRE.
    • 00:40:11
      There would be an agreement with VRE to determine what level of oversight and the Passenger Rail Authority would need and also to comply with those original smart scale parameters.
    • 00:40:25
      You see the prior rail funds and then
    • 00:40:28
      also we have the in and I guess the point I want to make with the green slice here is in the TRV financial plan there were there was a projects well the TRV financial plan let me rephrase the TRV financial plan was not just a capital expenditure plan we also incorporated the operating cost obviously we're doing
    • 00:40:58
      $3.7 billion capital initiative.
    • 00:41:01
      You want to know how much it's going to cost afterwards and can you afford it.
    • 00:41:05
      So what this piece here represents is in that plan there are maintenance costs that have to be paid to the post railroad and in this case it's CSX because those are the tracks we're working with.
    • 00:41:20
      And currently Virginia Railway Express pays a access or maintenance fee each year
    • 00:41:27
      to each of both NS, CSX, and even to Amtrak for access to Washington Union Terminal.
    • 00:41:34
      So in the financial plan, we actually did include those track access costs.
    • 00:41:41
      And you can see in the capital grants section, you will see that those track access costs to VRE are one of the line items in the capital budget.
    • 00:41:51
      And the point here was, within the financial plan, I wanted to make
    • 00:41:57
      the point to y'all that we had incorporated those operational costs of maintenance and track access in the plan.
    • 00:42:08
      So with that, we'll move on to the next slide.
    • 00:42:13
      And it really, this is a slide that really is just to show y'all the revenues, the direct revenues of the Passenger Rail Authority, I call them the dedicated revenues.
    • 00:42:26
      they do come from the Commonwealth Transportation Fund, so the flow technically will be various state agencies, DMV, taxation, collect these revenues, BDOT determines a distribution, and then right now the plan will be then DRPT will receive them, then DRPT will remit them to the Passenger Rail Authority, but those are all
    • 00:42:56
      and I call them dedicated funds because there are no, there's no lever in place or hurdle that has to be achieved.
    • 00:43:05
      When the funds are deposited, those entities turn around and move them along.
    • 00:43:12
      They will process, when we get funds from VDOT, we will immediately turn them over to the passenger rail authority.
    • 00:43:19
      But trust me,
    • 00:43:22
      All of that seems like it could happen very quickly, but from the beginning of collections and taxation and DMV, you'd be surprised the length of time it can take.
    • 00:43:32
      But anyway, that's the top line in this chart with the dedicated revenues.
    • 00:43:40
      We also talked at the Finance Committee about the second line in the chart, the financing, and that is our plan in the TRV financial plan is to take
    • 00:43:52
      the revenues of our Amtrak passenger services.
    • 00:43:58
      And we've briefly discussed this with Amtrak, so we feel they're on board with it.
    • 00:44:03
      But anyway, to take those revenues at the gross level and to finance or to leverage those to obtain funding to help us with, as you see, FY 25, that's when Long Bridge, the larger amount of expenditures
    • 00:44:21
      and that is a little different.
    • 00:44:23
      I mean, I think what's different about that approach is that our Amtrak service is subsidized.
    • 00:44:30
      So in a way, you think you're going to issue debt against the subsidized service.
    • 00:44:37
      So that's what that line item is, is to take the passenger ticket revenues and bond against those.
    • 00:44:45
      We did
    • 00:44:46
      moved that out.
    • 00:44:47
      We had planned to do it in the 22-23 timeframe, but with the impacts of the pandemic, we chose to move that out to allow ridership to recover, to allow for better terms of issuing that debt.
    • 00:45:04
      And you may be thinking, well, why not just use the revenues of the passenger rail authority, you know, the top line?
    • 00:45:13
      and the reason that's not viable, one, the founding legislation of the rail authority doesn't permit us to do that and the reason for that is those are taxpayer-based revenues and taxpayer-based revenues would count against the debt capacity limit of the commonwealth and so sort of a creative way using those passenger ticket revenues to stay clear of
    • 00:45:43
      that debt capacity limit.
    • 00:45:48
      So moving on down the chart here, basically what I wanted to do here is to just show those are the total revenues and then the taking out the amounts needed for the capital projects and then showing what's available to fund operations and capital grants.
    • 00:46:05
      And this is to sort of
    • 00:46:09
      I'd like to give you all more detail, but hopefully what this chart shows is that there are funds available to fund our operating costs and our capital grants and our capital projects costs.
    • 00:46:22
      There is a plan in place to finance all of those three components.
    • 00:46:30
      And the next slide is really just, we've talked about this before, but it's
    • 00:46:36
      As mentioned earlier today, we need to submit the budget to the CTB.
    • 00:46:42
      The CTB can provide feedback on the operating budget.
    • 00:46:48
      The CTB then has till May 30th to approve the capital budget.
    • 00:46:57
      If they don't approve, meaning if they don't take any action, it's assumed to be approved.
    • 00:47:04
      Hopefully we plan to present
    • 00:47:06
      to them, provide the budget and then present in February on this budget.
    • 00:47:12
      So we hope to get their feedback and approval of this budget.
    • 00:47:17
      And I will add, I think, as a board and as a team working on this, we need to consider there may need to be changes to this budget.
    • 00:47:30
      Director Mitchell mentioned this earlier, maybe we get more clarity with respect to those COVID relief funds from Amtrak.
    • 00:47:38
      And if we get that clarity, maybe we adjust that operating budget.
    • 00:47:42
      Another item that we're working on, I know we're working currently on initiative, Western Rail Initiative, as the Madam Chair mentioned, there's a $50 million item in the budget of general funds.
    • 00:47:58
      for that initiative.
    • 00:47:59
      And potentially at that initiative, if we get further along where there's more clarity, it might be that we need to add that to this budget.
    • 00:48:08
      And then further, the Transforming Rail in Virginia initiative is, you know, we have done a lot of work on financial planning for that project.
    • 00:48:19
      And obviously with the pandemic, we went through iteration after iteration.
    • 00:48:26
      That being said, this possibility that maybe some of those allocations and the timing of some of those expenditures may change.
    • 00:48:37
      And if there are significant changes, I think it would be wise of us to potentially adjust this budget over the next three months.
    • 00:48:46
      And obviously, we keep Finance Committee abreast of any of those issues and the full board as well.
    • 00:48:56
      And finally, the last slide I wanted to just talk about, if we can, and I'm not really necessarily going to read this.
    • 00:49:04
      This is really just a slide to try to elicit thoughts from you as a board and the finance and audit committee.
    • 00:49:16
      But, you know, this year we are just trying to stand an organization up, so we probably didn't have the best
    • 00:49:24
      planned approach to creating a budget.
    • 00:49:28
      So I thought it would be wise that since we're kind of at a point, we're not done with a budget, but we kind of have put a document together, we're going to submit it to the CTV, but I think it's wise for us to start thinking about next year and coming up with like a timeline where we have set up front, you know, deadlines for submitting a budget, deadlines for planning it,
    • 00:49:54
      that would get a lot more involvement of Finance and Audit Committee and the Board as a whole.
    • 00:50:00
      So I'm not going to read all those bullets, but that's what this slide is about.
    • 00:50:05
      It's intended to make us start thinking about it.
    • 00:50:08
      And that's really the end of my presentation.
    • 00:50:10
      The rest of the slides are just there.
    • 00:50:12
      They're information you've seen before, so it's just there for your reference, frankly.
    • 00:50:19
      And I'll be glad to not answer any questions that anybody might have.
    • SPEAKER_13
    • 00:50:28
      Does anybody have any questions or comments for Steve?
    • SPEAKER_07
    • 00:50:35
      Madam Chair, I'd like to, again, I mentioned this on behalf of the Finance and Audit Committee.
    • 00:50:42
      I want to extend our thanks to Steve for having really shepherded this process through and I'm glad that he mentioned that going forward that we will have a more planned approach
    • 00:50:58
      to discussing the assumptions in the budget and developing the budget before it really comes before the finance or board for final approval.
    • 00:51:08
      This is a kind of an aberration of what we would expect to take place going forward.
    • SPEAKER_01
    • 00:51:20
      Madam Chair, this is Maria Zimmerman.
    • 00:51:22
      I have a couple of questions.
    • 00:51:24
      One, I was just curious.
    • 00:51:26
      I didn't hear in the discussion whether or not there were still plans to be seeking federal core capacity grant funding for the Long Bridge and how that may fit into it.
    • 00:51:41
      I know you can't count your chickens for the hatch, but didn't know where that was at.
    • 00:51:45
      And then I was also curious, definitely understand and appreciate all the challenges around trying to get a handle on the operating budget and uncertainties there.
    • 00:51:55
      But I am curious if you're also seeing, and if so, how you might be taking into consideration on the capital side, increased costs of construction, of materials, of any of those things that I know is impacting infrastructure and housing projects.
    • 00:52:13
      And I didn't know if that was also part of the mix and how that was being considered, if that was the case.
    • SPEAKER_13
    • 00:52:20
      I can take the first one.
    • 00:52:24
      The funding source that Maria is referring to refers to some Federal Transit Administration funds that are designed to help fund capacity expansion projects, what's referred to as core capacity for projects that have bottlenecks that are restricting their ability to grow.
    • 00:52:47
      Long Bridge certainly is one of those bottlenecks
    • 00:52:51
      and because VRE uses the bridge, this would be an eligible project for that source of funds.
    • 00:52:58
      We do plan to apply for those this spring.
    • 00:53:01
      We are working on that right now.
    • 00:53:04
      We had to get into preliminary engineering, which is going to take about two years.
    • 00:53:12
      For everybody else's benefit, this core capacity program does have a
    • 00:53:17
      to your application cycle or up to two years, I should say.
    • 00:53:21
      And so we are timing that application so that if these are discretionary funds, there's no guarantee that you're going to get these funds and they are highly competitive with projects around the state, around the country.
    • 00:53:35
      But we do still have a plan to apply for those.
    • 00:53:37
      And we think that we could be eligible for up to six to 700 million
    • 00:53:42
      in funds.
    • 00:53:43
      If we were able to secure those grant funds, we would likely utilize our rail revenues to, we would propose at least to the Rail Authority Board that those, any revenues that were not needed for the Long Bridge project that we had previously committed could be used for future phases of the Transforming Rail in Virginia initiative.
    • 00:54:08
      We have
    • 00:54:09
      Right now phases one and two are the projects that are included in the $3.7 billion capital cost estimate.
    • 00:54:18
      There is also a phase three and a phase four that will continue to build out portions of third track between DC and Spotsylvania.
    • 00:54:31
      So our proposal at least to the board would be to utilize some of those funds to start working on phases three and phases four.
    • 00:54:39
      and that's something that we've discussed with the Amtrak as well.
    • 00:54:43
      If we were able to get those funds, we could potentially use the Amtrak revenues again for those future phases.
    • 00:54:51
      And then the second part of your question, and Steve can talk a little bit more about this.
    • 00:54:57
      All of our cost estimates do include cost escalation, some of which is designed to
    • 00:55:06
      take into account the increased price of materials.
