Finance and Audit Committee Meeting   4/29/2026

This meeting of the VPRA Finance and Audit Committee.

Welcome all to Richmond.

Sure, thank you.

We are at 919 East Main Street on the 24th floor in the Old Dominion Conference Room.

In the event of an emergency, there are two exits.

We can either go this way down the hall to the stairwell or that way down the hall to the other stairwell.

There are fire extinguishers by each stairwell and also fire alarms.

We use the extinguishers just to clear a path not to fight the fire.

None but certified for fire biting.

We'll go down the 24 floors and I promise you, you'll feel it in your calves tomorrow morning and we'll meet at the statue at 9th and Grace.

We'll do a headcount, just take a look to your right and left to make sure everybody that is here is there.

The only person that will be missing is Mary Stell, she stays back as a floor warden.

In the event of a medical emergency, there's an AED in the copy room, CCR certified, I'll take the lead.

Mr. McLaughlin, you're also certified.

You can be my backup, please.

Michael, if you'll get the AED and Mr. Pinkney, if you will call 911.

Joan, if you'll go meet the first responders, that would be fantastic.

And just if one of them is incapacitated, someone's got to take their shot.

In the event of an active shooter, we'll flee first, we'll hide second, and we will fight third.

And I forgot to mention, there's also a first aid kit right in the kitchen.

Any questions or concerns about your safety?

Next, I ask our Board Assistant to take roll call attendance.

Ms. George?

Here.

Mr.

Flowers?

Ms. Spears?

Mr. Watkins?

Here.

Ms. Zimmerman is just walking in.

Mr. Crawford?

Here.

Thank you.

We have a quorum.

Okay, thank you very much.

Next item up is approval of the meeting minutes from our January 14th meeting.

Any comments on or changes to those minutes?

Second.

Okay, now a voice vote.

All in favor, aye.

Aye.

Any abstentions?

In the opinion of the chair, the ayes have it.

Minutes are approved.

Next item on the agenda is consideration of the fiscal year 2027 VPRA budget.

We'll have a voice vote at the end of this on whether the committee should recommend the budget to the full committee for when the full board considers it next month.

And now I recognize our CFO.

to set the stages to where we are in terms of the development of the budget.

Just a reminder of what we've done since January.

So with the board's recommendations, we advance our capital budget item to the CTB in late January to meet the February 1st requirement in the Code of Virginia.

In a subsequent workshop meeting in March, DJ, our director, presented that capital budget to the board.

And then in April, the CTB considered it.

Our chair presented that on our behalf and it was approved by the Commonwealth Transportation Board.

So we've met our capital budget requirements with regard to the CTB.

And today we're going to go through the VPRA budget, which includes those capital assumptions, but also our operating budgets as well.

Okay.

Morning.

My name is Sona Hanovich.

I'm the Director of Financial Planning and Analysis.

And we're going to go ahead and start by looking at a bird's eye view of our financial plan.

So if you recall from our meeting back in January, we talked about the top section of our sources and uses and how that impacts our reserve.

We're going to focus on the bottom row for this meeting.

So this is talking about the changes in our sources and uses since our January meeting.

And looking at our sources, we have a $0.8 million increase in our sources.

Our use has also increased by $24 million, resulting in a $23 million decrease in our management reserve.

On the next slide, we're going to go through in a little bit more detail talking about our sources and uses, starting with our sources.

And if you all recall, every quarter we present to you the changes in our management reserve.

So the left part of the slide is what we discussed in January.

So we're going to focus on the Q3-26 changes in our sources, starting with

The first item, which is a Chrissy Earmark Award for the Alexandria Fourth Track Project.

So that was an increase of $0.3 million.

There was also an increase in the DC Ped Bridge contribution of $4 million.

And this is offset by a decrease of $3.3 million in our Stafford utility reimbursement line item.

as well as a decrease of $0.2 million in the VRE access fee payment.

So the net of these items results of an overall increase in our sources of $0.8 million.

Are there any questions?

Next, we're going to dive into the side of our financial plan.

The far two right columns are what we discussed during our January update.

We're going to focus on the April column of our net base budget changes.

For the I-95 corridor, there was an increase of $3 million.

The other capital projects budget component decreased by $9 million and our operations increased by $30 million.

So these are additional net base budget changes since our January meeting.

And then we're going to go into a little bit more detail of the changes in each of these budget components.

Starting with the I-95 corridor, for the Long Bridge project for both the north and the south component, there is an increase in the project budget from the fiscal year 26 budget of $1.5 million and $3 million, respectively.

And these increases are related to district Department of Transportation project oversight costs.

So these were not previously included in those project budgets.

I forgot to mention, we're only going to focus on the orange peach colored items as these are new items since January.

And we talked about the other changes in our January meeting.

So going down the line, there was an increase, a total increase of $18 million in the Potomac Creek Third Track Project.

We presented a $15.5 million increase in January.

There is an additional $2.5 million increase in that total project cost as a result of utility expenses that will not be covered by the Stafford County.

And the last item on the I-95 corridor is the Potomac Creek Third Track Stafford Utilities Project.

There was an increase of $1 million since the fiscal year 26 budget due to a refined 30% design estimate.

And I will just make a note that this project is fully reimbursed to VPRA by Stafford County.

On the next slide in the other capital projects budget component, there was a decrease of $9 million in the Manassas Line capital maintenance line item due to refined estimates provided to VPRA by Northbrook Southern.

And there were no additional budget adjustments related to capital and operating grants than what we discussed in January.

I just want to take a pause and see if there's any questions related to these additional adjustments.

The next couple of slides are VPRA's expenditure plans for our capital program through the project completion, and I believe these budget tables are included in the materials that were provided to the findings.

So this is the I-95 corridor here, and then the Western Rail and other capital projects here.

Let me ask, DJ, you sent out that notice about a delay in some costs associated with a gas line, I guess, that's going into the airport.

And that extends it out about 10 months.

Yeah, so that's not actually in our budget.

We feel at this point that we've got contingency within the budget because we had built in contingency to cover delays or other increases in cost.

There are actually other parts of the bypass project that have saved up some money, so we had a little more contingency than we thought.

schedule has moved.

It'll be about nine or ten months.

