Board of Directors Meeting   1/24/2023

All right, so we're back.

Thanks everybody for your patience while we got some technology challenges worked through.

Next item on our agenda is a big one, is the budget.

And so we have Mr. Pittard and Shannon Perry to present today.

Working through this budget, we had a meeting, a couple of meetings, finance committee over the past several months working towards this.

I'm just going to kick off and then I'm going to hand this off to Shayna to you.

First, just to remind everybody what we have to do each year and the timing of our budget.

We have a February 1st commitment in the Code of Virginia of our budget document to the Commonwealth Transportation Board.

At that point, we asked the Commonwealth Transportation Board for their approval of our capital expenditures and

So we work with that February deadline.

I will say that in the future, I'd like at some point to maybe push that back a month to give us time to have better data for a July 1 start year.

I think it would still allow common transportation for the time they would need to ponder.

So with that said,

I'm just going to take you through at a high level where we are.

And really, probably the best way to put this is rather than budgeting, it's really more of a financial planning process that we go through.

And in that financial planning process, we're looking at operations, capital projects, and our capital grants and operating grants.

And we're looking at that over the whole life of those capital items.

So that's currently through

fiscal year 2030 is where we intend to be done with the construction of these capital projects and the capital grants to be completed.

So we're looking at the operational cost there all the way to the end.

And then we actually look five years after that to make sure we look forward to operate the new service that we're bringing on and maintain assets that we're bringing.

So once again, it's a financial and savings process.

A lot of costs involved in this, so the cost of money we're going to spend, but there's also the revenue side that on both of those, there's a lot of estimates.

And so it's an iterative process that's continually being looked at throughout these years.

Once a year, we come to you kind of put a lot of sand and ask for your proof.

That being said, you're going to see a budget and you're looking at this as of May, we put out a financial plan.

We were in balance.

Sources of funding equal the projected uses.

As of today, with the post-pandemic economic situation, the shortfall of supply chain issues and the labor markets, you see we're looking at all of a sudden our sources of funding did not equal the projected uses.

And the net of that, we do have some slight increase in sources of funding

but we have even larger increases.

The net is for $712 million short to do the proposed projects.

So that being said, we had to determine that constraint, which we did, and then we need to determine a prioritization process.

Shannon will take you through the proposed prioritization that we applied to this funding shortfall.

And then finally, I just want to, before I hand it over to Shannon to take, I just want to say today, really asking you to do is sending the budget document forward to the Commonwealth Transportation Board.

And then later, we will come back to you after we've gotten their feedback.

And we're continuing that process.

I just spoke of that iterative process.

We will come back in May to look for you to approve the budget.

for the constant year.

And what we're approving in that budget in May will be a one-year operational budget, but then we're approving the capital projects that are in the plan for the life of the project that we have the funding.

So what's changed in our sources picture through FY3?

We may change again in the future.

I'll make sure I call that out as we go through so you know which ones may be changing as we go through our financial planning exercises.

So first up, we have the I-66 inside the Beltway PAGO.

This is an estimate right now that toll facilities are not generating the amount of revenue we had initially forecasted in our plan.

At this time, we are not reasonably assured that we're going to be able to draw down this pay go, so it has been removed from our plan.

Next, again, another estimate.

We have Amtrak revenues.

This is going to come up again as we zoom in on installations.

While ridership really has returned to the pre-pandemic levels, the revenues have been sluggish to come along on that journey.

There's been some change in the shift in the way that they've done the revenue management.

They went to an airline pricing model, and we noticed that ridership really benefited.

Revenues did not come along that journey.

So in the summertime frame, we really partnered with Amtrak and the revenue management team, and we have seen this trend kind of turn around.

At the time, we had to really derive these numbers.

We weren't reasonably assured, again, that this was going to be the trend that we could pull into our financial plan.

As we see the turnaround of revenues coming back and rebounding to those 219 levels, we'll have more assurance that we can put the forecast back to what it was.

So again, as Steve mentioned, there will be some changes likely to those contract revenues.

Next, we have the C-RAP bond financing.

When this went out the door, interest rates were rising.

So based on what we had initially estimated for interest rates, interest rates had a negative impact on how much that capacity could go out the door.

So we had $22 million less there.

On the flip side, we have some big positives coming into the plan.

We were awarded three different grants.

As Jeremy mentioned, we have the CRISI grant for S-LANDS.

We were able to bring in $38 million as a source related to that project.

We have the ETRIC CRISI grant and then the RAISE pen bridge.

Alongside that, we have a local contribution that has been confirmed from Washington DC on that bridge as well.

So we've written $215 million into our plan.

Another estimate, just recently at the end of December, we had new revenue estimates that come from the Department of Tax on our Commonwealth Rail funds.

increasing $96 million through FY30.

So we're able to put that in our plan as well.

Next, we have a 2020 Appropriations Act item.

So this was put into the Appropriations Act to improve the VRE Manassas Line service.

So we recently got approval to take this funding and put it on Long Bridge.

So we put it in the plan to fund Long Bridge.

So another increase in our source

As Steve mentioned, our interest has really ticked up.

We've got a significant amount of cash.

Based on our cash flows, we're estimating that we'll be able to bring in about $33 million of interest earnings.

So we've put that into our plan as well.

And then just $8 million of some ups and downs that we've just kind of classified as other here.

So that brings us to our total increase of $129 million.

On the other side, we're going to go through high level, the changes in usage.

So we're going to zoom in on each of these, but we wanted to kind of tip toe into this.

This is a lot of information.

So high level, this is what we're seeing as the changes based on budget component.

in our uses.

So we have our capital projects, capital operating grants, and then operations.

Because the capital projects has grown into multiple porters, we start taking a different slice of that.

So we'll be looking at the I-95 corridor, the Western Rail corridor, and then other capital projects, just made up of projects that will be capitalized as fixed assets, but they don't fit into the other two corridors.

So now we're looking at it kind of in three different pieces there.

So I-95 corridor, overall increase of $623 million,

As you'll see here, a majority of that relates to base increases.

So capital projects already in the program have increased, and that came in two forms in this budget cycle.

One, we met a milestone, we have better cost estimates, we have a better picture of what it's gonna take to deliver that project.

Or two, we didn't necessarily have a better cost estimate, but we know that our projects aren't gonna go through this economic turmoil without having cost increases.

So what we've done is leveraged a VDOT study that looked at CPI, supply chain shortages,

Labor rate increases, and they came up with this 11% methodology, and they applied that to their capital projects.

So if we did not have a better cost estimate, we took an 11% approach to make sure that we're looking at all of the capital projects and escalating them properly.

So that's what you're seeing, that $570 million there increase in the I-95 corridor comes in those two forms.

And we'll zoom in on that so you can see the detailed projects, which ones went each way.

The other item there, new budget item, you guys,

Back in October, I believe, approved the King and Commonwealth design to continue to move forward.

This is the construction piece.

We're now bringing the King and Commonwealth Bridge's construction into our plan as well.

Moving down the list, we have the Western Rail Corridor increasing $64 million.

This increase really relates to budgets being refined as they move through product development on that corridor.

Other capital projects increasing $59 million

This is the gross-up of bringing in the total expenditure, the $38 million that Jeremy just brought to you, and then the sources as well.

So while it looks like it's just the expenditure side, we also increased the other side, so that will have met to zero.

In addition to that, there is a small amount of match for getting that signed all the way to the 60% design mark, and then also our continued funding of the management reserve.

Next we have our Capital and Operating Grants.

So this primarily relates to changes with VRE passive grants.

So stuff that's coming through VDOT, going on to VRE, we administer those grants, and then our continued obligations for VRE track lease payments.

And last, we have an increase of $83 million related to operations.

So this is just our core operations expense and then our administrative needs.

Rounding it out, this gets us back to our $841 million increase.

We talked about our sources increasing only $129 million.

We now have uses increasing more than that.

So we have this funding gap that we have to think about.

Where are we going to prioritize our funding when it comes to the door?

Where is it going to go?

And what are we going to fund first?

So this next slide is going to depict what our methodology will be.

Again, this is the plan.

We sat down as a team and we're trying to think through the best way to apply these funding sources.

And this is what we came up with, obviously open to any comments input here, but let me walk through this so we can chat through how we're going to apply our

and we're going to prioritize our funding within our plan.

So first we have a check mark next to operations.

Operations is the core of what we do.

We need to run our trains and pay for our admin costs so we can deliver our projects.

That will be funded.

Next, we have our capital and operating grants.

So capital and operating grants typically are passive grants or they're grants that are already under agreement.

We have very little flexibility with the sources there.

So we will need to continue to fulfill those obligations.

So those will be funded as well.

Leaves us with our large portfolio of capital projects.

When you look at our capital projects, there's a couple different timelines that are going on simultaneously.

So the first one being that we have this phase one, our 26th completion, and then we have phase two.

When we complete our phase one, our 26th completion, we get new service or extended service.

We would like to continue to fund those projects.

They have a shorter window and a deadline, and we get additional train service for the Commonwealth of Virginia.

So that would be what we'd like to fund first.

And then moving to phase two,

We will still be able to find all design for our phase two projects.

There will be a portion of construction that we will have to go out and find other sorts of projects.

This is the methodology we would like to apply, again, bringing that new service.

So in the I-95 corridor, when we complete our phase one projects, we get another train out of Richmond and another train out of Newport News.

We also will be able to drop our service all the way down to the New River Valley.

So this is the methodology we would like to apply for our projects.

And we will dive into this on the next slide to see how it pans out.

Can I answer any questions on this before we peel off the slide?

I want to see how it looks.

Okay, so let's go into the I-95 corridor.

It's important to note that the I-95 corridor is primarily where the Phase II project sits.

So this is going to be the most complex slide.

There is a lot going on.

We have a lot of data we want to get across to you.

So walk with me through it and I'll take it in pieces here.

So starting down the left-hand side, you're going to see we have the two different phase timelines.

