Board of Directors Meeting   5/23/2022

The May 23, 2022 meeting of the Virginia Passenger Rail Authority Board to order.

I'm Jennifer DeBruhl.

I'm the new chair, so be patient with me with my first meeting.

I'm really excited to be here and have very big shoes to fill, but have been very fortunate to work alongside of Jennifer Mitchell for the last six years, who has prepared me well for the task ahead.

Good morning.

Mr. Cardwell?

Is virtual, I believe, with this.

Present.

And Cardwell is present.

Yes, sir.

Thank you.

Ms. Doersch?

Here.

Mr. Hall?

Mr. Maestri?

Present.

Mr. Moorman?

Mr. Nichols?

Here.

Maristelle, do we have a quorum?

All right, next item on the agenda is public comment.

I do not think we have anybody signed up for public comment this morning.

We do not.

All right, we will move along then.

So the next item is approval of the minutes.

Second.

Second.

Thank you.

All right.

We'll do a roll call vote for the minutes as well.

Mariia Stell?

Ms. Doersch?

Aye.

Mr. Fisette?

Aye.

Mr. Hall?

Mr. Moorman?

Ms. Moses-Nedd?

Aye.

Mr. Nichols?

Thank you.

Our next item on our agenda is our Executive Director's Report.

Thank you, Madam Chair.

Good morning, everybody.

As with past presentations, I'm going to go through some administrative updates and then I'll turn it over to the staff.

We'll kind of do a round-robin to give updates in different aspects of Virginia Passenger Rail.

There's a lot going on as you see from the agenda.

We've got a full agenda today.

Every day in the office is just looked at.

We've got a lot of projects that are moving forward and moving forward quickly and we continue down the path of strong progress, so we're excited about that.

So if we could pull the slides up for the Executive Director report.

The first administrative update is really all about Amtrak.

It's after a long time with the same board members.

Finally, I shouldn't say finally, the president has once again nominated a slate of directors which are hopefully going to be vetted and approved.

The list of directors is on slide three, if we can go there.

You'll notice that Tony Koscha, who's the current board chair, was re-nominated, so if everything goes through, he will continue on the board.

I don't want to guess why that was, but I think that's some good stability.

Amtrak historically has not had great stability, so I think this is a good thing for Amtrak as they continue to move forward on the path.

It's a good cross-section of folks from the industry with different transportation experience, so we're hopeful that that will continue forward.

The current board members have been there for a while, and I think everybody's looking to get a fresh group in there to continue the good work that Amtrak has done.

Those nominations have been referred to the committee and we'll see the progress going forward.

Moving off of Amtrak to VPRA, if we can go to slide four, we are continuing forward on the path of closing the Norfolk Southern deal.

As you know, we came to commercial close back in January.

Financial close is scheduled for late June, early July.

It's only when that close takes place that, thank you, sorry about that.

Only when that close takes place, we can start the new service.

There are three trains that are waiting for that close.

One is the new Roanoke train, which will be the second Roanoke round trip.

One is the Newport News train that was paused due to COVID slash Amtrak staffing issues.

And then the third one is the new Norfolk train.

So we continue on path for that.

That should, that'll take place the closing end of June, early July.

Those trains should start mid July.

So we're excited about that.

Also on the topic of major projects, obviously our biggest project is the Long Bridge project.

We've talked in this forum before about the availability of federal funding.

We are putting in, VPRA is putting in an application under the big mega program, the mega infra-rural program for $300 million to help us with that $2 billion bridge project.

That application is either in or going in today.

and we are hopeful that we will get support on that.

Mike, when he comes up, we'll talk a little more about the status of that project but we have a strong partnership with the District of Columbia as we work through not only the bridge over the water but the multiple bridge spans that are over the roadways in DC, so we're in a good place there.

And finally, probably the best news that I have to report today is we finally come to an agreement with Amtrak.

Amtrak has agreed with our

Design in Crystal City.

We are moving forward from 30% design to the next step, so that project thankfully stays on schedule.

Amtrak is a strong partner and we need to continue to be in close communication with Amtrak.

Moving to operational information, we have good news to report on ridership.

If you look at the April ridership, we're up over 25% from the previous month.

Quote unquote normal times, you would see an increase from March to April of about 8%.

So this is a huge increase showing that folks are getting back on the train.

It's the first time that we have been above the pre-COVID levels of ridership for all of the trains with the exception of the Richmond train and the Newport News train.

Newport News obviously we're not going to be there because we only have one of the two trains running and then the Richmond train is just slow to come back.

It wasn't

running for a long time during COVID.

But the ridership, huge positive trajectory.

Folks are getting back on the train.

We're confident that as more frequencies are put in place, July 11th and moving forward, that ridership will increase even more.

So that's really good news.

Again, we're looking at July 11th to get those trains back and that'll make a huge difference in ridership.

Here's the, on slide six, the year-over-year comparison.

I'm not going to read through the numbers, but you see it's a tremendously positive story and folks are coming back, which is good.

Slide seven gives you the federal fiscal year-to-date ridership.

Again, positive story.

You see the two trains, Roanoke and Norfolk, are well over 100% of last year's ridership and looking good compared to pre-COVID.

The next slide is on-time performance, slide 8.

This is not a great story just by straight numbers.

We're looking for the on-time performance to be much higher than that.

We have performance committees in place with CSX, VRE, and Amtrak that are designed to meet on a regular basis to talk about trains that were late.

to figure out why they were late and come up with new operational procedures to stop that bottleneck on the railroad.

The numbers still are not where we want them to be.

However, there is some promise because if you look, these are the March numbers, the most recent available.

If you look at the February numbers and then at the January numbers, you see a pretty steady uptick in on-time performance.

Comparing it year over year, it doesn't look so good.

Last year, there were a lot fewer trains on the track, so there was less cause or possibility for interference.

We are cautiously optimistic.

January, February, March, that trend is heading upward.

This is the statistic we continued, one of many statistics we continue to watch very closely.

So headed in the right direction, nowhere near where we want it to be.

The biggest factor that impacts on-time performance has been freight train interference, freight trains that are out there.

If an Amtrak train is out of slot, it slows down a freight train.

If the freight train is out of slot, it slows down everything.

This is really what the dedicated right-of-way for passenger rail is going to fix.

We are going to have 20, 30 right-of-way that's just passenger, and we won't get these slower trains in the way of what is going to be a well-scheduled and well-choreographed operation.

Any questions?

I know I did that quickly.

It's somewhat of a question, but just a comment to build on what you said.

Having done a lot with transit, not commuter rail in the past, the biggest thing is frequency and reliability.

You know, you're absolutely right.

Those reliability numbers are just really bad.

I mean, it dissuades people from using trains.

There's no question.

And, you know, you travel in Europe and the train leaves on time and it arrives on time.

Almost 100% is my experience.

So it's reliable and therefore you use it.

and I get it, the shared tracks.

So there are lots of reasons, but it's a huge, I would suggest, a huge obstacle.

If we got to a place where it was 95%, I think people that don't even consider it now would begin to consider it.

and I think the on-time performance isn't even really on time, it's within a range, right?

Yeah, you're exactly correct.

It is within a range.

The train gets there, and we've got two metrics there.

One is end point.

So if the train gets to the end point within 15 minutes of the scheduled time, it is quote unquote on time.

So basically, you could be 14 minutes late every single time and still hit 100%.

As a passenger, I don't want to be 14 minutes late every time.

And then you've got the all stations OTP, which takes all stations into account.

That's normally a little better because if there is a delay between

the last station and the second to last station, you want to get credit for the folks that were on time.

That being said, you're 100% accurate.

Folks get on the train, and if they don't show up where they want to be on time, they're not going to get back on it, so you're right.

You made the excuse for me, and it's not an excuse, if you go to Europe, there's much less shared track.

That's passenger only, so what we're doing will help.

However, we can't wait, and that's why we have these performance committees that cascade upward from the staff level,

to the management level, to the executive level to make sure that we're all on the same page.

The good news is that CSX, and I'll speak just to CSX because that's where most of this traffic is, CSX doesn't like these numbers either because every time we're in the way and we're late, one of their trains gets late too and they like to run it on time as well.

Again, cautiously optimistic.

We've seen a good trend over the last few months, but you're right on point.

We can do that.

We'll do a briefing on the performance committees.

I'll also add that in our Norfolk Southern deal,

that we closed late June, there's actually a cascading payment.

Seems to me this is the entire purpose, really, of the Passenger Rail Authority and the work that we do is to

make it possible for us to have ownership over our own destiny as far as our performance, on-time performance.

So in a perfect world, when we finish our build out, we'll be just like Europe.

I don't think the coffee will be as strong, but that's our goal.

In the meantime, we don't want to just throw our hands in the air and say, well, 2030 will be here soon enough.

We've got to continue to make improvements, but you're right.

Any other questions or comments?

Good morning, everyone.

Very happy to join you this morning and give you an update from a staffing perspective.

By the end of the month, the authority will be over 30 employees for the first time, so very happy about that.

We're welcoming five people on the 25th this Wednesday.

That includes two interns.

We are piloting an internship program, which we think will be crucial for our staffing and our projects going forward.

We are intending to expand that program with more colleges and universities

and more internship slots in the fall.

Slide 10, we have our diversity information which we will continue to share with you, sharing the employee count based on gender, race and age.

And then where I want to spend my time this morning is on slide 11.

We have done a tremendous amount of work as we continue to set the foundation for VPRA.

We recognize that there was a need for certain anchors for the authority to put in place for our culture work.

We revisited what was initially chartered with our mission, our vision, and our performance competencies.

We developed core values, an employee proposition, an employee value proposition, and a tagline.

Employees throughout the authority were actively engaged in this process.

We formed a subcommittee to drive the work forward in a timely fashion, and we held a number of individual conversations and small focus groups to ensure that we were on track.

We hosted a few weeks ago an all-staff meeting to finalize what you have in front of you on slide 11.

It was a really fun and collaborative effort, and I know the employees appreciated the fact that they had a voice in where we landed.

We are going to take this information and we are going to continue to drive these culture components throughout the authority and the work that we do.

We're going to move the vernacular into our language and we are going to incorporate this into our daily work practices.

Not a question.

I just want to add that it's important to note that 13 months ago, VPRA had literally zero employees, and 12 months ago, we had three or four.

I have to go back and check the exact dates.

But as we've grown over the course of the last year, we have worked very hard to build a high-performing team, and we've been very selective.

in Virginia.

We want to make sure that we create an engaging, fun, and inclusive place to work.

And that's why we do all of these things collaboratively.

And knock on wood, the team has responded.

I feel like we continue to move forward.

Our culture is as important as our results in many ways.

Thank you.

The board of this agency is that this opportunity to create what you want.

It isn't a typical state agency, right?

So I'm interested in like innovation excellence.

That seems a way to distinguish yourself.

So what is involved in doing this, right?

You don't just take, it's clear you don't just take the employee manual from the state government.