At this point, we're not sure whether it's going to be an increase in cost or not.

What we're doing is we're working with the construction company, Flatiron Merzog, and we've shown them, look, here's where the gas line is and here's where it's moving and here's the schedule under which it's going to move.

Can you restructure your work and what you thought you were going to do here

Later in the contract, move that forward because it doesn't impact the gas line.

So we're working with them now to, to kind of finalize that contract.

10 months is a worst case scenario.

Jeff and the team and Adeel, Jeff and Adeel, and I think Jeff Sonnes are working to minimize that as, as, as much as possible.

We're hopeful that it won't have a budget impact.

Of course, if it does have a budget impact, we'll come back and talk to the board.

But, but at this point we are not getting any requested changes.

All right.

And just a little more on that.

It's a complex agreement between the railroad and the utilities.

The agreements are not uniform.

So the agreement they have with Verizon is very different than the agreement they have with Kinder Morgan, which is very different from what they have with Dominion.

And as we negotiated with the utilities companies about moving them, in most places, they have the responsibility to move them.

There's not really a schedule responsibility that they're held to.

So we've worked with CSX.

It's a three-party deal with most of the utilities about, okay, how is this transaction going to work?

The gas line that has to be moved has taken us a little longer to finalize that design work to know where the bypass is going to be, where the new pipeline is going to be.

Thankfully, we have final design now and we have a schedule that has them done November, early December.

I just want to make sure that I lied.

I was just going to ask about that particular gas line given it's serving in the airport.

They're well aware of the importance of that pipeline, isn't it?

It's a related question, and we can talk about this after the meeting if it's better.

to the point where you said, well, we have some contingency in this project, we can cover the costs, right?

And I remember in the before time, so I was first on this board, if we'd have these project

cost changes.

We said, oh, it's within the contingency that we have, or we change some of our assumptions, we have the money.

But now it seems like if there's something, increased costs, it's like a direct debit to the management reserve.

If there's increased revenues, it's like a direct credit to the management reserve.

Is that how we work these things now?

or there's still, like to an extent, there's some of these orange shaded areas.

Those are things that are beyond the contingency.

There's no assumptions that can be changed.

So our practice has been that we hold the contingency back until construction starts, because as we go through design, there are multiple changes in that.

We've talked about that quite a bit.

As we get more and more contracts under, or projects under contract, the fluidity really, really goes down.

So we want it to hold contingency back in design.

So when we get into construction, that contingency can be used for construction changes or things like this.

But there's no notion of change assumptions or because I remember we do a lot before we had a management reserve.

How are we compensating these things right?

And now that we do, it's just like a direct predator addition, right?

One more question on slide 7.

Just the expenses incurred to date.

Just wanted to get a gut check of where we're at with that.

Just for the set of projects that are... Yeah, I think it's different project by project.

In prior years, I would have said, we're kind of behind on spending.

Our cashflow folks will say, well, now the money's going out the door, so we're catching up.

But there are different answers for every single project.

Sorry.

There are different answers for every single project.

Yeah.

But why don't you say that?

Just in terms of our expenses incurred to date, if we feel like, because there had been, like, do we feel like we are now sort of in a cadence where we're going to see that picking up, where it's kind of in alignment with where we want it to be?

The payments, you mean in general?

Yeah.

I see a 24 million for became, um, yeah, we are,

spending, gosh, I'll make payments of 15 million here, 20 million there for Long Bridge project almost every month, right?

So those are definitely picking up now that we're moving to construction.

Some of our projects are at our expected spend and some might be having some big payments coming up that will get us to the point, because I think we just prorate

the cost per year, right?

Even though we might have a big $25 million insurance payment coming up on something.

That's, and we know it might be lumpy, but for the year when we do the budget, it's spread out over 12 months.

So now that we're in construction, as those of you in Northern Virginia, Patty and I talked about it, can see the construction projects happening.

The dollars are going out the door quickly.

We want to rest assure everyone that there is a long

process to make sure the dollar is being spent wisely.

There is a long cadence of people, both our people, our owners reps that ensure the money is being spent wisely.

And let me add to that, we spent the last number of years updating the board on design and oh, we're at 30%, oh, we're at 60%.

at the May board meeting you will either be vastly entertained or incredibly bored with the videos we have of construction all across the state.

I mean like hey here's where we're getting forms of concrete and here's where we actually have track moving.

So the page before is in this page there's a lot of projects that aren't yet at

But if you see the page four, the expenses incurred to date, as you can see, Long Bridge is in the over $100 million range.

Same with Long Bridge South as well.

So, and you'll see these continue to pick up.

King Commonwealth Bridges, for instance, as you can see, the projects are going out there now.

Previously.

But then we have in our EDR report every month, we have, and it's hard to juxtapose that with that, we do have what's done through probably March or so.

And those dollar amounts will be much, much higher for those projects.

Yeah, to Mike's point, the Long Bridge North is the first line item.

As of July 1st of last year, we had spent $109 million.

Okay, no, that actually has to be scheduled.

I forgot that this was FY25 on the expenses incurred to date.

Seems like we're still not where we should be with that.

We will send the new version of the EDR out tomorrow.

Let's do a clarification.

And, you know, that's why we have these meetings, maybe in the future expenses occurred.

By the previous FY, yeah, previous fiscal year.

Okay.

In terms of Amtrak operations, this change from January represents the largest change across the board that we've implemented.

And what I want to note is that as we've updated the service changes were implemented on January 12th, and we've seen the experience that our riders are having, as well as with the trains, we've pursued opening what's called deadhead cars on the trains.

And that means additional Amtrak staffing is needed.

and additional costs for corrective and scheduled maintenance, the cleaning and inspection of those cars, and the Wi-Fi costs associated with that.

This assumption is about $4.5 million per year across the planning period, and that is the biggest change related to our operational costs for Amtrak.

What I will note is that we believe this will bring a better customer experience in terms of

the trains that are available, providing additional access and bringing down a high demand ticket cost of those trains that are remaining in our service windows that are available.

We have no change in our VRE access payments.

We have a small change related to our own asset maintenance, related to refined budget information from North Fork Southern.

We've also had a slight increase in our operations administrative cost.