So we've got phase one up on top,

Phase 2 and then other items, most of which have already been completed.

So next you're going to see the estimate level.

We wanted to bring this to your attention because a lot of these projects are still going through the design, right?

So they started at a rough order of magnitude, moving to conceptual design all the way through.

And as you get further along through design, what that's really going to take to deliver that project comes into focus.

It starts out blurry.

We have a better idea as we get better cost estimates.

So that's what we're showing here in this estimate level.

That is what's informing our FY24 budget.

That is being compared to the prior budget from FY23.

And then you have our year over year change.

What we have done here to isolate for you is the two different forms of estimates.

If it has a circle on it, that means this budget has been informed by an updated cost estimate.

So you'll see that a lot of the phase one project budgets have been updated based on a cost estimate.

Everything else got an 11% increase.

So that's where we wanted to make it clear.

So in total,

As a result of our methodology that we applied for increasing our costs this year, we have a $623 million year-over-year increase in our project budgets.

If we continue to move over to the right, we have our total project budget.

So this is what we're recommending that we fund in accordance with our methodology we've laid out.

And then the unfunded portion.

Again, phase one timeline, components are funded all the way through project completion we funded that.

Phase two, and then Long Bridge because partial construction, because there's some funding left over.

for an unfunded portion of 706.

And I know many of us are gonna say, hang on, cost increased 623, but we're unfunding it, $706 million.

Because of the funding methodology, we had increases in operations, so that got funded first.

We had increases in western route quarter, it's supposed to be delivered in the 26 timeline, that got funded first.

So this, because it has the phase two timeline, this is where the unfunded portion is falling.

In your budget documents, if you look at page 30,

It's going to show the spend of when this unfunded portion is sitting, and you're going to see that it's in 28, 29, 30.

This is the biggest runway to identify new funding opportunities to come in and still deliver these projects on time.

Steve is going to go through a slide later on that talks about what we're exploring to still bring these projects to completion, what other opportunities we have to fill this gap, but this is how it looks in the I-98 back floor.

That was a lot of information.

What can I pause?

In your budget document, you'll see the unfunded spend.

Oh, yeah.

It's in the actual budget document itself.

Oh, I don't have it.

I know.

Okay.

I'm sorry, I'm referring to a document you may not have, but it is there.

So you see that it really does pick up in that 20 times.

28, 29 and 30 is the big spend.

Shannon, that document that Shannon is referring to is on the, in the email that I sent y'all, there's a little link to a Google site.

There's a little folder that says budget and that document is in the budget.

It's on the website too.

Any other questions on this that we can answer?

We can continue to proceed to the next slide.

So continuing on in our capital project section, we're going to move over to the Western Rail Corridor.

So Western Rail Corridor, we have an increase of $64 million, 44 being related to the platforming connector track, and then $30 million on other capital improvements that we need to make on the B-Line.

This has been offset by some reduction in transaction costs.

Can I just know about the estimate level on this?

So this is like rough order of magnitude.

We have brought on contractors to bring us the 30% design.

And let me add to that that the I-95 quarter was all part of the CSX deal, which was signed more than a year earlier than the Norfolk Southern deal.

So because this was signed later, and these projects are, knock on wood, smaller in complexity, so we can still get them done at the same time.

Okay, so is that

So these have been updated based on just they're going through project development and they have better estimates that the 11% really pertain to the I-95 corridor.

It's important to add, like Dina just mentioned, this entire corridor came into our budget last year.

I-95 corridor came on earlier, so it had more room for getting that time value money brought back up to what we're sitting in today.

The estimates, when we developed the initial estimates, it was after the inflation had started to go haywire.

So those numbers were closer to reality than the ones that were created in 2018 that have since become outdated.

All right.

Moving into our last section of the capital projects, we have other capital projects.

That large $38 million increase related to the S-Line 30% design is just a grossing up of the budget.

We're bringing the expenditures in and then the revenues.

The S-Line 60% design grant match, North Carolina asked for us to come in and do about $5.7 million to come into the next section of the Christie Grant application.

In accordance with our methodology, this is outside of our window, so we did not fund this grant match because

We are going to fund our capital projects within phase two first.

So this is not funded.

So that's one other portion of our budget that's not funded.

So 706 from the I-95 corridor and the $6 million here gets us to the $712 million of unfunded in our budget this year.

The last item you're going to see here that changes our continued commitment to fund our management reserve.

This is the board management reserve.

We need to build up this cash essentially for all the unknowns that we don't know that are going to happen on our capital projects.

Estimates will be good, but there's still going to be things that may come down the pipeline.

It'll still be a fund that we can use for opportunities if they're presented to the PRA.

It's the board's management.

It's not the PRA from SNAPs.

Moving on to our capital and operating grants.

So changes here really relate to VRE passenger grants.

As I mentioned before, the continued commitments for the track lease payments.

This has been offset by removal of the Amtrak train equipment.

So we thought we were going to need to come up with some money to get new service, get new trains for the new service we started in FY23.

We did not have to do that.

So we were able to remove that from our budget.

So that is offsetting some of the costs here.

So as we laid out in our funding priorities, all of this is funded

because it is primarily pass-through, it is coming from VDOT to us.

In the last section here, our 10-year operations plan, we call out that this is the 10-year operations plan.

As a board, we bring to you the one-year operations plan.

So we're gonna dive into that in a second here, but in order to do our financial planning exercise, we still have to forecast out operations so we can see how an operation plays into all of the capital projects you have to deliver.

So this is the change that we're seeing in that operations plan.

Increases related to our Amtrak operations expenses primarily on the NEC and then our capital use charge, which is the equipment that we pay for.

And then also larger changes in the administrative costs as we forecast out over those four past eight years.

So $83 million increase in accordance with our priorities, this has been funded.

That rounds out kind of a financial planning exercise.

Now we're gonna zoom into the 24 operations budget.

So as I foreshadow,

This is what the board would approve for us to execute on for FY24 for our operations budget and the sources discussion.

The Amtrak train revenues, at the time we needed to pin this down and forecast out, we were still operating under the fact that the revenue hadn't returned to those 2019 levels.

We are now seeing a trend of the past two, three months that they are not only coming back to the 2019, but they're exceeding it.

We may come back and revisit that.

If that trend continues, we have from now until May to really reassess this.

The reason being is that this is going to be our benchmark for all of FY24, so we want it to be the best available data.

So we may come back, take a pass back through this and see if that trend of escalated revenues is what we should be including for our operations budget.

As you'll see, we have our revenues, our train operations expense, so how much does it cost to run our trains, other operating expenses, and that's going to come down to our overall cost recovery.

This is one of our STI factors this year.

Those revenues, our overall cost recovery metric that we are driving towards will adjust as well.

So that is why we would come back through and possibly adjust that so we do have a good benchmark for our budget actuals that we report on on a monthly basis.

Other big changes here, aside from our train operating expenses and other operating expenses, we had some changes related to capital equipment maintenance, maintenance of weight costs, and then the administrative budget, the last line here,

We're going to dive into that on the next slide.

You'll see that we have about a 60% increase.

So let's go ahead and talk about why that has increased so much or perceived as increased so much.

So as you all know, we are still getting our legs under ourselves as an entity.

So we have some thoughts that come with the startup aspect of the VPRA.

So starting with payroll and benefits, in this year's budget, we are forecasting an average full-time employee of 70.

That's up 31 employees from our last year's budget.

As we continue to staff up, there's a lot of roles that are open even right now, so that is what is reflected in those payroll and benefits numbers.

Professional services has one of the largest jumps here.

The reason being is that we have a lot of policies and procedures that need to be set up as an entity.

I think a great example here is the asset management consultant services that we need to bring on.

None of us have owned a rail corridor before.

There's a lot to owning assets like that.

Bringing on an expert that can help us get set up right will benefit us for years to come, so that's why

That professional service line is really to help us get our feet underneath us, so we make sure that we establish the entity properly.

Along that same vein, we have information and technology.

That's actually very similar to what I was just talking about in professional services.

That increase relates to systems that we need to bring on in order for us to run like a true entity.

We need an ERP system that will be capitalized and appreciated in that.

We need a project management system.

We need a content management system.

We need an asset management system.

So all of that is being captured in that information and technology line.

Building and office-related increase.

We are getting another office in the Nova area.

It makes sense most of our projects are up there, so we need to have a space for our people to work out of there.

We also have people that are designated to that office.

There's also one-time office costs that will not occur again in the subsequent year, all of that being captured in that line item.

Other employee costs increase as we have more employees, which is incremental costs related to travel, reimbursement programs, and whatnot, and that's captured there.

So that brings us to our $1626 million admin budget increase.

really reflective of us still getting up and running as an entity and the start-up costs that come with that.

So we have gotten through a lot.

All right, going through this quick summary.

Other questions?

And so it's just a real quick summary really.

At a macro level, so we have a shortfall, you know, some of the project expenditure and estimates have increased, which I think based on where we are from 2019, as Director Stadler pointed out when these projects were first essentially put on paper, obviously, post-pandemic are in a really different world.

So I don't think

It's surprising that we've had some change here.

I think at a macro level, you have to think about the way we did the prioritization.

There's no point doing these projects if we're not going to add new service and we're not going to operate the new service that comes along with them.

So prioritizing operations, the grants are pretty much passed through, so it's not save money to one of these projects.

By getting printed out, you lose the funding.

So that leaves the capital projects

and therefore we chose that methodology really it's a time thing to give us more time to find the funding to fund all of these projects because really it is a suite of projects that we've agreed to with CSX and a suite of projects down at Western Rail to get us to Extension, to Christianburg, really to get all the benefits.

Particularly on I-95 we have to do all the projects to get those benefits so it's really

The methodology makes sense in my mind to push for service changes in 26 so we can get those projects done, get the new service, give us more time than with phase two to find the funding to get those projects back to fully funded.