    • 00:55:11
      And we have pretty healthy contingency estimates, contingency in all of our cost estimates right now.
    • 00:55:20
      Some of that contingency, you know, potentially could be used if there is any increase in unit costs that are part of the cost estimates too.
    • 00:55:31
      Certainly for Long Bridge, as we go through preliminary engineering,
    • 00:55:34
      Big part of that is going to be updating the cost estimate and getting us better information for that.
    • 00:55:40
      So that is something that they'll be looking at too, is those unit costs and whether there's future escalation because of increased material prices that we need to take into account.
    • 00:55:53
      So Steve, I don't know if I got everything there, but is there anything else you want to touch on?
    • SPEAKER_03
    • 00:55:59
      Oh, you did a great job, Jennifer.
    • 00:56:02
      The other thing I would add to what you said is we are constantly looking at the financial plan.
    • 00:56:10
      There is, as you mentioned, healthy contingency.
    • 00:56:14
      It's above 30%.
    • 00:56:15
      The one thing that has been changing is the timing of the project and the elements of the project.
    • 00:56:27
      So obviously, I'm sure
    • 00:56:29
      You're aware, Maria and board, that if these projects are delayed three months, it adds dollars and not a small amount, millions of dollars.
    • 00:56:40
      So that's the one thing that we're very conscientious of is the timing of getting these projects moving.
    • 00:56:48
      And as I said earlier, if we do come back and we do
    • 00:56:56
      potentially change the timing of some of these projects, it will have an impact on the budget of that initiative.
    • 00:57:03
      So, but that's, that's what I would add, Jennifer.
    • SPEAKER_12
    • 00:57:13
      Okay.
    • SPEAKER_13
    • 00:57:15
      So, with that, are there any other questions about the budget, budget process?
    • 00:57:24
      And I do want to thank also Mr. Saadid and the other members of the Finance Committee too for all the work that you all have put into this and reviewing and giving feedback to Steve and our staff as well.
    • 00:57:38
      So thank you.
    • 00:57:40
      So with that, we have a motion that was included in your meeting materials.
    • 00:57:44
      It's up on the screen right now too.
    • 00:57:48
      And if you all are amenable, I would like to go ahead and ask if
    • 00:57:52
      Anybody would like to move to adopt the resolution?
    • SPEAKER_07
    • 00:57:58
      Madam Chair, I'll move to approve the budget for a 521 and a 522.
    • 00:58:02
      Great.
    • SPEAKER_13
    • 00:58:06
      Second?
    • SPEAKER_04
    • 00:58:09
      Second.
    • SPEAKER_13
    • 00:58:11
      Thank you.
    • 00:58:12
      All right.
    • 00:58:14
      And with that, Bridget, would you please go ahead and do a roll call vote?
    • 00:58:20
      Ms. Bolivar?
    • SPEAKER_14
    • 00:58:22
      Aye.
    • 00:58:23
      Ms. Butler Painter.
    • 00:58:24
      Aye.
    • 00:58:27
      Mr. Cardwell.
    • SPEAKER_00
    • 00:58:29
      Aye.
    • SPEAKER_14
    • 00:58:30
      Ms. Dorsch.
    • 00:58:32
      Aye.
    • 00:58:33
      Mr. Facet.
    • 00:58:35
      Aye.
    • 00:58:36
      Mr. Hall.
    • SPEAKER_04
    • 00:58:37
      Aye.
    • SPEAKER_14
    • 00:58:39
      Mr. Moorman.
    • SPEAKER_04
    • 00:58:40
      Aye.
    • SPEAKER_14
    • 00:58:43
      Ms. Moses-Ned.
    • 00:58:49
      Aye.
    • 00:58:51
      Mr. Nichols.
    • 00:58:56
      Mr. Siddeed.
    • SPEAKER_07
    • 00:58:58
      Aye.
    • SPEAKER_14
    • 00:58:59
      Mr. Spore.
    • 00:59:05
      Ms. Zimmerman.
    • 00:59:07
      Aye.
    • 00:59:08
      The ayes have it.
    • 00:59:09
      The motion carries.
    • SPEAKER_13
    • 00:59:14
      Great.
    • 00:59:14
      Thank you all very much.
    • 00:59:17
      So, I'm going to use Chair's prerogative here and move around some items on the agenda because we do have Ray Lang with us.
    • 00:59:26
      from Amtrak, and he is here to give us an update and a presentation on Amtrak 101.
    • 00:59:33
      I know many of you know Amtrak very well, but I think many of the board members may not, but we wanted to give you an opportunity to learn some more about our major passenger rail partner.
    • 00:59:45
      So with that, I'm going to invite Ray to go ahead and get started.
    • SPEAKER_15
    • 00:59:51
      Thanks, Jennifer.
    • 00:59:52
      First of all, can you all hear me and see me?
    • 00:59:55
      Good.
    • 00:59:56
      Great.
    • 00:59:56
      All right.
    • 00:59:57
      And yes, you're correct.
    • 00:59:58
      Some of you know Amtrak very well, including our former President and CEO, Wick Moorman.
    • 01:00:02
      It's good to see you, Wick.
    • 01:00:04
      You too, Ray.
    • 01:00:05
      Thanks.
    • 01:00:06
      And it's really a pleasure to be here in front of the Commission.
    • 01:00:10
      So I'll jump right into this.
    • 01:00:10
      There was a lot of discussion about Amtrak in the previous presentation, and I really enjoyed listening to it.
    • 01:00:15
      But I'll walk you all through a little bit about sort of what Amtrak is, what it does, and why we're useful for you.
    • 01:00:24
      I think most of you know this, but if you don't, we were created by an act of Congress in 1970 and we came into being.
    • 01:00:31
      We began operating on May 1st, 1971.
    • 01:00:34
      The reason that the Congress created Amtrak was because prior to that, the railroad industry used to be required to run intercity passenger rail service as a result of federal law since so many of them
    • 01:00:52
      got the land for the railroads from the government.
    • 01:00:55
      And so they were sort of in the classic unfunded mandate required to run intercity passenger rail service prior to Amtrak's creation.
    • 01:01:02
      And in the late 1960s, with the advent of the interstate highway system and the jet engine, there was pretty dramatic changes to the nation's transportation habits and the railroads really wanted to get out of the business.
    • 01:01:14
      And to the government at the time decided intercity passenger rail was worth saving and preserving and created Amtrak.
    • 01:01:22
      We're structured as a corporation.
    • 01:01:24
      We have a board of directors and our board members are nominated by the President of the United States and then they're subject to Senate confirmation.
    • 01:01:31
      Once they're on the board, they have five-year terms, but they're really on until they're replaced.
    • 01:01:35
      And so that because the nomination and confirmation process can be quite time-consuming.
    • 01:01:40
      We have some board members who've been on the board for a long time.
    • 01:01:44
      The board then chooses the leadership team of the company and WIC was one of their
    • 01:01:50
      Excellent selections when he was chosen to be CEO.
    • 01:01:53
      Next slide.
    • 01:01:57
      So here's a little bit about what Amtrak is and what it does.
    • 01:02:01
      I often speak publicly about Amtrak.
    • 01:02:03
      And when I talk about what is unique about Amtrak, why are we special, it's because we are in many, many respects, we are our access rights.
    • 01:02:12
      At our founding, we were given very unique access rights to access basically any piece of railroad that exists in the United States of
    • 01:02:19
      for the purpose of providing intercity passenger rail service, not commuter service.
    • 01:02:25
      And we're allowed to access those rail lines at an incremental cost, which means what it costs the railroads to have us there.
    • 01:02:32
      We have individual contracts with the railroads to spell out what each of us believe are incremental costs, but we do have the ability, we have recourse with the Surface Transportation Board if we think that the rates that we would be charged for access are not incremental.
    • 01:02:47
      and accompanying these access rights is the right of preference, meaning that the freight railroads have to give the passenger trains the right of preference and priority, if you will.
    • 01:02:58
      They have to do their best to run the passenger train with preference over their own railroads so their employees have an obligation to dispatch us with preference.
    • 01:03:08
      And these rights have been enhanced when the FRA issued its final rule on the PREA metrics and standards.
    • 01:03:14
      which further defined what is considered on time, believe it or not, that has not been a definition prior to the metrics and standards being adopted.
    • 01:03:23
      In fact, they chose customer OTP, which is different than endpoint OTP, when they set up those rights.
    • 01:03:30
      This is an important designation, and that's because if you were, say, going on a train from Norfolk to Washington, DC, and you were running late the entire time, but because there was recovery time at the end of the schedule,
    • 01:03:44
      and you arrived in DC on time, the train would show up on time.
    • 01:03:47
      But if you were on the train and you were getting off at one of the intermediate stops and you were 15 minutes late, you would see yourself as late.
    • 01:03:53
      And so the new metrics and standards define customer OTP as one of the measurements, which we all believe is a very, very good thing.
    • 01:04:00
      Next slide.
    • 01:04:04
      So with those rights, we operate really three different kinds of service.
    • 01:04:08
      And one of them is important to you all today.
    • 01:04:10
      The first one, as you know, is we own the Northeast Corridor virtually
    • 01:04:14
      all the Northeast Corridor between Boston, New York and Washington, D.C. And on the NEC, we run the regional trains and we run the high speed Acela trains.
    • 01:04:22
      There are long distance trains that operate over the Northeast Corridor as well.
    • 01:04:26
      And there's certainly a lot of commuter trains.
    • 01:04:29
      We have several commuter partners that have access.
    • 01:04:32
      We have access agreements with that provide commuter service over the NEC.
    • 01:04:38
      Then, of course, we run a series of overnight long distance trains around the country.
    • 01:04:42
      And I think depending on where you are in the United States of America, when you think about Amtrak, I think most people in the country, when they think of Amtrak, they think of these overnight long distance trains.
    • 01:04:52
      They really capture the imagination.
    • 01:04:55
      I think a lot of people imagine themselves riding in a sleeping car, having dinner in a dining car.
    • 01:05:00
      But in many parts of the country, when people think of Amtrak, certainly outside of the Northeast, they think of the long distance network.
    • 01:05:07
      There's only 15 long distance trains that we operate.
    • 01:05:11
      And we're very proud of them.
    • 01:05:12
      Most of them are hopped in Chicago, but we have quite a few that operate through the Commonwealth, including the Auto Train, which is an enormously successful, very popular train which runs from Wharton down to Orlando, Florida, a place called Sanford every single day.
    • 01:05:27
      And just as an aside, during the pandemic, it was really third and we're still in the pandemic.
    • 01:05:32
      The Auto Train has really been the best
    • 01:05:34
      is a performing train in the entire Amtrak system.
    • 01:05:37
      It really has performed very, very well as it caters to a snowbird clientele.
    • 01:05:44
      And because it's really an all sleeping car trainer, primarily sleeping car train, we found that Americans are very comfortable riding in an enclosed space on a train right now.
    • 01:05:55
      And so the auto train has done well.
    • 01:05:57
      The last thing we do is what we're going to talk about most for most of the rest of the conversation today.
