Transit Life Cycle Program 2013 Update

Transcription

1 V a l l e y M e t r o Transit Life Cycle Program 2013 Update DRAFT June 5, 2013 valleymetro.org

2 Table of Contents Background... 1 Revenues... 5 Project Descriptions Jurisdictional Equity Conclusion Appendices... 27

3 Background TLCP History and Purpose Overview The Transit Life Cycle Program is maintained by the Regional Public Transportation Authority (RPTA) and implements transit projects in the Maricopa Association of Governments (MAG) Regional Transportation Plan (RTP). The Program meets the requirements of state legislation calling on the RPTA to conduct a budget process that ensures the estimated cost of the Regional Public Transportation System does not exceed the total amount of revenues expected to be available. This includes expenses such as bus purchases and operating costs, passenger facilities, maintenance facilities, park-and-ride lot construction, light rail construction and other transit projects. The Transit Life Cycle Program will receive major funding from the Proposition 400 (Prop 400) half-cent sales tax extension, as well as federal transit funds, fare revenues and local sources. The half-cent sales tax extension started on January 1, 2006 and revenues from the tax were available beginning in March The RPTA maintains responsibility for administering halfcent revenues deposited in the Public Transportation Fund (ARS ) for use on transit projects, including light rail transit (LRT) projects as identified in the MAG RTP. The RPTA Board must separately account for monies allocated to light rail transit, capital costs, and operation and maintenance costs for other transit modes. Although the RPTA maintains responsibility for the distribution of half-cent funds for light rail projects, Valley Metro Rail, Inc., (VMR) a public nonprofit corporation, was created to implement the LRT system. VMR is responsible for overseeing the operation of the light rail line, as well as the design, construction and operation of future corridor extensions to the system. It should be noted that the RPTA often uses the term Valley Metro for the agency, having adopted the name in 1993 as the marketing identity for the regional transit system. Similarly, VMR uses the name METRO to refer to the light rail system. In 2012 the Boards of Directors of RPTA and VMR agreed to have one Chief Executive Officer and integrate the staffs of the two agencies into one. The two agencies continue to operate as separate fiscal entities, each with separate Board of Directors. Guiding Principles After the passage of Prop 400, RPTA and its member agencies developed the Transit Life Cycle Program to conform to the requirements of the RTP. As a first step, the Board of Directors adopted a set of Guiding Principles in October The Guiding Principles provided DRAFT June 5, 2013 Page 1

4 a framework for the development of policies and procedures for the implementation of Prop 400 funded RTP transit projects. In April 2010, the Board approved changes to the Guiding Principles. These changes led to additional policy changes, which were adopted by the Board in September The changes in Guiding Principles and policies were in response to the economic downturn and subsequent reduction in forecasted revenues, which presented serious challenges to scaling back the projects in a way that would be viewed as being geographically equitable and create consensus. The new policies gave additional definition to the process for modifying the bus program to balance the TLCP to the new, lower revenue forecast. The updated Guiding Principles are listed below: 1. A defined and consistent process will be established for allocating funding for projects in the Regional Transportation Plan 2. A defined and consistent process for Plan amendments and changes will be established 3. Funding allocations will be regularly monitored and managed 4. A defined and consistent process will be established to ensure legislated compliance audit, reporting and performance requirements are met 5. Budgeting and accounting systems will be established to manage Public Transportation Funds (PTF) and monitor and report results 6. Jurisdictional equity will be maintained. RTP and other regional plans The Regional Transportation Plan is the long range transportation plan for Maricopa County and includes all transit services throughout the region, as well as other modes of transportation. The RTP focuses on regional projects that are funded with the half-cent Maricopa County Transportation Excise Tax. However, there are other projects that are included in the RTP and underlie the regional projects. Many cities have their own dedicated tax for transportation or transit. As a result, much of the existing service is funded from local sources. In some cases, the regional PTF will assume funding responsibility for existing service which frees up local funds to be spent on other local transit projects. In some cases the regional PTF supplements local funds. This is particularly true of regional routes that run through Phoenix. Much of Phoenix service is funded through Transit 2000 and will continue to be regardless of regional funding availability. The extensions of routes beyond Phoenix borders may be regionally funded. This results in many complexities regarding decision making for TLCP projects. Whereas the other Prop 400 modes are capital based and have discrete projects, the TLCP bus program DRAFT June 5, 2013 Page 2

5 must be planned in coordination with all of the local plans. Changes in TLCP projects can affect local budgets and plans and vice versa. Baseline TLCP In late 2006 RPTA undertook a major review of the TLCP. During development of the RTP, numerous options were evaluated and there was some confusion among members about the specifics of the projects in the TLCP. The review process looked at all of the previous documentation, including the Regional Transit System Study, the Prop 400 ballot and the Regional Transportation Plan. Additionally, all RPTA members were consulted individually about the projects. The resulting report identified specific details by project (such as headways, route end points, service span, implementation date) that would guide the TLCP. The final report was adopted by the Board in March 2007 and is identified as the baseline TLCP. All changes since then are identified as delays, accelerations, enhancements, etc. relative to this baseline. Planning Process RPTA has a TLCP Working Group, which is made up of staff from its member agencies. The TLCP Working Group has many of the preliminary discussions regarding changes to the TLCP. This is where much of the discussion regarding impacts on local plans and budgets would take place. No formal decisions are made at the TLCP Working Group, however many requests for modeling different changes are made and brought through this group for discussion. The Working Group is guided by the TLCP Policies. In 2013, the Working Group met once to discuss rail issues. No significant changes were made to the bus program for the 2013 update. It is anticipated that the Working Group will meet during FY 2014 to discuss potential additions of bus service and also to review various scenarios for constructing light rail/high capacity transit corridors. In addition, a Service Planning Working Group is being recommended to review bi-annual service changes. Recommendations from this group will be discussed at the TLCP Working Group to ensure changes conform to the TLCP Policies. Approval Process Once the Working Group generally agrees that the proposed changes are acceptable and conform to local plans and priorities, the changes will be presented and discussed at the Regional Transit Advisory Group (RTAG). The RTAG reviews items of regional significance prior to any formal committee actions. The RTAG does not take any formal action, but rather provides input to the Chief Executive Officer for Valley Metro. Formal action is taken by the Transit and Rail Management Committees (TMC and RMC), which are advisory to the two Boards of Directors. The TLCP is also reviewed by the Valley DRAFT June 5, 2013 Page 3