So just I-95 is where majority of that fell and you see here just a different little picture of the $623 million debt differences with these three

Items add up too, so we had the revised cost estimate, so we're moving at 30%.

We're at 30% on a few of the projects.

A couple of them were very close.

I think we're also very close on Long Bridge.

And I think we applied 11% here, but close to 30 there, and we're feeling pretty good about that estimate.

That's the biggest project.

And then Virginia Commonwealth Bridge is definitely added.

The design last board meeting, but then this time we're actually adding the whole project.

It's right in the middle of the Alexandria fourth track project.

In the next 10 years, these bridges are going to have to be replaced, so it makes sense, but we're adding a third and fourth track in that area to go ahead and do it.

So the next slide is just the Western Rail.

Once again, it starts at start 26, so fully fund these increases.

I liked a positive on the transaction costs.

A little bit of overestimating transaction costs based on what we had seen on that.

So that was a little positive.

Just want to close with, and I think we kind of said this in the executive director's report, we're constantly looking to find other funding, not just a suite of projects you're seeing, but there's a phase three and a phase four

to us getting things separated, not divided quarter, but we have our own control of our half of the quarter.

And so we're possibly looking for more funding.

One, now we need to fund the shortfall we have, and two, we need to work towards phase three.

And I'm not gonna read all these, but if you're by the biggest one, we talked about this a little bit earlier, about the investment grant.

We do think, and I'm, my peers gonna give,

If a bigger number, I'm going to say four to six hundred million dollars to conserve.

But that's the ones that we're really focusing on.

And we think by August we'll have a lot better idea.

And frankly, it's where a lot of our federal partners are.

So it's back to your discussion earlier, but they're trying to tell us to stay in that lane.

But we're still going to apply to all the other federal grants.

You see them up there.

Also, real quick, and it is possible to have funding from the state, that state partnership and the CIG.

I think there's a lot of projects around the country that had, in the past, some billed money, some CIG money.

So if we do receive money from Fed State Partnership, which we plan to apply for,

We can still go after the capital investment grant money.

There's a cap on the amount of federal funding, so our amount we receive from CIG could be toward the lower end, as Steve says, but there's a lot of, we still have to determine that exact amount.

But just because we do get some money later this year out of the Fed State Partnership, for instance, we still plan to apply for the CIG funding.

So I don't want people to think it's one or the other.

So jumping down to the I-66 toll revenues, we were talking about that earlier, and there's, right now, we're hoping that the traffic, actually let me rephrase that, the traffic, the volume of traffic is not too far from pre-pandemic, it's the timing of that traffic.

And so I-66 is having the beltway tolls in the morning going into the district.

and a tolls in the evening coming out of the district.

Well, now, post-pandemic, those traffic patterns are all volumes about the same, but timing's different.

And so we're hopeful that, I think, first quarter of this fiscal year, there's an NVTC component, so the Transportation Commission gets a share of the waterfall, these revenues, and that payment did get made the first quarter.

So we're hopeful that

traffic and then the dollars are coming back and so we took that $129 million out of our sources.

There's a possibility that I-66 could generate more funding along those lines.

We're also going to present to the Commonwealth Transportation Board because they provide a lot of funding in this plan and so there's the potential that they may have some other funding.

That being said,

We're definitely looking at the operations of Amtrak.

And at this point, we're pretty comfortable that the revenues are back to where we thought they should be.

But we do take a couple more months to be very good about that.

So I think there will be an adjustment coming back in May.

And then the other entities, Maryland wants to run service through to Virginia.

I don't think anybody is opposed to that, but we also would like some participation on the funding side and we hope to get that.

So we talk about other entities.

Another example there is we're talking about the S Line project in North Carolina.

They would like, we would like the project, they like the project, but for them, it saves everybody in North Carolina, I think about an hour and a half to not have to go out to the 95 corridor

So once again, looking there for potential funding on that suite.

And this is just in summary, a summary of the actual budget document by category that we're asking approval to send forward to our Commonwealth Transportation Board.

So the I-95 we're asking you to achieve funding of $3.8 million

By 95, the $274 million of capital projects, there's also another $200 million of the Western Rail quarter, to confuse things here.

A portion of the Western Rail quarter project is a capital brand, two quarters Southern, so we won't actually have any ownership of those assets.

$200 million approximately is in that capital grant for Western.

The other capital projects of $104 million,

Total of $4.2 billion per capital projects.

These are the funded $620 million for our capital grants.

And then finally the FY24 operations budget of 150.

Last slide here is just may have some, but it's really just talking about the funded portion of these projects.

We're recommending to design some of those sidings in phase two.

If we did find the $712 million shortfall, for us to have the authority to move forward with the construction of those sidings, we'd need to come back and say, we found the funding, and now we'd like to move forward with those projects.

It gives you time that if it's two years from now when we find the funding,

Your priorities may have changed.

It gives you that option that over time you can't change what your priorities are.

With that, I'll be glad to answer any questions.

This is really informational.

I'm not going to dive into it.

If you attended the Finance Committee meeting back in December, that first slide we showed today or second slide we showed today had some different numbers.

This, if you care to reconcile, this will reconcile you back to where we were at Finance Committee.

So changes from Finance Committee to today.

Steve, can we just clarify, or I guess I can clarify and you can correct me if I'm wrong, but the process is that we're asking this board to recommend for approval us bringing this budget to the CTB where they will approve the capital expenditure portion.

Then we bring that back to this board in May, and then you all approve it as the final budget.

So there's a little bit of back and forth.

Thank you.

And we have

And that is, I mean, I'll just add what D.J.

said.

It's a little, so the CTV approves it in March.

And then we make an adjustment.

There's the idea, do you go back to the CTV?

And the way I see the CTV approval, they're providing a significant portion of our capital fund.

They're looking at the capital plan and that's where they can exercise some influence to say, wait a minute, this project or that project should be a priority.

So it is a little, there's a little bit of grayness if we actually made a significant change.

So we're talking about maybe $25, $30 million on operations.

And it is not unusual for us to get a revenue adjustment between the draft and the final program.

So there will be changes in numbers, but it is really just to keep that line of communication open between the Commonwealth Transportation Board and this board, as there is a lot of money that goes back and forth between CTP and VPRA.

A comment, maybe a question to you, Jennifer, but

You know, having done capital budgets at the local level, which don't go out this long, you know, they're usually six years.

Some of them don't see, don't go through the end of a project and maybe just be the planning money or something up front.

So you're never quite sure it's going to evolve.

There's going to be new money to apply for.

So I'm completely aware that these numbers will shift dramatically over time, whether from inflation or from expansions of project, new challenges.

I mean, they're going to evolve.

So I guess my

Primary question is, this is a long period of time.

Some of this is unfunded.

Two to one to you is, this is pretty common, like with CTB, even looking at DRPT, your long term, to have some of the out years where you're not sure yet exactly where the funds are coming from.

And secondly, back to what Steve mentioned earlier,

So the Commonwealth Transportation Board by code adopts a six year program.

Six years.

So it's a six year program.

We generally speaking with smart scale fund projects to completion, but over the course of the past year, there have been a lot of adjustments just because of our current environment.

So it

It is not unusual for us to have a long-term program that has projects that may not be fully funded or aspects that have to go back to the board for adjustment.

I think what makes this body unique is it was created to deliver a program of projects and has built a financial plan and a budget around a longer-term program of projects.

And I think you're 100% correct that that comes with some challenges because we know things are going to move.

You know, I feel like we're in a good position.

I think as like we briefed the secretary yesterday and talked about funded versus unfunded and the tools and the resources we have available to address that.

I think I think it shows we're all being very, very transparent about what it's going to take to deliver this program of projects and how we're going to continue to work and apply for funding and things are going to continue to move over time.

And so

I think it goes to the transparency of this body and that communication that we have with the Commonwealth Transportation Board helps with that as well.

And this is a seven, 24 to 30.

So it is one year over than the six year window, but we're going to have to sign contracts that soon,

are going to carry over a long period, like with Long Bridge.

And that's one of the items that we're having discussion internally about is we've broken Long Bridge into two pieces, and we're going to have a $300 million shortfall on that project out of $2.1 billion.

And how is that going to impact people bid in construction companies, whether that's going to scare people away or not?

So far, we're not

I don't think so, but there is that concern.

And then if we don't have that funded at the time of contract, we're going to have to have an exit path.

Because there is, you know, it's a long plan.

Putting the known expenses in the first few years makes complete sense to have the first several years

accounted for it.

I just wanted to say this program, these programs are so big and so transformational.

We are unique in Virginia, the steps we're taking in the area of expanding rail and even purchasing rail right of way ourselves.

And we're very fortunate that our administrations have been so supportive.

So first of all, of course, Governor Northam, but Governor Youngkin is also supportive of making sure that this moves forward.

So I think we're in a good place.

And we also have a federal government that is supportive of this

kind of, you know, these kinds of projects.

So I think, you know, the stars have aligned, you know, for us to be able to move forward.

So anyway, good job.

And to Steve and Shannon's credit, there's a lot of funding that has strings associated with it that can only be used in certain places.

And so it does take a lot of effort to figure out where it art.

It's an art.

It's an art.

And to Steve's point about Commonwealth Transportation Board, we've seen a lot of change in the board.

I mean, there's Commonwealth Transportation Board was working through this in a lot of detail before VPRA existed.

And so we have members of the CTB that know this program, know the set of projects, know how we got here very well.

And then we have new folks that have been appointed that don't know anything about what we're doing beyond what they might read in the media.

So Steve and Shannon will have the challenge at the board meeting in February to address a broad spectrum of knowledge bases amongst the board and kind of bring them up to speed.

And if I can add just quickly.

The word transparency has been used a couple times here.

We are so committed to transparency.

We at the VPRA and everybody on the staff has heard me say it probably a hundred times, no surprises, right?

We cannot have project managers within VPRA surprise the leadership team.