    • 01:06:03
      Really, in partnership with a number of states around the country, Amtrak runs a network of short distance trains.
    • 01:06:09
      Short distance is legally defined in statute as a train that operates under 750 miles in length.
    • 01:06:16
      Currently, there are 17 states and 20 contracting entities that pay us to run trains.
    • 01:06:22
      And another way to think about these is that these trains would not exist but for the contract between Amtrak and the state.
    • 01:06:29
      California has three partnerships, which is why this goes up to 20 because
    • 01:06:33
      We have three different entities in the state that we contract with for operation.
    • 01:06:37
      But as you know, the Commonwealth of Virginia is one of our largest state partners.
    • 01:06:41
      We're very proud of that partnership.
    • 01:06:43
      Together, we operate trains under partnership with these states on 27 different routes.
    • 01:06:50
      Some states have multiple routes.
    • 01:06:52
      And they account for 50% of the Amtrak passenger levels, which it did in 2019.
    • 01:06:58
      So really, when you think about the Northeast Corridor, and everybody, I think, thinks how
    • 01:07:03
      is an important and vital it is to the nation's transportation infrastructure.
    • 01:07:07
      I believe about half of our ridership is actually on a train funded by a state.
    • 01:07:10
      Although the corridor has a bigger share of revenue, our state supported services have a bigger share of ridership.
    • 01:07:16
      Next slide, please.
    • 01:07:24
      Okay, here we go.
    • 01:07:25
      So I want to talk about sort of how these services are structured.
    • 01:07:30
      In 2008, Congress passed a piece of legislation called the Passenger Rail Investment Improvement Act, or PREA.
    • 01:07:36
      And this was really a transformational piece of legislation that shifted the funding responsibility for short distance trains really away from the federal government to the states.
    • 01:07:45
      Prior to PREA, we certainly had a number of states that contracted with us to run short distance trains.
    • 01:07:52
      But there were trains that we inherited the day that we were founded in 1971 that were funded through our federal appropriation.
    • 01:07:59
      although we were growing short distance services and partnerships with states all over the country, prior to PREA, PREA changed it and basically said, look, Amtrak, all of these other short distance trains that you run around the country that are paid for with the Congressional Corporation, you have five years to transition the funding responsibility for those trains over to the states.
    • 01:08:20
      And if you can't, they go away.
    • 01:08:22
      As you would imagine, that was a really scary
    • 01:08:26
      proposition for us.
    • 01:08:27
      There was lots of service around the country that states didn't find that the states were going to have to pick up or they would go away.
    • 01:08:33
      New York, Virginia, Pennsylvania, Illinois, Michigan, some service in California.
    • 01:08:38
      There were a lot of states that were impacted by this.
    • 01:08:41
      And so, you know, we worked for five years with the states on a transition plan.
    • 01:08:47
      The other parts of PREA that I want to talk about
    • 01:08:51
      on the next slide, because this is really important, I think, information for you to have, and we can go to the next slide.
    • 01:08:58
      Was it defined how states would have to pay us?
    • 01:09:03
      First of all, it directed the creation of a common methodology so that every state would pay on the same basic methodology for services.
    • 01:09:11
      It said, prior to PREA, we did not allocate overhead to states for state-supported services, any of it, really.
    • 01:09:21
      PREA said look Amtrak that's a pretty bad business practice and you really need to begin to move towards recovering some of your other other costs.
    • 01:09:31
      We hadn't allocated overhead costs or other charges to states prior to that because from our perspective if a train went away you know we charge states for the cost that would go away avoidable cost if you will.
    • 01:09:43
      So PREA said now you have to sure it's fine that there's a federal responsibility for some of your
    • 01:09:49
      your overhead, but you have to find a way to work with the states to at least recover some portion of your overhead costs, which we now just call an additive.
    • 01:09:57
      We're not close to covering all of overhead, but we have a methodology that covers a portion of our overhead through what's called an additive.
    • 01:10:07
      PREA also said we would have to have an equipment charge.
    • 01:10:11
      Again, prior to PREA, we did not charge states for the use of our equipment, and the simple explanation of that is because
    • 01:10:18
      When the equipment was fully depreciated, the state didn't take ownership of it, and it wasn't replaced.
    • 01:10:23
      We would rebuild it, but there was not an equipment charge charged to a state.
    • 01:10:28
      So we had to begin charging an equipment charge to states for use of the Amtrak rolling stock.
    • 01:10:36
      And then the third thing it did was say that in addition to
    • 01:10:41
      not being able to run trains at 750 miles or less, requiring a charge of an equipment capital charge, requiring an allocation charge, basically said all the states have to agree on this.
    • 01:10:51
      And if they don't agree on it, then we go to the Surface Transportation Board.
    • 01:10:56
      There were 19 states at the time that were impacted by this.
    • 01:10:58
      18 of the 19 agreed with the methodology.
    • 01:11:02
      Indiana did not.
    • 01:11:02
      They objected to the entire premise of having to pay for passenger service at all.
    • 01:11:07
      And so we went to the Surface Board.
    • 01:11:09
      Surface Transportation Board agreed with the methodology and on October 1st of 2013, five years after the PREA legislation was passed, the cost allocation methodology was adopted and that became the methodology that we used for charging all of our state partners for the operation of their state supported services.
    • 01:11:31
      Next slide.
    • 01:11:37
      PREA also led to the creation of SAPIR-C, the State Amtrak Intercity Passenger Rail Committee, of which Virginia is a member.
    • 01:11:44
      The group that set about creating the methodology was a group of state DOT staff, by and large, who worked over those five years with us and with the FRA and others to come up with a methodology.
    • 01:11:57
      But Congress really felt that SAPIR-C was valuable and formalized it.
    • 01:12:04
      And the FAST Act
    • 01:12:06
      They authorized the creation of Safercy into law.
    • 01:12:09
      Safercy now gets an annual appropriation of a couple million dollars a year.
    • 01:12:13
      They have an executive staff.
    • 01:12:15
      They have an executive director and staff.
    • 01:12:17
      Administratively, they're housed in NEPRA, which is the service that oversees our ridership, or I'm sorry, our services in Maine.
    • 01:12:24
      And they meet regularly.
    • 01:12:25
      They meet on a quarterly basis with all of the state partners, and then we meet on a monthly basis with an executive committee.
    • 01:12:33
      Amtrak and the FRA are members.
    • 01:12:35
      And now as a result of the pandemic, we've begun to meet every other week.
    • 01:12:41
      Early in the pandemic, we were meeting every week with the states.
    • 01:12:43
      But as a result of the pandemic, we've had more frequent meetings with Safer Sea to talk about lots of things, including equipment plans, including marketing plans, and any revisions to the costing methodology that the states would be interested in.
    • 01:13:00
      Next slide.
    • 01:13:04
      So there was talk in the previous presentation about the COVID relief funding, if you will, that was made available to the states through the CARES Act and through the recent appropriation which Congress passed at the end of December.
    • 01:13:18
      CARES provided $239 million through Amtrak's grant to the states to help them through the pandemic.
    • 01:13:25
      $17.4 million so far came to the state of Virginia through
    • 01:13:31
      CARES.
    • 01:13:32
      There's a little bit of CARES money left.
    • 01:13:34
      The money lasted a little bit longer than was anticipated in April, I think.
    • 01:13:39
      We did a pretty good job of estimating what we thought we would need in late March when we were working with the Congress, but thankfully there's actually a little bit extra which was left, and so that's going to take us through January.
    • 01:13:51
      But those monies were really allocated to the states based on the language which was included in the CARES Act.
    • 01:13:58
      There were really five total sentences in CARES that
    • 01:14:01
      that discussed how the funds would be allocated to the states.
    • 01:14:05
      And it really lifted up to us and the FRA through the grant agreement to finalize that methodology.
    • 01:14:11
      But in effect, the funds really represented repayment for the loss of ticket revenue associated with the immediate decline, the dramatic decline in ridership that we saw last March.
    • 01:14:24
      And I will tell you that in 2019, the company set an all-time ridership record
    • 01:14:29
      and Revenue Record, and we were doing really well in 2020.
    • 01:14:33
      In fact, on February 29th of 2020, we just finished a record February, and we're on pace for a record year.
    • 01:14:42
      By the end of March, ridership was down 97%.
    • 01:14:44
      So, in one month, the complete floor fell out of our customer base.
    • 01:14:51
      It was met also with a corresponding
    • 01:14:55
      a corresponding dramatic increase in cancellations.
    • 01:14:58
      Basically anybody who got reservations for the rest of the year canceled ticket reservations.
    • 01:15:03
      So we were running trains but with not a lot of passengers on them at all.
    • 01:15:09
      So those funds were really meant to make up for the loss of ticket revenue and really to keep, as you remember back to what life was like in March and April, they were meant to keep the employees on the payroll so that we wouldn't discontinue trains.
    • 01:15:25
      to prevent employees from losing their jobs and going into the unemployment rolls.
    • 01:15:31
      The most recent federal stimulus provided $175 million for the states, as was alluded to earlier.
    • 01:15:37
      The allocation of those dollars is a little bit different.
    • 01:15:41
      The language in the legislation is a little bit different.
    • 01:15:43
      The state partners came up with much of the language which the Congress adopted and basically says that the states
    • 01:15:53
      It divided up into two pools, and this will be hard to explain, but I'll try and do my best in explaining all of this to you.
    • 01:15:59
      But basically, each state received an, or will receive an allocation because these will come through an FRA grant agreement to Amtrak, but these funds will be held by Amtrak for the states.
    • 01:16:09
      Each state will receive approximately 7% of what its costs were, their expenses in FY in 2019.
    • 01:16:18
      So you see Virginia, this is the estimated allocation for Virginia as a result of that of $3,078,000.
    • 01:16:25
      And then that adds up for all the states to about $52 million, which leaves really, I think, close to $125 million left.
    • 01:16:34
      So the remaining funds then, according to the language in the bill, are going to be allocated on the revenue generated by each state in 2019.
    • 01:16:42
      And so this is the estimate for what Virginia will receive, which is just over
    • 01:16:46
      So, all told, I think that comes to 12, almost 12.6 million, I believe, in funding available to the states as a result of the most recent federal stimulus.
    • 01:16:58
      And again, this is spelled out in the language in the bill.
    • 01:17:01
      We are working through the grant agreement with the FRA right now, and I think of use to you is that
    • 01:17:09
      that looks like the way that funds are coming.
    • 01:17:11
      They can be used by the state however it sees fit, meaning they can spend it on capital or they can spend on operating.
    • 01:17:18
      That's what I think is going to happen right now, but we should have a new grant agreement in place here very shortly.
    • 01:17:26
      Next slide.
    • 01:17:30
      So I'm going to finish on this slide because I've covered a lot of ground here and I think I had a pretty meaty presentation that I hope you found useful.
    • 01:17:39
      What do you get when you partner with Amtrak?
    • 01:17:40
      Why would you use Amtrak and not just go out on your own?
    • 01:17:44
      And first and foremost, as I said earlier, with Amtrak, you get the right of incremental access.