6 Metro Board s Budget and Finance Sub-committee (BFS). The Boards of Directors are responsible for taking formal action to approve the TLCP and any changes to projects contained therein. The TMC, RMC and BFS actions and discussions are taken into consideration by the Board when making decisions. Changes to projects in the TLCP that are material, as defined in the TLCP Policies, or impact the Transportation Improvements Program (TIP) must also be approved by MAG. Such changes may be forwarded to MAG either as individual items or as part of an overall update to the Regional Transportation Plan. DRAFT June 5, 2013 Page 4

7 Revenues PTF Revenues from the half-cent Maricopa County Transportation Excise Tax (TET) are distributed to the Freeway, Arterial and Transit Life Cycle Programs. The TLCP receives 33.3% of the monthly revenues, which are deposited into the Public Transportation Fund (PTF). This distribution is defined in Arizona Revised Statutes By policy of the RPTA Board of Directors, the transit share is further distributed between the bus and light rail/high capacity programs. The bus program receives 56.76% of the transit funds and light rail/high capacity receives 43.24%. Additionally, there is a provision in that transfers an amount from the Regional Area Road Fund (RARF) to RPTA and MAG to use for planning and administration expenses associated with the RTP. Originally, this came only to RPTA for use in operating a regional bus system. The statute was changed in 2003 after development of the RTP. The amount is based on a formula; originally $5 million in July 1986 and inflated each year using the Implicit Price Deflator for the Gross Domestic Product. In the late 1980s there was also some additional RARF that came to RPTA for planning a regional transit system. The Arizona Department of Transportation develops a forecast for the TET. The forecast is used by ADOT, MAG and RPTA in the respective life cycle programs for planning purposes. ADOT s forecasting process has been in use for nearly 20 years and is widely accepted as a reasonable methodology. Historical revenues and the current forecast are attached as Appendix A. The combined (actual plus forecast) totals for the TLCP provide $101.7 million from RARF for planning and administration expenses, and $2,873.4 million for Prop 400 projects. The 20-year totals have declined significantly from previous forecasts. In 2006, the ADOT forecast showed a total of $5,006.8 million for transit Prop 400 projects. The decline in actual and forecasted revenues has negatively impacted the number of projects that are able to be implemented or constructed. Following is a chart that shows the change in 20-year revenue totals for the TLCP (Figure 1). DRAFT June 5, 2013 Page 5

8 Figure 1 $6.0 $ Year Total (billions) $4.0 $3.0 $2.0 $1.0 $ Forecast Year Federal The capital program for the TLCP is heavily dependent on federal funds. There are several major sources of federal funds which support the TLCP, each with its own assumptions for the future. Formula programs are the largest Federal Transit Administration (FTA) programs that support bus and bus facilities. The funds are allocated annually to each area, as defined by the Census Bureau. The areas are split into three tiers: urbanized areas over 200,000 population, urbanized areas over 50,000 but less than 200,000 and non-urbanized areas. Each urbanized area must have a designated recipient that applies for the funds to FTA. Within an area, there can be additional recipients of funds. These sub-recipients deal with the designated recipient and not with FTA directly. The City of Phoenix is the designated recipient for the Phoenix-Mesa urbanized area. RPTA and METRO are considered sub-recipients to Phoenix. For the Avondale-Goodyear urbanized area and non-urbanized areas, the State Governor is designated as the recipient. In 2013, the US Bureau of the Census implemented updated its urbanized area definitions based on the 2010 census results. The Avondale-Goodyear urbanized area still qualified as a smaller UZA, but nearly tripled its population from The addition of new large UZAs, over 200,000 population, has impacted the formula and amounts apportioned to the region. In addition, in 2012 Congress passed Moving Ahead for Progress in the 21 st Century (MAP- 21). The legislation made significant changes in transportation funding programs. Most significant is that nearly all discretionary programs were converted to formula programs. DRAFT June 5, 2013 Page 6

9 Section 5307 Formula 5307 funds are primarily intended for capital needs and are designated for urbanized areas. However, there is an allowance in the program for preventive maintenance support. In urbanized areas between 50,000 and 200,000 population, such as the Avondale urbanized area, the funds can also be used for operating support. The TLCP capital program has been largely deferred, except for bus replacements, due to the downturn in the economy. This has allowed for additional federal funds to be directed to the preventive maintenance program to essentially support operations. Preventive maintenance still occurs, regardless of whether federal funds are available. The additional federal funds allow the PTF subsidy to be reduced and the PTF can be utilized to support other costs not restricted to PM activities. The 5307 program now includes eligible activites that were previously funded in the Section 5316 Job Access and Reverse Commute program (JARC). The JARC program was established to address the unique transportation challenges faced by welfare recipients and low-income persons seeking to obtain and maintain employment. Many new entry-level jobs are located in suburban areas, and low-income individuals have difficulty accessing these jobs from their inner city, urban, or rural neighborhoods. In addition, many entry level-jobs require working late at night or on weekends when conventional transit services are either reduced or non-existent. Finally, many employment related-trips are complex and involve multiple destinations including reaching childcare facilities or other services. Section 5309 Discretionary The 5309 transit capital investment program formerly provided capital assistance for three primary activities: Modernization of existing rail systems (Fixed Guideway Modernization program); now Section 5337 State of Good Repair formula program; New and replacement buses and facilities (Bus and Bus Related Equipment and Facilities program); now Section 5339 Bus and Bus Facilities formula program; New fixed guideway systems (New Starts program and Small Starts). A "fixed guideway" refers to any transit service that uses exclusive or controlled rights-of-way or rails, entirely or in part. The term includes heavy rail, commuter rail, light rail, monorail, trolleybus, aerial tramway, inclined plane, cable car, automated guideway transit, ferryboats, that portion of motor bus service operated on exclusive or controlled rights-of-way, and highoccupancy-vehicle (HOV) lanes. The New Starts program provides funds for construction of new fixed guideway systems or extensions to existing fixed guideway systems. The Small Starts program provides funds to capital projects that either (a) meet the definition of a fixed guideway for at least 50 percent of the project length in the peak period or (b) are corridor-based bus projects with 10 minute DRAFT June 5, 2013 Page 7