We've had some refinement in those cost drivers, as well as we've added a new line item for property management expenses.

As VPRA has acquired property for our projects, as well as being property owners, we do have some safety and security improvements that are necessary to make those facilities work for the communities, provide signage,

All the things that a good property owner would do, we're finding that is the case here.

And then in terms of other operations, we have an overall decrease of 3 million primarily related to combined bus services cost.

So we had what was a, I'll call it temporary bus contract with Amtrak, and we've had more long-term

procurement, and we just got information back about what that may cost us.

And so we've updated those estimates and we were pleasantly surprised that we were able to bring our cost estimates down for the supplemental busing that we have during this period of time.

And then with the addition of the new aero trains in the future, we've added an assumption for the Amtrak new equipment usage charge that just starts at the end of our planning period in 31.

Can I?

Sure.

With the bus service, is that, in my understanding, you've put that out for the contract bid and you're getting a different provider who's coming in with a lower cost to do that.

Yes, ma'am.

Amtrak has.

That's my understanding.

Yeah, we did, since we met in January, though, add Richmond.

I can't remember if we talked about January.

We added another direct.

We did.

We did add another direct Richmond to DC because we found that people might want to take the bus back, but the bus north, but the train there.

In terms of just looking at fiscal year 2027, our operations budget, most of these changes were in place in January.

They represent the year-over-year adjustments that are tied to the service changes.

You'll see any new adjustments in 27 that didn't exist or are substantial are really about bringing on New River Valley in 2027 and ensuring that we're prepared for

the cost of initializing that service as well as the Western Rail access fee adjustment.

Going into our fiscal year 27 administrative budget, I'll walk through the major components of these and please let me know if you have any questions.

In terms of payroll and benefits, VPRA is

fully staffed.

As I understand, we are and we've been in that posture for a while.

We're planning to be at this staffing level in 2027.

We've budgeted for a 4% merit increase in the fall and assumed 100% AIP goal achievement for the agency.

The biggest adjustment here is a pension adjustment accrual.

As a new agency, we're still adjusting to the expenses related to VRS and our employees.

and so that we don't have a surprise at the end of the fiscal year again, we're trying to plan for that in 2027.

And so that is a million dollars of that adjustment is built into the payroll and benefits.

In terms of professional services, this is one of the largest percentage changes, but we believe that these items are definitely important for our future and planning for

the work that we have underway as well as what's next.

So we have a depreciation study that needs to be done related to the assets that we're bringing on board, as well as updating VPRA's financial plan.

In terms of IT and cybersecurity, we may have a review and penetration testing that needs to be done every three years that is incorporated into this line item.

We have CAD and design standards and specs to be established and a completion of the Richmond area study with

RTC, and then remaining looks at our station program and the needs across the stations throughout the Commonwealth.

And those make up the bulk of the changes in professional services.

Can I speak to the station for a second?

There's a lot of focus on the projects, but here we'll have more service.

We want to make sure all stations around the Commonwealth have capacity, both on the platform and after station houses, to make sure we can service those people.

And we need to take a look at that.

So that's one of the station plans we have.

We'll put it out to our bench or planning bench.

So we want to take a look at places like Charlottesville and Alexandria.

They're going to have

especially those places where you have more Amtrak service and VRE service such as Alexandria, Quantico, Woodbridge, places like that to make sure that there's enough capacity, again, getting in and out of the platforms, in and out of station houses.

So that's something that we've talked with DRPT about as well.

I've talked to you and your staff about it to make sure that we're ready for 2030 and also includes Union Station.

How much of this is our responsibility and how much of this is Amtrak's?

It is a mix.

Yeah, the station matrix is quite long and interesting as far as who owns what.

We feel responsibility because we are the Virginia passenger rail authority to make sure that people can get in and out.

But even at locations where we might own the station or on the platform, we still have the lease agreement with a VRE or an Amtrak.

So it's a shared responsibility with them all.

of course are focused on Virginia, and Amtrak is focused on the nation, so sometimes we like to make sure Amtrak is also focused on Virginia.

If I could just add to that, it seems

If you look at a station like Stanton, so Stanton, we own it, doesn't have any Virginia State Service, it's only got Amtrak Long Distance Service, and the platform and the canopy that's there is half owned by a private entity, an LLC there.

So when we want to do improvements, Amtrak's got to approve it.

to some extent they contribute, but has to contribute as well.

And every station is different.

Mike talked about the station matrix.

There are places where the city owns part of the parking, we own part of the parking, the railroad owns part of the platform, we own part of the platform.

Every station is different.

Mike's spot on.

We want to make sure that if you're boarding a train in Virginia, that the station meets the needs, whether from an ADA point of view or from a proper point of view,

We have to balance that with community resources.

Every station is a different story.

We realize we can be the catalyst.

Even if someone else, like the City of Alexandria, might own the station house.

We're in a meeting with Maria and the mayor and others.

that we know BPRA can be the catalyst because we can bring Amtrak to the table.

We have a good relationship with them.

So it's a great question.

I'd like to take that responsibility upon ourselves.

And catalyzing any work or improvements at a very busy state Richmond Staples station.

We've had conversations with them where I go about Staples Mills.

But at the same time, there's a lot of local discussion of moving that station.

So it is something I think for DRPT and VPRA, I know our staff are working on it, but I think if we can do that more, because I think there's some

Needles, we can help thread through the MPO tables that we're sitting in on those meetings through the CVA to like other things to wherever the station is, right, that we can support that.

And then we at DRPT are also going to be starting relatively shortly, a TOD study that is also linking in, I know VRE is doing a TOD study.

And so we also want to make sure any future development that's going to

be supportive of the transit slash rail needs and not enter at odds with that.

and when 2030 comes, we can get the layer facility done right out there.

There'll be more trains coming to Main Street.

So there's just no way that we could take advantage of what they're building out at the diamond or Carmex Park now.

As I recall, some time ago, they had mentioned

may be using some of that space for a train stop.

I don't know how real that is, but I didn't know if that was ever discussed because that is a real opportunity for the region and to direct people here because we want them here.

We want the Diamond District, as they call it, to be very successful.

And I think getting people here, offering it as a location to stop is also a good one because traveling from Staples Mill to the Diamond

Still an interesting idea.