    • 01:17:49
      And you get the right of access to the railroad and the right of incremental access, meaning what it costs the railroad to have you and us there.
    • 01:17:58
      And you get our right of preference and the add-ons that come with it, the measurements and the tools that come with it.
    • 01:18:05
      We also indemnify the host railroads for virtually everything, but grossing willful misconduct, so we have very good indemnity agreements with the railroads.
    • 01:18:14
      There's sort of no-fault indemnities, which is if there's an accident between an Amtrak passenger train and a freight train, Amtrak pays for all of its costs associated with that incident, no matter who's at fault, and the railroad pays for its own costs associated with that accident, no matter who's at fault.
    • 01:18:34
      The railroads are generally comfortable with these indemnity agreements.
    • 01:18:38
      The standard no-fault indemnity agreements get that from us.
    • 01:18:41
      You also obviously get connectivity to the Amtrak National Network, whether it's onto the Northeast Corridor or whether it's to one of the overnight long-distance trains or to another state train.
    • 01:18:51
      In many places, we have state trains which connect to other state trains.
    • 01:18:55
      And obviously, we have a national reservation system for anybody in the country, anybody in the world really to make a reservation on any Amtrak train.
    • 01:19:04
      and make ticket reservations for connecting trains as well.
    • 01:19:10
      Most of our reservations now come over the app.
    • 01:19:15
      Amtrak.com has been an extremely successful website for us, and the app itself now is really taking over what you find just on the computer.
    • 01:19:26
      The app has really become the dominant way that passengers make reservations.
    • 01:19:34
      I think it's under 18% that come through all the other sales channels, which are tickets at stations, tickets over the phone, ticketing by mail, anything like that.
    • 01:19:43
      But everything else is really electronic now.
    • 01:19:46
      We have a very successful loyalty program called Guest Rewards.
    • 01:19:50
      We have over 11 million members in Amtrak Guest Rewards right now.
    • 01:19:54
      And they've been very loyal to us through the pandemic and we have good communication with them on a very regular basis with
    • 01:20:03
      all of the things that we have been doing and we can communicate first and foremost to the guest rewards members and they give us very good feedback through the surveys that we send them.
    • 01:20:16
      We obviously have pretty significant hiring and training qualification programs for our T&E crews, for engineering departments, for our dispatchers, and so you get the benefit of that.
    • 01:20:26
      and obviously we advocate for you at the congressional level for funding both in terms of COVID funds or just capital funds in general that we're seeking through reauthorization of the Surface Transportation Policy Bill which is coming up.
    • 01:20:44
      We're seeking billions with a B for the development of state supported services nationwide because we really believe it's the right thing to do to help our state partners grow and we're
    • 01:20:56
      is going to be very aggressive doing that in surface transportation.
    • 01:21:00
      Policy reauthorization.
    • 01:21:02
      You might want to look up HR2 from last summer that passed the House T&I Committee under Mr. DeFazio's leadership.
    • 01:21:09
      This is really our reauthorization proposal.
    • 01:21:11
      We got out of subcommittee, full committee, through the House floor in the proposal that we had largely intact to provide billions of capital funding for state partners around the country to develop services.
    • 01:21:24
      that didn't go anywhere in the Senate because the Senate didn't take up the Surface Transportation Policy Bill last year, but we're very optimistic about its chances in the coming Congress.
    • 01:21:35
      As I said, it was said before in the previous presentation, we're providing $944 million for your Transforming Virginia proposal.
    • 01:21:43
      We're very proud of that.
    • 01:21:45
      That's one of, in my time here,
    • 01:21:48
      largest grant program, the largest match I think we've ever provided to a state.
    • 01:21:52
      We're excited about that.
    • 01:21:54
      It is really a remarkable project that you're doing.
    • 01:21:57
      I'm proud of the work the company's doing to help you through that.
    • 01:22:02
      And we look forward to providing matching capital dollars for other projects in the state, whether it's stations or passing sidings or anything like that through the grant programs, which are available, Chrissy and BUILD and the Federal State Partnership, which they did good repairs and some others.
    • 01:22:17
      There's lots of other things I think as an Amtrak employee that I could tell you that we do for you, but I thought this was a list of sort of what you get, a good list of what you get when you contract with Amtrak for services.
    • 01:22:30
      So I'll open it up to questions there.
    • 01:22:32
      I think there was a lot of, based on the previous presentation, there's a lot that was in here that you probably have some follow-up questions on.
    • 01:22:37
      So Jeremy, if you want, you can open it up to questions for me and I'll do the best I can.
    • SPEAKER_13
    • 01:22:46
      Does anybody have any questions?
    • 01:22:48
      And Ray, thank you very much for the very informative presentation.
    • SPEAKER_15
    • 01:22:52
      Thanks, Jennifer.
    • 01:22:53
      Appreciate that.
    • 01:22:54
      Good to see you.
    • SPEAKER_13
    • 01:22:56
      Anybody have any questions for Ray?
    • SPEAKER_04
    • 01:23:03
      Hey, Jennifer, I'll say one thing, having been there for a little while.
    • 01:23:08
      I went up to Amtrak in 2016, and there were some
    • 01:23:16
      things that needed to be changed.
    • 01:23:19
      But the thing that I was struck by was how many good people there are at Amtrak.
    • 01:23:24
      And there are, Ray is certainly one of them, but there are just a lot of very good people there.
    • 01:23:30
      And I think over the past few years, Amtrak has really come an enormous way in terms of being a well-run corporation.
    • 01:23:44
      and the only credit I'll take is I got some things underway.
    • 01:23:49
      I actually got them underway with the help of some colleagues of mine from NS, who thankfully had retired at the same time I had, including Deb Butler.
    • 01:24:03
      But it's a good company now.
    • 01:24:05
      It's a well-run company.
    • 01:24:06
      They're thoughtful people.
    • 01:24:08
      They have a vision on where they want to go.
    • 01:24:11
      and I'll just close by saying that even when I was there, and I used to make this point all the time, when we looked out across all of the states and the partnerships we had with the states, Virginia has always stood out as being the progressive state, the state, the Commonwealth that
    • 01:24:33
      is doing the right things and looking to the future.
    • 01:24:36
      And obviously, we're now sitting on the board of an organization that will continue that.
    • 01:24:41
      But yeah, and thank you, Ray.
    • 01:24:44
      Good to see you.
    • 01:24:45
      Thank you, Wick.
    • SPEAKER_15
    • 01:24:46
      I appreciate that.
    • 01:24:47
      I don't know if Bruno's on here.
    • 01:24:48
      I understand he's an ex officio member, but NS has certainly had an influence on Amtrak.
    • SPEAKER_01
    • 01:24:57
      This is Maria.
    • 01:24:59
      Just like to thank you for your presentation, Ray, and maybe
    • 01:25:03
      Thought for DRPT in this as well.
    • 01:25:08
      I think as an Amtrak rider, I love the app, I love the website, super easy to do.
    • 01:25:14
      And transportation is about the people, the people who work in transportation, the people who use transportation, and the public doesn't necessarily know where that line starts and ends of what is Virginia Rail passenger transit, Amtrak,
    • 01:25:30
      CRS, whatever it is.
    • 01:25:31
      So I love as you were talking to think about how can we do better maybe with the state's leadership and partnership of using the app and being able to buy a ticket that is seamless between Amtrak, between other state service, between WMATA or GRTC.
    • 01:25:50
      Like the more we can do and think about those collaborative ways to provide information and make it as seamless and easy for the passenger,
    • 01:25:59
      the better it works for all of these different transit modes.
    • 01:26:04
      And I think for me, often riding from Richmond, sometimes up to Alexandria, and even just the clunkiness of getting from the Amtrak station to the WMATA station, I'm always like, that should be such an easy transition.
    • 01:26:20
      So I just think maybe it's a stretch goal for all of us as collective partners in working on this and hope we keep that in mind too of how do we make the information, the ticketing, the travel experience as seamless as possible for people to get from point A to point B.
    • SPEAKER_15
    • 01:26:39
      Thanks for that.
    • 01:26:40
      One thing I will add to your points is that we're actually working on something like that and our partners in California
    • 01:26:50
      have really done tremendous work in this regard.
    • 01:26:52
      And in California, they're looking very closely at seamless ticketing, similar to what you're talking about, not just between Amtrak trains, which we can do pretty easy, but between modes.
    • 01:27:05
      And in California's mind, when you hear their rail department leaders talk, they say they don't have an issue with multi-seat rides.
    • 01:27:13
      What they want is multi-ride tickets.
    • 01:27:16
      So one ticket for multi-seat rides, whether you go from a commuter train to an inner city train to a subway, they're working on that.
    • 01:27:24
      But it's underway and we're partnering with them on that.
    • 01:27:27
      We have done a lot of good work with them on that.
    • 01:27:30
      I think it's still a few years out to get the technology in place for that, but it's really the direction that the mode is going and I'm excited about it.
    • SPEAKER_06
    • 01:27:42
      Hi, Ray.
    • 01:27:43
      Ron Hall here.
    • 01:27:44
      Thanks for your presentation.
    • 01:27:46
      One of my Amtrak informants advised that to get you going, just reference Chicago Cubs or the Blues Brothers, and you could go all day.
    • 01:27:58
      I guess I would just ask that we amend that list to add Virginia to it and where I'm going with this.
    • 01:28:08
      I can foresee, just given one with
    • 01:28:12
      the transition in administration, and as evidenced by HR2, you know, more of a rail focus, if you will, to sort of gauge the health and industry of the industry.
    • 01:28:24
      Post-pandemic, hopefully, once we're able to get to the other side of this thing, and I can foresee an appetite amongst congressional personalities of, okay, where can we further cut and where can we further highlight
    • 01:28:38
      area states that are getting it right, if you will.
    • 01:28:41
      I guess my only ask is that you keep Virginia as sort of an example of entities that are getting it right, if you will, when done correctly.
    • SPEAKER_15
    • 01:28:53
      Yeah, absolutely.
    • 01:28:54
      I mean, as I said, I mean, we could not be more excited as a corporation about your project.
    • 01:29:00
      We're contributing $944 million to it.
    • 01:29:04
      Absolutely, we intend to
    • 01:29:06
      to talk about it as much as we can and really want to mimic what we're doing with you in other places across the country.
    • 01:29:13
      So really thanks for being such a great example for this mode.
    • 01:29:19
      It really is remarkable because I have a long time here and there was a lot of lean years when the mode was really, really poorly funded and our future was
    • 01:29:29
      in jeopardy.
    • 01:29:30
      We were like the Cubs for a while.
    • 01:29:33
      So I think that that was probably your friend, Mr. McLaughlin, who's a Sox fan and who was saying stuff about my loyalty to the team on the north side.
    • 01:29:44
      But I'll just let it go and we'll continue on with questions.
    • SPEAKER_12
    • 01:29:51
      Great.
    • SPEAKER_13
    • 01:29:53
      Anyone else?
    • 01:29:54
      Any questions for Ray?