10 peak/15 minute off-peak headways or better while operating at least 14 hours per weekday. The Federal assistance provided or to be provided under Section 5309(e) must be less than $75 million and the project must have a total capital cost of less than $250 million, both in year of expenditure dollars. Section 5309 eligible activities are light rail, rapid rail (heavy rail), commuter rail, monorail, automated fixed guideway system, or a busway/high occupancy vehicle (HOV) facility, or an extension of any of these. Projects become candidates for funding under this program by successfully completing the appropriate steps in the major capital investment planning and project development process. For this update, it is assumed that New Starts/Small Starts will provide funding for all High Capacity/Light Rail Transit projects except Northwest Phase I and Gilbert Road extensions. The 5309 amounts programmed for each corridor do not exceed 50 percent of the project costs (excluding non-prior rights utility relocations), nor does the annual total across all corridors exceed a $100 million cap, inflated annually from 2012$. Section 5337 State of Good Repair The State of Good Repair program is designed to ensure the proper renovation of the nation's older rail transit systems, and is distributed on a formula basis, using fixed guideway miles older than 7 years. The program has two components: Fixed Guideway and High Intensity Bus, which is defined as public transportation that shares lanes with other HOV vehicles. The funds and eligible activities for each component cannot be mixed with the other, i.e. fixed guideway funds can only be spent on fixed guideway activities. Currently, eligible activities are capital projects to modernize or improve existing fixed guideway systems, including purchase and rehabilitation of rolling stock, track, line equipment, structures, signals and communications, power equipment and substations, passenger stations and terminals, security equipment and systems, maintenance facilities and equipment, operational support equipment including computer hardware and software, system extensions, and preventive maintenance. For this update, Section 5337-FG funds are assumed to fund state of good repair activities for the rail system. It is anticipated that the funds available will increase in 2018, after the rail system reaches 7 years of age and the updated data are applied to the federal formula. Section 5339 Alternatives Analysis The Alternatives Analysis program was eliminated in MAP-21, but funding from this program will continue to be used for some work until existing grant funds run out. Future funding for alternatives analyses could be programmed through the Section 5303 Metropolitan Planning program or the Section 5307 Formula program. DRAFT June 5, 2013 Page 8

11 Section 5339 Bus and Bus Facilities The Bus and Bus Facilities program provides capital assistance for new and replacement buses, related equipment, and facilities. It is a discretionary program to supplement formula funding in both urbanized and rural areas. Eligible capital projects include the purchasing of buses for fleet and service expansion, bus maintenance and administrative facilities, transfer facilities, bus malls, transportation centers, intermodal terminals, park-and-ride stations, acquisition of replacement vehicles, bus rebuilds, bus preventive maintenance, passenger amenities such as passenger shelters and bus stop signs, accessory and miscellaneous equipment such as mobile radio units, supervisory vehicles, fare boxes, computers and shop and garage equipment. Section 5311 Formula The 5311 program provides formula grants for non-urbanized areas to states for the purpose of supporting public transportation in rural areas, with population of less than 50,000. This program has limited applicability in the TLCP, as the majority of projects and services provided are within the urbanized areas. However, some 5311 funds are used to support services, such as Route 685 Ajo/Gila Bend, which provide connections from rural areas into the urbanized areas. Section 5310 New Freedom The New Freedom formula grant program aims to provide additional tools to overcome existing barriers facing Americans with disabilities seeking integration into the work force and full participation in society. Lack of adequate transportation is a primary barrier to work for individuals with disabilities. The 2000 Census showed that only 60 percent of people between the ages of 16 and 64 with disabilities are employed. The New Freedom formula grant program seeks to reduce barriers to transportation services and expand the transportation mobility options available to people with disabilities beyond the requirements of the Americans with Disabilities Act (ADA) of Surface Transportation Program The STP is a Federal Highways Administration (FHWA) program and funds are provided for a wide variety of uses, including construction, restoration, and operational improvements for highways and bridges, capital costs for transit projects, carpool projects, fringe and corridor parking facilities and programs, bicycle transportation and pedestrian walkways. STP funds can be transferred to FTA to fund eligible capital projects. Congestion Mitigation/Air Quality The CMAQ program is designed to provide funding for projects that provide congestion mitigation and air quality benefits. The program is administered through the FHWA, but funding can be transferred to the FTA for transit projects. A portion of the State s allocation of CMAQ funds is transferred to FTA and programmed by MAG for light rail capital projects. DRAFT June 5, 2013 Page 9