You don't take necessary procurement processes.

Absolutely.

So is your question really around how we got to here and the process?

Well, it comes to the employees.

So there's a certain amount of accountability that is inherent with that kind of brainstorming.

We had, as I mentioned, a number of individual conversations in small focus groups.

that brought people together.

And we talked very honestly about what we wanted to be and how we wanted to be with each other within the authority, with our partners throughout the Commonwealth.

And so those conversations led to, well, what does that look like behaviorally?

What does good innovation and excellence look like?

And we talked a lot about, for example, holding each other accountable, creating good work, sharing of information matters a lot when you do the kind of work that we do.

and so the transparency becomes very relevant as well which helps drive us to excellence.

So you'll see the values listed there as an example but I believe what's going to set us apart and to really answer your question is how we execute against that, how we embrace and live those values that we all agreed were really important to us.

I also think we focused on being very lean.

As I said, we had zero employees 13 months ago.

So as we've grown, we have hired people in positions with the understanding that just because your title is financial planner, you're going to have to do some accounting.

You're going to have to do some strategic work.

You can't just be tied into one box saying, this is what you do.

We're trying to create, and knock on wood, we've been successful so far, a culture where no matter what your title is, no matter what your position description says, if there's something that needs to be done, you step up and you do it.

In exchange for that, exchange probably isn't the right word, but everybody's doors are always open.

If folks have a question, they don't say, well, I'm going to go up the chain of command because we're relatively flat.

People come ask me questions all the time.

People will go right to Mike or Joan or Steve and say, hey, what's going on here, even if they're not in that line of communication.

We're also fostering, if you've got a good idea, don't take it home with you.

Come to us and say, hey, maybe you could do this differently.

We're working on building this diverse team that comes with different experiences, different ideas, because there's no one right way to do it.

I'm going to add something too because I find that so appealing.

I think what you guys have just described and just even that slide with the values up there and using the word culture and teamwork, that's what you need.

I've been impressed by the number of people you've been able to hire in this environment out there.

The hiring environment is really tough.

Madam Chairman, if I could just weigh in as well.

I love this.

I think this is wonderful, great work.

And it's so important that this came from the employees so that there's ownership

You know, ownership by the people who have been hired and who work for the organization.

Different organizations have different cultures and it's important to establish

A positive culture at the beginning because it's so difficult if you get off on the wrong foot and to try to get back to where you'd like to be.

So I think that this is great and I think you should send back kudos to everyone who had a part and a role.

It was a lot of fun actually and when I say it was engaging, it was very engaging.

showed up at the table with thoughts and opinions and helped with wordsmithing and intent and it was really very positive.

Great work.

Thank you.

Yeah, good morning.

I won't repeat all the accolades that I have just heard.

I will simply echo them and say that I agree wholeheartedly.

I wonder, as I look at this page of mission, vision, and vision, and values, we rightly hold ourselves out as being at the forefront of passenger rail innovation in states.

And I wonder if any other state transportation agencies have approached this organization and

mentioned names.

We've had a number of folks from other states come to us and say, hey, our state doesn't work well because we've got way too much bureaucracy.

What Virginia is doing is what we want to model ourselves over.

And we have had, the team has had multiple conversations with folks

from very big, very active passenger rail states saying, all right, here's what we did.

And they're gathering that information to change the path that they are on.

And it's been refreshing to go to meetings and have people pull us aside and say, hey, what would Virginia do?

We want to get where you are because you have great relationships with the freight.

You have employees that just last week I got a text from somebody at Amtrak saying, wow, your employee just gave the best presentation we've ever seen at one of these meetings.

with great power comes great responsibility, thanks Uncle Ben, but that's where we want to be and we continue to raise that bar for ourselves and for each other.

Thank you.

Thank you, John.

Good morning.

Next slide, Mike.

I should like to segue from the last, from Joan's discussion to highlight a couple things that aren't on here and that we hired, and we talked about this with many of you at our February board meeting, we hired a couple people we're very proud of, John Carney and Shirley in Cleveland.

They've worked on some mega projects well into the billions and billions of dollars.

John Carney, he just came from Jacobs Engineering, he's our Director of Engineering and Construction, basically leading all the engineering construction that

that you see on the board here, you're gonna see in the next couple slides.

He helped deliver the Dela Silver Line project from a construction standpoint.

And Shirlene Cleveland also worked on the project, she also worked on the Woodrow Wilson Bridge.

Shirlene will be, so she has experience building bridges over the Potomac and she will be leading the Long Bridge project.

She also worked other mega projects in the region.

So we're very excited to have John and Shirlene on board as we build our organization.

So on to updates, the Long Bridge project, something that actually just came up last week, we got on the agenda item for the Commission of Fine Arts.

For those of you who might be aware, there's a lot of various organizations in the capital region that we need to

get the approval of, Commission of Fine Arts is one of them, another one's the National Capital Planning Commission, so Kate Youngbluth and our team has presented last week the Commission of Fine Arts, and it went well, and we'll be with them again soon, same with National Capital Planning Commission.

We're working with NPS National Park Service,

a lot on these presentations.

As you may recall, we actually had to change federal legislation to be the past federal legislation to allow Long Bridge to be built in National Park Service land.

So we're tied at the hip with the National Park Service for the next few years.

Alexandria Fortrack project, we now have all the signatures in 30% design and Amtrak has signed.

DJ mentioned earlier in executive director's remarks about the Amtrak Crystal City platform.

That is tied into the Alexander Fortrack project because we had to allow for the footprint of that Amtrak high-level platform and some gauntlet tracks will be added within the Fortrack designs.

So we're excited to get that agreement with Amtrak.

Thank you for their team.

to the team for working with us and also working with VRE because there's some agreements there with VRE where they'll be able to use the very low-level platform that they're constructing at Crystal City which would be an island platform with two edges until the Amtrak high-level platform is built a few years later.

Also in Alexandria, in case you're wondering what King and Commonwealth are, those are two bridges.

If you've been to over the two bridges that the track rolls over the roads there at King and Commonwealth in Old Town, we are working with VRE and CSX and others to get to deliver a assessment report and recommendations for next step, which will be coming shortly, on how to deal with those structures.

Again, we've been working with Rich's team for a few years on this.

and we'll keep you apprised of that.

We want to tie that into the Alexandria four-track work so when we improve those bridges we'll be able to do it in conjunction with the four-track work that spans pretty much from there up to almost the Potomac River.

The next four projects are really all part of one of the same area, the Franconia to Lorton areas we're calling them.

The Franconia-Lorton Third Track mainline is just as it is, about six to seven miles of mainline track.

The Franconia-Springfield Bypass, which will be built in that area.

Same area, also needs to be coordinated, along with two other bridges, the Newington Railroad Bridge and Route 1 Railroad Bridge, we've talked about before, I've presented on these before, those are actually linked, a new two-track bridge that will complement the existing two-track bridge, so we'll have capacity there for four tracks over those roads, and for those who haven't been in the area, they're very narrow, especially Newington Road, only one car can get through at a time.

and if you're wondering why four tracks, remember our long-term goal is to actually add four tracks all the way from first DC to Spotsylvania and then later and add some further track below that but DC to Spotsylvania have that four track corridor so we can separate passenger and freight as Director Bulova was alluding to in her comments, the long-term goal is to separate passenger and freight so we can fix some of the on-time performance issues that Director Fisette was talking about.

That was our long-term goal.

Next slide please.

Gosh, I did it again.

If I do it a third time, I'm just going to walk away.

These are the siting projects.

If you recall, there are six sitings slated in phase one and phase two.

A, B, and C are the three sitings in phase one.

We are working with Michael Westman and others on a project, sorry, right here to my right, project authorization notice with CSX where we can move the project forward.

And then the other three projects will come online later on in the decade.

Western Rail Initiative, I'll keep this brief because I'm going to go into detail later on of a presentation on the Western Rail Initiative, but the long story short here is that

Norfolk Southern has already begun design on their part of the network, which is Nokesville to Calverton.

They promised to deliver that.

Seven miles of double track, Roanoke Westyard, which will get us up to speeds of 40 miles per hour in the Roanoke Westyard to get us through there to the New River Valley Station.

And also New River Valley Station and service facility.

We've had a lot of work done in the past few months.

That is slated for 2026.

We've had a lot of conversations with the secretary's office about this.

They are keen on getting this done on time.

We pledge to do that.

Again, we'll be talking about the findings of the River Valley Station survey that we had in the winter and spring.

So again, we'll touch on that later.

Happy to answer any questions now if you want, but again, myself and Michael and others will be briefing you on our trying to close the Norfolk Southern Deal later this afternoon.

These are projects that we track, but that are actually led by others such as VRE.

For instance, the L'Enfant, Fortrack, and the Quantico Station project are led by VRE, but there is significant Commonwealth money in here, so that's why we track these, and we have regular meetings with the VRE team, and VPRA, and CSX, and others.

Also, Arkenell to Powell's Creek is a legacy project that CSX is refinishing up soon that's tied in with the Quantico Station, because the Quantico Station is in the middle of that Arkenell to Powell's Creek triple-track area.

and the last one on here is Newport News Station again being led by the City of Newport News but we're tracking it because there's significant state funding and as you can see over 20 million dollars we're tracking that with CSX and Newport News and VDOT as well.

Contracting updates, I'll just go ahead and take this if that's okay because these are both actually related to my group.

We do like to update you on contracts above $250,000.

And I already talked about the Western Rail Initiative.

We're trying to close that.

So we have some transaction costs with our lawyers.

Hunt Andrews-Kirth has been along with us for the ride on a couple of these deals.

And you can see the contract amount of $280,000.

And the Buckingham Branch, as we talked about,

before the meeting began, we are, as you know, we are purchasing land and track right of way, and we need to do surveys.

We've done it on the RF&P line, sorry, the DC to Richmond corridor.

We're doing it on the Buckingham branch.

So we need flaggers to be out there to make sure it's safe when they're doing the survey.

So that's why you can see the $1.25 million for the flagging services.

And I believe that's it for me.

Just to add for clarity, under the bylaws, we notify the board after the fact of any contract between $250 and $5 million.

These figures were in the budget.

We didn't add any money to the budget.

Everything is within budget and scope.

It's just notification.

Thank you.

Super.

Thanks, Mike.

Thank you.

Next presentation.

I'm going to run you all through the financial update for the month of April, cumulative for the year to date is what this data is.

So this first slide I really just want to highlight.

Expenditure activity has been picking up throughout the year.

I think the first few months we actually had

some negative amounts due to some reversal of accruals from the prior year.

So we've slight uptick in expenditures as we get the projects moving and up and running.

Also, I will point out here, adding on to, I think Mr. McLaughlin said this, in June we hope to have the financial close of the Western Rail Corridor transaction.

It may end up being early July, so

Depending on when that occurs, we'll have certain expenditures, either a large uptick in June or it'll be reflected in the next year.

Here, a lot of information.