We can't have the leadership team surprise the board or the CTB and we can't surprise the public.

There are going to be changes.

It's complex.

All of these things are true.

I just want to feel like I'm talking a lot today.

Would it be possible, maybe we could do it at a finance committee meeting or something, but if we could have, you know, Steve and Mike say, you talk about, oh, complicated multiple funding sources, put it all together, they all have strings attached, especially, you know, for, I'm fully committed to this budget, but I want to make sure we're fully committed to Long Bridge too.

And just so I know about it,

and how it's pieced together.

And I, you know, Steve and Mike are talking about how much are we going to get out of CIG and that, you know, banding back and forth, just so I'd have a greater understanding of those parts, because they're more and more important as we're coming up with a funding shortfall.

Absolutely.

So with that, if there are no more questions, if there is a resolution, have you all authorized us submitting the budget document of our Transportation Board?

and then I'll present in February then seeking their approval of the capital expenditures.

If it still changes our budget, we ask for your approval of the final budget in May.

So the action on the table is to authorize VPRA to submit the recommended

VPRA FY24 Capital Budget to the Commonwealth Transportation Board, or the budget itself to the Commonwealth Transportation Board.

I'm happy to make that motion.

Motion by Ms. Bulova.

Do we have a second?

Second.

Second by Ms. Doersch.

Any further discussion or questions before we vote?

Ms. Bulova?

Aye.

Mr. Delandro?

All right, next item on our agenda is another significant milestone in the delivery of our program, and that's the Long Bridge Project Management Support Services contract approval, and Charlene Cleveland is gonna present that for us today.

And that's it.

Okay.

All right.

Thank you, everybody.

If you recall, I was here in October to get you ready for the action that we're going to ask you to take today.

At the time, you were in the process of going through a selective process to select a consultant in order to build an extension of VPRA staff on the Long Bridge project.

So today we're going to ask you to approve that contract.

We've gone through the process of selecting them and then negotiating the terms of the contract.

And so we're ready to get busy to provide the resources that we need in order to bring this huge project home.

So if you recall, I went over some of these slides last time.

This is the Long Bridge project.

We're building two bridges in the river, the rail bridge, the new rail bridge, and then also the bike pedestrian bridge as the mitigation for that project.

We're actually also building five other bridges across various roads and waterways.

Where we're not building bridges, we are building retaining walls.

You can basically see that here.

All the stuff in red are all the retaining walls that we're building in addition to all the bridges in purple.

The project does have four distinct kind of characters, starting in Virginia in the George Washington Memorial Parkway for number one,

Then we go to the Potomac River for number two, East and West Potomac Parks as a more park-like experience for number three, and then by the time we get to number four, you're getting into a very urban environment.

Main Avenue, Southwest, and the District of the Portals developed, you know, or the Mandarin Hotel, and also the Salamander Hotel.

Very different corridor than what we experienced in the...

I'm going to show you a little overview of a movie we developed so that you understand with this visualization exactly what we're going to be building.

So here we're starting on the Virginia Shore.

You can see the George Washington Memorial Parkway headed off to the northwest.

Coming into the project corridor, you can see the existing Long Bridge, the existing Yellow Line Bridge, and then the two bridges in the middle that we'll be building, the rail bridge and then the bike pedestrian bridge that will extend over the Potomac River.

You can see it's quite a long corridor.

The piers that we're building are going to be

basically in the same locations as the piers from the existing bridge so that for navigational purposes it becomes less complex.

So close the bridges are that we even have a navigational channel that's all going to be one navigational channel for all the support bridges.

Extending over to the DC Shore, you can see that the bike pedestrian bridge does end there to connect to all the bike paths and pedestrian pit trails that are in the East Hotel Park.

This just gives you a vantage point.

You're looking down into the park.

And then we continue on through the rail corridor.

We call this the portion that is separated.

Basically, you can see the passenger rail at the top and then the existing freight rail at the bottom.

As we get over 395, that's our last separated bridge, we get into a shared corridor where we're basically using existing CSX right-of-way.

We will be rebuilding the two tracks to four tracks.

And we will be rebuilding the whole section.

This just gives you a look back at the 395 bridge that we'll be building.

Then we will swing back to look at that shared corridor.

It's going to be far more complex to build.

We're going to basically be working with CSX hand-in-hand in order to be able to build this corridor around their trains, shifting traffic back and forth as needed in order to complete the corridor.

You can see the next bridge over Ohio Drive SW. That's another combined bridge, currently a two-track bridge.

It will be rebuilt to be four tracks.

and then over Washington Channel, we'll be doing the same thing there, and then finally over Main Avenue Southwest.

This just gives you more of a vantage point over Pile Drive.

Continue up to the north, you know, the Jefferson Memorial is just off to the top left, and then continuing on through that Portals Development, you see there with the Mandarin or Barcelona Hotel there all the way out.

And then we'll be rebuilding that bike pedestrian bridge,

because the existing one will be hitting the footprint of that in order to do our white picket.

And then just one last look going back into Virginia.

Let's see if we go back from the shared corridor back to the dividing border across the river.

And then we tie into the existing rail line right next to the Long Bridge Aquatic Center here.

Okay, so back to my presentation.

This is the different phases of the project.

If you're all familiar, this used to be a DDOT project.

We didn't oversee it from the pre-NEPA phase until a rod was signed back in 2020.

Then the project came over to VPRA after it had been created.

We're currently in the box in bold, preliminary engineering.

I'm going to be moving on to the next phase very shortly.

One of the more important activities in this one is to procure the PMSS contract so that we have those resources in order to build the subsequent phases.

And so that's obviously what we're going to be doing here today.

Then we'll be moving on.

I would say we can consider ourselves in the next box within the next few months.

We will be doing, we'll be procuring the construction contracts, really getting into the land acquisition activities, really delving into the environmental permitting, you know, environments that are associated with that.

and then getting deeply into the final design constructors.

So this just tells you basically what we've done over the last few months.

We are getting to 30% design plans so that we will be distributed February with final 30% plans due in May after we address all the comments on the initial plans.

Soil boring sampling is complete and currently are mostly being analyzed in the lab.

Utility test pitting is ongoing as we get property rights in different places.

We get in there and do that test pitting so that where

Confident that we know how deep the utilities are and whether they're at direct hit and whether they need to be relocated out of the way of this project.

We've done survey and property research, starting to get into the title research phase for the properties that we do need to acquire from private entities.

We have plant development is ongoing, starting with those private properties, but also we'll be doing that for the MPS property that we'll be transferring over to us as well.

Stakeholder coordination, lots and lots of stakeholders on this project, so that's a constant process.

EMSS contract ready for execution, we talked about that.

And then Steve alluded earlier to one of the more important functions that we've been performing in this phase was to determine the procurement methodology.

So we have decided to break the project down into two contracts.

They will be design-build, the exact flavor of design-build we're determining, but we are looking at

releasing the RFQ for the first package in late Q1 of 2023.

Then for the south package, we would be looking at probably later Q2 of 2023.

We did do a request for letters of interest from contracting teams at the end of last year.

We got very good response.

We got age responses of teams, not just contractors, teams.

for the south package.

We got eight, and then for the north package, we got nine, which is fabulous.

I was at a conference recently and talked to other owners that were upset because they couldn't even get two.

So we are getting very, very good interest.

Okay, so back to the purpose at hand is the Project Management Support Services contract.

You recall again, it's a site-specific, qualifications-based contract, professional engineers, that sort of thing.

It will be an extension of our staff to help us manage this project, the design, the construction, quality, safety, finances, reporting, all of that kind of stuff that typically a larger organization might handle.

The consultant will be doing all of these functions and we're looking forward to getting them on board because they will bring a lot more resources in order to go through all of these different activities, such as the ones listed here,

We talked about some of these, others that I didn't mention were to help us with this procurement that those parents that are coming next in a few months, environmental permitting, which I alluded to earlier, stakeholder coordination, which is a huge, huge undertaking, especially development of the grievance, which are required in order to qualify for those core capacity grants that we were talking about.

Civil rights compliance, public affairs, and then I guess we're talking about the acquisition and utility coordination.

So there are three things

These distinct phases of the contract, we will be entering into the pre-construction phase, which is really just getting ready for construction, getting the contracts in hand, getting the design, that sort of thing.

And we'll get into heavy construction.

That will be obviously a more costly phase of the project.

This will also become more costly at that period versus this ramp-up period.

And then also for the post-construction period, which is basically just closing the project out, also less costly.

So how is this managed?

We basically have the race negotiated, the terms of the contract.

We are now working through the annual work plan.

So each year we will come up with a plan of anticipated tasks for the following year, come up with who needs to work on those, come up with man hour estimates, and then we would negotiate those for the subsequent year.

Budgets are then created by multiplying those hours times the approved race, which are basically

Independently audited rates using federal guidelines.

Those will be escalated each year following the employee cost index, which for the section that's on professional engineers and scientists.

If we find that we missed the boat somehow and there's more scope or something happens, we can always do a change order to add scope to that particular budget.

Obviously that would be negotiated, would have to be approved by VPRI staff and executive leadership.

Performance would be assessed on a yearly basis unless we find that the employees are not performing adequately, in which case obviously they'll be more common.

We'd have recovery plans and if they were really not performing, we could ask them to be replaced.

And then if they find that the entire consultant is just not performing, there are ways that we can

basically exit the contract, obviously giving them a chance to perhaps improve their performance.

If that still doesn't work, then we could exit the contract.

So, like I said, we're working on the annual work plan one, which would extend from contract execution until June 30th of 2024, which is our next fiscal year.

And then from there on, the EWP would correspond to the VPRA's fiscal year.

And I believe that is it.

Questions for Ms. Bulova.

I'm just curious.

This project seems to have been moving along.

No one denies the importance of it.

Not really.

When we go out and talk about the project, everybody seems to think it's a great idea.

I'm not saying that different people don't necessarily want different things, but they all seem to think it's great.