12 Fares Fare revenue makes up a large part of the operating budget. The regional fare policy is set by the Board of Directors and is guided by a target of 25 percent regional recovery of operating expenses for bus and rail modes. The Board approved a fare increase effective in March For this TLCP financial model, it is assumed that a fare increase would occur next in July 2016 and then every third year thereafter. This is done for modeling purposes only and should not be construed as policy. The model will be updated as further direction is received from the Board of Directors. Other Other revenues consist primarily of interest on fund balances and contributions of local funds to TLCP projects. These revenues account for just over one percent of total revenues to the bus program. Local revenues are a significant source for the rail program, as local revenues fully fund light rail operations and construction of the Northwest Phase II and West Phoenix/Central Glendale corridors, as well as providing funds for the Capitol/I-10 West corridor. In addition, the City of Phoenix is advancing $60 million for construction of the Northwest Phase I, which will be repaid by the PTF in FY2017 with interest. The following tables summarize the revenues forecasted for the bus and rail programs. Table 1 Bus Program 2013 Update 2012 Update Change % Change Revenue Operations PTF $1,631.0 $1,639.5 ($8.5) -0.52% RARF $88.3 $89.8 ($1.5) -1.72% Fares $233.1 $230.5 $ % Federal $59.6 $48.8 $ % Other revenues $20.4 $18.3 $ % Sub-Total Operations Revenue $2,032.4 $2,026.9 $ % Revenue Capital Federal - ARRA $35.8 $35.8 $ % Federal - Capital $901.6 $914.3 ($12.7) -1.38% Financed Revenue $58.3 $58.3 $ % Other revenues $20.9 $33.0 ($12.1) % Sub-Total Capital Revenue $1,016.6 $1,041.4 ($24.8) -2.38% Total Revenue $3,049.0 $3,068.3 ($19.2) -0.63% DRAFT June 5, 2013 Page 10

13 Table 2 Rail Program 2013 Update 2012 Update Change % Change Revenue Operations Phoenix $387.8 $386.0 $ % Tempe $143.2 $143.0 $ % Mesa $98.6 $70.0 $ % Glendale $0.0 $0.0 $0.0 NA Federal $23.1 $23.0 $ % Advertising $5.0 $5.0 $ % Fare revenues $270.5 $267.0 $ % Sub-Total Operations Revenue $928.3 $894.0 $ % Revenue Capital PTF $1,280.3 $1,287.0 ($6.7) -0.5% FTA 5309 / TIGER $1,037.9 $1,052.4 ($14.4) -1.4% CMAQ $263.7 $355.9 ($92.2) -25.9% STP/CMAQ - Mesa $135.2 $0.0 $135.2 NA Other federal $80.8 $67.6 $ % Phoenix T2000 $373.1 $361.2 $ % Phoenix WSD $7.4 $0.0 $7.4 NA Glendale $93.3 $69.7 $ % Mesa $8.7 $0.0 $8.7 NA MAG / RPTA $13.8 $8.2 $ % Sub-Total Capital Revenue $3,294.3 $3,202.0 $ % Total Revenue $4,222.6 $4,096.0 $ % Debt State statutes allow for RPTA to issue debt to finance the transit capital program. The debt is secured by the Maricopa County Transportation Excise Tax (TET) revenues that are deposited directly into the Public Transportation Fund. ADOT also uses the TET revenues to secure debt, but they can only use the revenues deposited directly into the Regional Area Road Fund. The RARF funds that come to the PTF for planning and administration costs cannot be used to secure RPTA s debt, as they have already been secured by ADOT. RPTA Board of Directors adopted a Master Resolution in 2009 that outlines the bond program for transit. The Master Resolution lays out what bond proceeds can be used for, how they will be paid, the types of liens (e.g. Senior or Subordinated) and coverage ratios for each. DRAFT June 5, 2013 Page 11

14 Outstanding debt In June 2009, RPTA Board of Directors authorized the issuance of $100,075,000 in Senior Lien Bonds. The Supplemental Resolution outlines the debt service schedule and uses of the proceeds. As of June 30, 2012 there was $97.81 million of outstanding bonds. Following is the maturity schedule and associated interest costs for the outstanding debt. Table 3 Year Ending June 30 Principal Interest Total 2013 $ 5,085,000 $ 5,053,018 $ 10,138, ,290,000 4,819,068 10,109, ,555,000 4,547,943 10,102, ,835,000 4,282,006 10,117, ,085,000 4,007,593 10,092, ,215,000 15,111,715 50,326, ,745,000 4,420,798 39,165,798 Total $ 97,810,000 $ 42,242,140 $ 140,052,140 Plans for additional debt The current TLCP financial model shows a need for additional bond financing to support the LRT/High Capacity program, but none for the bus program. Based on the current official TET forecast, the estimated capacity for additional senior lien debt is $410 million. The estimated capacity for additional subordinated debt is $330 million. These estimates are based on minimum coverage ratios of 2.0 for senior lien and 1.2 for subordinated debt. At this time it is anticipated that the financing needs will be approximately $115 million in FY 2014, $125 million in FY 2016 and $110 million in FY2020. The planned additional debt is well within the estimated debt capacity of the PTF and all of the additional debt is planned to be senior lien. Net interest costs assumed for each issuance are 2.05% in 2014, 2.75% in 2016 and 4.00% in Based on these assumptions for financing costs, the debt service coverage ratio at the time of the 2014 issuance is estimated to be 5.3. The coverage ratio at the time of the 2016 issuance is estimated to be 3.3. Sensitivity analyses have been prepared to confirm that increases of 100 basis points will not cause the DSCR to fall below the minimum of 2.0. DRAFT June 5, 2013 Page 12

15 Project Descriptions Bus Operating For the 2013 TLCP update, there are no significant changes in bus services funded. There are some minor changes based on route modifications planned for July No services have been advanced or deferred. Appendix C lists the revenue miles, by route and jurisdiction, funded in FY These miles carry forward through the model, and the only changes are highlighted in the following table. Table 4 Route Fiscal Year 29 Thomas Road Elliot Road Waddell/Thunderbird 2015 Description PTF replaces local funding in Scottsdale at existing service levels Improve weekday headways in Chandler, Gilbert and Mesa; add Saturday and Sunday/Holiday service Extend route into Peoria at existing service levels only Scottsdale/Rural LINK 2015 New route 3 Van Buren 2016 Improve weekday headways in Avondale and Tolleson 104 Alma School Rd Add Saturday service in Chandler; replace local funding in Mesa 50 Camelback Road 2019 Replace local funding, existing service levels in Scottsdale only Avondale Express 2020 New route 30 University Drive 2021 Replace local funding, existing service levels in Mesa only 81 Hayden/McClintock 2021 Replace local funding, existing service levels in Scottsdale only 170 Bell Road 2022 Replace local funding, existing service levels Procurement of a new contract in the East Valley, unifying the services previously contracted separately by Valley Metro and City of Tempe, has resulted in a forecasted reduction in operating costs for fixed route services. Other operating costs Other changes are primarily related to funding levels for various programs. These other programs include the planning and administrative costs for RPTA, the costs for the regional customer services (e.g. call center, Transit Book, web site) and reimbursements for ADA paratransit costs. DRAFT June 5, 2013 Page 13