The main thing I really wanna focus attention on, and this dovetails with Director Stadler's information on ridership earlier, is the cost recovery percentages at the bottom of the chart.

We're at 81% compared to our budget of 73%.

So a positive trend there, primarily expenses are down.

Also, we've been able to utilize more of the federal credits that are out there for us, which is a good thing.

We actually do want to utilize those credits as quickly as possible.

But also, even without the federal credits involved, we are actually positive.

at 65% cost recovery for the year.

And coming off of COVID, I hadn't seen those slides on the ridership until just now and I was personally very enthused to see that we're very close or have exceeded pre-COVID levels.

So this backs that up.

Next slide really is a slide that's each of our train routes.

So I'm not gonna go into that detail

There is one train in Newport News that's currently suspended.

It's going to be starting back up in July is the plan as of now.

Administrative budget.

We will see there is a positive variance here.

We will see some increased expenditures as we close out the year from May and June.

One in the payroll as

Ms. Panick pointed out we've hired a lot of people and from the beginning of the year to now the payroll is a lot more significant each pay cycle so we'll have a significant payroll number the next couple months and then also the building office and related we've moved into our new facility and had some cost involved with getting some cubicles and slight repairs were needed at the facility.

Next slide.

I'm not going to go too much detail here.

As I spoke of overall, the expenditures have been upticking here.

We also expect the Western Rail corridor to come through, as I mentioned earlier.

The capital operating grants, really these are, as Mr. McLaughlin said, these are projects managed by outside entities.

We really have expenditures when we're asked for reimbursement and then obviously at the end of the year we will seek to make accrual entries on anything we actually owe to any of those parties.

Was a budget adjustment during the past month.

We added $15,000 to a capital project, the purchase of St. Julian's Yard.

We did have the funding to do that, and this action was within the delegated authority of the executive director.

The next slide basically shows our revenues.

You'll see that large uptick.

We had a change in the revenue estimate that occurred back in December, and it took a while to work with VDOT to get that revenue that had accumulated prior to that time.

It took a while for them to change their methodology of distribution, but that's what that large uptick, when you see there in February, March, we actually got like a 20, $24 million

one-time payment to catch us up for the year, but overall we're on track to meet that $173 million estimate for the year.

Next slide, I want to point out here, interest rates, I guess the biggest thing I want to point out here is interest rates have obviously increased lately, and if you notice, the blue bar has diminished, so until

Got to June of 21, we didn't have an investment policy so all of our funds were with the state of Virginia's general account, basically in a bank account.

We formed our own bank account and then also had an investment policy and we started putting funds in the LGIP, which is the state's local government investment pool.

as per our investment policy.

And you see the blue has slowly diminished to where the last few months essentially we're leaving, I won't say a zero balance at the bank, but almost a zero balance because the fees that we're being charged now, we actually are earning enough interest, the rates have ticked up enough that it's actually a positive for us to take all excess funds and move them to LGIP.

For a long time that wasn't the case.

the credit that was provided for our balance at the bank was better to offset those fees.

And the fees, just to give you a point of reference, are roughly $200 a month.

I know when we first did this contract a year ago, there was a question about the fees.

So the next slide here, I just, once again, rates, this is really,

A slide in essence that tracks interest rates because we're very conservative in our investments, very short term in nature.

And so you see the big drop was rates went down and we paid CSX.

$200 million went out the door.

And then you see starting in February rates are going back up and we're actually earning a significant amount of return.

There it says .539%, so that doesn't sound like a lot, but when you go from .2% to .539, it's essentially a 250% increase in what you're earning.

So the percentages, or a percentage increase, is actually significant, and that's what happened on the other side of this chart, to the left.

Finally, this last slide, I wanna take a moment here and point out

We do have funds in LGIP in the extended maturity investment pool.

And our intent, you know, we have $30 million there.

Our intent is to hold that to maturity.

So because interest rates have been declining and because that pool is not a 30-day maturity, rather it's a year to two-year maturity,

and rates have been increasing, therefore those underlying investments have to mature and then they'll reinvest in higher returning assets.

And that's been ongoing now for three or four months.

In fact, we checked the rate, the actual nav on this fund the other day and it's actually $145,000 unrealized loss at this point.

So we expect to hold those to maturity.

We don't expect to have a realized loss here.

The next thing I'll point out here is the investment policy.

We had intended to come back this month to work through the investment policy.

However, we're still working through the contracts with our investment manager.

As I've reported to you, we did those investment management services under the Wells Fargo contract.

Wells Fargo spun that business off back in November.

And since that time, we've been working through

a contract to actually engage with them and not due to any necessarily due diligence on our behalf but actually due to market timing and the interest rate rising.

We actually are somewhat fortunate that this has occurred because we're actually going to have take some of our cash, our LGIP funds, move them to this investment manager and we'll be at a good point in the market for that to happen.

So do plan on coming back in July to change the investment policy to incorporate environmental, social, and government's principles to a more detailed level.

And that does involve the investment manager because each investment manager handles that in a different way.

So we're going to have to put some specifics into the investment policy there.

I want to also work with the finance committee, and we've had the chair resign back in February to move on to bigger and better things.

So I want to get the finance committee involved with that.

And then also, once we get set up with the investment manager, I want to work with them for a month or so.

We actually think that should happen any day the next week.

I want to work with them for a little bit of time and also look at our authorized investments and decide do we need to make any changes there.

Do we want to look at the ratings that were assigned to the authorized investments and then possibly there's a category called sovereigns and supranationals that possibly a lot of other entities similar to us have those types of investments.

And so also want to look at that to come back to y'all in July.

Questions for Mr. Stadler or for Mr. Pittard?

Thank you.

I think you're up next, though.

All right, so next item on the agenda is the fiscal 23 budget.

Thank you, Mr. DeBruhl.

So on our budget, there's a resolution for you today.

The slide's actually showing the financial plan.

But basically, coming back to you today for approval of our budget, there should be a resolution in your package for approval.

Since you authorized the budget or recommended the budget to be sent to the Commonwealth Transportation Board back

on February 1st.

We got some feedback from the Commonwealth Transportation Board.

It was primarily around identifying the local source, the Virginia local sources of funding that were provided as part of the plan.

We did add a sentence in the executive summary.

We added a sentence to a couple of the projects in the back of the budget.

Those are the only edits that were done to the document since

you recommended it forward.

None of the numbers have changed.

The budget is still FY23 is projected $595.4 million in total.

So with that, I guess one last thing, the CTB did approve the capital projects portion of our budget, which is what they're required or asked to do each year.

They did approve that on April 19th.

Do we have a second?

Second.

All right, motion is second.

Yeah, this is Deb Painter.

I don't anticipate that.

I'll say this, we are all concerned about the inflation numbers we're looking at right now.

We had in our plan 3% inflation starting in 19-20-21, so we had a few years where we were actually over the actual inflation, but obviously this year we're going to be a little

on the downside.

So longer term, that is definitely a concern.

And let me just add to that.

We looked at that closely as we were preparing for this board meeting.

We remembered very clearly the conversation from last year that last year we went in for a budget amendment because when we did the budget, we really didn't know a lot of what was going to happen.

We were in a much more mature place, relatively speaking,

Now, and we said, let's make sure that we are happy with this budget because we are not going to go back and ask for an amendment.

And we looked long and hard at just about every line item and said, you know what, we're still comfortable with this.

We had our consultants look at the supply chain issues.

And at the end of the day, we said, no, we can live and we will live and prosper under this budget so we don't recommend any changes.

And as I said earlier in the executive director's report,

Spending has picked up.

I also know procurement has picked up.

Thank you.

All right.

Any other comments or questions?

Ms. Butler Painter?

Aye.

Ms. Doersch?

Aye.

Mr. Fisette?

Aye.

Mr. Moorman?

Ms. Moses-Nedd?

Aye.

Aye.

Thank you.

Mr. Pittard, you're still here.

Next on our agenda is a briefing on the financial plan.

Thank you, Chairperson.

Our financial plan document, it's a rather lengthy document.

I don't know if y'all have had a chance to read it.

Hopefully you got a chance to take a look at the executive summary.

We plan on giving you a short overview here today.

I guess before I bring up, I've got the team that we've been working with from KPMG for the past three years, actually.

Not to just do this one document, but it's been a lot of work, a lot of twists and turns, frankly.

COVID happened right in the middle of this effort.

We thought we had a financial plan, and then all of a sudden COVID happened, and we're looking at all our revenues with a very keen eye.

Also, taking a look at all the expenditures, Western Rail Corridor came along, that opportunity came along, so there's been a lot of work behind all this, a lot of moving pieces.

We thought it important to actually have a financial plan document that's out there for everybody to look at.

I think the main thing that you'll find here is there's a lot more detail.

I think there's nothing new, there's not any new projects, but a lot more detail

especially on the revenue side for you to know the funding plan for this $4 billion worth of capital projects.

And also, more importantly, or just as important, frankly, is after we build it, can we actually pay for all the operations and maintenance afterwards?

So with that, I'm gonna introduce the KPMG team, and I think one of them's gonna come up and take us through the slides.

Morning, everybody.

My name is Matt Biller.

I'm a director with our Infrastructure Advisory Practice from KPMG.

It's my privilege to present the financial plan document that Steve laid out.

Some of you might find me familiar from last year's Finance Committee, so please bear with me if you do see me again.

Let me just check this.

As Steve said, we've been a part of the team for three years and really what this purpose of this presentation is today is to give you a snapshot of the financial plan document.

Really the financial plan over the past three years has evolved to include four major elements.

The I-95 corridor, phases one and two, phases one and two really being split between smaller projects and then the larger Long Bridge projects, which encompasses phase two, the Western Rail corridor, capital and operating grants, as well as the operations and maintenance budget for the system.

The document itself, around a 60 to 70 page document, I do believe, is split into three sections, Chapter 1, 2, and 3.

Chapter 1 really covers the introduction to the VPRA organization.

As we all know, it is a very new organization, an executive summary of the document and the plan itself.

and then Chapter 2 being the financial approach, getting into the methodology of what financial planning is, what the expenditures are, what the budget is and sources of revenue for that expenditure and then the importantly risks and next steps of the overall plan and the organization.

I think, importantly, at the heart of a financial plan, and any good financial plan, is a financial model tool that's encapsulated on the right-hand side of this slide.

It is effectively a detailed Microsoft Excel model which enables the organization to have flexibility around constantly updating the financial plan.

But in addition to an XL model, there is a detailed plan and report around the numbers that give and detail the purpose and need for the investment, the benefits, a summary of all the expenditures, the funding, and how funding sources

were matched to users.

And this is particularly important because, as you can imagine, there is a large bucket of funding, and not all funding can be used for particular expenditures, which opens the door to mismatches in timing, et cetera, et cetera.

And that is where the project risks mostly lie, and those are addressed in the financial plan document as well as what the next steps are.

In the report you will see what we call an anchor diagram and this we hope is a nice snapshot of the entire plan overall.