No showstoppers?

Nothing.

Mr. Fisette?

As I looked at the part in DC, clearly when the tracks come together, that's one of your bigger challenges, I'm sure.

It made me realize also the National Capital Planning Commission.

One, I'm curious what their role, if anything, has been in advising.

Secondly, I know they have solicited all sorts of redesigns of the monument area around the Jefferson Memorial, Tidal Basin, FDR, because of sea level rise.

They're planning.

It's already encroaching.

It's already going over the banks.

Have there been any adjustments or adaptations to anticipation of the

Yeah, yeah, actually the existing bridge is higher, I think it's two feet higher than the existing bridge.

The new bridge will be two feet higher just because of that exact issue.

So yes, the standards for what flooding is have changed and they're putting additional environments on us to make sure that we're accounting for that.

NCPAC has been very involved.

We do have our initial approval for the project.

Yes, that's called a signatory to the programmatic agreement.

It's a part of our EIS rod.

And so, honestly, we have a meeting with them on Monday.

Thank you.

Commissioner of Fine Arts as well.

I know you're just undertaking the property search in terms of ownership.

Is all of this anticipated to be owned by some municipality government or do you anticipate any private ownership and what's the plan?

Is it for invoking eminent domain?

Is it

Would that be necessary?

We have a good sense of who owns what, but you know, obviously you can do much more formal legal studies called title search in order to get all of that prepared for actually doing the property transfers.

We're in that process now, but we know who owns what.

We hope we don't have to go to eminent eminent domain.

I mean, obviously if we had to, we might.

The plan is that VPRA would own the property that we acquire, if at all possible.

The question is not premature, really frozen, figuring out exactly what we need within the district.

We need a few slivers from private owners, we know that.

The interesting legal part is we, the rail authority, do not have the powers of eminent domain within the districts.

So we're also

reaching out to our stakeholders to find the right partner for that exercise if we need it.

The hope is always to acquire voluntarily as everybody knows.

And the good news is that by far, the property owner that we have to get the most property from is the National Park Service.

So they've already agreed to do that.

And just adding to the complexity, there's some property that we need to acquire for the project itself.

Any further questions?

All right, so we have an action before us and that is to approve awarding of the project management support services contract for the Long Bridge project.

So moved.

Who is their team?

My team is a joint venture of WSP&R Cancay called Long Bridge Partners, the joint venture.

I think I did have a motion from somebody online and now I can't,

Victor Cardwell, moved.

All right, motion by Mr. Cardwell.

Do I have a second?

Second by Mr. Fisette.

Any further discussion?

Ms. Bulova?

Aye.

Mr. Cardwell?

Aye.

George?

Aye.

Ms. Drake?

Aye.

Mr. Fisette?

Aye.

Ms. Moses-Nedd?

Aye.

Motion carries.

Thank you.

Thank you, Charlene.

All right.

So in terms of our schedule, then we're going to break for lunch.

And you need a motion that states

Let's see, 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 that legal counsel and the VPRA chief administrative officer attend the closed session because their presence is deemed necessary and will aid the board

in its consideration of these matters.

All right, so motion by Ms. Bulova.

Do I have a second to go into closed session?

Second.

And by Mr. Delandro?

They do.

Yeah.

All right.

Now can you call roll please?

Ms. Bulova?

Aye.

Ms. Doersch.

Aye.

Ms. Drake.

Aye.

Mr. Fisette.

Aye.

Mr. Hall.

Aye.

Thank you, Mr. Hall.

Ms. Moses-Nedd.

Aye.

Mr. Payne.

All right, so the motion carries.

For the purpose of those that are participating online and visitors we have in the room,

plan to reconvene in open session at 1.25.

So with that, we're gonna break and reconvene then.

Yes.

Perfect.

There will be lunches outside the door for members of the board and we can get our lunch and come back in here.

Alright, so...

We are now coming back into open session.

We are going to take a roll call vote, and I ask that each member indicate their agreement with the following statement.

To the 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. Bulova?

Aye.

Ms. Doersch?

Aye.

Ms. Drake?

Aye.

Mr. Fisette?

Aye.

Mr. Hall?

Ms. Moses-Nedd?

Aye.

Mr. Payne?

Mr. Payne.

Aye.

So in closed session, the performance of Executive Director Stadler was discussed in addition to a couple of adjustments to his employment contract.

There are two modifications that are considered by vote.

We'll take them in turn, and it is how we're gonna do it

One modification would be something to extend the term of the employment contract by six months to terminate in October of 2026 rather than April of 2026.

In addition to that, to move the performance valuation period to October of each year rather than April of each year to align with staff.

So that is the first modification that will be considered by the board.

So moved.

So we have a motion that I would like to propose that we extend the term of the executive director by six months and adjust the performance review from April to October.

Second.

I guess I'll second.

All right.

Second, Mr. Fisette.

Any discussion?

Ms. Bulova?

Aye.

Ms. Doersch?

Aye.

Ms. Drake?

Aye.

Mr. Fisette?

Aye.

Mr. Hall?

Madam Chairman, the second motion

Again, this is administrative.

I can't quite introduce it.

Okay, please.

The other contract modification that was discussed is right now the employment contract provides for a potential annual bonus.

The range is zero to 10%.

The modification that was proposed is changing that range from zero to 25%.

And again, this is administrative to change the executive director's contract to give more flexibility to what we would consider when we are considering a bonus.

So we're not doing it, but we're providing for more flexibility in his contract.

And so I would move that we raise the annual bonus cap

from zero to 10%, to zero to 25%.

So this would extend the range.

Again, we're not saying what a bonus would be, but what the range would be in his contract.

All right, we have a motion for Miss Bulova on the P&C Committee.

Second.

Second.

Second by Mr. Cardwell.

Thank you.

All right, Mary Estelle, can you call the roll, please?

Ms. Bulova?

Aye.

Ms. Doersch?

Aye.

Ms. Drake?

Aye.

Mr. Fisette?

I'm staying.

Ms. Moses-Nedd?

Aye.

Mr. Spore?

Aye.

Great, motion carries.

All right, next item on our agenda is the Northern Virginia Core Capacity Program.

Good afternoon.

My name is Naomi Klein.

I am a planning manager with the Virginia Passenger Rail Authority.

I started with the agency

Bill Vapsivad, and my portfolio includes the Northern Virginian projects in Granconia up to Longmont.

Today I'm here to talk about, to adopt the Northern Virginian Life of Happening project as a locally preferred alternative.

This is a requirement by the FTA in order to secure the SIG fund, and I'm gonna talk about that.

So some background information.

I'm gonna try to keep this brief,

because I think some of my colleagues also talked about the SINC grant earlier today and you have heard about it last year as well.

The chief's part of my law is to be able to be an FTA grantee.

So FTA manages the Capital Investment Grant Program.

We are applying for a core capacity grant for the Northern Virginia core capacity grant.

The SINC program has a large pot of money, two to four billion dollars allocated a year.

for projects that have been recommended.

It's a multi-year, multi-step process.

So it is different than most other federal grants in that it is a two-year process right now that we are in project development just with a rating that will go to Congress that will determine if we will be getting funding.

We're accepted into that two-year project development phase in November of 2021.

and I will go over the timeline, but we're looking to complete that by this fall within the two year timeframe.

And a medium rating or above will result in a full funding grant agreement.

That rating, what FTA is looking at is really to secure their investment.

So they're looking at the risk of the projects that cost and the schedule are the main components that they're concerned with.

So the Northern Virginia Core Capacity Project is made up of what FTA is calling segments, but what we at VPRA may know as other projects that are being combined under one name of the Northern Virginia Core Capacity Project.

So the NVCC, I'm just gonna shorten it to an acronym for you, is made up of Long Bridge Project, the Alexandria Fourth Track Project, and the acquisition of three VRE train sets.

So this grant is really focusing on commuter transit, which is why the project is made up of a corridor in which VRE is operating.

So it is a condition of FTA that the board adopt the Northern Virginia Forecapacity Project as a discrete project with a locally preferred alternative.

The reason for this is that this project needs to be reflected in our long range transportation plan.

and the TIF and the STIP to show that the project is funded.

Although these are in separate elements, it's a requirement of FTA that they're all referenced as one project because we applied for the grant as one corridor.

So the schedule highlights what we're doing now.

We're working with FTA to secure environmental approvals.

So we have environmental approvals for those segments that you just saw.

They were done with FRA.

So FTA needs to now adopt the decisions that FRA had previously made.

We're continuing project development.

We plan to submit for a rating through the propagates.

And so we have lots of documents currently that we're compiling that talk about schedule risk budget that we'll be submitting.

And that's going to determine what our rating is that goes before Congress.

And then once we submit for that rating, we will request an approval to enter engineering.

And then the plan is for 2024.

We hope to receive our full funding grant agreement.

And at that point, we would begin construction on the Alexandria fourth track project and Long Bridge's schedule for construction to start construction about a year following that.

So these are the project costs based on our most recent estimates.

The numbers should be pretty familiar, hopefully, about $2.6 billion between the three segments of the Northern Virginia Quark Project.

And so the action item is to adopt the Northern Virginia Quark Pass and Project as a locally preferred alternative.

All right, we have a motion for Mr. Spore.

Do I have a second?

just on it.

Thank you, second by Ms. Doersch.

All right, Mary South, would you call the roll please?

Ms. Drake?

Aye.

Mr. Fisette?

Aye.

Ms. Moses-Nedd?

Aye.

Thank you, you were the picture of efficiency in today's meeting.

So thank you very much for the opportunity to give an update on the administrative things that we're working on.

Perfect.

All right, organizationally, your staffing information is provided in the executive director's report every month, but I did want to highlight something that we talked about a few meetings ago.

Right around that 18 month mark, we started to experience attrition.

We have maintained our commitment to making sure we have the best talent possible.

And we were seeing that some folks started to realize that this sort of growth

this sort of build wasn't quite the right fit for them.