Gene Trani and myself put together a plan and tried to move it forward but the city of Richmond just pooh-poohed the whole thing.

Yes, it was.

Yes, it was.

Certainly looks like it.

And there's plenty of space there around it to handle

What we're talking about, but the city is just, you know, they're locked on to Main Street Station.

And the question becomes, will that area ever become, represent the viability that say, the Diamond District represent?

It also is conveniently where the old Atlantic coastline comes right up right through there.

And

This is probably a good example of many cities across the Commonwealth having similar discussions, right, of either the train station you have and

what it could be and how that grows and what the development means and is it in the right spot or what?

So I think it is part of, again, for DRPT on kind of that planning side, working with VPRA.

We can't force the localities to do right, but we do sit at some of these different tables where I think, you know, being able to express what's the rail transit nexus around some of these things, because some of them too, it's just making sure folks who arrive in that town have a way to

Move Around, whether it's connections with local transit.

Oh, I know.

I'm just telling you.

I've been like, let's make Station's Mill better than it is.

And I'm like, really?

Well, that's where I think the Diamond District and

So going back to their next line item related to information technology, we have a small change there related to supporting our current systems as well as some additional support for Power BI reporting from our financial system, as well as implementing a grant system to help us track the many grants that VPRA has acquired to deliver our projects.

In terms of building and office related costs, we have a reduction of $41,000 or 3% related to our office leases in Richmond and Northern Virginia.

And we'll be bringing on a leased vehicle to help with our project visits in Northern Virginia.

But we've also reduced some one-time expenses for building improvements.

In terms of other employee costs,

We refined our employee costs based on our historical spending and future needs.

We also are looking at opportunities to implement a new human resources and payroll system.

We have a little bit of dissatisfaction with what we currently are using and would like to see what's out there.

And so this just puts funding in place in case we're able to find something that meets the agency's needs.

and we've also planned for some additional expenses related to marketing and communications with project groundbreakings similar to New River Valley coming online that we're going to need to support that implementation outside of project costs.

In terms of insurance, we had a refinement of our insurance costs based on what we spent and the future needs.

And then on third party projects administration,

This, we added this line item as a budget amendment in recent months since I've been here at VPRA for the current year.

And we have a new estimate of what we believe those third-party costs are going to be for fiscal year 27.

And so that is offset by deposits from those third-party folks to cover the cost of that.

And as I mentioned earlier, we've added a new line item related to property management to address our safety and security needs on the land that we own.

Any additional questions?

So this slide just provides a view of our administrative budget and its share of total expenses

As again, our capital projects continue to grow in terms of turning dirt and getting projects delivered, the share of our admin budget is going down.

And in terms of our quarterly update for the management reserve, as our chair mentioned earlier today, and our director, our program cost estimates continue to, we are dwindling away at the share of the estimated costs that are still in engineering status in terms of estimates.

And it's important to know that even those estimates contain contingencies.

and so as we continue to look forward to delivering projects and getting them under contract, things are going to get a lot firmer as those items come under contract.

And then with regard to the change in our quarterly estimate of the management reserve, we're down to $89 million compared to our policy target goal of 5% of future operations and capital expenditures of $241 million.

Okay, hearing no questions.

I request a motion to approve the recommendation of the fiscal year 2027 VPRA capital budget for consideration by the full VPRA board.

I'm going to take a roll call.

I mean a voice vote.

Thank you.

All opposed, nay.

Any abstentions?

In the opinion of the chair, the ayes have it.

A motion to amend the fiscal year 2027 budget to the full board as approved.

So while we are, um, now in next month presenting our budget for approval, we want to let you know there are some timing of some projects, whether it be because of construction procurements or design that will have some new costs coming in.

after the approval of the budget.

We went through this last year.

If some of you may remember, we approved our budget in May, and we came back and informed you of some budget changes due to some timing of Alexander 4 track, Franklinian Bypass, Long Bridge discussions.

So similarly, for these projects, you see listed Franklinian, 3rd track, the bypass, sidings, and routes from railroad facility.

We want to keep you informed on what's coming down the pike.

So we don't want you to say after we pass it in May and you hear in July or August, wait, we just passed the budget.

There could be some possible changes in the future.

We'd like to keep you informed.

So with that, Jeff is online.

I'm here.

Okay.

And I'm going to, I'm going to hand it over to Jeff.

Jeff, I have a, I can move the slides.

You can just say next slide when you're done, if you want.

So folks remember Jeff, he appears, he appeared before the board of

The last time, Jeff Colter is our director of Northern Virginia projects.

Thanks, Mike.

And good morning, Madam Chair, committee members.

Yeah, so the first project in NOVA that we want to talk about is Franconia-Lorton Third Track.

This project falls into that 23% of projects that Laura just presented that do not yet have construction pricing.

So we will expect some sort of amendment or at least, you know,

Keep it open to presenting to the committee and to the board throughout the fiscal year.

So just to remind you all, the Franconia-Loren third track, it's going to construct six miles of new third mainline track from where it currently ends north of the Franconia-Springfield VRE station.

and then it will continue to just south of Lorton Road next to the Lorton VRE station.

There's multiple bridges that are either being fully replaced or widened on the project at Pohit Creek, Acton Creek, and Lorton Road.

And then we also have the railroad bridges over Newington Road that are within the corridor.

We track it here and we show it as a separate line item, but for all practical purposes, it is part of the third track project.

The bridges have been designed and will be constructed by CSX as part of the Third Track project.

and they will be bid to a contractor as part of the full project corridor.

We've been tracking these bridges separately for financial purposes because we have separate dedicated funding through VDOT and through an FRA grant, so that's why you see them as two items.

But overall, CSX has led design for the project.

They will be leading construction.

We've started some early work, such as the track work you see here in the photo at the bottom right.

That was from work we did last month.

But overall the design is at 100%.

We're right in the middle of right-of-way acquisition right now.

We expect to have our acquisitions completed by the end of August.

So you see that the timeline that we have here kind of reflects our official program schedule where CSX will release the invitation for bid in late summer.

We'll select the contractor by the end of the year.

However, CSX is really pushing.

They're really working hard to accelerate that schedule, so they want to have a contractor on board.

and starting work by this fall.