Effectively what any financial plan is is dedicating sources of funds to various expenditures.

Those expenditures are divided between capital operations and management reserve and financing costs.

And I just want to highlight here the management reserve of close on $80 million through FY30.

This is a board controlled management reserve designed to provide VPRA with flexibility should things move over time, which undoubtedly they will.

Sources of funds for those uses are what we call pay-go funding or pay-as-you-go.

There are things like the VPRA fund, PTF fund, ticket revenues, and so on and so forth.

And then there is a large component of financing to the tune of a billion dollars, which I'll get into now.

Another large component is the Amtrak capital funding, also just shy of a billion dollars through FY30, and then all of the grants that cover the capital and operating grant expenditures, as well as tolls and concession payments from the I-66 toll revenues and Federal Express.

The graphs on these slides are not very clear on the screen, but effectively they detail the capital expenditures on the left-hand side and then the capital and operating grants.

The left-hand side graph shows the capital expenditures broken down into major categories.

As you can see, the orange on the far left-hand side is the CSX right-of-way acquisition, shortly due to be complete, followed by the major Phase 1 I-95 corridor projects, followed by the Phase 2 I-95 corridor projects.

And as I was saying earlier, really the division between phase one and phase two is the Long Bridge, which occurs in phase two, so that's a very back-ended project, and that's that chunky $2 billion project, which is effectively the cornerstone of this overall plan.

And then we have the Capital and Operating Grants on the right-hand side, which Steve alluded to are really pass-throughs that are managed by other entities.

This very detailed graph on this slide details the operations and maintenance expenditures and as Steve alluded to, what's very important is the financial plan itself addresses capital expenditure through FY30, which is when the program is forecast to be completed.

but what is equally important is to demonstrate the feasibility of funding O&M expenditures through the program and beyond the program.

So what you can see here is a graph that details all of those operations and maintenance expenditures made up materially of Amtrak operations expenses, Amtrak Northeast corridor pass-through costs, as well as the I-95 corridor maintenance of way costs.

Importantly with this graph is this is a gross view of things.

So there are Amtrak ticket revenues that obviously contribute to funding these expenditures and effectively fund the material portion of these expenditures.

The balance is effectively funded by the VPRA fund.

So I know I'm giving you a lot of details, but there's gonna be time for questions obviously.

On the sources side of the fence, we have a couple of major categories.

The graph on the left details what the total of those categories are through FY30, and the graph on the right details the spread of those sources over time.

So as you can see on the left-hand side, the major categories are PAYGO,

The Amtrak Capital Contribution of $944 million, the financing source of just over a billion dollars, as well as the federal and local grant awards and matches, as well as the tolls and concession payments.

And I think the point to realize is that there is this foundational component of PAYGO sources across the life of this financial plan, shown in the brown, and the yellow are the financing sources.

So as you can see, there's a source that comes in in FY22 that is the C-ROC revenue bonds sponsored by VRE.

and then in FY25 there is a planned capital raise using I-66 toll revenue sources as well as Amtrak ticket revenue sources.

Those amounts there are demonstrated in the time that they can be raised but importantly that big yellow bar in the middle there is not necessarily when those funds will come in, those funds will be raised as and when they are needed potentially in multiple tranches.

Moving on about the financing sources and honing in on that billion dollars.

As you can see there, that billion dollars is made up of 650 odd million of I66 revenue financing, as well as 139 million from the Sea Rock source, as well as 210 million from the Amtrak ticket revenue.

Importantly from a responsibility perspective is that VPRA is responsible for the Amtrak ticket revenue debt service whereas the I-66 debt as well as the C-ROC debt are responsible by the VTB as well as the VRE respectively.

and the graph on the right hand side really illustrates the debt service that is expected over the next couple of years through FY30.

The blue is showing Sea Rock debt service and the orange and the gray are showing the Amtrak and I-66 debt services respectively.

Now what's important to realize is that obviously

The other perspective here is that

You know, there is a lot of planning that goes into financial planning, so to speak, but within that planning, there are a lot of project risks, project and program risks to consider.

And as you'll see in the financial plan document, there is a dedicated section for risks, and importantly, it acknowledges that any financial plan is a living process and a living document.

So within that, it's important to understand obviously that the financial model that underpins the financial plan is constantly updated and there is a constant assessment of feasibility effectively and the management of risks.

But in addition to that, there are

updates that are deemed that will be significant, such as significant changes to costs, funding availability, technical design milestones such as 30% design on Long Bridge, and updates to the risk profile of the overall program that will call for an update to the overall financial plan.

And on the right-hand side there, all of that is

His snapshotting, so to speak, is an example of risk management practices within the VPRA such as technical risk registers that are constantly managed and updated.

Then really the next steps in the financial plan documents addresses what VPRA plans next, and that is, as I said, ongoing financial planning.

There is a call for enterprise risk management, which is really taking project and program risk and taking it more broadly to an organisational level, an analysis of capital project delivery options,

There is obviously significant stakeholder engagement that has to occur as well as engaging the market around delivering these projects, opportunities, and so on and so forth.

And that's it.

May I make a couple comments?

I just have two things to add to this, and I recognize in advance that I'm going to contradict myself immediately.

The first thing is that we're excited about the financial plan, because for the first time since we've been here, this puts probably not the right nomenclature, but a line in the sand that says this is where the money is coming from, this is where it's going to go,

This is what we have to deliver and until we have this document we really have had unfortunately some fungibility on what we're going to deliver but we've got projects that are progressing through design and this is our path forward and this is now what we're going to hold ourselves accountable to and it's exciting to have that because we can look back and say yes this is what we said we were going to do and this is what we're doing which is really what we want.

Now I contradict myself.

As Matt said, it's a living document, and what's in here now assumes what we know now.

As I said earlier, we applied for federal grants.

If additional funding comes in, those funding sources are going to change.

If three years from now we have major changes in scope to our projects, we'll have to come back and say, hey, this changed.

But the good news is that we've got

that line in the sand so we can track this changed, this is why it changed, this is how we're mitigating that change, and this is the new reality.

So this is an exciting foundation for how we continue forward in delivering the projects and we're excited that it's done.

And I thank KPMG not only for the work but also for working with us to transition the model to us so we can now manage it and run it.

or a comment or a question.

So I guess this actually is probably even more complex than it would appear because some of our funding comes from other sources of revenue, federal funding, a number of different

programs.

So if you really drill down even further, I guess into that, you would find a number of different federal programs, state programs that also would contribute towards funding plan.

I would say that we

We probably looked at over, definitely over 30 sources, and I think within the plan itself, there's 25 different sources of funding identified.

So we turned over every rock, but Director Stadler said, federal dollars right now, we just got confirmation that we submitted an application this morning, so we're actively looking, here's the plan today, we're actively looking

for more funding to advance, as you recall, we have phase three and phase four.

There's also our S-line project.

So we're looking to advance initiatives even further.

So there is a lot of detail.

There's a whole section on the funding, and I think that's what y'all have seen in the budget and other presentations.

I think that's the most,

additional information you're going to find in this document from what you already have seen.

And I just wanted, if I may just add, I just wanted to say a couple things, and Director Stadler took a lot of them.

It's an evolving plan.

We do plan to come back.

I don't want to say at a set time frame, but as major milestones or events occur.

As Director said, we're applying for federal dollars.

We hope to get significant federal dollars.

Obviously, that would change this plan and would change it to the point that maybe we would update a plan and put a new document out.

It's a lot of effort to do this, so we don't want to be doing it every six months or even every year necessarily.

The other thing I did want to point out was on the operations and maintenance costs after we finish all the projects.

It's about $120 million net cost after you take the Amtrak ticket revenues and apply them.

The dedicated source of funds for VPRA is about $175 million during that 2031 to 2035 time frame.

So it's not that we just barely cover our operations and maintenance.

There is some room above the expected cost.

I wanted to actually write down the page in the documents, page 36.

I think it explains that clearly because to me that's a very key point that if we build it, we also want to be able to operate it.

I just have a follow up to Sharon's.

You may have answered, how do we budget for

the potential to get significant federal funds, right?

I mean, just think of Long Bridge.

If we get like a mega grant, if we get CIG funding, I don't know.

Do we budget we get zero?

Do we say 50-50?

So at this point, until we are given an award document, I'm not including funds in the budget, much to Mr. McLaughlin's chagrin.

I just think that's the prudent way to handle this.

And then we have talked about always getting those additional funds.

We're working with DC currently also to maybe participate in the Long Bridge project as well as federal dollars.

Or at least an award document in my mind.

And Ms. Doersch, that's probably, we're probably two years away on CIG.

So, Madam Chairman, so someone, probably you, looks at there's a whole universe of potential funding, you know, that we could be eligible for, but clearly you're not going to put that, you know, into one of our documents, but you probably have that in your head or you have that, you know, in, you know,

documents on the side for potential sources of funding and potential sources of funding that requires different kinds of matches and things like that.

Exactly.

In the document or the sources to cover the projects you've authorized to date, we're always looking at more sources

However, some of the sources have restrictions on them.

So for instance, the I-66 inside the Beltway debt.

We pretty much need to use that on Long Bridge.

So if that $850 million is paying for Long Bridge, that doesn't leave as much room to go after federal dollars on a cost-sharing basis.

So there are certain restrictions and sort of a puzzle we're piecing together, but

And let me also add to that, it's not just Steve and his group that are looking for additional sources of finance.

I mean, we've got Joan Panek-Scott and her government affairs folk, Jerica Goodman's here.

who is constantly looking at legislation saying, hey, here's a grant opportunity that could work for us.

Mike and his team do the same thing.

We have members from the CTB who reach out, hey, are you applying for a Chrissy grant?

So we have multiple folks looking at opportunities to leverage the projects and the funding that's available.

And we will keep looking at that.

One more question.

Yes.

New River Valley, Long Bridge, pedestrian bike bridge,

What'd you say?

Newport News.

Newport News, sorry, thank you.

The Newport News project that I mentioned earlier had some issues with it and we could use some funding even though we're not the project sponsor, we thought we'd help out the project.

That actually has come up with I've talked to the Senator Cain's office for instance and I talked to our team as well The money can be spent on design for instance, and we are already at 15% design on Longbridge and and there is going to be a

While the committee, we've been told the Appropriations Committee, at least in the Senate, has not put a time frame on the spend, they would like it if it'd be a more competitive... More competitive request if you could spend it in the next two to three years, we've been told, in my conversation with Senator Cane's office.

But yeah, without a doubt, we could spend it on design.

The other thing that helps us, and I promise I'm not pandering, is really the direction of this board to push for the multimodal aspects of our projects.

You get a lot of credit in these applications because you connect to the ped-bike bridge and because you connect to park and rides and kiss and rides and ride share.

So those things really help our projects as we apply and will continue to push.

This is not just passenger rail.

I would just like to note that the congressional earmark requests are a small dollar amount.

I just want to put that expectation out there.

We've heard from the office of committees that it's in the low millions.