    • 01:29:56
      And I just, again, just want to second
    • 01:30:00
      You know, the partnership that we have between the Commonwealth and Amtrak is a very strong one.
    • 01:30:06
      And we really do appreciate, greatly appreciate the support that Amtrak is providing for the Transforming Rail in Virginia program.
    • 01:30:15
      Similarly, also working with them on other rail expansions across the state.
    • 01:30:21
      And it's been a very good partnership.
    • 01:30:23
      So Ray, thank you very much for the presentation.
    • SPEAKER_05
    • 01:30:26
      Hey, Jennifer, if I can,
    • 01:30:28
      I just wanted Ray to know I was here, I did hear his comment, and I'll address it when I am up on the agenda later.
    • SPEAKER_15
    • 01:30:39
      Thanks, all.
    • SPEAKER_13
    • 01:30:41
      Appreciate it.
    • SPEAKER_15
    • 01:30:42
      Thank you, Ryan.
    • SPEAKER_13
    • 01:30:45
      Okay, so with that, that does lead us into our next agenda item, which is the Human Resources Policy.
    • 01:30:55
      So, I'm going to let
    • 01:30:57
      Jeremy, take that.
    • 01:30:58
      Hopefully you all had a chance to review the policy itself.
    • 01:31:02
      I know Jeremy's gotten a few questions and comments, but certainly look forward to hearing any comments that you may have.
    • 01:31:10
      And at the end of this, we will ask you to consider a resolution or a motion to adopt the policy so that we can begin moving forward with some of our key HR related activities.
    • 01:31:24
      And I do want to note as well that
    • 01:31:28
      As we've been putting this together, first of all, I really want to acknowledge the work of Jeremy, Mike Todd, and some of the others on this call today who have really put a lot of time and effort into this, especially for people that are not HR experts.
    • 01:31:45
      They've done a really good job.
    • 01:31:46
      We've gotten support in putting this together from some specialists with the Department of the State's Department of Human Resources Management, as well as
    • 01:31:57
      some HR resources that VDOT has lent to us as well.
    • 01:32:02
      So, I really do appreciate the work that our team has put into this.
    • 01:32:06
      So, with that, Jeremy, I will hand it over to you.
    • SPEAKER_09
    • 01:32:10
      Great.
    • 01:32:11
      Thank you.
    • 01:32:11
      Can you hear me okay?
    • 01:32:14
      Great.
    • 01:32:16
      All right.
    • 01:32:16
      So, as Jennifer said, the policy manual that you have in front of you or that you received, it started with a team.
    • 01:32:26
      of some experts and some not experts.
    • 01:32:29
      So I had myself and Mike Todd and some others, DRPT, who were involved.
    • 01:32:34
      But Lisa Wright, our representative from the Office of the Attorney General, did a lot of work, especially in the very beginning.
    • 01:32:40
      We started with a massive spreadsheet comparing a lot of policies across several agencies and really kind of helped us as we had those in front of us to decide which direction are we going to go.
    • 01:32:51
      We also pulled in resources from the Department of Human Resources, TARS Harmon,
    • 01:32:56
      and from VDOT, Mark Gunn.
    • 01:32:58
      And then we, of course, were briefing with the DRPT executive team.
    • 01:33:02
      And then Lisa had some contacts as well in the private sector.
    • 01:33:05
      So we just really pulled in as much expertise as we could.
    • 01:33:11
      We went through that massive spreadsheet to develop something that we wanted to put the best practices that we could find in there.
    • 01:33:23
      And, you know,
    • 01:33:26
      We discussed them.
    • 01:33:27
      We wanted to keep some of the state policies where we felt the state was generous and you have the benefit of state or you have really generous state benefits.
    • 01:33:36
      Then we also altered some things because as we started to choose different policies, you find out some policies are interrelated.
    • 01:33:42
      And so this document became quite a task.
    • 01:33:47
      And so we had to decide how to move forward.
    • 01:33:49
      And so there were a lot of internal meetings.
    • 01:33:50
      I think we started this process as far as like June 2020.
    • 01:33:54
      So a lot of work has gone into it.
    • 01:34:00
      We contemplated a bunch of things.
    • 01:34:06
      And one of the things we had to look at was we borrowed heavily from the Virginia Port Authority.
    • 01:34:11
      So you see that's one of them, Virginia 529.
    • 01:34:14
      We also looked at some policies outside of the state.
    • 01:34:17
      And there were things like the Virginia Port Authority has more wage workers.
    • 01:34:21
      So there were some
    • 01:34:22
      adjustments that we had to make, also with their union presence.
    • 01:34:27
      And so, again, as I mentioned, finding those discrepancies, we adopted some policies.
    • 01:34:32
      Oops.
    • 01:34:33
      Controlling slides and talking.
    • 01:34:34
      All right.
    • 01:34:35
      The goals of our policies and procedures.
    • 01:34:37
      We wanted to initiate the hiring and the compensation and management of staff.
    • 01:34:44
      So this is a very important step to getting the VPRA stood up.
    • 01:34:48
      We also have this unique opportunity to modernize and craft something that blends the best of the state and private sector, and so that's what we have sought to do here.
    • 01:34:58
      We did intend to keep the state benefits, especially as we would anticipate some state employees from DRPT to come over, but we also wanted to find those modern best practices and include them as well.
    • 01:35:12
      We also recognize that one of the first hires is going to be the HR director, so this would be something
    • 01:35:16
      that would be handed to an HR director with consultation from the Passenger Rail Authority's executive team, may come back to the board as well and alter this in the future to clarify things in greater detail.
    • 01:35:28
      And I think that's something to be understood is a lot of these policies will require some internal forms to be developed.
    • 01:35:34
      And then there's just a lot that can go into furthering this policy as a starting point for the agency.
    • 01:35:40
      So we really, though, wanted to encourage a professional environment and attract high caliber employees.
    • 01:35:44
      And I think that's important.
    • 01:35:46
      that's something we've seen a success at DRPT.
    • 01:35:50
      So the Passenger Rail Authority, we think is going to be an agency that has projects all over the Commonwealth and has relationships with Amtrak and other partners.
    • 01:35:59
      And as we saw from Amtrak, a lot of those partners are other states where we work together collaboratively, and even some of those meetings around the country.
    • 01:36:05
      So, you know, having some progressive policies about teleworking, wanted to mention that one of the things that DRPT did well, and we borrowed a lot from the teleworking policy,
    • 01:36:16
      When the pandemic happened, DRPT was pretty ready to go.
    • 01:36:20
      We had an operation plan.
    • 01:36:21
      A lot of employees were already set up with the infrastructure to have VPN.
    • 01:36:25
      And that was the DRPT finance team had all these policies already in place.
    • 01:36:30
      And so we've had a lot to use that was already proven in what's happened in recent times.
    • 01:36:39
      So with the policy manual itself, some of the differences to point out,
    • 01:36:44
      or some of the highlights that employees would be at will.
    • 01:36:49
      So there's not going to be contractual agreements with these employees that serve a certain term.
    • 01:36:56
      And then some of the things that we looked at at the Department of Human Resources, there's a very robust grievance process that we have tried to streamline looking at some other agencies.
    • 01:37:09
      And when it comes to benefits, again, borrowing from
    • 01:37:13
      the Department of Human Resources and wanting to bring over some state employees and also really just benefit the agency in attracting the right workforce.
    • 01:37:23
      We took the leave and you all did receive an email about this that we had to correct the hours, but the leave was designed to take what the state employees get today as far as sick leave, family personal and accumulated annual leave according to their years of service and put that into a PTO bucket.
    • 01:37:39
      And then there is also a cap on how much can be carried over annually.
    • 01:37:42
      The Virginia Retirement System is an important piece of or important benefit of state employees.
    • 01:37:49
      So we have brought that over.
    • 01:37:51
      And then there's also policies like severance, which is determined on years of service.
    • 01:37:57
      And so one of the things you'll notice when you read that first paragraph on the front page of the policy manual, it talks about at will employment, and also talks about recognizing years of service for state employees.
    • 01:38:08
      I mentioned a little bit about work-life balance and telework and how that has been something that for a workforce that's going to be nimble and traveling around the state, telework is important.
    • 01:38:19
      And I think also coming out of the COVID pandemic, we've really seen how that can work well.
    • 01:38:25
      Flexible schedules, you know, there's probably going to be a lot of work that is not just 8.30 to 5 or, you know, within those hours.
    • 01:38:35
      Giving the manager some discretion to work with their employees and achieve that work-life balance has also been something that we've seen work well at DRPT because I know a lot of us at DRPT are, you know, making sure things are done.
    • 01:38:48
      It could be seven o'clock on a Friday or whatever it takes, but we don't mind because we know we work together.
    • 01:38:56
      Professional development is also something that we have at the state that I think is also
    • 01:39:03
      Well done in the private sector, so we felt like we could carry over some of the policies about career development, professional certifications, advancing education as it relates to the job of that person in their role, and also some of the health benefits and the wellness programs that come with the Department of Human Resources.
    • 01:39:21
      We carried over a lot of that from the state.
    • 01:39:26
      So, just stopping there, that's giving you the highlights of the
    • 01:39:32
      The manual and we do anticipate some feedback, but we did get some already.
    • 01:39:38
      And of course, you all received the email that we would have adjusted the hours down because it's something didn't calculate right.
    • 01:39:44
      So I just want to let you all know that was fixed in the draft.
    • 01:39:47
      And I can open it up for questions or comments.
    • SPEAKER_13
    • 01:39:55
      Steve, I see you got your hand raised.
    • 01:39:57
      Was there something I wanted to add?
    • SPEAKER_03
    • 01:39:59
      Yeah, if I may, Jennifer, thank you.
    • 01:40:02
      I just wanted to point out that in the legislation itself, it directs that employees of the Rail Authority will be considered employees of the Commonwealth and they will have the retirement system benefits.
    • 01:40:19
      So this wasn't a decision of executive team at DRPT.
    • 01:40:26
      It is actually written in
    • 01:40:29
      the code section to sort of mirror those benefits of Commonwealth employees.
    • SPEAKER_13
    • 01:40:39
      Thank you.
    • 01:40:40
      Thanks for clarifying that.
    • 01:40:41
      And the legislation when it was drafted was very much modeled after the Virginia Port Authority legislation.
    • 01:40:48
      So a lot of these provisions are similar to the ones that they use.
    • 01:40:54
      And that was part of the reason that we did lean so heavily on
    • 01:40:58
      some of the HR policies that the Port Authority has in place.
    • SPEAKER_10
    • 01:41:03
      Jennifer, this is Jay.
    • 01:41:07
      It's amazing how long a document like this can be, right?
    • 01:41:10
      All the work that goes into it.
    • 01:41:11
      And I'll just say I was especially impressed to see the telework section, you know, where that has evolved to with COVID and how all private and public sector entities are beginning to have to explore and redefine
    • 01:41:29
      It's the most thorough explanation or sort of policy framework I've ever seen for the use of telework and it looked really good.
    • 01:41:40
      The other thing I'll bring up is that community service 16 hours looked like a really nice progressive benefit to me.