16 Bus Capital Fleet In the 2013 TLCP update, fleet purchases are changed for several reasons. First, the need for fixed route buses decreased as a result of planning less service overall and replacement cycles were stretched to get the maximum life from existing buses. Vanpool replacements have been increased in the model to reflect a larger base fleet. The following table summarizes the fleet purchases for the current update with a comparison to the 2012 update. Table 5 TLCP Fleet Acquisition 2013 Update 2012 Update Change % Change Fixed route buses 1,412 1, % Paratransit buses % Rural route buses % Vanpools 1,392 1, % Total Fleet 3,473 3, % DRAFT June 5, 2013 Page 14

17 Facilities There are no changes in the schedule for planned facilities. Following is a table that outlines the facilities that have been or are planned to be funded in the TLCP. Table 6 Type Jurisdiction Name of Facility Year O&M Facility Mesa East Mesa 2009 O&M Facility Phoenix Phoenix West 2009 O&M Facility Tempe EVBOM 2009 Park and Ride Chandler Chandler Park and Ride 2009 BRT Capital Improvements Mesa Main St LINK 2011 Park and Ride Mesa West Mesa 2011 Park and Ride Phoenix Happy Valley-I-17 * 2011 Park and Ride Scottsdale Scottsdale/L101 * 2011 Transit Center Phoenix Central Station Rehab * 2011 BRT Capital Improvements Chandler Arizona Ave LINK * 2012 BRT Capital Improvements Gilbert Arizona Ave LINK * 2012 BRT Capital Improvements Mesa Arizona Ave LINK * 2012 Park and Ride Buckeye East Buckeye 2012 Park and Ride Surprise Grand/Surprise 2012 BRT Capital Improvements Scottsdale Scottsdale/Rural Rd LINK 2014 Park and Ride Glendale Bell/ Park and Ride Phoenix Desert Sky 2014 Park and Ride Phoenix Baseline/24th St 2015 Transit Center Mesa Mesa Downtown 6-bay 2015 Park and Ride Phoenix Laveen/59th Ave 2017 Transit Center Peoria Peoria 4-bay 2017 Park and Ride Peoria Peoria Grand 2018 * These facilities were primarily funded with ARRA DRAFT June 5, 2013 Page 15

18 Costs The following table illustrates the costs for the bus program compared to the costs assumed in the 2012 TLCP Update. Table 7 Bus Program 2013 Update 2012 Update Change % Change Operations Expenditure Debt Service $72.1 $76.3 ($4.1) -5.4% Fixed Route Operations $960.3 $1,017.4 ($57.1) -5.6% ADA & Alternatives $484.2 $475.7 $ % Regional Expenditures $254.3 $230.1 $ % Sub-Total Operations Expenditures $1,770.9 $1,799.5 ($28.6) -1.6% Capital Expenditure Fleet $961.7 $982.2 ($20.5) -2.1% Facilities $267.3 $275.6 ($8.4) -3.0% Sub-Total Capital Expenditures $1,229.0 $1,257.8 ($28.8) -2.3% Total Expenditures $2,999.9 $3,057.4 ($57.5) -1.9% High Capacity / Light Rail Transit Capital The development of previous TLCP updates were based upon the corridors and project schedules included in the MAG RTP. The recent Census 2010 results coupled with adoption of MAP-21 has created funding shortfalls, particularly with the CMAQ funds programmed for high capacity / light rail (HCT/LRT) projects. This has put additional pressure on PTF and local funds and has pushed out some construction start dates to be commensurate with available funding. The completion of certain HCT/LRT corridors has changed since the 2012 TLCP update as follows: Tempe Streetcar: from 2016 to 2017 Gilbert Road: new project with completion in 2018 Northeast Extension: from 2032 to 2034 No schedule changes are anticipated for the remaining projects. It should be noted that the Northeast Phoenix project remains in the RTP, which now extends to Also, most of the project s duration extends beyond the timeframe of the TLCP and the Proposition 400 sales tax, which ends in FY An extension of the sales tax is assumed to allow completion of the Northeast Extension. DRAFT June 5, 2013 Page 16

19 Completion of the Northwest Phase II and West Phoenix/Central Glendale projects are dependent on local funds from Phoenix and Glendale. It is assumed that the Phoenix Transit 2000 tax will be extended beyond 2020 The TLCP continues to show early initiation of the Alternatives Analysis for the West Phoenix/Central Glendale and Northeast projects. In addition, a Project Definition Study will be initiated for Northwest Phase II. This will allow early definition of the alignment and transit mode to preserve and protect the right-of-way and will facilitate coordination with future public and private development within these corridors. The study for West Phoenix/Central Glendale started in 2012, for Northwest Phase II in 2014 and for Northeast in A map showing the HCT/LRT corridors, including the original, existing and proposed completion dates, in calendar years, is shown in Figure 1. Figure 1: Regional Transportation Plan HCT/LRT System Map DRAFT June 5, 2013 Page 17