It's not going to make or break a project like a CIG, $500-600 million for Long Bridge would, that'd be huge if we can get that.

But the support of Congress and be able to get that earmarked would be big.

I was just going to say, Ms. Butler Painter has her hand up.

Thank you very much, and I certainly don't want to direct the conversation away from the subject of sources of funds, which is incredibly interesting.

I really, though, wanted to compliment the group on the risk management part of the financial plan.

the heat maps and the financial risk management and at least there is a mention of operational and technical risk management process as well.

So I appreciate that comment and that's something we've talked about a lot as an executive team.

The ownership has not yet been defined.

We're still arguing that, but we'll be updating the board regularly, just because as that risk management portfolio evolves, we want to make sure that everybody's aware of where we are and how we're mitigating those risks.

So we've gone back and forth.

Does it report to the CFO?

Does it go to the Chief Administrative Officer?

We've been back and forth on that, and that's a decision that we'll be making over the next few months.

There's a lot of debt in the plan.

I think we modeled rates on a very conservative basis, and I think there has to be a recognition that there is debt in the early part of the plan.

The first tranche is a C-ROC revenue bond, which is coming to the market right now.

and then there are the Amtrak and I-66 debt portions which are budgeted for FY25.

And I'll just add on the actual underlying toll revenues for I-66, we did quite a bit of work to roll back the anticipated revenues.

So I think we probably were overly conservative, Mr. Spore, there.

So I'll say I think there is opportunity that

If we needed to, the debt issuance could actually be larger, which could offset a little bit of interest rate risk down the road.

The other thing I'd add to what Mr. Beller said is there is the timing, FY 25, at this, we do not plan on, the plan shows it because it's a static plan.

We never anticipated to issue $650 million of debt in FY 25.

We actually plan to issue in several tranches to meet the needs of our expenditures because we can't go issue a bunch of debt and then sit on it.

It's not really prudent for us to do.

We have to work with arbitrage at that point.

Thank you, Mr. Petter and Mr. Miller.

Thank you.

Good morning again.

Pam Ash, our Director of Human Resources, was unexpectedly unavailable today, so I will do the update on the employee manual.

In terms of background,

Board members received an initial review of the employee manual in February of 2021.

In typical human resources practice, you review those policies periodically to make sure that they are up to date and relevant and accurate and follow current legislation.

We reviewed the entire manual over the last few months.

Most notably, it looks a lot better.

We updated the format and made it a lot more user-friendly.

We provided recommendations for certain revisions.

You'll see a summary here on the slide.

There are 11 new policies.

Most of those policies were separating two topics that needed additional clarification.

We made updates to 24 policies, deleted two, and really there were no substantive changes for 32 of the policies that we had listed.

Most of the revisions included additional details for clarification.

Several policies, we simply updated the title to make them more accurately reflect the content.

And in some cases, we updated who the policy was applicable to, adding, for example, contractors where that made sense.

To highlight a few of the policies that may be of particular interest, vaccinations, public health emergency leave, and telework were all updated to align with the Commonwealth guidelines.

The telework policy in particular, any employee that is working remote more than one day a week as a part of their regular schedule requires sign off by our executive director.

From a performance management perspective, we updated the policy to detail the process itself, including documented check-ins, the definition of ratings, and the inclusion of performance improvement plans as needed.

For the corrective action policy, we also updated to add details to the process.

We also updated the tone of this policy to be more corrective than punitive.

We included additional action steps like coaching and verbal and written warnings.

Employment at Will, we updated, moved some of the content in the original Employment at Will policy and moved it to other policies where the information was more relevant and some of the information moved to the benefits policy, for example.

And the remaining Employment at Will policy provides visibility and additional clarity for our employees.

Grievance process was updated with more specific information on timelines for management and how to respond to grievances in a step-by-step process.

The last one that I'll highlight is the standards of conduct that has been updated to incorporate expectations that employees will live our mission, vision, and values, as well as meet other performance expectations, including upholding safety standards and compliance.

I know it was a large document.

The format, again, looks a lot better.

Really, no material changes, but the ones we thought would be of interest, I've just walked you through.

As I mentioned at the beginning, going forward, the best practice is to review these periodically.

That is our ongoing commitment to you.

I just have one question.

I served on one other state board with the Virginia Housing Development Authority, now Virginia Housing, which is quasi-independent.

What is our status in regards to having our policies aligned with the Commonwealth?

Are we required to do that?

Do we have full flexibility?

Do we use it as a guide?

So we've looked for alignment.

I know at the onset, I wasn't here when they were originally created, but I know they leveraged kind of sister agencies or similar authorities to keep the alignment.

The intent is to remain consistent, as consistent as possible.

We also want policies that allow us the flexibility to conduct business the way we need to do business.

I'm sure General Counsel wants to jump in on where we specifically... Yeah, so I'll tell you what the Code of Virginia says.

The Code of Virginia says this Board sets the personnel policies for the rail authority.

So that's what the General Assembly said in our Enabling Act.

Yeah, which I generally agree with.

It was really a question of what authority we have, and we have complete authority to do whatever we want.

I think it's good practice to align wherever possible and where we don't have a reason, a substantive reason to vary.

But it's helpful to know what authority we have.

Great.

Question?

Ms. Bulova.

So under public health emergency leave, it says updated to reflect the governor's most recent guidelines.

Those were policies updated as the pandemic guidelines have evolved and so we will constantly update that one in particular to make sure we're following the guidelines of the Commonwealth.

Okay.

Sure, Ms. Doersch.

I'm going to just explain, it's not, I just think that one of the benefits again of being an independent board is that we can be, we can get past the things that didn't work, right?

I just think if a system is not responsive, you know, if you don't punish the good, you don't reward the bad, either people, behaviors, et cetera, then you're going to lose the good and you're going to be left with the bad.

I mean, that's oversimplification, it's kind of an Old Testament version, but I just think that if this is a place to reward,

The incredible talent that's here right now.

I'm thrilled with all the staff that I've seen here.

And I don't want to have a non-responsive system that couldn't hold on to these folks, right?

Because we've really, as far as I can tell, compiled some superlative talent.

So have you taken advantage of that?

Depends on the topic.

Again, as we're establishing the foundation, we see some opportunities for improvement.

Our policies are a part of that.

There are technological systems that we are looking at to further our authority and make sure that we're delivering in the spirit of the values that we mentioned earlier around innovation and excellence.

So for now, I think it's a great starting point, and we will continue to evolve over time and be able to leverage that flexibility where it makes good business sense.

Thank you, and thank you for all the work that's gone into this.

Not to beat a dead horse, but clearly align myself with my colleagues here, but I couldn't help but in going through the executive summary, think about some recent comments from

the Airbnb CEO with respect to his sort of thoughts on the office concept, and he referred to it as an anachronistic form of a pre-digital age, if you will.

And so I guess I say that to sort of set the stage up to the extent that you all label this a living, breathing document, particularly given just the sheer, outright, competitive nature of obtaining and retaining talent to the extent that we can continue to be

We appreciate that.

Let me just add a comment to both of your statements.

We have said, since day one, we can't afford to settle for mediocrity.

And we need to make sure that when we are looking for talent, we get the best and brightest, we attract them, and we retain them.

And we have to do that.

Our jobs are way too hard to not, our jobs are way too hard to lower that bar at any time.

And knock on wood, we've been consistent on that so far.

I do.

Frankly, I did.

I want to also commend all the hard work that's been put into this effort.

And as a labor and employment lawyer, I appreciate how much this has to be and continue to be a living, breathing document.

My primary or initial question terms with regard to our relationship with, if there's any, the vision of risk management.

So I appreciate that comment, and we are right in line on that.

As we look forward at our projects, we've done a matrix of, in fact, we review it once a month with the team.

Here are risks in delivering the project, and they go—I don't even know the number.

Mike, you may know off the top of your head.

but there are dozens if not hundreds of risks that we look at every month.

And some of them are red, they're huge risks and we need to mitigate them immediately and relationships and environmental issues, those types of things.

But one thing that we probably haven't put high enough on that list is our talent.

We've talked about it on the project delivery side but it doesn't at this point expand to the other aspects of the organization.

Look, who we are, we are in an interesting place because we

We are individual, but we are also linked to the state.

I think we're moving in a great direction.

Thank you, Ms. Bulova.

Do we have a second?

Second.

Mr. Cardwell, got you.

All right, motion and a second.

Any other discussion?

Ms. Doersch.

Aye.

Mr. Hall.

Aye.

Mr. Moorman.

Aye.

Ms. Moses-Nedd.

Aye.

Mr. Nichols.

All right, motion passes.

Thank you, Ms. Panek.

So we are ahead of schedule.

So trains are running on time today, Director Stadler.

Keep it going.

All right, so we're going to keep going.

We're going to ask Ms. Bulova.

And I move that the board convene in a closed session pursuant to section 2.2, 3711A1 of the Code of Virginia for the purpose of discussing the performance of a specific public officer and pursuant to Virginia Code section 2.2,

3711A8 for the purpose of consulting with legal counsel regarding the legal effects of proposed VPRA procurement rules.

And additionally, I move that for the purpose of the motion based on section 2.23711A1 of the Code of Virginia, legal counsel and the VPRA chief administrative officer,

So moved.

and we're going to reconvene in open session.

We're going to take a roll call vote and in doing so I ask that each member indicate their agreement with the following statement.

Best of my knowledge during the closed meeting, the only matters heard, discussed or considered were those matters lawfully exempted from open meeting requirements under the Virginia Freedom of Information Act and only those public business matters as were identified in the motion by which the closed meeting was convened.

Yes.

Ms. Butler Painter?

Yes.

Ms. Doersch?

Mr. Hall?

Aye.

Mr. Moorman?

Aye.

Mrs. Moses-Nedd?

No, she may be joining us a little bit later.

She had a conflict.

Mr. Nichols?

Mr. Nichols, are you there?

We are back in open session.

We're on item 10 on our agenda, which is our procurement policy.

And John Costanuk.

That is correct.

Thank you.

Excellent.

Will do.

Thanks for being here.

Thanks for the time to walk you through our procurement rules.

As the board knows, and as the general public may not know, VPRA is ready to obtain the best quality products and services from the market in a fair and competitive manner.

Now, everybody in this room knows, but the general public may not, VPRA is exempt from the Public Procurement Act, but we are required to develop and adopt rules governing our procurement procedures.

So the procurement rules that we developed were to establish a framework and general policies under which VPRA will procure goods and services from public contractors.

And the rules are intended to be used by VPRA to help us advance our mission to promote, sustain, and expand the availability of passenger and commuter rail service in the Commonwealth.

As VPRA was developing these rules, we discussed them with various business groups that had reached out to us interested in how we were gonna do our procurement.

and the business community that we talked to and that got to show advanced screenings of the rules appreciated the open communication that we had and they seemed happy with our rules and that VPRA would be open to competition and our procurements would all be fair.

How are we going to procure?

The methods of procurement.