So we're certainly on track schedule-wise.

Budget-wise, we're also tracking.

We did make one small budget change that we've seen here, which is we've moved some scope for a new box culvert over to the Franconia Springfield Bypass Project, which is the $0.7 million decrease.

There are a few items as we are approaching advertisement to contractors that we are tracking for when it comes to costs.

This budget is about three years old and there has been a lot of volatility in the construction industry in the last year.

Things like material costs, labor availability, things like that are definitely affecting construction pricing right now.

But on the positive side, there is a lot of industry interest in our work and CSX's work.

We saw a very competitive bid environment in the Alexander fourth track project, and we believe we're going to see it on third track as well.

Jeff, can I just add that picture in the bottom right?

I believe that's a snapshot from a video.

We've got a video of that work being done that will show at the May board meeting.

It's pretty impressive.

Yep, go ahead.

So the next project is the Franconia Springfield Bypass.

I know we've discussed this a bit already, but just maybe a few more details for the committee.

You know, as you know, many of you know, we executed a construction amendment for the bypass with our contractor last summer.

And we did that knowing that there were some utilities that needed to move on the project, but there was enough work for us to get going.

And that could be done in the meantime while the utility relocations progressed.

On our projects, as DJ mentioned, the utilities are compelled to relocate through their agreements with CSX and CSX manages those relocations.

But late last year, it was starting to become apparent that Kinder Morgan, who operates this jet fuel pipeline all the way to Reagan Airport, had concerns that

about their design that they felt were not being addressed.

So at that point, we at VPRA stepped in.

We developed a solution that we felt like, you know, addressed those concerns that Kinder Morgan had, and that allowed them to get moving with their design.

So they started their design in November.

That design will be completed very soon, like imminently within the next week.

We have final comments that just were delivered yesterday, so we're very much close to completing design, at which point Kinder Morgan will put the bid out for their contractor in the next couple weeks, and they should be under construction by the July timeframe, completing in November.

And that results in a delay to the bypass project of 10 months.

That's going to obviously have some cost component to it.

But once we know really what's happened there and whether or not Kinder Morgan can beat their schedule or whatnot, we won't really know until we've confirmed the full extent of that delay what those cost implications are going to be.

But just knowing that that's coming, we have been working with our contractor to mitigate any of the delays.

We're doing value engineering to the structure and the project itself.

We are resequencing some of the work so we can do as much as possible that's not in the way or not next to the fuel pipeline.

We're also looking at ways that we can just do work concurrently to compress our schedule and claw back some of that delay.

And just to be clear, we haven't stopped completely.

There is a lot of work in progress.

You see here in the photos, but we've established all of our site access points.

We have all the right-of-way we need for the project.

We have retaining walls that are underway and there actually are some other utilities such as the fiber optic line that run along the corridor.

They're relocating right now as well.

So there are good things happening.

There is progress happening, but this delay is going to be something throughout the next calendar year and really into the fiscal year that we're going to be tracking very closely.

So I will leave it at that.

and Rob McRib for the last month.

Good morning, Madam Chair Committee.

Happy to be here.

Quick update on a few of our projects here.

We're going to start with the sidings.

Like Mike alluded to, we've presented this already.

We did a little bit of a shuffle and move some of the sidings around here today to talk about D, E, F, and C. You heard earlier about Siding A and some of the budget challenges there, but we

The new projects here are our youngest projects.

These are just kicking off.

I'd be happy to report we've made some good progress since the beginning of the year.

We've worked with CSX and the design team to go through our 15% concept designs and really kind of get a good feel or a better feel for what's in the corridor there.

And as you can see, a little bit

As far as alignment of lettering, but it used to be ABC was phase one and DENF was phase two.

They're not geographic.

They were really more of a timeline, but they are spread out throughout the RFP with the Taylor's Mill project, replacing the old Hanover Third Track way down near Ashland.

But everything else is focused really as possibly up, which will help out with the VRE service.

And, you know, this provides a lot of fluidity throughout the corridor for, you know, passengers.

Any questions on locations or general idea around sidings?

So as a quick lead in, the four siding projects here will implement about 12 miles worth of mission siding track, various different lengths.

The budgets that are shown currently were based on 0% design.

We knew really nothing about the corridors.

It was from point A to point B using some historic data and some backup napkin and some other exercises to come up with some solid numbers.

We're getting to the point where we're expecting our 30% designs to come in with the CSX teams this summer.

We actually just got one in here yesterday, so we haven't unpacked it quite yet.

That's our first chance to get really

Learning more about the project and getting a first cost.

So we expect that some of these costs are going to start to move around a little bit.

We hope that they don't terribly, but we know, like Jeff alluded to, the market's doing some things that are challenging to construction and pricing.

So we're kind of keeping a tab on all that.

We do have some contingency built in.

We're hoping to absorb a lot of that stuff and keep everything on the tab.

But this is our first chance for learning.

What does it look like out there?

What's the topography?

What's the environmental impacts?

What's the right-of-way look like?

We didn't know really any of those things, and I'm happy to report, you know, we're out doing fieldwork for all of these things now, which is a big lift, as you can imagine.

We're starting four new projects.

We're asking CSX for track protection in various different locations all over the corridor.

It's put a big burden on getting out on the corridor to see lots of people up and down doing fieldwork, you know, be all the best.

Not fowling work per se.

It's a lot of it's off to the side.

So really just investigating and flagging and looking for wetlands and whatnot.

But it's, it's been good.

It's been solid.

We've had a lot of really good conversations with CSX and kind of going back and forth.

We're looking at more of the third and the fourth track ideas and with the longterm and try to make some really good decisions.

But all that to say, we're very early and we expect that some of the, some of the budgets may change as we learn more.

So like I said, 30s coming in for most of these through, you know, basically everyone on the month here from May, June, July into August.

And then we'll start to see some 60s, 60% plans, you know, late 1026 and now we've got more information.

So that's where all that field information that we're learning now actually gets implemented into the design.

That's really the big first bite of fairly detailed design.

This is, you know, at 30%, obviously it's 30%, a third of the way to your design, but it's not based on

We don't have a lot of field information yet, so there's still a lot of unknowns.