20 Given that federal funding is anticipated for most of the HCT/LRT corridors in the RTP, the development of a HCT/LRT project involves adherence to a rigorous federal process. Federal review occurs at various milestones. This federal approval process includes the review of alternative transit technologies (e.g. light rail transit, bus rapid transit, etc.) and alignments, the development of environmental reports, preliminary engineering, and final design. These steps are followed by the purchase of right-of-way, utility relocations, construction, and testing of the system. Taken together, the entire development process takes about ten to twelve years to complete, depending upon the length and complexity of the project. The project s duration and development steps are integral factors considered in the development of the HCT/LRT Life Cycle program. Figure 2 below identifies these steps in the project development process. Figure 2: Federal Transit Administration Project Development Process Future corridors may require supplemental funding sources in addition to existing local, regional or federal sources in order to be completed within the TLCP planning horizon. DRAFT June 5, 2013 Page 18

21 The revised schedule for development of each of the seven HCT/LRT projects is shown in Figure 3. Figure 3: Regional Transportation Plan HCT/LRT System Schedule Significant progress has been made since the last update on each of the HCT/LRT corridors including: Northwest Phase I: The Northwest Phase 1 Light Rail Extension is a 3.2 mile extension of light rail along 19 th Avenue from the existing end-of-line station at Montebello to Dunlap. The design was completed in fall of The city of Phoenix has completed most of the required land acquisition. Construction activities were initiated in January The project is estimated to be complete in 2016, consistent with the sequence of project implementation in the original RTP. Central Mesa: The Central Mesa Light Rail Extension is a 3.1 mile extension of light rail along Main Street from the existing end-of-line at Sycamore to Mesa Drive. The city of Mesa has completed most land acquisition. Construction activities were initiated in May In October 2012, a Project Construction Grant Agreement was signed by federal officials endorsing the value of the project and committing $75 million in federal funds. The project is estimated to be complete in Tempe Streetcar: The Tempe South Locally Preferred Alternative (LPA) was approved by MAG in December 2010, which included a 2.6-mile modern streetcar along Mill Avenue from Rio Salado Parkway in downtown Tempe to Southern Avenue. In April 2013, the Federal Transit Administration approved the Tempe Streetcar project into Project Development. Valley Metro, in coordination with the city of DRAFT June 5, 2013 Page 19

22 Tempe, will make modifications to the streetcar route to better fit the new federal funding criteria. The modified project would include the one-mile downtown Tempe loop on Mill and Ash avenues and south to Apache Boulevard. The Environmental Assessment should be complete in fall Valley Metro is pursuing FTA Small Starts funding and exploring other opportunities for federal grants [e.g. U.S. Department of Transportation (DOT) Transportation Investments Generating Economic Recovery (TIGER)]. Valley Metro estimates this project to be complete in Gilbert Road: The Gilbert Road Light Rail Extension was recommended as a future unfunded phase as part of the Central Mesa LPA. The project includes a 1.9 mile extension of light rail along Main Street from Mesa Drive to Gilbert Road. The planning study was completed in summer of The Environmental Assessment was drafted and submitted to FTA in spring 2013 and a Finding of No Significant Impact (FONSI) is anticipated in the fall The city of Mesa has repurposed federal monies previously allocated for roadway improvements to transit to fund this project. There will be no impact to the PTF. This project is estimated to be complete in Capitol / I-10 West: The Phoenix West LPA was approved by MAG in August 2012, which included extending light rail 11 miles from downtown Phoenix, through the State Capitol area, to approximately 79th Avenue and the I-10 West freeway. The Environmental Assessment began in spring This project is estimated to be complete in West Phoenix / Central Glendale: The West Phoenix / Central Glendale project will travel westbound though Phoenix to the city of Glendale. Valley Metro completed work on Phase 1 of the Alternatives Analysis in fall Initiation of Phase 2 of the Alternatives Analysis began in spring This project is estimated to be complete in Capital Cost Assumptions Capital costs for the program are estimated at $2.988 billion in year-of-expenditure dollars. This estimate includes the design, land acquisition and construction expenses for each of the corridor projects thru FY2026, reimbursements for all private utility relocations, repayment to Phoenix, Tempe and Mesa for regional infrastructure developed in the initial project, systemwide support infrastructure in future years and necessary systems planning and design standards. An additional $197.3 million is needed to fund non-prior rights utilities relocation expenses. Net costs to finance the projects are estimated at $90.4 million, bringing the overall program costs to $3.276 billion. DRAFT June 5, 2013 Page 20

23 The costs for the program also include costs of the Alternatives Analysis studies for the development of each corridor. These costs have been reported separately since they are considered non-capital project expenses. Additionally, each project s share of upgrades to the METRO Operations & Maintenance Center (OMC) has also been reported separately as part of the overall TLCP program update. Table 8 reviews the updated expenditures by project and highlights the added cost estimate for non-prior right utility relocations. Table 8 Base Utilities Total 2013 TLCP Open Year 2012 TLCP Open Year Northwest Phase I $304.2 $23.9 $ Central Mesa $182.7 $8.1 $ Tempe South $119.8 $8.6 $ Central Mesa/Gilbert Road $143.4 $0.0 $ NA Capitol/I-10 West $1,054.6 $49.7 $1, West Phoenix/Central Glendale $495.4 $25.1 $ Northwest Phase II $139.7 $7.5 $ Northeast Phoenix $26.8 $0.0 $ Sub-Total Corridor Extensions $2,466.6 $123.0 $2,589.7 LRV Acquisition $16.5 $0.0 $ NA OMC Expansion $65.4 $0.0 $ CP/EV Regional Reimbursements $198.8 $74.3 $273.1 System-wide Support Infrastructure $145.7 $0.0 $145.7 Alternatives Analyses $49.7 $0.0 $49.7 Design Standards & System Planning $14.0 $0.0 $14.0 Capital Project Development Administration $31.6 $0.0 $31.6 Sub-Total Other Capital $521.6 $74.3 $595.9 Total Capital Expenditures $2,988.3 $197.3 $3,185.6 Cost of Financing $90.4 Total Capital Project Costs $3,276.0 Within each of the project capital cost estimates, there are also a variety of assumptions that have been used, including: All capital cost estimates were estimated in base year dollars (2012$) and inflated to year-of-expenditure dollars. The future costs are inflated at a rate of 2.2% in FY2013, 2.2% in FY2014, 2.5% in FY 2015, 2.8% in FY2016, 3.0% annually in FY , 3.1% annually in FY , and 3.0% annually in FY DRAFT June 5, 2013 Page 21