Depending on the dollar value, none of these labels are going to be new to anybody or the general public, but we're going to have micro-purchases under $10,000.

It's going to follow procurement rules with VPRA and it needs to be approved, but if we determine that the price is fair and reasonable, VPRA can make the micro-purchase under $10,000 with an approved vendor.

When it comes to small purchases, above $10,000 and under $250,000,

It still needs to follow VPRA's procurement approval process, and we need to obtain at least three quotes, if available, from the market, and that we're going to go and get fair and reasonable purchases for the small items.

For the sole source and emergency, I believe they're self-explanatory, but I also want to say that they're going to be limited.

Sole source and emergencies aren't going to happen every Monday.

They're going to be limited in nature during VPRA procurement.

As you read our rules, there are going to be categorical exceptions that were listed because we have certain purchases where competition is not practical due to time or specific needs or competition is not available.

And for those exemptions that we listed, procurement is not going to be required for the rules.

And if anybody has any questions in further detail, they can please reach out to VPRA Procurement.

Then we're going to get to competitive negotiations and competitive procurements.

We're gonna have sealed bidding.

It's gonna, nothing revolutionary which VPR is gonna be doing here, but we're gonna solicit and receive bids and then award contracts to the lowest responsive and responsible bidder.

When it comes to competitive negotiation, we're gonna solicit and receive proposals, but we're gonna evaluate, negotiate, and obtain the best value for us.

When it comes to professional services,

Anything over 80K for professional service procurement, it is gonna be a unique category for VPRA.

We must procure them in a manner that's consistent with the provisions of the Virginia Public Procurement Act, the VPPA, and the provisions establish that professional service procurements require qualifications-based solicitations.

As you read our rules, we wanted to just highlight some of the features in there.

When it comes to bid security, it's going to be mandatory on all non-emergency construction over $250,000.

We're going to ask that it's accompanied on anything over 250K so that we can guarantee that the bidder will, in fact, enter into the contract for the work that was mentioned in the bid.

We may request performance and payment bonds if we deem them appropriate and beneficial.

And obviously, the payment bond is to ensure contracts and materials that's supplied at any tier level on the project that they receive payment for the work and materials that were supplied in accordance with the contract.

and the performance security will ensure timely and proper completion of the contracted work.

Additional contract terms are going to be incorporated into all solicitations and documentations.

VPRA is developing documents, and we will make them public, that will contain the general and specific terms and conditions that will apply to each type of contract that we're going to use in the future.

And of course, if any of our funding partners have terms and conditions that apply, they will be incorporated into all contracts as well.

As we're implementing our procurement rules and moving forward, there is going to be a need for VPRA to use some of the transitional DRPT contracts, and we may still continue to use and administer these transitional legacy contracts.

EBE and SWAM.

As VPRA transforms passenger rail into Commonwealth,

We're also excited how we can impact some of the communities.

Many of the local businesses happen to be DBE or SWAM.

And going forward, we're gonna make supplier diversity part of all competitive procurements.

But we're also gonna be reporting to the board our yearly goals, but on a monthly basis, we'll also be communicating our progress towards the goals.

But we will make SWAM and DBE part of all competitive procurements in the future.

Next item on the agenda is committee assignments.

I'm going to turn it over to Mr. DeBruhl.

Oh, wait a second.

We've got to approve it.

Thank you, DJ.

So we need to take action to adopt the rules governing VPRA's procurement procedures.

And a second.

Quick detailed point of procedure.

I believe the motion should be to adopt the rules as presented to the board with one

Thank you, Mr. Westerman.

Good with that, Mr. Spore?

All righty.

Ms. Doersch.

Aye.

Mr. Hall.

Aye.

Mrs. Moses-Nedd isn't available right at this particular moment.

Mr. Nichols.

All right.

Now, item 11 is to discuss committee assignments.

Sure.

Thank you.

So I'm going to do something I was told to never do in a board meeting, and I'm going to throw a curveball and change the agenda item slightly.

We were hopeful that we would have committee assignments to populate both of our committees.

We envision a personnel and compensation committee and also a finance committee.

However, because the appointment process for new board members is still evolving and we do not have a full board in place, we want to change that slightly and the board obviously can say no.

But what we'd like to do is propose, currently there is an executive director search committee

Hopefully that committee no longer needs to do that work, so we'd like to dissolve that committee and transition those same members to a personnel and compensation committee.

That would be the only action we would propose for this meeting.

Those members are Mr. Moorman, Ms. Bulova, Mr. Cardwell, Mr. Hall, and then Ms. Painter, who's rolling off, so there'd be a vacancy on that committee.

We would propose that would be the only action that takes place at this meeting, and then we believe that by the July meeting, we'll have a full board back in place, and at that point, we could nominate folks for both, anyone else for the personal and compensation committee, and then folks for the finance committee.

So that's what we are going to propose

That's exactly right.

I don't have anything substantive to add.

We do not have a draft resolution reflecting this because, again, we were hopeful that we'd have appointments and we don't, so we're shifting a little bit.

The motion would simply be to dissolve the Executive Director Search Committee and to create the Personnel and Compensation Committee

Madam Chairman, I would move that we dissolve the Executive Director search committee and that we create in its place a personnel and compensation committee.

Thank you.

So we have a motion.

Do we have a second?

Second.

Who seconded it?

Sorry, I didn't hear who seconded it.

How about Deb Painter's last official action on the board?

Yes, ma'am.

Thank you.

Any additional discussion?

Ms. Butler Painter?

Aye.

Ms. Doersch?

Aye.

Mr. Fisette?

Aye.

Mr. Hall?

Aye.

Mr. Moorman?

Aye.

All right.

On to item 12, and this is a briefing on the Western Rail Initiative and related Amtrak service improvements.

I do remember that it's a clicker this time.

So as I mentioned earlier this morning, I'm going to brief you on the latest with our ongoing negotiations

and Design and Movement of Other Projects, Western Rail Initiative with Norfolk Southern.

Just a little bit of background.

The why we're doing this, because people want it.

Ridership, as you can see, estimated in 2009 to carry just 33,000 passengers, more than triple that forecast in the first year, had 220,000 passengers in 2019.

We're using that number, but as DJ reported this morning, our Roanoke ridership has now surpassed that 2019 number for the month of April.

I just want to be clear, it's not for the whole year, but our trends are going upward, which is good, which is very good to have Roanoke and Norfolk ridership actually above where they were in the record ridership year of 2019, that 2019 was.

So, we announced a year ago, in fact in May, with Norfolk Southern and the Governor, an expansion of a doubling of the Roanoke round trip and also an expansion to the Maneuver Valley.

Upon financial close, we will take over 28 miles of the Virginia line.

I should note that the estimate of ridership, and we'll be very clear on this,

Once we extend New River Valley, the estimate of ridership of the expansion of the second train and the extension of New River Valley will be 80,000 new passengers.

That's 80,000 passengers along the whole corridor with the expansion to New River Valley.

That's net new riders.

We're always keen on net new riders.

It's not just for the second round trip.

It's net new riders to the corridor.

Back in January, you approved our closing of the legal agreements with Norfolk Southern and we're expecting financial close in June of next month, June of 2022, once we have environmental survey title work and other federal clearances from the Surface Transportation Board.

Yeah, so there's not a lot to say here other than we have ongoing work streams to achieve settlement of the transaction.

I won't read you every bullet point here.

As we're here today, each of these work streams are scheduled to support a late June close.

But obviously any one of these, if we run into trouble,

could cause a slight delay and push us into July.

Nonetheless, it's good news at the moment.

All these ongoing work streams are lining up to support a late June close.

I will note the third bullet point is critical for us, which is that we have a petition in front of the Surface Transportation Board to make what's called a state of main determination.

It's a non-jurisdictional determination.

We absolutely need that from a legal perspective before achieving close on the line.

I want to note with the State of Maine determination from the Surface Transportation Board, we received that for our CSX agreement along the DC to Petersburg segment and for the Buckingham Branch segment from Clifton, from Doswell to Clifton Forge.

So this is something that is not new to us or to the STB, so we're hopeful that that will come through.

Moving on to the next slide, just to recap again, there are improvements by Norfolk Southern and we talked about this with our budget as well earlier in the year.

One of the big projects is the $15 million North Florida-Calverton double track that will allow for 22 miles of double track to get us to double track to just about 10 miles north of Culpeper.

This area is southwest of Manassas, as you can see.

This is a project that Norfolk Southern is leading and taking on.

They already started design.

D.J., sorry, Executive Director, Mr. Sadler, gave them a letter of no prejudice to proceed last summer.

And importantly, our extension of service is not predicated on completion of this.

That was a key point during negotiations.

One project that will be predicated on the extension of New River Valley, though, will be the improvements to the Roanoke Yard.

As you can see, the reason these pictures are up is to show you how complicated the Roanoke Yard can be.

We have been working with Norfolk Southern to ensure that we'll get through here in a timely fashion.

In fact, some of our agreements actually have a, if we don't get through in a timely fashion, they will be docked and lose some of the funding that will come to them.

and this is important obviously because you don't see in here, at least it's not jumping out at you, is the station is to the east, the current Roanoke Station is to the east of the yard and you've got to travel through the yard west to get to New River Valley.

Approvements that once we get out of the Roanoke Yard into Salem, where our purchase begins, again that 28 miles starts at that Salem crossovers on the V-Line.

There are some improvements in our budget.

They're mentioned here, I'm not going to read every word on the page.

See over 14 million for bridge enhancements and replacements.

There's a Merrimack Tunnel that is a mile-long tunnel.

that we want to make some safety and other modernization improvements to.

We've already had a few consulting teams out there to take a look at it to make sure.

First, some conversations earlier to tell you that our budget is adequate and that confirmation came back.

Yes, it is.

Also, we'll make some track improvements as well.

I just used over 22 million in the budget to make some track improvements on the V-Line as well.

We've had a survey ongoing since December that Kate Youngbluth, who's here, who's behind me, her and her staff, Colin Birch, have been leading this.

They've done an incredible job and actually started with outreach to local elected officials and other key folks before the survey even went live.

And then we had a whole, and I'm gonna show you the list of meetings we had later on, a whole host of meetings with folks over the past few months.

Started with five alternatives.

Ellet, Merrimack, which is just west of that Merrimack Tunnel I showed you, two mall locations, a North Franklin East location.

The North Franklin East location on the mainline was eliminated since it's not part of the agreement we have in Norfolk Southern, it's not on the Virginia line.

The L location was also limited for many reasons, one of which it was a lot more costly to and wasn't essentially located as the mall locations.

So we are down to now two study locations.

We're just going to get into more detail here in a minute.

Study timeline, as I mentioned, we started

We really started back in September.

I said the survey went out in December, but work started well before then.

Environmental review is ongoing and a community outreach.

I'm going to get into more here in a little bit.

The two mall locations, one is the New River Valley Mall West.

As you can see, the bottom of the screen, the Uptown Christiansburg Mall is a location there that has a community college in there as well.