    • 01:41:47
      And the only question I have, which I don't know that much about, which is the severance part of this,
    • 01:41:54
      You know, having worked a lot in nonprofits and federal and local government, I haven't seen much of that, unless as it relates to some of your senior people that you're negotiating a departure.
    • 01:42:06
      So, I'd be curious whether that is something that was in the Port Authority or at VHDA or in the state government, or is it, and others on the board, is it something you have experienced and that this looks
    • 01:42:23
      right in line with other policies, other organizations' policies.
    • SPEAKER_13
    • 01:42:33
      On the severance, and I'm happy to take that.
    • 01:42:36
      That was something that we did actually discuss extensively, and it is a bit of a departure from the practices that are available within the state, which really is the state offers no flexibility at all when it comes to
    • 01:42:53
      being able to offer severance benefits to staff.
    • 01:43:01
      And so we did model that off of some other private sector policies that we looked at as well.
    • 01:43:10
      But definitely that's something that we are happy to discuss.
    • 01:43:15
      I can say in my personal experience that being able to provide severance
    • 01:43:23
      benefits in some cases can be a very good tool for being able to work with employees when maybe it hasn't been a good fit or there's a need to part ways for various reasons.
    • 01:43:43
      And so that was something that we wanted to have some flexibility in the policy for the executive management to have that
    • 01:43:52
      that flexibility and have that tool available.
    • SPEAKER_10
    • 01:43:58
      Well, I was going to say, I know it's not supposed to be based on performance, but I appreciate how difficult it can be to process a departure based on performance.
    • 01:44:16
      That's why I raise it.
    • 01:44:19
      It seemed generous to me, and it doesn't seem as flexible.
    • 01:44:23
      It seems like it's pretty well stated.
    • 01:44:24
      There isn't a lot of flexibility in it.
    • 01:44:27
      So, if anything, I found it overly generous.
    • SPEAKER_11
    • 01:44:35
      Question, Sharon Bulova.
    • SPEAKER_12
    • 01:44:38
      Oops, I better.
    • 01:44:41
      Yes, Sharon.
    • 01:44:49
      Okay.
    • 01:44:51
      You can hear me now?
    • 01:45:10
      Yes.
    • SPEAKER_11
    • 01:45:11
      Okay.
    • 01:45:13
      I was impressed to see the wellness category.
    • 01:45:19
      and it's listed under professional development.
    • 01:45:21
      It also could be listed under work-life balance.
    • 01:45:25
      I know in Fairfax County, we experienced actually a lot of savings by offering wellness programs to our employees, especially employees in public safety and people, you know, were able to
    • 01:45:47
      take advantage of health-related benefits and programs that then made it possible for people to work longer and not to take as much time off that they would have to for sickness.
    • 01:46:03
      So anyway, I'm curious also, what are some of the wellness programs or benefits that would be included?
    • SPEAKER_09
    • 01:46:18
      And I can answer some of that.
    • 01:46:19
      So the, um, I know the employee assistance program was one.
    • 01:46:23
      Can you all hear me okay?
    • 01:46:25
      Yes.
    • 01:46:25
      The employee assistance program was one that offers counseling services.
    • 01:46:29
      And, um, there are just some programs that you can take advantage of as part of the state there.
    • 01:46:33
      In addition to the health benefits, um, the state offers or that has incentive programs and things like that for doing do right activities.
    • SPEAKER_00
    • 01:46:44
      Jennifer?
    • 01:46:45
      Hey, this is Victor Carville.
    • 01:46:46
      If I can go back to the severance provision for just a second.
    • 01:46:50
      And I'm sorry, you know, if we want to move to different places, but my only quick comment about it is the generous nature of it, you know, that's fine, whatever works for budget.
    • 01:46:59
      But I don't see in here where we're going to receive a release in return for paying them for anything.
    • 01:47:04
      And it strikes me that's got to be, that's a critical component of giving people some type of severance is to get a release of claims so that
    • 01:47:13
      When they leave, they won't follow a grievance.
    • 01:47:15
      They won't follow a lawsuit.
    • 01:47:16
      Even in these involuntary situations, which should look to be pure legitimate business reasons, they are oftentimes challenged.
    • 01:47:26
      And so if we're going to give anybody a sum of money, whatever number of salary it is, without a release, that's just a down payment to a plaintiff's lawyer.
    • 01:47:34
      So I would ask us to consider putting a requirement
    • 01:47:41
      among other things, whatever those other things might be, if we're going to give them a severance that we also expect them to sign what at that time will be a standard release document.
    • 01:47:52
      That's something to consider.
    • SPEAKER_13
    • 01:47:55
      Okay.
    • 01:47:56
      Is that something that you might be able to provide us with or be able to share some language with us in your experience that you've seen?
    • 01:48:06
      I think that would be helpful for us.
    • SPEAKER_00
    • 01:48:07
      I've probably seen one or two in my experience.
    • 01:48:09
      So yes, I'd be happy to share such a thing with you.
    • 01:48:11
      Yeah.
    • 01:48:11
      Again, you know, just for the for the full board.
    • 01:48:14
      Again, at the end of the day, if I'm going to give someone a severance of some sort, and in particular, if I'm going to make it contractual, which is what this will be, so we won't be negotiating this.
    • 01:48:23
      This will be, I think, as Jay mentioned earlier, set terms.
    • 01:48:28
      We should really set the term that if we give you this money, what we get in return is the ability to go to bed at night, not worrying about whether you're going to go try to sue us for something else.
    • 01:48:36
      And yeah, I'll be happy to give you at least some language to consider and we can talk about that in greater detail offline.
    • SPEAKER_13
    • 01:48:45
      Great.
    • 01:48:45
      Thank you.
    • 01:48:46
      And I do want to get back to the comment that Jay made.
    • 01:48:49
      And I was actually thinking of a different section when I responded, but
    • 01:48:54
      The section that we do have here on page 41 related to the severance benefits for those who have been involuntarily separated from VPRA does reflect and mirrors what the Commonwealth currently has for severance policies like this too.
    • 01:49:13
      So that is where that came from.
    • 01:49:17
      I guess, are there other concerns about the policy that
    • 01:49:24
      specifically about severance.
    • 01:49:26
      I guess for many of the other board members, would you all like us to consider reducing some of the severance benefits?
    • SPEAKER_12
    • 01:49:42
      Okay.
    • SPEAKER_13
    • 01:49:42
      Well, I didn't hear anything there, so I don't know if anybody was talking.
    • SPEAKER_02
    • 01:49:46
      This is Jim Spoor.
    • 01:49:48
      I was impressed with the requirements.
    • 01:49:53
      and the amount of the benefit from a municipal standpoint, it's pretty typical of what department heads typically receive.
    • 01:50:03
      I was a little surprised to see that it applied to all employees, you know, but the length of time is reasonable.
    • SPEAKER_04
    • 01:50:15
      Hey, Jennifer, this is Wick.
    • 01:50:17
      I think that having
    • 01:50:22
      The ability to offer a generous severance package with, as Victor rightly pointed out, a corresponding agreement that goes with it is fine, but I just think that it should, the amounts, and in fact, the entire package, the amounts associated with the entire package should be at the discretion of the management, you know, just because it's
    • 01:50:52
      Just because you have an up to, doesn't mean that you have to offer that to everyone.
    • 01:50:58
      So I think putting some element of discretion in the document would be appropriate.
    • SPEAKER_12
    • 01:51:07
      Okay.
    • SPEAKER_10
    • 01:51:08
      That language alone, up to, is very useful.
    • SPEAKER_13
    • 01:51:17
      Okay, so we could certainly include that.
    • 01:51:21
      Looking at, in that language, the number of severance payments, it may have a reference that it could be up to this amount of benefit.
    • SPEAKER_04
    • 01:51:36
      So, yeah.
    • SPEAKER_12
    • 01:51:39
      Okay.
    • 01:51:45
      All right.
    • 01:51:46
      Any other comments or questions?
    • SPEAKER_13
    • 01:51:50
      Hussain?
    • SPEAKER_07
    • 01:51:51
      I heard that I haven't really studied the severance policy at the Department of Human Resources Management for state employees, and I heard a reference that the guidance in this policy book really follows what the state offers, considering that
    • 01:52:17
      You know, we're an extension of the state.
    • 01:52:18
      The question I have, it's not a comment really, it's a question, is this compatible with what the state is currently offering to the employees?
    • 01:52:28
      One aspect.
    • 01:52:29
      The other thing is that you mentioned the Port Authority.
    • 01:52:33
      I assume that this is modeled after the Port Authority and is there a benefit of being compatible with the existing policies?
    • SPEAKER_09
    • 01:52:50
      What we do have in the manual comes from the Department of Human Resources Management.
    • 01:52:59
      So there are other areas where we looked at VPRA.
    • 01:53:02
      I have to go back and see if the passage of the Port Authority has anything like this.
    • 01:53:08
      I'd have to check, but I know that this particular aligns with Department of Human Resources for the state.
    • SPEAKER_12
    • 01:53:19
      Thank you.
    • SPEAKER_13
    • 01:53:23
      Any other questions, comments?
    • SPEAKER_02
    • 01:53:28
      Jennifer, I just wanted to thank Jeremy for taking another look at the PTO amounts and reducing those.
    • 01:53:36
      I really appreciate that.
    • SPEAKER_09
    • 01:53:39
      Thank you.
    • SPEAKER_00
    • 01:53:44
      Yeah, I think it's, this is Vector Card.
    • 01:53:45
      Well, I think it's a great effort and I also would acknowledge Jeremy's efforts in getting this done.
    • 01:53:51
      One thing I would say is, as we look at it again, which I will give it a closer look, is for as much as we can, being the public entity that we are, trying to retain as much flexibility within management's discretion.
    • 01:54:04
      That goes back to a comment that I heard right just a second ago, even about these severance payments or anything else.
    • 01:54:10
      Ultimately, for as much discretion as you can maintain, that usually enures to your benefit.
    • 01:54:17
      Keeping in mind that we're
    • 01:54:20
      operating one in a public sphere and two in an industry that is heavily unionized.
    • 01:54:25
      And with some changes in the Commonwealth of Virginia as of July 1 of this past year, those are very relevant issues for us to think about as a board and as a management team.
    • 01:54:38
      Here to date, generally speaking, in the public sector, collective bargaining didn't agree, didn't exist.
    • 01:54:47
      We can have a conversation, and it might very well be a personnel conversation that should be held at a different time, some of the nuances of some of these policies, without my knowing all the rules associated with these kinds of hearings or these kinds of meetings.
    • 01:55:00
      But I do think strategically we should be thinking aloud about how we manage our employees, how we work together, and how we ensure that we have as much discretion within management as possible.
    • SPEAKER_13
    • 01:55:14
      Yeah, I definitely concur with that as well in terms of being, that was a big, you know, that was one of the reasons, I guess, when the legislation was drafted and that, you know, the authority was given the ability to come up with its own personnel policies and a big benefit of that is being able to provide some additional discretion to management that provides a little bit more flexibility than what is available at the state today.