Any questions on the sidelines?

Don't have any fun pictures yet or any videos to show, because it's all paper.

So moving on, Richmond Layover Facility, a lot of text on this slide, but I think the big takeaway is just as a refresher, this is going to be a Level 2 facility in Richmond at Fulton Yard.

We'll have three tracks for layover, servicing and maintenance that will be going on.

And by L2, that's an Amtrak term that is basically a level two facility that will have a pit and a canopy.

So more robust than some of the layover facilities that we have now.

So they're going to be doing more heavy duty maintenance.

So as new aero trains come on, some of these requirements, they don't have the ability to do that kind of work in our current layovers.

So they're looking at doing basically oil changes and pulling wheels off and things and some other things.

So we have to have those things in place.

So it's a big step there.

This project currently right now, you see the 10.4 up top, that's only through our final design.

We've been searching for funding.

The whole project right now is priced at about $76 million.

That includes all of the requirements from Amtrak.

Like I said, you can imagine it's basically a big pavilion canopy.

They've got to get to the top of the trains.

They've got to get underneath the trains in the pit.

So think about your jiffy move, if you will.

You've got to get underneath and take a look at things.

So, $76 million total all in.

We have a funding gap, obviously.

We've been working hard to close that gap.

We are happy to say that we've gotten CVTA money for about $15 million.

We've also got commitment from Amtrak.

using their IIJA funds for $30 million.

Mr. Westman is still working on that agreement diligently back and forth as we speak, but they have provided the letter that commits that.

So we still have a gap.

So we're working to fill that gap.

And how are we working to fill that gap?

You can see there's four different grant programs that we're trying to leverage.

We've already applied for a few of them.

Some of them are to be in the future as they're coming available.

Depending on which ones we hit on, we may have more money than we need, but then we'll have to decide which one we're going to use and that's going to kind of impact what our match will look like.

If I can, yeah.

extra Amtrak trains we'll be getting.

I know it's on the slide.

This is an important project because we need a place to put those trains overnight.

There's not enough room at Staples Mill.

They're going overnight one train there and that's not ideal because you have to go get the deadhead between Main Street and Staples Mill.

So this is an important project and hence why we are applying for everything.

that we can to try to get that.

And thank you, Maria and others, you were on the CVTA.

Let us know about the first one.

Let us know about the $15 million grant.

Hey, thanks, Patty.

Mike, I just had a quick question for if we were going to leverage Chrissy.

Is there a way that we can think about how saying this labor facility helps connectivity across the state?

Yeah, the Southwest, we are building

facility at Radford for the New River Valley trains.

So that's a different facility.

And that one is funded.

But if they need to pull some trains up from Newport News, though, to your point, we have been adding that to our application.

So that's a great point.

It's not just about Richmond, but if Newport News trains need that oil change, if you will, they will pull it up to this level two facility at Richmond, which is

If I can add to that, Mike, we've been reading with Amtrak and they presented to us, they're actually going to be doing some improvements to a lot of the other rail facilities as far as Newport News and Norfolk as well.

So they're going to start to invest in those to bring them, maybe not canopies and pits for those, but they have to have more power for the new aero train sets and compressors.

So they have to do some upgrades and then we're talking about what else may be needed.

Hey, thank you all.

Thank you.

Where do we stand with that Appomattox River bridge still

So go ahead.

I'm sorry.

North Carolina DOT was awarded a, sorry, obligated a $50 million grant in February to kick off a conceptual design for the various segments built in Virginia and North Carolina.

So it is still pending, but we will have more information early next year.

about the Appomattox River Bridge initial cost estimate.

I had that tone in my voice because it's going to be conceptual.

It's not going to be 30% design, so I'm still going to be a little hesitant about shouting that from the rafters, whatever that would be.

But we are looking at items such as, will it be a new two-track bridge?

Because that's the only one-track segment in that whole area, right?

Are you familiar?

Or will it be just another one-track bridge next to the current bridge?

And it's a complicated bridge because it's high up

Not great road access, not great water access from below.

It goes from rock to rock to rock.

In many ways more complicated than Long Bridge South for the reasons I just listed.

So it's good that there is some movement with US DOT and North Carolina has been, we've been meeting with them on when we have a staffer dedicated to working through

And from a timing point of view, DOT has given them a pretty strict 12 month deadline.

So we'll know a little bit by then.

From the VPRA standpoint, I mean, it's going to be particularly important to have that facility

at least coming on when we get the improvements up in Northern Virginia all accomplished.

But to serve time warp, to serve, you know, that whole Norfolk, Suffolk, Chesapeake, Virginia Beach area, that's got to be there.

And on top of that, the Amtrak service north-south, you know, into North Carolina and points south are going to be dependent upon it.

That's going to be a key

It's a concept point for trains coming from Norfolk as well.

That's single track.

Yeah.

Good question.

Thank you.

We, we, we, I think we put in one of our EDR reports that that grant was obligated, but we haven't had a chance to talk to you about it because it came just after our January board meeting.

Any further questions?

And then I'll move on to a presentation from our CFO on upcoming financing plans.

We thought it would be a good opportunity to update you all on these upcoming finances that are are baked in our financial cake.

So

In terms of the pie chart that you've seen before of all the different components that go into the delivery of our capital projects and our operations needs, there are two pieces of this pie that have financing inside them.

One of them is the passenger ticket revenue financing, currently estimated at $210 million, that will be done

later in the future, and I'll talk about that in a subsequent slide.

And that was a conservative estimate that we'll begin to revisit when we get closer to that financing window.

And the other is inside the funding that's provided by the Commonwealth Transportation Board.

An amount estimated at $504 million today is from proceeds from financing the toll revenue from I-66 inside the Beltway.

And that number is obviously subject to change as we advance it.

So we're going to talk a little bit about the details of each one of these and what we know about them today.

So in terms of the debt that will be secured by the toll revenue from I-66, to provide some background, back in 2015, a memorandum of agreement was established that set the tone and direction of how the toll revenues from I-66 inside the Beltway would be used.

There were other components of the agreement related to widening on one directional side of the road as well as how to allocate funding.

It manages the dynamic tolling as well as funding multimodal improvements.