24 The total capital cost estimate of each project, with the exception of the Central Mesa, Tempe South and Phoenix West extensions are based on the weighted average cost of the CP/EV and the Northwest Phase I amount of $75.1 million per mile. The Central Mesa capital costs are based on the Preliminary Engineering estimate adjusted for the design-build contractor bid pricing. The Tempe South extension assumes a modern streetcar technology with a capital cost estimate of $48.3 million per mile. The Phoenix West capital costs are based on the Advanced Conceptual Engineering estimate. High Capacity / Light Rail Transit Operations Another component of the HCT/LRT Life Cycle Program is the operating expense and revenue evaluation. The annual operating costs for HCT/LRT projects are estimated in 2013 dollars at a rate of $1.48 million per mile and are based on the initial 20-mile project s current cost forecast plus operating cost estimates for Central Mesa, Northwest Phase I and Tempe Streetcar extensions. Costs are escalated for annual inflation at 3.0%. Operating costs are paid by fare revenues and METRO member city contributions. Fares are anticipated to cover 29% of the cost of operations. Table 8 outlines the operating expenditures and Table 9 outlines the operating revenues through A detailed report of all of the operating program revenues and expenses is shown on the Operating Summary table included in the Appendix. Table 9: Operating Costs by Project (YOE$) Rail Program 2013 Update 2012 Update Change % Change CPEV $726.0 $726.0 $ % NW Extension Phase I $45.0 $45.0 $ % Central Mesa $43.0 $43.0 $ % Tempe Streetcar $31.0 $34.0 ($3.0) -8.9% Gilbert Road $33.6 $0.0 $33.6 NA Capitol/I-10 West $46.0 $46.0 $ % West Phoenix/Central Glendale $0.0 $0.0 $0.0 NA NW Extension Phase II $0.0 $0.0 $0.0 NA NE Phoenix $0.0 $0.0 $0.0 NA Total Operations Expenditures $924.6 $894.0 $ % DRAFT June 5, 2013 Page 22

25 Table 10: Operating Revenues (YOE$) 2013 Update 2012 Update Change % Change Phoenix $387.8 $386.0 $ % Tempe $143.2 $143.0 $ % Mesa $98.6 $70.0 $ % Glendale $0.0 $0.0 $0.0 NA Federal $23.1 $23.0 $ % Advertising $5.0 $5.0 $ % Fare revenues $270.5 $267.0 $ % Total Operations Revenue $928.3 $894.0 $ % Cash Flow The cash flow summaries show that overall revenues exceed expenditures for both the bus and rail programs. The full cash flow documents can be found in the appendices. Following are summaries of the cash flows. Table 11 Bus Program TLCP Totals Funding Surplus / Shortfall Total Program Revenues $3,049.0 Total Operating Costs ($1,747.9) Funding surplus before capital and financing $1,301.2 Total Capital Costs ($1,229.0) ($1,229.0) Financing Needs anticipated: Net Finance Proceeds Cost Series 2009 $47.7 ($23.0) Series 2014 NA Series 2016 NA Term 2020 NA Total Financing $47.7 ($23.0) ($23.0) Total Program Cost 2026 ($2,999.9) Net Fund Balance $49.1 DRAFT June 5, 2013 Page 23

26 Table 12 Rail program TLCP Totals Funding Surplus / Shortfall Total Program Revenues $3,294.3 Total Base Program Cost ($2,988.3) Funding surplus before PTF utility expenses and financing $306.0 Non Prior Right Utility Relocations ($197.3) ($197.3) Net Finance Financing Needs anticipated: Proceeds Cost Series 2009 $52.4 ($26.5) Series 2014 $102.0 ($15.3) Series 2016 $120.0 ($20.7) Term 2020 $110.0 ($26.4) Advance Funds by Phoenix $60.0 PTF Reimburse in FY 2017 ($60.0) ($1.5) Total Financing $384.4 ($90.4) ($90.4) Total Program Cost 2026 ($3,276.0) Net Fund Balance $18.3 DRAFT June 5, 2013 Page 24

27 Jurisdictional Equity Overview The Guiding Principles for the TLCP include a requirement that jurisdictional equity be maintained within the bus program. To meet this Guiding Principle there are two specific policies that guide the model. Jurisdictional equity only applies to the amount of transportation excise tax revenues deposited into the PTF. The 20 year total includes actual revenues for FY 2006 through FY 2012 and the official ADOT forecast for FY 2013 through FY From this total is subtracted any amounts used for regional purposes and are not allocated to jurisdictions. These regional expenses include the Mobility Center, Customer Service, regional Intelligent Transportation Systems (ITS), program financing costs, vanpool expenses and an allocation to meet the Board s policy for a minimum cash balance. The net amount available is then distributed to jurisdictions based on the percentages identified in the TLCP Policies. These policy allocations are compared to the model allocations to determine if a jurisdiction is above or below its policy allocation. If a particular jurisdiction is under its policy amount by more than $7.5 million, then the model cannot move forward for approval without the express consent of that jurisdiction. In this update there are three jurisdictions that meet this condition. Sub-Regional Summary The policy and model calculated amounts are aggregated into sub-regional totals. The policy requires that each sub-region s calculated model amount be within 2.5 percent above or below their policy allocation. In this update, all sub-regions meet this requirement. Below is the 2013 TLPC update summary by sub-region: Table 13 Calculated Policy Percent Sub-region Allocation Allocation Difference Difference Central $443.5 $441.6 ($1.9) -0.43% East $745.5 $788.7 $ % West $160.6 $161.2 $ % $1,349.6 $1,391.6 $ % DRAFT June 5, 2013 Page 25