It's not just a mall, there's becoming a place in the New River Valley area.

And there's already transit in there.

There's already transit from Virginia Tech and that's joint transit with the locals.

So that's a plus for the area.

And there is

There may be available parking at the mall as well.

We still have to work that out with the mall owners.

This is one option.

We call it the New River Valley Mall West.

Another option is New River Valley Mall North, which is a very similar location, just a little bit north, so the parking and the

Station Location wouldn't be on the mall property, it would be just a little bit north of there.

And actually during this study, we've learned from working in Norfolk South and others, it might have to be a hybrid of the two.

The mall location less is a little bit on a curve and that's not preferred amongst railroaders.

So it might actually be a hybrid of the two, which I think would work well as well.

I do want to note the Huckleberry Trail is very important to this area.

Mr. Stadler and I have been out there a few times, and we've walked the trail.

Even in the middle of the week, in the middle of the day, there's just a good number of folks on it.

And I know it's used by all walks of life, and a lot of comments have come back during the feasibility study, how important that trail is, and that we maintain the service of the trail, which we plan to do.

Could there be maybe one night or something like that when you're tying in something we may need to do?

Yes, but we do not plan on relocating or changing the basic structure of the trail.

There might be some locations where we're bringing in a rail line that we might have to elevate the trail.

It actually is elevated now over the Virginia line, so we'll continue to update you on this, but it's very important to us.

We've talked before how important that trail is.

I also want to note

We are planning for a proposed pedestrian bridge to the west of the mall.

There is a development over there that we've been told is actually going to be growing.

We thought it was important for us to have a connection from the community over there so it can be easy to get to the station.

I will note, though, that some of the comments came back, some of the community might

are not as in favor of that as some others are.

I think it's important to us that we work with them, but I've heard from the board before that it's important to the board to have good community access that's not just accessible by a car, that people can be able to walk over there.

So we'll continue to work with the community and update you on that.

And Kate, if I miss anything, please get up here and kick me.

I'm just taking a little further outlook.

I mentioned that this is good for the track connection.

So right now the Virginia Line

coming, that's kind of a north side, the page is flipped a little bit.

There is no current track connection from the Virginia line to what is called the Blacksburg Branch or the Norfolk Southern.

That branch that goes by the mall is an active rail line and it comes in the Corning Glassworks.

Norfolk Southern uses that really industrial lead to come into the Corning Glassworks.

And for about a third of a mile or so, there's no current track between the Virginia line and the mall connection.

You can see the old track bed there.

For those of you who have walked it out there, there's an old track bed there and it reverted back to Montgomery County and some other property owners in the area so that we would have to rebuild some track.

in that area to get to the mall.

We've talked to Norfolk Southern about it.

They're open for it.

There's a can opener, not a legal term, but that's a can opener agreement with Norfolk Southern that Mr. Westman helped us on that if we need to open those discussions to get to the mall, they're willing to do so.

But we would have to do that with Norfolk Southern.

I'm also happy to take questions during this.

I know we're throwing a lot of information at you.

But again, I think the main points here are

We're going to keep access to the trail.

We're going to try to use as much as we can the current transit access into the mall and other areas that really had a lot of benefits.

Again, this is just a different way of showing the screening, how we started with five location sites and we whittled it down to two.

Cost estimates for the Mall North site, as you can see, Mall West site, are very similar as you would expect, because they're right next to each other, in that $56 to $57 million range.

The Merrimack site would be more, because you would actually have to add some roadway to get in there, and parking in there as well.

So the Merrimack site is going to be a little higher, and the Ellet site is the highest.

It is important for us to have transit access to

Stations, and for the Ellet site, we would actually have to expand the road to allow for bus access, and you're taking a lot of property there as well, and adding a lot of costs, and special thanks to Ken King and the VDOT district staff for helping us out with some of these estimates and what the road costs would be.

So, again, all the signs are pointed to, it makes a lot of sense to go to the mall locations.

I'm not going to read every word on this page.

If I did, DJ would not be happy with me.

What I'm trying to show you here is all the public outreach we did.

There's been a lot of public outreach.

Again, kudos to Kate and her staff.

I'm just lucky enough to be up here to present all the work they did.

They did 90% of it.

Kate might say more than that.

I just helped out when need be.

I should also mention that

Mr. Stadler and Mr. DeBruhl have been very helpful as well recently in talking with the Secretary of Transportation.

In fact, Chairwoman DeBruhl helped us out in the New River Valley with a meeting down there at a local SIP hearing.

She saved me about seven hours of driving and she heard she did a great job by all accounts in answering questions folks had down there about

what I just discussed, and also the timing of it as well.

People want to get there as fast as possible, and we get it.

This is a big deal to get train service to New River Valley.

So a couple key points on this.

Of the public meetings, we had 188 attendees.

Those were virtual.

A lot of good questions in those meetings that Kate and I fielded.

We've had a lot of participants, as you can see from the surveys as well, and already talked about some of the feedback.

Feedback with regard to

Pedestrian walkway to the neighborhood.

There are some questions about noise as well, which is understandable, since there's only a few strains a week going into that corning spur.

Some people were asking about some noise from that community, and that's well understood.

So long-term project timeline, as I mentioned, we're committed to having service start in 2026.

But of course, I should go backwards.

The second train will begin hopefully in July.

If not July, it's shortly thereafter, but we're aiming for July because we're aiming for... We get that June close that Michael talked about.

We're working with Amtrak and Norfolk Southern and also CSX.

Remember, CSX has the last eight miles of the route.

from Alexandria and Union Station.

Working with all them, kudos to Jeremy Latimer and my staff for working the scheduling through with the freight railroads and with Amtrak and also coordinating with VRE as well to make sure we don't get in the way of their trains as well as we're adding trains.

So, as we mentioned this morning, we're actually turning on the Roanoke train and Norfolk trains at the same time.

There's some interconnectedness to this with the Northeast Corridor and all this.

As you can see, the current service is up there for the Roanoke and Norfolk trains.

And the proposed, again, these are draft times, we're within

The final time should be within a few minutes of these.

We're still trying to finalize these with the freight railroads and Amtrak.

But we think both on the Roanoke line and on the Norfolk line, the new additions will be a good balance to where the current service is.

As you can see, Roanoke service, for those Virginia Tech students who don't want to get up to take a 6-32 a.m. train, they can sleep in and hopefully be awake for the 4-35 p.m. train.

and get in D.C. late at night for meetings the next morning or whatever folks are doing the next day.

And similar with the southbound.

It's a flip in Roanoke.

It's a flip.

I'd be able to leave in the morning and get to Roanoke midday.

Norfolk as well.

There's two early morning or morning trains leaving Norfolk and be able to add an early afternoon train getting up to Washington, D.C.

Mr. Waffen, can we look at slide eight?

It's a little spur line that doesn't connect up and yet that's where people want it and that's where it's most cost effective.

Sorry about this.

See the north arrow?

That's looking north to south.

So right now there's a thick black line at the bottom.

and off that is a, from what I can see now, a yellowish line that kind of trails up a little bit and then it takes a hard north turn right before it gets to New River Valley Mall West, that is the Blacksburg Branch.

Okay, and that goes up to just behind the mall and goes into that Corning spur that I mentioned that'll be just to the, of that red circle, kind of about, it's at about three o'clock on that red circle.

The Corning facility is that Norfolk Southern brings materials into and out of.

So the connecting track will go from the green line in the north to connect to that kind of that where the yellow line kind of the Blacksburg branch line kind of ends.

And I say kind of ends because it does kind of end because there you can see some some parts of old dilapidated track just north of the Corning Spur and then it just flows into what you can tell it's an old track bed.

So we would we'd be adding about a

a third of a mile or so thereabouts of track from that green line in the north to kind of take that leftward-southward turn to get to the mall area.

And that is some of the land that we will need is owned by Montgomery County, who's supportive of what we're trying to do here, and some private property owners.

And Norfolk Southern then owns the track

Yes.

Good question.

Good point.

Yes.

Either location, you might need a little less if you go to the Mall North site, but again, we're talking a couple hundred yard difference between the Mall West and the Mall North site.

It's pretty close to each other.

that, but the pictures also don't show is the grade difference.

The track is somewhat set down a good amount, a good 20, 25 feet or so from the mall.

Actually, when you're walking Huckleberry Trail, you can't even see the mall parking lot.

You basically see the side of the mall parking lot.

I just want to let people know it's not as simple as just throwing down a station in a pocket track.

There's going to be some great differential in that area.

I mean, we're talking about the New River Valley, which is a beautiful area.

So there's some great differential.

There's a decent amount of water there, too, even if you don't see it on a map.

There's almost like a little stream running alongside the railroad track, north to south.

And there's definitely a big stream running alongside the green line, if you will.

along the Virginia line that you do see on maps, but there's a little bit of water runoff, almost creating a little stream throughout kind of in that north-south Blacksburg branch connection.

Yes, and you had a very good point.

We went from a north-south look here to a, to have flipped it on the other pages.

Sorry about that.

No, it was very helpful.

Is our next board meeting going to be down there?

Was that one of the discussion points?

We weren't looking at the July meeting to be down there, but we were looking at the one later in the year, I think the October meeting to be down there.

We've also committed to ongoing quarterly meetings with the folks down there to keep them apprised of our work, our progress.

We've already reached out to the head of the local

Kevin Byrd, the head of the local Planning District Commission, I believe it is, who we've, Kate and I have already established a relationship.

He'll kind of be our point person to help round up folks so we can continue updating them in progress.

Thank you.

All right.

Good afternoon.

We'll be talking a little bit about a generational investment Amtrak is making in their equipment.

So I have the clicker here, don't I?

All right, starting off with a nice vintage artwork here.

This is promotional material from when the equipment that is currently in service was created.

So this is from 1975, and it talks about starting to put this equipment in service in 1978.

I was born in 1981.

And we're still running this equipment.

And I would also point out one of my favorite movies, Planes, Trains, and Automobiles, if you've seen that scene.

Similar equipment.

So, Amtrak did write a business case for this, a very strong business case with all the benefits that will be realized from modernizing, but I think the thesis statement there is it's time.

So the Amtrak Intercity Train Set Program is going to replace Amfleet coaches and locomotives.

It's going to benefit the Northeast Corridor as well as a number of states who utilize this equipment.

That includes Virginia.

It'll also replace out in the Pacific Northwest.

It'll upgrade and build new service facilities.

I'll talk a little bit about that.

But in Virginia, we do have some service facilities that will need some upgrading.

We may have a new service facility in the future as well.

The enhanced maintenance will be through this TSSSA and that's going to improve the way that Amtrak manages that maintenance of new equipment.

The total cost of this program, $7.3 billion.

The equipment acquisition piece of that is $3.4 billion.

Now the bipartisan infrastructure law looks like it's going to cover the rolling stock equipment and a bunch of the design and testing and other things that actually states were planning to incur their percentage share of the equipment.