So within that MOA, the toll revenues may fund eligible components, which include multimodal projects that are selected by NVTC and that are approved by the Commonwealth Transportation Board.

There are also funds for rail components.

That's the subset focused on transit and rail, and the rail component of that includes our Long Bridge project.

The table at the bottom just highlights the responsibilities under that MOA.

VPRA is not a designated responsible party in this MOA, but we are the benefit of full revenues from the facility.

Is 66 partially funded with, I mean, is there private money in that?

On outside the Beltway is a public private partnership and it's a joint venture, but

Mainly Centra is the backing party that won that concession arrangement back in, I think, 18 or 19, no, 2017.

This agreement has been modified several times since 2015.

Those amendments just refined the responsibilities of the parties.

When the ability to use the funds for rail was established, this waterfall of how the application of revenues was established, and I'll go into that.

Importantly, it allows that toll revenue to be used for debt service and PAYGO expenses for rail components.

VPRA has received some funding from PAYGO allocations or the actual

toll revenues themselves in the last couple of years.

It also secures a payment to NVTC to support those commuter choice program projects that they deliver.

And then when outside the Beltway, as you mentioned, was brought online, the incorporation of the transit outflows of that project were brought into this agreement as well.

And so it also supplements

Additional funding for commuter choice as well on the outside of the beltway component of 66.

In terms of the waterfall, this is the dictation of how those toll revenues should be used.

Obviously, you first cover the operations and maintenance of the toll facility itself.

And then once you enter into a debt arrangement, the debt service on that rail component debt

is taken into account.

When we size the debt, we assume that we are accommodating for the subsequent payment in step three to NVTC for those Commuter Choice Program dollars.

And then fourth in line is any amount for PAYGO to rail components.

So, VPRA could receive funding for rail components between now and 2034 or during the duration of construction for Long Bridge.

And the remaining components of the waterfall just ensure that the facility was established with a loan from a fund inside VDOT called the Toll Facilities Revolving Account.

And so that needs to be repaid.

And then if there are other components, for example, if NVTC were to pursue debt later, those are steps in the waterfall, depending on the revenue profile of the facility.

Can I ask a question here?

We have incorporated that as VDOT has been able to allocate it.

So we do not assume pay go because of its placement in the waterfall until the fiscal year in which they're planning to provide it.

And so in the budget that they presented to the CTB just this month, they've assumed a number just over 13 million dollars that would be available for us.

Okay, so that's only done annually?

Yes, that is correct.

And what I will say, because of I-66 inside the Beltway, its revenue profile has changed over time due to what was doing before COVID, what it's doing after COVID, the commuting patterns of folks in Northern Virginia.

And it is only told in the peak direction during peak hours.

And so that is limited the toll revenue that can be collected.

And so, for that reason, even when I was at VDOT, it was not an assumption we could provide to VPRA with a regular cadence that would assume that there would be PAYGO funding.

And so the focus has been

on the debt and how much can be secured at the facility to date.

What we assume now, though, for both the PAYGO and the debt significantly less than what we assumed back in 2020 when this was all created because of those changes in community patterns.

To DJ's point, back when BPRA was created, the same piece of legislation included the Virginia Passenger Rail Facilities Bond Act 2020.

And so in that legislation, it authorized the Commonwealth Transportation Board to issue bonds in total principle, not to exceed $1 billion to support the cost of rail improvements.

Then that includes the Long Bridge.

And that at that time was thought that between financing and PAYGO, we would potentially reach a billion dollars to help with Long Bridge.

And obviously those assumptions have changed over time.

At that time, it was a pledge of the net toll revenues from inside the Beltway that are collected by the Commonwealth.

Since that time, we have assumed what's called a TIFIA loan through the U.S. Department of Transportation is the lowest cost of financing available for a project like this in terms of interest rates.

And so that is what we continue to have in the plan in terms of financing.

And I'll get into that process in subsequent slides.

Obviously, there'll be continued refinement as VDOT, as supported by VPRA, advances the financing with the USDOT to deliver

on this promise hopefully in the next year.

With that in mind, back in January, we briefed you on the need to have this project partnership and financing agreement.

Michael took the lead in discussing this agreement with you and its features, but it was important to set up the roles and responsibilities of the entities involved.

With that approval and with the approval of the Commonwealth Transportation Board, we were able to execute that agreement in late March.

And under that, obviously, we are responsible for delivering the design and construction of Long Bridge.

And then VDOT is responsible for negotiating the loan documents and administering that loan on behalf of the Commonwealth Transportation Board.

And then we will work through making those proceeds available to us and our project.

So this is just a preliminary schedule of where we are in that process.

VDOT and VPRA did some substantial work in submitting what's called a letter of interest to the Build America Bureau's advanced financing in the fall of last year.

We worked through that partnership agreement this winter and executed it in March.

And we're currently in that phase of April to December where we are working on the, we've been recommended to move forward to credit worthiness.

So we will be engaging with the Build America Bureau on the next steps and advancing a plan of finance to the Commonwealth Transportation Board.

And that also has to be presented to the Treasury Board as well.

But it's important to note that VDOT is the lead on this effort, and we are here to support whatever they need to advance it, secure our financing.

and what we've conveyed to them is based on the schedules we have for our project.

We believe we will need this cash for Long Bridge North and South in first, second quarter of fiscal year 2028.

So we'd like to be done with the financing process next summer.

I also think it's important to note that we do have

mechanism in the agreement that if TIFIA proves to be not the best financing in terms of timing for VPRA, there is the Commonwealth Transportation Board can move to just a bond deal transaction.

Yes, yes.

The legislation authorizes the various types of financing.

Yes, sir.

Yes.

And they are not subject to the debt capacity of the Commonwealth since they're backed by toll roads.

So moving on to debt secured by passenger ticket revenue.

In terms of background, the enabling legislation that created our authority allows us to issue debt and pledge revenues, except for those dedicated funds to the Commonwealth Rail Fund.

And that is a restriction in the Code of Virginia.

I think it's important to point that out because if we did

use our state resources, we would be subject to the deck capacity of the Commonwealth just based on those sources.

And then you're in competing with all the other demands on the Commonwealth debt.

And I think that's a good restriction, though it limits the resources we have to use for debt.