28 Conclusion The TLCP is a dynamic program. It is updated based on changing economic conditions, development patterns, local priorities and available funding. Each year ADOT produces an updated 20-year revenue forecast. The jurisdictional equity is not balanced for this update. There is an available balance in the East Valley sub-region which can be spent to improve or advance projects. However, Valley Metro recommends that the process to guide those decisions not begin until phase 1 of the Service Standards and Performance Measures project is complete. The service standards will provide some performance based data to help guide the decisions on how to reinvest those funds. The High Capacity/Light Rail Transit program is balanced. However, much of that balance is achieved through assumptions of existing taxes and availability of federal funds that will be monitored closely and updated as needed. DRAFT June 5, 2013 Page 26

29 Appendices A - ADOT Forecast and Historical Revenues B - TLCP Cash Flows C Revenue Miles Funded in FY 2014 DRAFT June 5, 2013 Page 27

30 Appendix A ADOT Forecast and Historical Revenues

31 Transportation Excise Tax Revenues Historical Revenues and Distributions to Transit ($ millions) Fiscal Year Total Tax Transit (RARF) Nominal dollars Transit (PTF) Bus PTF Rail PTF 1986 $ $94.8 $ $99.2 $ $106.3 $ $110.8 $ $113.3 $ $116.5 $ $127.3 $ $142.8 $ $160.3 $ $178.4 $ $192.3 $ $209.3 $ $229.5 $ $248.6 $ $264.7 $ $267.6 $ $268.7 $ $288.6 $ $316.8 $ $367.6 $3.9 $51.1 $29.0 $ $391.0 $4.0 $130.2 $73.9 $ $380.1 $4.2 $126.3 $71.7 $ $328.2 $4.3 $109.0 $61.9 $ $299.0 $4.4 $99.4 $56.4 $ $309.2 $4.4 $102.7 $58.3 $ $324.2 $4.5 $107.9 $61.2 $46.7 Total $5,972.0 $159.8 $726.6 $412.4 $314.2 Prop 300 $3,786.8 $130.0 Prop 400 $2,185.2 $25.2 $618.7 $351.2 $267.5

32 Official ADOT Forecast October 2012 (millions) Nominal dollars Fiscal Year Total Tax RPTA/MAG * Public Transportation Bus Rail Annual Growth 2013 $340.5 $9.1 $113.4 $64.4 $ % 2014 $361.1 $9.2 $120.2 $68.3 $ % 2015 $381.4 $9.4 $127.0 $72.1 $ % 2016 $401.8 $9.6 $133.8 $75.9 $ % 2017 $422.9 $9.8 $140.8 $79.9 $ % 2018 $443.0 $10.0 $147.5 $83.7 $ % 2019 $464.3 $10.2 $154.6 $87.8 $ % 2020 $487.9 $10.4 $162.5 $92.2 $ % 2021 $509.3 $10.6 $169.6 $96.3 $ % 2022 $532.4 $10.8 $177.3 $100.6 $ % 2023 $554.0 $11.0 $184.5 $104.7 $ % 2024 $578.0 $11.2 $192.5 $109.2 $ % 2025 $602.3 $11.4 $200.6 $113.8 $ % 2026 $367.9 $11.7 $122.5 $69.5 $ % TOTALS $6,446.8 $144.1 $2,146.8 $1,218.5 $928.3 * RPTA and MAG receive a small portion of the highway RARF for planning and administration (amount split 50/50)

33 Appendix B TLCP Cash Flow Reports

34 TLCP Cash Flow - Bus Program TLCP Cash Flow ($ thousands) May 20, 2013 Category Type Revenue Operations Preventive Maintenance $130 $304 $398 $1,036 $1,047 $1,527 $2,994 $6, Rural Assistance $75 $131 $319 $392 $524 $0 $0 $ JARC $92 $64 $0 $0 $0 $0 $0 $0 Alternative Fuel Tax Credit $86 $292 $517 $1,306 $723 $1,221 $603 $1,439 Fares $1,670 $4,347 $5,293 $6,533 $7,124 $7,440 $7,919 $9,058 Interest Earnings $493 $608 $187 $555 $251 $264 $279 $294 Local Operations $163 $37 $0 $0 $0 $0 $0 $0 MAG Planning $225 $225 $225 $225 $225 $225 $225 $225 PTF $29,031 $73,895 $71,701 $61,880 $56,419 $58,286 $61,238 $64,358 RARF $2,328 $3,785 $3,637 $3,777 $2,835 $3,923 $4,771 $3,995 Sub-Total Operations Revenue $34,292 $83,687 $82,276 $75,704 $69,148 $72,886 $78,030 $85,491 Revenue Capital Formula $9,881 $15,428 $70,832 $25,803 $8,872 $617 $23,974 $106, Discretionary $0 $7,828 $17,603 $8,250 $0 $0 $0 $ Fixed Guideway $0 $0 $0 $0 $0 $0 $0 $5, Rural Assistance $0 $0 $0 $91 $0 $0 $0 $ JARC $0 $0 $0 $0 $305 $0 $0 $0 ARRA $0 $0 $0 $0 $4,330 $29,151 $2,279 $0 CMAQ $2,773 $354 $0 $2,385 $0 $0 $636 $0 Financed Revenue $8,285 $0 $0 $50,000 $0 $0 $0 $0 Local Capital $0 $101 $2,304 $18,535 $0 $0 $0 $0 STP $2,343 $1,983 $272 $2,925 $0 $989 $2,918 $2,638 Unprogrammed Federal $0 $0 $0 $0 $0 $0 $0 $273 Sub-Total Capital Revenue $23,282 $25,694 $91,011 $107,990 $13,507 $30,756 $29,808 $114,793 Total Revenue $57,574 $109,381 $173,286 $183,694 $82,654 $103,642 $107,837 $200,284 May 20, 2013