    • 01:55:45
      Okay, so what I would like to request, and I think we will add the language regarding the up to for the severance ranges here, and then we can include a reference to a, I guess what it, I'm not sure, Mr. Cardwell, how you would,
    • 01:56:13
      if it's referred to as a release clause that we would put in here as well?
    • SPEAKER_00
    • 01:56:20
      Well, I would recommend, Jennifer, that we not necessarily put it in the document.
    • 01:56:24
      I would recommend that we reference it because it can change over time.
    • 01:56:29
      These handbooks are reviewed and change over time, but the laws or the situations we might want to address for any particular employee may change over time.
    • 01:56:37
      So for me, it would be something like an employee who's involuntarily separated
    • 01:56:42
      may be eligible to receive blank severance benefits subject to their agreement, to a severance agreement or a release document to be provided at the time of separation.
    • 01:56:54
      Where's that effect?
    • 01:56:55
      There are lots of situations where people will put in individual contracts on employment agreements an attached example of what you might see, but obviously, if a person works three, four, five years, the document changes.
    • 01:57:07
      I would just reference it and create the expectation.
    • 01:57:10
      and if they are to receive these funds, then they should, in return, expect to give us a severance, a separation agreement or release document so that they go their way, we go our way, and we're all happy together.
    • 01:57:23
      That would be something I would do in voluntary termination also, even performance-based, but certainly in this setting, I would just make a reference to it.
    • 01:57:31
      We can edit that language to fit accordingly.
    • SPEAKER_13
    • 01:57:37
      Okay, great.
    • 01:57:40
      So with that, if we go ahead and make those changes, would the board be comfortable at this point going ahead and approving a motion to, or considering a motion to approve and adopt the policy with those changes reflected in it?
    • 01:57:59
      Or would you want another copy?
    • SPEAKER_00
    • 01:58:02
      Okay.
    • 01:58:04
      So moved.
    • 01:58:05
      This is Jay.
    • SPEAKER_13
    • 01:58:05
      Is there a second?
    • SPEAKER_00
    • 01:58:07
      Secretary Cardwell, second.
    • SPEAKER_13
    • 01:58:09
      Great.
    • 01:58:10
      Thank you.
    • 01:58:10
      Bridget, would you please call the roll for a vote?
    • 01:58:14
      Ms. Bulova?
    • 01:58:15
      Aye.
    • SPEAKER_14
    • 01:58:18
      Ms. Butler-Painter?
    • 01:58:20
      Aye.
    • 01:58:21
      Mr. Cardwell?
    • SPEAKER_00
    • 01:58:22
      Aye.
    • SPEAKER_14
    • 01:58:24
      Ms. Dorsch?
    • 01:58:26
      Aye.
    • 01:58:27
      Mr. Fisette?
    • SPEAKER_12
    • 01:58:29
      Aye.
    • SPEAKER_14
    • 01:58:30
      Mr. Hall?
    • SPEAKER_12
    • 01:58:31
      Aye.
    • SPEAKER_14
    • 01:58:33
      Mr. Moorman?
    • SPEAKER_12
    • 01:58:35
      Aye.
    • SPEAKER_14
    • 01:58:36
      Ms. Moses-Ned?
    • 01:58:38
      Aye.
    • 01:58:40
      Mr. Nichols?
    • 01:58:44
      Mr. Sadeed?
    • SPEAKER_07
    • 01:58:46
      Aye.
    • SPEAKER_14
    • 01:58:47
      Mr. Spore?
    • SPEAKER_07
    • 01:58:48
      Aye.
    • SPEAKER_14
    • 01:58:51
      Ms. Zimmerman?
    • 01:58:53
      Aye.
    • 01:58:54
      The ayes have it.
    • SPEAKER_13
    • 01:58:55
      The motion carries.
    • 01:58:57
      Great.
    • 01:58:58
      Thank you, Bridget.
    • 01:58:59
      And thank you to all of you as well.
    • 01:59:01
      This is actually a really important step for us now being able to move forward in hiring staff.
    • 01:59:09
      This will be very helpful, a very big step for us.
    • 01:59:12
      So, all right, next on the agenda, I believe we have Mike McLaughlin to talk about the Long Bridge or the upcoming procurements for the Transforming Rail in Virginia initiative.
    • 01:59:26
      So, Mike, I'll let you take it from here.
    • SPEAKER_05
    • 01:59:29
      Hi, thanks, Director Mitchell, Chairwoman Mitchell, and members of the board.
    • 01:59:34
      Thanks for having me here.
    • 01:59:37
      I presented to you on the status of some major projects, and I want to present to you the status of some procurements that are related to those projects.
    • 01:59:47
      I'm hesitating to see if the screen can be changed to the PowerPoint.
    • SPEAKER_09
    • 01:59:54
      Sorry, it is on mine.
    • 01:59:55
      I'm changing.
    • SPEAKER_05
    • 01:59:56
      I wasn't sure if I was the only one who had the wrong document in front of me.
    • 02:00:03
      This would give me a chance to comment on Ray Lang's comment about the Cubs and White Sox.
    • 02:00:08
      I am a fan of both, but my family did grow up on the south side of Chicago, and if I had to choose, I'd choose the White Sox, but I'm a Cubs fan too.
    • 02:00:18
      I know Patty's shaking her head no, but the White Sox did win the World Series in recent memory before the Cubs did.
    • 02:00:25
      I don't know if Ray's still listening someplace somewhere or if Bruno is and he can pass that on.
    • SPEAKER_06
    • 02:00:30
      William McLaughlin, I'm sorry.
    • 02:00:32
      It was actually from one of his Amtrak government affairs colleagues, but as he was rolling with it, I just let you get thrown under the bus.
    • 02:00:38
      I'm sorry, brother.
    • SPEAKER_05
    • 02:00:39
      It's okay.
    • 02:00:40
      Ray and I have known each other about, gosh, 15, 17 years now from my time working in the Illinois delegation, and I knew Ray well when he was just recently at Amtrak in Chicago and ran amongst the same group of people.
    • 02:00:54
      Unfortunately, most of them were Cubs fans, too.
    • 02:00:58
      Okay, so I'm gonna talk to you about a few procurements.
    • 02:01:00
      The first one is Long Bridge, and Director Zimmerman, you brought up the issue of core capacity.
    • 02:01:08
      I agree with everything Chairman Mitchell said, that we are waiting, in fact, one of the things we're waiting on was a procurement to finalize PE, because PE, as I think you and some others know, is one of the steps needed to be taken to, you have to finish 30% design to exit project development, which is a two-year timeframe
    • 02:01:28
      that Chairman Mitchell referred to earlier.
    • 02:01:32
      So that's one of the reasons we wanted to move forward with Long Bridge PE.
    • 02:01:36
      The other one, of course, when you have a $2 billion project, every month you delay.
    • 02:01:39
      It costs a lot of money.
    • 02:01:40
      So with that, I think a lot of you know the details.
    • 02:01:43
      Again, I presented on this last week.
    • 02:01:45
      It is a two-track bridge with three tracks on either side, going to four tracks on both sides.
    • 02:01:49
      We want to go to four tracks over the Potomac as well.
    • 02:01:52
      It carries almost 80 trains a day at 98% capacity during peak hours.
    • 02:01:58
      We have made a lot of progress in the last few years with environmental clearance finalized in September of 2020.
    • 02:02:04
      Next page, please.
    • 02:02:10
      The bridge, as I mentioned, is almost a $2 billion bridge.
    • 02:02:14
      We did move forward.
    • 02:02:15
      So, preliminary engineering was started by the District Department of Transportation in coordination with DRPT and others.
    • 02:02:23
      They only took it to 15% along with the environmental.
    • 02:02:26
      we need to take it to 30% design.
    • 02:02:28
      I think most everyone's familiar that 30% design is that industry threshold for taking projects to a certain milestone.
    • 02:02:36
      And then from there on, you then determine if the project's going to move to design-build or design-bid-build.
    • 02:02:43
      That is something we also plan to determine during the preliminary engineering phase.
    • 02:02:49
      I should note that this procurement and all the other procurements have an assignability clause to VPRA.
    • 02:02:55
      We did start these procurements under the DRPT procurement manual.
    • 02:03:01
      So we are completing this one through DRPT, but in the future, we will be bringing these procurements for your approval to VPRA once the VPRA has an executive director, as you talked about earlier in the program.
    • 02:03:16
      But this will be assigned, this procurement will be assigned to VPRA, hopefully in the short term.
    • 02:03:22
      During preliminary engineering, we'll continue to work with the District Department of Transportation, which I think a lot of people know most of the bridge, most of the project is actually in the district because of some odd historical oddities.
    • 02:03:37
      The district actually has the property up almost until the shoreline in Virginia.
    • 02:03:43
      So we'll work closely with them in the Potomac River and parts in DC.
    • 02:03:48
      Also works the National Park Service.
    • 02:03:51
      Director Mitchell mentioned earlier that we had legislation passed to allow us to have some National Park Service land conveyed.
    • 02:03:59
      So we'll want to work with them to make sure that's properly handled.
    • 02:04:02
      We're also, of course, going to be working with our partners at Amtrak and VRE and others.
    • 02:04:07
      PE will take about two years.
    • 02:04:09
      Final design and construction will then come after PE is done.
    • 02:04:14
      I hope we hope to have it completed by 2030.
    • 02:04:16
      I already mentioned Long Bridge Act and the MPS land, which we'll start working on with MPS.
    • 02:04:21
      Next page, please.
    • 02:04:25
      And if you have any questions while I'm presenting, feel free to ask them too.
    • 02:04:28
      Otherwise, I'll just continue to go on and I'll pause at the end for questions.
    • SPEAKER_02
    • 02:04:34
      Mike, this is Jim Spoor.
    • 02:04:36
      Just back on that other picture.
    • 02:04:38
      Is there any concern about deferred maintenance on the existing bridge?
    • 02:04:43
      I mean, God, look at that landscaping growing out of the abutment there.
    • SPEAKER_05
    • 02:04:47
      CSX assures us that the bridge is in good condition.
    • 02:04:51
      In fact, they are going to continue to operate and maintain that current bridge.
    • 02:04:56
      That's the current bridge, the current Long Bridge, the current two span bridge we'll be building right next to it.
    • 02:05:01
      We'll be building upstream.
    • 02:05:03
      So that is in good structural shape.
    • 02:05:07
      I do understand your point about maybe some paint and some vegetation maintenance there.
    • 02:05:16
      And you're not the first one when this picture has come up to notice that.
    • 02:05:19
      Hey, Jim, I think they just planted that tree a few years ago.
    • 02:05:26
      Wow.
    • 02:05:30
      They did.
    • 02:05:32
      During World War II, the bridge is over 100 years old.
    • 02:05:35
      During World War II, they shored it up with some additional structures, additional structure support.
    • 02:05:41
      So it is in good shape, they assure us.
    • SPEAKER_04
    • 02:05:44
      Jim, always remember that CSX.