And so I thought it was an interesting outcome, much like the ones that we forecasted several months ago.

Similarly, we shared this slide about the war on talent.

We also experienced several of the things that were forecasted.

It has been harder to attract candidates.

Most people have, once they're in the market, they have multiple offers in hand at the same time,

Significant dollars we've talked about before that the private sector is very difficult to compete with.

And expectations around for remote work.

There's lots of articles recently about folks doing more return to office.

And so the expectations are very interesting.

There's going to be a fascinating kind of push-pull as we watch this calendar year unfold between the employees and employers.

It's also been interesting retention efforts around our folks.

The manageable workload is the thing I think I worry about the most.

We still have a number of positions to fill, upwards of 20 positions within this fiscal year.

And until those positions are filled, somebody's doing something with the work at hand.

And so we've got a lot of people who are pulling double, and in some cases, triple duty.

That worries us, trying to hire the right people as fast as we can to offer that workload.

That matters to us very much.

Also in your executive director's report every month, we talk, report on some of the numbers.

Now, truth be told, we're sharing those numbers because they're the easiest to measure.

And so we've talked about diversity in the past.

There's a number of benefits.

I won't read that to you.

But what we wanted to do was to make sure we had a good idea what those percentages should be, right?

Give us kind of a measure, a point, a goal,

So we knew, okay, we got these measurements with regards to racial diversity and gender diversity, but are they the right markets?

So we set ourselves some goals for both race and gender, also in your packet.

And I compare that to the current staff.

So you'll see where we are currently, and this was as of January 10, and the goal, we're doing very well.

But what we took into consideration were

other factors as it comes to the open positions that we're hiring into.

Heavy in engineering, heavy in project management, and we look at census data as well.

So we look great for now, but as we start to hire some more of those positions, construction, those sorts of things are not historically gender diverse, often not racially diverse.

So we took that as a factor.

We are going to continue in the executive director's reports going forward.

show you the same numbers, but with the goals and how we're doing against those goals as well.

Can I ask a question?

Why?

Yep.

So we took into consideration the types of positions that we have throughout the organization, again, heavy in engineering and construction.

and we took into consideration the locations that we have currently, the Richmond Alexandria areas and those factors.

I have a whole analysis behind the scenes.

I guess I'm just trying to say we're drawing from a pool, I guess, for employees where it's heavily male dominated.

That's a reasonable goal to start.

We do, our commitment is to assess the goals annually, but we're still getting our legs under us.

And so we're still, and we're finding, you go back to the concern about balancing workloads, we're having a hard time finding talent that's going to come in there.

Again, the private sector, we're competing with private sector a lot.

with a lot of these initiatives.

And so that comes into play and we're experiencing some of that accomplishable.

I'll be happy to show the analysis.

I guess I'm just trying to understand that box.

No, no, no.

This is just the current, so this is our goal.

I'm sorry, Patty, I misunderstood.

This is our goal.

We're currently here, but of the 22 positions we have forthcoming, there's a ton in engineering and construction.

So you're going to see this number vary.

We're going to end up probably hiring more men than women from an engineering and construction perspective.

One of the things that we recognize, and if you pay attention to the markets and the research and the articles,

Women and people of color will often self-select out.

So effective October 1st, we've added this disclosure to every one of our postings.

And what it basically says is, if you don't meet every requirement listed, that's okay, apply anyway, because you could be the best candidate for this role.

A lot of organizations, because of this war on talent, we are spending time hiring people based on potential.

So here are the 10 qualifications we'd love to have.

If you have eight,

That is it.

I just have to say that's a great paragraph.

Yes.

It really does.

Thank you.

Appreciate that Jay.

And we've gotten positive feedback on it as well.

We made some updates to the policy manual, pre and post employment activities.

So again, now that we've got organizationally 39 people, there are positions, we've got background checks, we're verifying credit reports if you're responsible for making big decisions financially for us, and we're moving into drug testing for safety sensitive positions as well.

Performance Management, we updated the rating scale that's on the next slide.

I won't walk you through that, but what I will suggest is we previously had three categories.

Most folks landed in one and we wanted to provide additional differentiation, so we socialized that with folks in the organization as well.

We added some religious comp time.

This is the opportunity for folks to celebrate different religious holidays, the opportunity to coordinate with their manager and with HR to work

comp time specifically to take off holidays that they wouldn't normally have off.

Parental leave was extended, bereavement leave was added for immediate family members only.

And we got great feedback from the PNC committee about the Commuter Reimbursement Program.

And so we have an opportunity to do Commuter Reimbursement as they're using public transportation.

And we've got riders and bicyclists and walkers in there as well.

Performance Management Rating Scale, I mentioned that already, just expanding that and giving us an opportunity to differentiate.

From a culture perspective, we've shared this before, we've continued the work that was so well received by you all.

Mission Vision, Employee Value Prop, one of the things that we've been doing, for example, is brainstorming as a group.

The beauty of the size of our organization is the fact that we can do a lot of collaboration, which from a culture perspective matters a lot.

Several months ago, we did a brainstorming, for example, at our all staff meeting.

We hold all staff meetings every other month.

And we did a collective brainstorming around what does safety mean for us?

The thing I like most about this slide, two things.

All of the ideas came from our employees, and most of them are already implemented.

Very excited about that.

And then we're gonna continue to do that.

We have six values.

Again, you've seen these before.

There's a couple of initiatives listed there.

that we will continue to press on.

We'll continue to look for ways to reinforce our culture.

In our February All-Stack meeting, for example, we're gonna do another collaborative brainstorming session on the financial stewardship.

What does that look and feel like for us as an organization?

How are we spending taxpayer dollars responsibly?

Then the meeting after that, we will be brainstorming about the championing, championing, championing, I'm done.

equity and inclusion.

Alright, so that is that's our report from an admin perspective.

Lots of great feedback on the culture so far plenty of work to move ahead.

Joan, how many employees is your is your end goal?

Actual employees, yes, consultants would take that number.

Other questions from the group?

A little worried about Andy.

Okay, so next item on our agenda is updates on the legislative session.

We got Jerrica Goodman, and I'm looking for Andy Wright.

That's why I was late.

Hello, as the chairman mentioned, my name is Jerrica Goodman.

I'm the director of communications here at the Virginia Passenger Rail Authority.

And I'll give you an overview of

What we are doing in our approach to the Virginia State General Assembly.

So as those of you may know, the General Assembly 2023 session began on January 11th, 2023.

And it is our short session in Virginia.

Our number of years are short sessions.

They are 45 days.

and even number of years, they are 60 days.

So a lot of work to get done in a very short amount of time, those days in the week needed.

So 45 working days straight.

I have my colleague here, Claire Mansfield, who is our Government Affairs Manager here, who is taking the lead on our state government affairs day to day.

And I have

I'll just kind of go through what we are currently working on in terms of legislation.

We don't have any VPRA initiated legislation that is active.

That means we don't have any proposals that we are currently working on, DRPT does.

And so Andy is going to go through that in his presentation.

But we do have things that we are monitoring and betting with all of the introduced legislation.

Usually,

There are a couple of thousands of pieces of legislation.

And so Claire and I have reviewed them and vetted them to look for potential implications for VPRA.

We also want to reintroduce and re-engage all of our members.

As you all know, we were established in 2020.

And so we are going to the members of the General Assembly and say, hi, you all voted for this.

Authority, this organization is part of a large omnibus bill.

This is what we're doing.

These are the projects we're working on and paying close attention to those members who have projects in our area.

So to that end, we've had a couple of great presentations in front of the House Transportation Committee.

Our chair of the board gave a presentation in front of the House Transportation Committee.

the Executive Director presented before the House Appropriations, Transportation and Public Safety Subcommittee and our Chief Operations Officer, it's not listed, but he did present in front of the Senate Finance and Appropriations Transportation Subcommittee.

So getting in front of key committees and then separately meeting with members in all of our different regions.

We'll continue that approach throughout session.

I am like Joan, I can't talk there.

End of the day.

And again, building relationships with all of our legislators, not just to inform them of what we're doing, but let them know that we are a resource as we continue to progress these projects.

If their constituents have questions or issues, letting them know that they can pick up the phone and call us because we are, in addition to having our handout, we are also

I'm here to reach back out and here to help them and to let them know that we are here.

We've also instituted what we're calling our legislative review team, acknowledging that we have a lot of expertise, really talented folks around the PRA.

So as Claire and I have our expertise and background in the General Assembly, we know that there are a lot of legislation, like I said, thousands of bills that get introduced and having our council review them, but also having

folks in engineering, procurement, HR, look at and review legislation for potential unintended consequences or impacts to the authority and our operations.

And so that's done really well.

And we're really grateful for all the time that folks around the organization have taken to review the legislation for impacts.

And I think that's done really well.

And of course, our partnership with DRPT has been very critical.

Our chair has been really great at assisting us and elevating our messages.

She is, I told her we need to get her a physical hat because she is able to take off her DRPT hat and put on her VPRA hat and helping to get the message out and support us as well.

So we've been really great.

We have a briefing, a weekly briefing and working meeting.

We take meetings together.

So I think that's working really well.

So I wanted to highlight that also.

And then we're here as a resource for you all.

If you have questions about the work we're doing, please feel free to reach out to Claire and myself.

Everything moves really fast.

Some things happen in the paper that you may hear about and have questions about its implications for the authority and the work that we're doing.

Please feel free to reach out to us.

We're happy to provide some additional context.

So that is a bit of an update for this session.

We're not quite.

at the midway point, unfortunately, but we will get there.

February is coming and we will see what happened and we'll continue to provide you updates through DJ, but please feel free to reach out to us directly if you have questions.

All right, so the next part of our legislative update is Andy Wright, who is

A key part of our team at DRPT is our Chief of External Affairs and Strategic Initiatives.