And so today, we still hover around a 70 cent return on operational costs with regard to our ticket revenue.

So to advance that, our dedicated rail funds would pay the total cost of the contracted operations instead of offsetting by ticket revenue.

As laid out, we believe this is an innovative approach to utilizing our passenger fares to leverage for debt.

If I can, this was something that current Secretary Donahue

Raised with then Amtrak President six, seven years ago.

And just as back up to date, we've been able to negotiate with Amtrak.

I mean, that's a big deal.

No one's ever been able to address those ticket revenues out of Amtrak to be able to use in this way to bond against it.

So the current assumptions in our financial plan are $210 million available.

When this amount was established, it was based on a very conservative estimate.

based on the only six trains in terms of inner Virginia travel.

And so we believe there's some flexibility if needed to exercise this further when the time comes.

We have to ensure that our rail fund and the estimated excess revenue can cover the operations and the maintenance costs after the capital construction is complete.

And so we have to have a complete financial picture and model that backs up the issuance

and that work is underway.

It's important to know that that is clearly just by its nature.

It's a liability to our authority and we would only enter into it when we felt comfortable that it makes sense.

In terms of issuing the debt, as you mentioned, we have successfully negotiated with Amtrak back in 2024 to receive that ticket revenue.

directly and pay them the net difference for cost.

We've also advanced a revenue and ridership study.

That study has to advance to what's called investment grade, so it's ready for the financing.

We are going to initiate that closer to the time that we need these proceeds for construction.

So in today's financial assumptions, as Rob mentioned, the sightings D, E, and F,

In our financial model, this is where we believe the proceeds will benefit those projects directly.

And so as they are getting closer to construction is where the alignment of this financing will occur.

And so we are currently reviewing that model.

I plan to spend a good deal of my summer taking a look at it and trying to understand it.

It's very well done in terms of it takes into account service changes trained on and offline when they'll be coming back.

And so we think we'll be in a good position to advance that.

Probably within another year to 18 months, we'd begin that process.

Just repeating again, the $210 million is very conservative.

So that concludes the update I wanted to give on the two financings that are in the plan.

Laura, excuse me.

Yes, of course, because it and its assumptions is a major component of any financing package you're advancing.

Any other questions?

Thanks so much.

Next is our bylaws.

So every year about this time we look at the bylaws and say, okay, what needs to be updated?

The last time we updated it was in May of 2025.

Today's presentation, it will be very short.

There's no action item.

It's just a preview of what's coming in the full board meeting next month.

Within the bylaws, there's what we call Table 1.

Table 1 deals with the budget and Table 1 is to say, okay, when can the Executive Director, when does he have authority?

to make budgetary changes without going to the full board for approval.

And outside of that, you would have to go to the full board for approval for budgetary changes.

So what changes are we proposing this year?

For the Budget Adjustment Authority, there are four major components of our budget.

And so we're saying of those four, we're going to change the rules about two, Operations Administration and then Operations Passenger Service.

For any budget component,

When you look at Table 1, the question is, okay, when can the Executive Director transfer the budget?

Let's pretend we have a $100 budget.

When can he transfer staying at $100 but among or between the line items that exist within that budget component?

And then the other question we looked at is, okay,

When under what circumstances can the Executive Director actually change and add budget?

So the budget would go from $100 to $101 in the example.

And so when can you add and when between without adding?

So for that admin budget, the new rule would say the Executive Director can transfer cleaner among line items.

When there's no overall increase, there would be this new limit of a million dollars per transfer, excuse me,

And one of the key changes here is it would expressly allow the executive director to add new non-existing line items to the administrative budget.

This mirrors a change that we made on the capital budget side in 2025 gives us flexibility to do things you heard about the third party projects line item you heard about.

What was the other one?

Property management line item that we had to add to our administrative budget just in the past few months.

It would have been much simpler if the executive director had very clear authority to just go in and add a line item to the budget, stay within the overall budget, but add a line item where we need it within the administrative expenses.

There's always been clear authority for the executive director to transfer among or between line items.

What wasn't always clear is whether he can add new line item or not.

So we're trying to clarify that ambiguity just like we did on the capital component back in 2025.

And then there's always been the ability for the Executive Director to increase the budget by up to one and a half percent of the overall budget.

So there's one and a half percent cushion component that kind of applies across the board to all the budget components.

What we're saying now is we're clarifying that the Executive Director would have the authority to add a new line item

That's associated with an overall increase to the budget.

Again, capped at that one and a half percent for the year.

And then when we go down to the passenger service, it's almost identical changes, except when we talk about passenger service, that's just the funding we have to spend to conduct the state supported Amtrak service.

or VRE track access fees from there also, so the VRE service.

There's some pretty big dollars involved, and so we have some pretty big uncertainty also about service in the immediate future, right?

Buses, what are they going to cost, etc.

So the one difference between admin and passenger service is there's not going to be a cap on a transfer when the executive director has the authority to transfer a monitor between line items.

It's all just staying within the existing

overall budget.

He could move money around as needed to support the service costs.

The other two components, capital grants and capital projects, there are no new substantive changes in those.

We had some redlining in the draft that you may have seen.

They're just clarifying and making the language consistent.

There are no new substantive changes about authority for the Executive Director to be able to change budgets.

And then

The very last two bullets, period of validity for forward approval contracts.

So we run into this problem where we get board authority to enter into a contract.

This happens with FRA, big grant agreements.

We get authority from y'all.

That authority right now is good for 90 days and it goes stale.

We have to get a ratification from the board.

That 90 days can get chewed up when we're with FRA.

It takes a while to get those agreements done.

Sometimes there are other partners due to the FRA has been sort of the quintessential example.

We then have to come back to you and get a decision that you literally just made at the last meeting ratified.

Again, all the same people voting on all the same topic.

So we're saying, okay, instead of having the board approval last for 90 days and then go stale,

Let's have it last for 12 months, after which time there could be different folks on the board and the outcome could be different.

And just a reminder on the budget adjustments, every month in the EDR, any budget adjustments, they're reported there.

Alright, so those are the those are the recommendations that will come to the full board for a vote in May.

No questions.

And no other comments from the other three.

DJ, whatever happened with it.