    • SPEAKER_02
    • 02:05:50
      I know it wasn't the thoroughbred of transportation.
    • SPEAKER_05
    • 02:05:56
      These are the project phases and activities for Long Bridge.
    • 02:05:58
      You see the 2016 and 2020 past work.
    • 02:06:02
      I already mentioned a lot of that was done in coordination with the District Department of Transportation.
    • 02:06:06
      21 and 23 is kind of in that middle section there with preliminary engineering, which I've already referred to these.
    • 02:06:14
      This is just another way of kind of looking at what I previously said on the previous slide.
    • 02:06:20
      So I'll pause here.
    • 02:06:21
      Are there any questions on Long Bridge procurement or Long Bridge in general?
    • 02:06:26
      And again, to Director Zimmerman's point, getting through this procurement and getting PE underway is a key part of the project development phase for the FTA's core capacity program, which could be a significant chunk of money for this and related projects.
    • 02:06:46
      If there's no questions, I'll move on to the next few procurements.
    • 02:06:50
      I do want to note, sorry, one more thing, that we just awarded the contract for PE to a firm, VHB, so that procurement is done.
    • 02:07:01
      I can't answer questions about the procurement.
    • 02:07:03
      The next procurements I'm going to talk about are still in process, so I can talk about what's on the slides, but as far as the selection of the contractors, we're not yet final with those, so I can't get into details on the selection of the contractors for the next few slides I'm going into.
    • 02:07:19
      We did award the preliminary engineering contract to VHB in the past week or so for 30% design.
    • 02:07:28
      There were six contractors and they were the selected consultants.
    • 02:07:35
      So I'm gonna move on to the corridor surveys.
    • 02:07:37
      As part of our deal with CSX, we had three years to do surveys for the three main sections of the agreement with CSX.
    • 02:07:48
      The first being the one I think a lot of us are familiar with, which is the RFP and then the Bellwood Sub.
    • 02:07:55
      So the RFP goes from DC to Richmond and includes also the Bellwood Sub down to Petersburg.
    • 02:08:02
      That's the blue line, as you can see on the map here.
    • 02:08:04
      That is one of the surveys.
    • 02:08:07
      Another survey will be along the Buckingham Branch, which is, we call it the Buckingham Branch line, but it's the Richmond Allegheny Division, and we are receiving
    • 02:08:17
      from CSX, the Dodge Wall to Clifton Forge portion of that CSX branch.
    • 02:08:23
      So there'll be a separate survey for that.
    • 02:08:24
      And the third survey will be in the gold from Petersburg to Ridgeway, North Carolina.
    • 02:08:31
      We did release these procurements in August.
    • 02:08:33
      We did not, we wanted to spare the industry from having to respond to all them at once.
    • 02:08:38
      So there are different staggered response dates.
    • 02:08:41
      And so these will be three separate procurements, not one massive procurement.
    • 02:08:48
      makes it easier in some ways on the procurement, on the survey industry.
    • 02:08:54
      Also include the signability clause of VPRA.
    • 02:08:56
      And I'm getting each one of these here in a second.
    • 02:08:58
      Next slide, please.
    • 02:09:02
      And again, that will be also called the I-95 quarter survey, the RFMP, as I mentioned, 144 miles.
    • 02:09:10
      I mentioned the project limits from Washington, DC to Petersburg.
    • 02:09:14
      Deliverables in the surveyor, as you would expect,
    • 02:09:17
      field verification, documentation of existing right-of-ways and tracks, definition of railroad right-of-way, maps, related documents.
    • 02:09:25
      I do want to note that these railroad documents are often 150-plus years old, so that's why we have to go out and do surveys.
    • 02:09:34
      Some documents we have found were actually burned during the Civil War, so that's why it's good to go out and survey and ensure that the right-of-way limits, if you are,
    • 02:09:46
      consistent with what CSX and the Commonwealth agreed to.
    • 02:09:51
      Again, the schedule RFP was released in August of 2020.
    • 02:09:55
      We are expected in the next month or so to award the procurement for this DC to Petersburg survey.
    • 02:10:04
      And I should note that to meet the three-year window that we had with CSX, the three-year starting in December of 2019, all deliverables from the contractor are due by November of 2022.
    • 02:10:18
      So any questions on this one before I move the other two?
    • 02:10:21
      Thank you.
    • 02:10:23
      No questions.
    • 02:10:24
      Happy to move to the next one.
    • 02:10:27
      The Buckingham Branch, as I mentioned, from Doswell to Clifton Forge, 164 miles.
    • 02:10:33
      And again, the deliverables and the schedule are generally the same.
    • 02:10:37
      And there'll be field verification and so on and so forth.
    • 02:10:44
      Any questions on this?
    • 02:10:46
      And again, we are
    • 02:10:47
      Receiving from CSX, the Doswell to Clifton Forge.
    • 02:10:51
      This part of the Buckingham Branch does also go from Doswell to Richmond, but for various reasons, CSX is keeping that part of this Richmond-Allegheny Division of the Buckingham Branch.
    • 02:11:06
      And we will be receiving from CSX ownership of the Doswell to Clifton Forge section.
    • 02:11:12
      Next slide.
    • 02:11:16
      The last one is the S Line, as I already mentioned.
    • 02:11:17
      This is 75 miles.
    • 02:11:20
      Collier Interlocking is on the south side of Petersburg down to Ridgeway, North Carolina.
    • 02:11:25
      I should note that this section does not have active track.
    • 02:11:29
      This section of the S Line was abandoned, and we will be receiving from CSX what they currently own.
    • 02:11:38
      There are some small gaps in ownership of CSX, so we will have to work with
    • 02:11:44
      and private landowners to retain the other gaps in the line, but for the most part, it is owned by CSX.
    • 02:11:50
      At Ridgeway, North Carolina, south of there, there are active tracks, and I should note that North Carolina DOT is working with CSX to retain ownership, to gain ownership of Ridgeway to Raleigh as part of the S Line.
    • 02:12:03
      So you would have a contiguous segment from Raleigh to Petersburg of the S Line, which, as you can see, the 85 corridor goes on a diagonal
    • 02:12:14
      Richmond and Petersburg to North Carolina, and that would save a lot of travel time, the S-Line would.
    • 02:12:19
      Whereas right now, the North Carolina trains have to kind of go in a southeasterly direction, then go straight north to go to Richmond.
    • 02:12:25
      So this would cut, the development of the S-Line would cut down travel times by an hour to an hour and a half between Raleigh and Richmond, which would be really significant for the, not just the southeast region, but the east coast.
    • 02:12:36
      So this survey, again, will meet the same timelines and deliverables that the other surveys will.
    • 02:12:43
      Any questions on any of these?
    • SPEAKER_04
    • 02:12:46
      Hey, Mike, this is Wick.
    • 02:12:47
      Just out of curiosity, does CSX operate the S-line north towards Ridgeway, or have they given it to a short line?
    • SPEAKER_05
    • 02:12:56
      I believe it's still CSX.
    • 02:12:57
      Now, North Carolina did receive a $45, $47 million-ish Christie Grant last year for the purchase of that S-line from CSX.
    • 02:13:08
      So I'll double-check that.
    • 02:13:09
      If I'm wrong, I'll let you know.
    • 02:13:11
      Director Morman, but I believe that is 98% sure that is owned by and operated by CSX.
    • 02:13:18
      Okay, thank you.
    • 02:13:19
      And if I would pull out a rail map just to double check it, but that could get a little messy.
    • 02:13:23
      I'm a huge fan of rail maps, as I think a lot of you are, but it would probably take away from you being able to see my face.
    • 02:13:30
      Well, don't worry.
    • 02:13:31
      I'll look at one of my maps and find out to you.
    • 02:13:35
      So that's a good question.
    • 02:13:36
      This is something really interesting.
    • 02:13:37
      I find this interesting, the development of a rail line.
    • 02:13:39
      It's kind of
    • 02:13:40
      in a sense fun to think about the development of a rail line.
    • 02:13:43
      And we look forward to working with Amtrak and North Carolina DOT and others on this.
    • 02:13:52
      So that's the end of my presentation unless there are other questions.
    • SPEAKER_13
    • 02:13:59
      All right.
    • 02:14:00
      No other questions.
    • 02:14:01
      Thank you very much, Mike.
    • 02:14:03
      As Mike mentioned, we will, you know, these are
    • 02:14:07
      currently being approved by the Commonwealth Transportation Board because it's DRPT acting on the authority to act on behalf of the rail authority and using the statewide procurement policies.
    • 02:14:19
      But in the future, when we do have a procurement manual that's been approved by the board and the authority is able to conduct procurements directly, then we will have those procurements in the future approved by this board.
    • 02:14:36
      Great.
    • 02:14:36
      Thanks.
    • 02:14:38
      Okay, so I think that completes our presentations right now, unless there are any other board members that have any other business that you'd like to bring up?
    • 02:14:51
      Okay, so we are now going to offer an opportunity for public comment, and I'm not sure Haley or Jeremy, who is going to be kind of operating this, but I know I've got a, let's see,
    • SPEAKER_09
    • 02:15:08
      Haley will take over.
    • 02:15:11
      Okay, great.
    • SPEAKER_08
    • 02:15:13
      All right, we will now begin accepting public comment.
    • 02:15:18
      Let me just pull up my document.
    • 02:15:23
      If you would like to provide public comment at this time, please raise your hand in the attendee column.
    • 02:15:29
      We will call your name and unmute your line when it's your turn to speak.
    • 02:15:33
      If you're using the call-in option, you can raise your hand by pressing star three.
    • 02:15:37
      You will have three minutes to provide your comment, and we will then move on to the next person in the queue to speak.
    • 02:15:43
      Once you complete your testimony, please re-mute your line.
    • 02:15:46
      All right, so at this time, if anybody would like to ask any questions or have any comment in regards to what we saw today, please raise your hand in the attendee column.
    • 02:16:04
      I'll give it a second in case anyone is having technical difficulties raising their hands.
    • 02:16:14
      All right, I do not see any comment at this time.
    • 02:16:18
      Hearing none, that concludes our public comment period for this session.
    • SPEAKER_13
    • 02:16:22
      All right, great.
    • 02:16:25
      Thank you, Haley.
    • 02:16:28
      So I believe that is it for our meeting today.
    • 02:16:31
      Unless there's any other questions,
    • 02:16:33
      and I'm going to ask for, I'm not sure if we need to vote actually to go ahead.
    • 02:16:44
      I think we can just go ahead and adjourn the meetings unless anybody has anything else.
    • 02:16:50
      Nope.
    • 02:16:51
      Okay.
    • 02:16:52
      Well, thank you all very much.
    • 02:16:53
      It's good to see all of you and I'm sure we will be talking in the future.
    • 02:16:58
      Please feel free to reach out to
    • 02:17:00
      me, Mike, or Jeremy, or Steve at any time if you need anything or have any questions.
    • SPEAKER_12
    • 02:17:05
      All right.
    • 02:17:07
      With that, thank you very much.
    • 02:17:11
      Thank you.
    • 02:17:12
      OK, thanks.