And we're fortunate enough that we had a proposal that was drafted and it is a governor's bill that's going through the General Assembly now that directly benefits one of the parties that's sitting at the table.

Good afternoon, Madam Chair, Director Stadler,

Like Director Rolle said, I'm here to talk about one of the Governor's key transportation initiatives, the 2023 session.

The bill, HB 1496 and Senate Bill 1079, exchanges to the Commonwealth Mass Transit Park, which is the primary distribution of state dollars to the 40 transit agencies operating throughout the state.

Specifically, the legislation is going to make changes

and how the CTB distributes funds to the Virginia Railway Express.

Further, it creates additional oversight requirements for VRA and for Washington Central.

The patrons for the legislation are Delegate Terry Austin, who is the chairman of the House Transportation Committee, and Senator John Cosgrove, who's a senior member of the Senate Transportation Committee.

Before I do a deep dive into the bill, I just want to give a quick overview of what the Commonwealth Mass Transit Fund is,

and how it distributes dollars to the transit agent states.

Currently, there are five categories within the fund.

Operating assistance, which is 27% of the fund.

These dollars are distributed by a performance-based metric system and are used to support the day-to-day operations of the transit agencies.

Capital assistance, which is 18% of the fund.

These dollars are distributed by an application-based process similar to smart scale and are used to support purchase of buses, train cars, constructions of facilities, and similar capital projects.

Currently, VRE receives funds out of those two categories, and in FY21, that amount was about $13.4 billion.

Some of you may be asking, why am I comparing it to FY21, not FY22 or FY23?

In those two years, we received a large influx of one-time funding, COVID-19 relief dollars.

So really the last normal year without any large influx of the one-time funding is FY21.

We used FY21 as the basis for what DRP receives on a typical year.

So what's the problem that we're trying to fix here?

The area's voiced some concerns to DRPT that the current distribution formula within the operating program

puts them at a disadvantage because they're competing against agencies that are primarily providing bus service.

And that is true.

The formula that we have set up within the operating program is performance metrics are heavily bus centric.

So what are we doing to fix the problem?

The area will no longer be eligible for funding from the operating and capital program.

Instead, we're going to add a six program to the bond

which is up to 3.5% annually.

It'll be dedicated solely to VRE.

There will be a performance-based metric system set up with metrics that are commuter rail specific.

And these changes will go into effect in FY 2025.

And I just want to stress it is up to 3.5%.

Over the next year, DRPT will work with the CTB on setting up performance-based metrics for VREs.

So in theory, we could see a year where maybe the area just gets 3.4%.

Any funds not used will then be redistributed back to the statewide capital program.

So how much money are we talking about?

These are the maximum allocations over the next five years.

FY 2025, the area would be eligible for up to 16.3 million annually.

And that would grow up to 17.6 million by FY 29.

One last measure that's been added to the bill is additional CTB oversight.

VRE would be required to submit their operating and capital budget to the CTB annually by February 1st.

CTB would take no action on that.

It's just simply them submitting it to the board.

If VRE does not do that, the board can withhold 20% VRE's funding.

And if this sounds familiar, it's very similar to the requirement that you all have

is submitting the VPRA's budget.

So where do we stand right now with the bill?

The House bill is currently in House Appropriations.

House Transportation has already heard the bill and it's passed out of that committee without any any votes.

And the Senate version is up in Senate Finance and Appropriations tomorrow morning at 9 a.m.

The only question or suggestion I have is during the legislative session, you know, various groups that I'm on will actually compile, you probably have them yourself, some sort of table with all the bills that are relevant, even if they're not our top priorities, but that are relevant to the general work we do, and sort of track them for yourselves, but also share them with the board.

So that we have an awareness, you never know who we're talking to or running into and being aware of those things can be very useful to some of us when we're out in our work.

For this particular bill, we have

DRPT staff on behalf of the Governor's Office spoken to 72 legislators or their staff and it is very proud of the partnership we have with VRE.

I think we've been talking about this issue with the way VRE is funded through the transit program since these transit measures were modified in 2018.

and everybody I've talked to, we've spent the last five years trying to shove a square peg into a round hole and we've just decided now we really need to do it and we've had a great partnership with VRE.

We work together and everybody that we've talked to, it's like this just makes sense and it doesn't matter.

I mean, it is truly a bipartisan piece of legislation that there is peace in the valley with everybody that we talked to and a lot of credit goes to Rich and his staff as we've worked cooperatively.

We have negotiated.

It is a piece in the circle.

There is no new money.

So that money is a new neutral.

And so it doesn't, because of the way that we structured the three and a half percent

roughly aligns with what BRE's historically got out of the program, it doesn't negatively impact anybody else.

Right, right.

Mr. Dalton.

Madam Chair, just I'd be remiss if I didn't thank you directly, and your staff,

and all those other 70 plus people that you've been able to get to.

One thing I do want to just state that as we move forward collectively with not only the direct capital improvement programs that the VPRA has, but VRE has a bucket and has a long list of capital improvement programs as well.

And it was important to us to essentially

In order to leverage off the federal funds was to put some stability to that, you know, the capital assistance piece.

And this will do that moving forward.

So just wanted to point that piece out as well.

Not necessarily, but again, not to get into the details and stuff, but there was, you know, I would

Let's say that we've been fortunate up to this point, relatively speaking, at the levels that we're at.

But again, just looking forward, just having some, I'll just say some reliability, if you will, on those state operating funds that come in the form for capital assistance.

Just helps us put some, similar to what the VPRA is doing, just put some stability in that funding plan moving forward to do all the

Thank you.

All right.

Thank you, Mr. Wright.

He's probably going to shoo me out of here to go talk to a committee here in a few minutes.

Right.

So it's sort of a little bit of something different.

I'm going to try and move efficiently because there's a lot to review.

But one of the things

I want to remind you that it's first looking at the Norfolk Newport News and Edgwick North corridor, really.

So it's really the Edgwick North corridor where we have to purview, but the Norfolk Newport News train has significant parts to the service, and then also the Roanoke service that comes into Alexandria onto the RFP.

That's the data that we're looking at with Amtrak, VRE, and CSX.

I'll go through VRE first, and then I'll go through Amtrak performance, our service, and then long distance.

So for BRE, the target to get to their end station is to have 90% on time performance.

And you can see here that since about April, it has been below 90% of course.

Mr. Dalton, please speak up if you would like to add to what I'm about to show.

But I also will show that you see on the bottom here, the red or the Manassas line delays and then the blue or the Fredericksburg line delays.

So as we go through what is now a baseline year, we have over a year of data, which gives us something that we can now, going forward, do a year-over-year comparison on this and start to look for improvements that just happened or improvements that we influence.

But looking at May, North and Southern had some major track and surfacing work going on.

VRE reduced their services, which actually helped to mitigate some of that, especially because I think the service cutback was affecting the trains that would have gone into Union Station in turn and caused a cascade event

and Schuster trains that come down the CSX line.

So that was appreciated and did some mitigating work.

It could have been worse.

As we moved into the summer, heat orders affected all services.

For VRE, especially on the southbound and south of Quantico, they're gonna change the schedule for their southbound trains, but putting in a schedule change to mitigate heat orders works for VRE.

That is not as simple for Amtrak because we have

a different type of service going northbound and southbound during all hours of the day.

But we are working with CSX on how to better predict or do something about heat orders.

And then as we saw heat orders start to subside and we got into October, actually CSX cruised on the ball railroads, but moving out of the north and coming south as fall and winter temperatures are coming, you see more cruise coming in the south.

So we saw some line where it started,

as we saw heat orders go away.

So the performance on the Fredericksburg Line is actually higher than the Manassas Line.

The Manassas is having a lot of issues right now with the northbound trains in the morning, which does cause events on the CSX Line.

But I wanted to at least show that, you know, you can see in August and all along the Manassas, Fredericksburg Line, that service was approaching 80%.

Jordan, anything you want to add?

I'm trying to forget about those last six or eight months.

Yeah.

And this kind of breaks down month by month.

So the warmer colors being summer months, we're just going into the winter months.

What I'll say about this slide is it's a lot to process.

The top three showing train interference for Amtrak, CSX, and VRE are actually the result of things happening in the network.

So these are not necessarily the delays themselves.

An Amtrak train might be out of slot because of heat orders or something else that's happening.

And so it affects, and everybody just starts to get jumbled up.

So those top indicators are actually symptoms, not necessarily causes.

And then you can see here on the weather related, you'll see the worms haulers were the greatest, which was the summer months with the heat orders.

And then it completely disappeared.

Still had some events, rain events and such.

So Amtrak performance,

I want to remind you about customer versus all stations.

So customer on-time performance is the federal standard now, and that's the percentage of customers getting to their destination within 15 minutes.

But we're looking at all stations just to see, get a better picture of where trains are tripping up in the network, how they're arriving at their stations.

But to look at the customer on-time performance standard, which is being reported to the Federal Railroad Administration, there's actually a lag.

So I show down here, they've only reported through June, and we're showing

December, and the slides to come.

So showing that the feds are reporting June, looking at the Roanoke route, for example, if you remember from the VRA slide, that was about, that's the quarter where they had all the track and tie work on the north and southern line.

So we can see that customer on-time performance dropped there and it's holding steady on the CSX line.

So looking at the Virginia services,

80% is the target for customer runtime performance.

This is all stationed, but we've been below 80% the entire year.

And one of the things I want to show is it looks like towards the end of the year, you saw a boost or just a rise in delay minutes overall, but starting July, we had more service, right?

So we added another Roanoke train, we added another Norfolk train, and we brought back the Newport News Service.

So a lot more service out there.

So there's naturally more opportunities for delays.

In the summer months, we had 54% of the days with heat orders.

Again, I guess what I'll say about that is 54% is a lot.

I'll also say that means there was 46% of the days where if we had changed the schedule, we wouldn't have needed to.

So it's just this thing that we still need to deal with.

Computers are causing big problems in the summer months, and the schedule solution is not the only solution, not ready to go there yet.