So we're still working with Amtrak to finalize that with the FRA, but that's some good news on the funding front.

We still will pay for our part of the TSSSA or the maintenance as we pay today for a equipment cost for our usage of the fleet.

So we should expect to see new equipment showing up in Virginia in 2026 and full delivery, so it will ramp up, we'll see that in Virginia by 2028.

Our train sets circulate throughout the Northeast Corridor as well as in North Carolina and Virginia and so what might go to Norfolk today could show up in Pennsylvania or Roanoke tomorrow so we're going to kind of see that gradual as the entire fleet is replaced.

Show up in Virginia all the time.

This procurement has been awarded and so there are now active negotiations going on so the dates and costs can change and fluctuate and I'm going to be sufficiently vague but try to give you as much information that Amtrak was comfortable with us presenting.

So Virginia's been working with Amtrak, but we also work through the state Amtrak Intercity Passenger Rail Committee.

You've probably heard me say that name before, SAPRC.

That is a group of states in Amtrak.

It's funded by Congress, about two million a year.

We have an executive director.

That group

Fairly well organized and that is where we have been organizing the state's voice with Amtrak throughout this procurement period and now with the negotiations.

So Virginia's been working with that group.

Some states were more active than others in various aspects of the procurement.

We had a Jacobs engineering contract to get really into some of the specifics and things that I don't understand if we needed engineers.

So we've been very active in that piece.

I wanted to mention that, again, I mentioned earlier actually that the state supported in Northeast Corridor will benefit from this, but we have long distance services in Virginia.

They will not see their equipment replaced by this effort.

There is discussions of another procurement to replace that equipment.

There are new locomotives ordered for the long distance, so that will improve reliability.

But that's something we need to think about and we've been talking with Amtrak about because if you leave from Roanoke or from Norfolk or from Newport News those are state supported services so by 2028 we would expect to see all new equipment leaving from those cities but in Richmond if you're booking a ticket and something's coming up from say Florida and it's long distance it could be the old we'll call it vintage equipment instead of what we're running on our services.

Amtrak's equipment, the new equipment and the old equipment, it will be Amtrak owned.

We don't own anything.

We pay a usage fee, so that's a national asset that they deploy as they partner with states and on their own services.

and we don't own any of our facilities, so that's about to change because we're procuring St. Julian's Yard down in Roanoke where we service the Norfolk trains.

But either way, the bipartisan infrastructure law will pay for the equipment and the upgrades of those facilities.

With our service connected to the Northeast Corridor, one thing I wanted to mention, so our service by agreement with Amtrak and the partnership funding agreement must connect to the Northeast Corridor unless Virginia were to opt for some reason not to.

That's where we get a lot of the revenue benefits with having those destinations to Philadelphia, New York, and Boston.

So that service will continue to connect with this new equipment and we will have what we're calling B1 and B2 equipment.

So there will be two types of intercity train sets circulating in Virginia.

Really the difference there is they're very similar.

They're going to have capacity very similar to what the trains do today.

The B2s will be the predominant equipment used in Virginia and have additional space for luggage.

Some of the benefits that we're going to see from this equipment procurement, dual power locomotives.

So when we first started talking with Amtrak about this equipment procurement, you know, we said, well, so what's it going to look like?

And I believe it was Max Johnson, he's a very helpful person through safer seats of the states, said, well, we know we wanted to have wheels and brakes.

That's where we started and so then we started talking to Amtrak about different priorities from different states and for Virginia the dual power locomotives are very important because that means, so right now you have about 30 to 45 minutes scheduled in your time at Washington in order to change the locomotives.

You lose power on the train for especially first-time riders.

This is very confusing.

I've overheard conversations on the trains of like, oh something broke.

You know, or that's why we're behind schedule or something like that.

So it also means, you know, the cafe car can't be used and it goes dark.

Well, that dwell time will be reduced to about 20 minutes, so it's a very cost-effective means of improving travel times between Virginia and the Northeast Corridor.

The train sets will be push-pull, so that's important.

So today, you have a locomotive on the front, you're always needing to move in that forward position.

And so we have to have a Y-track, W-Y-E is how you spell that Y-track.

It's like a curved triangle.

So that's how we turn the trains.

That takes up real estate.

I know in the Roanoke piece where the Y-track is actually in the middle of downtown, it ties up some main lines when we're making those moves.

Push-pull equipment will allow us to avoid those moves, allow us to not have to always have that real estate when we build a service facility.

So it's going to be very efficient from a network perspective.

But we'll also see an onboard experience improvement.

So cafe car modernization, modernization.

is something we're looking forward to where you'll have self-serve options, full-service options, and we'll have the ability to do things like dynamic menus which would be nice if Virginia wanted to personalize a menu or have something local on there and it's not on every train, on every route, then you have the ability to update that whereas we have static paper menus today.

And then the possibility of some investments in technology in the future for say ordering from your phone or something like that.

Bikes are very important.

We have a strong bike advocate community.

We've been talking about this for years, ways to put bikes on the current equipment, which is just a clumsy way to do it, but we have accommodated it with some retrofits.

We've been planning for it to be better accommodated on the new equipment.

So we'll have flex space for luggage, we'll have about six to 10 bike spaces on board, and those B2 equipments will have an additional eight to 12 spaces for bikes.

Current equipment is diesel and electric depending on where you are.

So in the northeast it's electric and you have a diesel locomotive heading south into Virginia.

That existing fleet is still more efficient than traveling by air, automobile, or bus on a passenger mile of travel basis.

55% more efficient than trucks, 47% than automobiles, and 30% more efficient than domestic airlines.

So as we grow that ridership, we're causing a mode shift.

We're removing millions of people from our highways and from our airports.

It's not just that we're, say, complementing the highway system, but also airline travel.

And encouraging that denser development around stations is something that has an induced effect.

Environmental benefits from the new fleet will show that intercity passenger service is even more efficient than it is today.

So reducing VOCs or volatile organic compounds in the air, reducing carbon monoxide emissions, nitrogen oxides, particulate matters.

And of course that impact continues to grow as ridership grows.

We created this marketing piece as well that we'll be posting on our website.

So as a final slide, I took this from the Siemens website.

So in July 2021, Amtrak announced that Siemens was awarded the contract for the new trains.

I think it's important to note that they're going to be building the trains in America, in Sacramento.

We're expecting to add up to a million and a half passengers annually.

And in the case of New York, they're introducing this hybrid battery powder.

They're going to have a test train, and if that proves effective, they're going to probably incorporate that into the fleet as well.

The first order is for 83 train sets.

Virginia's service plan through 2030 is accommodated in those 83 train sets.

We worked a lot with Amtrak to make sure that that was part of their plan.

Already other states are looking to add services and so there's an option to buy an additional 130 train sets and so they're already looking at those options.

I have a question.

I've talked to a DJ about this a little bit over time, and maybe this is a good opportunity to just raise it for future discussion.

I was so naive.

A lot of you have done Amtrak and a lot of the passenger rail for years.

I hadn't.

So I thought passenger rail was electric because I watched the commercials about Amtrak bragging about their electric and how much better it is for the environment.

So when I got here, I was a little surprised to know that it changed in DC.

and Northeast Quarter was electric and then they got, and you said there's all that time to switch in the past the locomotives.

Now we're dealing with the new locomotives that will be dual, which is a step in the right direction and all good.

But I still remain interested to understand better the roadblocks and opportunities and obstacles to electrifying.

Moore of the rail system through Virginia and beyond.

I suppose it makes sense if you're going to talk about what the situation is in Virginia, you also look at opportunities beyond Virginia, so as you go further south.

So at some future date, and I'm not looking for the discussion today, I would appreciate a fuller conversation about

what the obstacles and opportunities are to electrify more of our system, Virginia being kind of the linchpin between the already electric Northeast and the soon to be hybrid or dual south of DC.

We can actually talk more about it at a future meeting but the biggest obstacle, well two obstacles, one is money and I think you need to figure out how much more speed that electrification gets you understanding their environmental benefits as well because a big limitation of the travel time and the speed is the curvature and there are places between DC and Richmond and even further south where the curvature just prevents going any faster than the 79 or the 90 that we go now.

The bigger obstacle, though, I can't believe I'm saying there's something bigger than money that's an obstacle.

The bigger obstacle is that we have committed to CSX, at least on the RFP, that our right-of-way will remain interoperable with their right-of-way.

So if they have some kind of a situation on their side of the track, they can run their trains on the passenger dedicated track.

They want to run double stack trains and the catenary won't allow double stacking.

So that's the biggest obstacle is the inability to run double stack freight trains under the wire.

That being said, Jeremy talked about this a little earlier.

In New York, they're experimenting with the battery operated trains, which will be much better for the environment.

And actually overseas in Europe, they're doing even more work where they've got battery chargers that they're testing.

It's not in service in anywhere longer than I think commuter type short distance space.

But they've got the chargers right in the middle of the right-of-way, so as the train goes along the right-of-way, it continually charges the battery.

So we are as an industry globally moving towards getting away from diesel and getting into more energy-efficient solutions.

As Jeremy pointed out,

We've got a long way to go, first of all.

And even though we're still using diesel south of DC, it's still much better for the environment than the trucks.

So those are the obstacles.

We can talk more in detail, and we'll get people much smarter than I am here to explain the environmental side of it.

And so there is some movement toward getting rid of the above lines, above the catenary lines altogether at some point and going to battery.

I know with streetcars and other things, there's now power underground in certain urban downtown places, but it's expensive.

I'm not sure that there's movement to get away from the catenary.

I think the battery is a good substitute for places where you can't electrify.

and again, the current technology doesn't allow the long distance charging that we would need, but they, the industry, we, the industry are starting to look at it.

I mean, there are folks more so overseas, the Alstom's of the world and the Siemens of the world that are looking at that as the future technology.

I know for me that would be a very interesting conversation.

I don't even know what VRE's thinking about those sorts of things.

If I may, Madam Chair?

Yeah, absolutely.

There's a lot of emerging technologies out there, both with the hydrogen fuel cells and just onboard energy storage.

In addition to what DJ just said, there's a relatively large effort right now

on our Class 1 freight railroads in terms of battery-powered locomotives larger than I've seen in my career.

So we are focused, VRE is focused on these emerging technologies and in fact

You know, we hope that they come soon enough to where when we go to make our next purchase of locomotives, it is a, if it's not ultra low, it's low to zero emissions locomotives.

And it sounds like it might make even more sense or be more applicable for VRE at this moment in time anyway than Amtrak, Longer Trains.

Well, I know as one board member,

Any other questions?

So that brings us to the end of our agenda.

I mean, there's no other business.

We will... What's the deal with the tour?

Sure, so as folks know, we moved into new office space the first of May, and any board member that wants to, after the meeting closes, come with us and take a tour of the new building.

It's a short walk, probably two and a half blocks.

We can walk over there and see the new space.

With that, we will stand adjourned and reconvene in July, I think on the 21st.