August was a rough month.

It wasn't just heat orders.

We also had a major event on 10th, and then there was a lot of congestion as a result of cascading events up in Union Station.

So trains operating out of slot really hurt us in August.

And then again, similar theme to what we saw from VRE as CSX was bringing crews starting in the September, October months, we saw delays go up as heat orders were waning and we had hopes of seeing better

on-time performance, which things did improve, but we still had some problems out there because of the necessary work on the network.

And then December, what I want to mention here, I actually looked up, bomb cyclone is a technical term, coined in 1981 about a certain weather event that happened and caused a lot of problems for services.

And then also Amtrak, we did have some cancellations.

Not just the cancellation of trains, but because of crew shortages and issues servicing trains causing delays in Washington.

Line distance trains, they have a longer distance to travel, so there is more opportunity for problems.

This influences the Carolinian, which is the North of North Carolina train.

Then we have Palmetto, Silver Meteor, and Silver Star that traverse Virginia.

In January of 2022, we had that snow event that caused some significant delays for Amtrak long distance services in Virginia, if you remember, that three inches per hour or something that was not expected that fell for a couple of hours in Virginia.

Then we had, of course, the heat orders were coming into effect, but also the Silver Star and the Silver Meteor were combined.

And so not only was it a longer train that had to stop

a couple of times at each station and that was getting it out of slot.

But also an interesting piece of that story is that CSX was relieved from the penalty payments on that train because of the situation with a longer consist and there wasn't an official change to the certified schedule.

So, you know, a train that doesn't have any sort of accountability system in place for an entrance making multiple stops, it just became a bowling ball through Virginia affected the performance of our train as well.

That was a challenge that lasted a significant part of the year.

And then we had Hurricane Ian, which caused some additional issues as well as cancellations in Silver Star on meadow trains.

And then similarly, we see the freight train interference, the passenger train interference, and commuter train interference as symptoms.

The one thing that I wanted to point out was that we did see even with more passenger service out there in the second half of the year,

We did an analysis of freight train interference, which I'll talk more about in a second.

And we actually saw it was down this year.

So that was some good news.

So in addition to just looking and describing what's happening out there, we also did some deep dives and we're looking for opportunities to improve service.

So the Silver Star is one that you've heard about before, and we are asking all CSX, BRE, and Amtrak to come with information to give us a year to look ahead so we can better coordinate.

If we know that the Silver Star is going to do that, or we know the track work is coming in October, or we know it's just anything that could affect the services of the law.

That was one of the lessons coming out of the Silver Star is some of the track work.

Train 99 is a Saturday-Sunday train that is constantly late.

It has never come into Virginia on time.

We did get Amtrak to do a deep dive into that analysis, found some issues on the Northeast Corridor.

We did have requested a change in stopping patterns, which would possibly take

one of the stops out in the northeast corridor in order to get it through an area of congestion and get it into Washington on time which would then hopefully get it into Virginia.

So it's another example of where we did a deep dive, found an opportunity, let's hope the solution works monitoring that.

Fruit shortages, a nationwide problem that has affected Virginia especially recently with some cancellations.

Amtrak is

reporting their efforts and their numbers to us.

They've reported nationwide.

They're also reporting it to us on an individual basis now.

Heat orders, we are having an engineering conversation before it becomes a policy and possibly legal discussion.

So, I and Constantine on our engineering staff is helping me with that.

We did do an analysis of no delay, which means the train got somewhere early.

We were not ready with the information we have to make changes to the schedule.

We need more information, but there is pad time that we may do something in the future.

and then freight train interference.

We've looked into that to see if there were any chronic issues to identify.

Good news is we actually didn't find any.

It's not necessarily, it isn't a problem, but it isn't something that we could find is consistently some way that we could make a fix.

So it's something we're going to continue to watch, but I guess that points to a good faith effort in trying to keep trains in their slots.

And one thing that we found also with freight train interference

CSX is going to do tie work.

They're going to do that tie work at night so it doesn't affect passenger trains.

It does shrink the opportunity for freight trains to get through, which pushes freight trains through the window so we could see freight train interference go up.

So next steps, we have a baseline now, so we're going to start doing these year-over-year comparisons.

Like I just showed you, we're talking inventory and significant events to see how we can improve that year-over-year performance.

We want to better coordinate maintenance, construction, and known events.

We know there's a lot of construction coming online in the next couple of years from us and VRE and CSX.

And then we want to continue the opportunities to look into things at a more deep dive level, a minutia level.

Amtrak has really given us great opportunities to pull data directly from their system and CSX has also started sharing some of their data, which is proprietary.

And then

Thank you, Jeremy.

I have a real question just to say, I do think this is important.

I mean, I really do.

creating, trying to identify the problems, trying to get the data, and then engaging with Amtrak in a serious way that comes up with some solutions.

I mean, the last couple slides are really helpful, what you're actually trying to do and engage with Amtrak to make adjustments.

I know some of it's out of your control, but it's not small potatoes.

I mean, you know, people get affected by it and they either choose to ride or

Not.

I have some questions.

I always have one.

I echo everything.

Jeremy, this is fantastic and I love this presentation every time we get it.

What were you saying about heat orders?

It's a complicated issue.

It is something that we want to understand, promote,

from the CSX engineering perspective first.

So I'll say we have coordinated with Amtrak on heat orders.

They've done some research nationwide on other host railroads, how they implement heat orders.

And so it's not necessarily that heat orders need to go away.

They definitely have a place, especially in certain conditions, to operate a safe railroad.

Not every railroad does it the same.

In some, it's a policy decision.

So for instance, in some railroads, you might not drop the speeds.

or you might have a different temperature that triggers it.

There are things that we can look at, but that's a policy discussion and we first want to understand the engineering side from the CSX perspective before we get there because we're walking a fine line.

The CSX is basically dispatching and maintaining a railroad right now and we're not separate.

So we need to appreciate the decisions they have to make.

I guess it does, but you want to understand

I wouldn't say second guess it but discuss it with them.

A big part of it, and the science is really what needs to drive this, but a big part of it is when it's really cold and then really hot within the same 24-hour period, that triggers them.

Some railroads say, well, if there's a net difference between daily high and daily low of 50 degrees, that's when we need to put these in effect and make sure that we're

Other railroads are much more conservative and say, well, if that's got 30 degrees, then we're going to put them in effect.

We don't know why some railroads are at 30 degrees and some are at 60 degrees or why some say if it's 90 degrees or higher, we put them in place and others say, well, if it's 78 or higher, I mean, and I'm making these numbers up, but it's just understanding the science as to why the railroads treated differently.

It's all about risk.

and the last thing you want to do is slam your hand on the table and say, no, that's not hot enough for heat order, let's run the train and then have something tragic happen and that's not what we want to do.

But to the extent that we can look ahead and say, CSX, whatever, Norfolk Southern, name the railroad, they want to put heat orders in effect at this temperature, well we know that 27 days out of 30 in August it hits that temperature, let's change the schedules for August so at least passengers have an expectation of when the train's going to get there.

We have some railroads.

A railroad might say, if you have, say, a concern in three areas, the entire division goes into a heat order.

And on other railroads, they actually have a policy that says you will never put an entire division under a heat order.

So we have two different ways of handling it.

And when you're under the more severe one, all the speeds drop and they need to drop them.

Thank you.

Jeremy, could I just, three quick things.

One is we would love to have a presentation at the Amtrak Board.

There's no question we've talked about it, Steven, and we welcome that.

Second, on the staffing issue, that's our biggest challenge.

You know, last year we hired 3,700 people on the railroad.

We had 1,700 people leave.

And when that happens,

What happens with the crews?

They get to bid on open jobs.

So you have some crew bases all of a sudden vanish for one craft or another, which really impacted Virginia for a period of time.

And so balancing that is a challenge.

We've got the goal of hiring 4,200 people this coming year.

It's a huge talent acquisition process that we're putting a lot of resources toward.

And the final thing I want to say is this is an on-time performance.

We did take an action filing a Section 213 claim at the Surface Transportation Board.

Section 213 is a section of the law that gives the Surface Transportation Board the ability to investigate long-time performance issues related to a host railroad.

We took the Sunset Limited, which runs from Los Angeles to New Orleans, which for the last year had an on-time performance of about 8% on time, worst performing

and we filed that action.

It involves Union Pacific, we filed it at the end of August, and beginning in September through the date I just saw yesterday, the average on-time performance on that line is now 74%.

No infrastructure changes, nothing but management attention to the issue.

If I may just add a 2A, that hiring surge has been going on a long time and it's the same challenge we talk about with the war on talent.

The 2A I'll add to the Amtrak challenge is when they hire a new engineer or conductor, they don't go into service, they go into training for 18 months.

So there's a lag for when those folks... How long?

18 months, sir.

It's a year and a half.

Well, I assume they're being paid.

Yeah, oh yeah.

In and of itself, yes.

Jeremy will do a rare labor briefing next time.

I was just sort of projecting ahead.

Earlier today, we voted on a budget that was, you know, pretty ambitious and I am

Looking ahead at years to come when we have a lot of projects that are happening that likely will impact maybe on on-time performance for Amtrak, for BRE, for freight trains, for everyone.

So anyway, I guess hopefully we're thinking ahead at that issue.

So there was a Pogo cartoon

You know, we have found the enemy and he is us, so that could be in the future.

So that's a big part of Jerrica's job, and I'm not putting you seriously, but the community engagement, the expectations, the letting folks know who are driving on the roads that we're going to be impacting as we put these bridges in place, that are going to be taking the trains that are going to be late.

Jerrica, the communications team, working with the operations team, letting folks know, hey, for the next five months, this bridge is going to be ripped up, so your train is likely going to be 10 to 15 minutes late.

I think that brings us to the end of our agenda for the day.

So with that, no other business.

DJ's gonna make me use the gavel.

We stand adjourned.