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Transit CapitalProjects Revenue Advisory Board (RAB)

VDOT Auditorium

1221 East Broad Street

Richmond, Virginia

March 8, 2017

10:02am-1:55 pm

Minutes

Members Present:

Hon. Marty WilliamsHon. Jeff McKay

Jim SporeHon. Tom Rust

Josh BakerHon. Mary Katherine Greenlaw

Dr. James Toscano

  1. Call to Order/Introductions (10:02AM) – Chairman Marty Williams called the meeting to order. Tom Rust shared concern about meeting the July 1st deadline given the current meeting schedule. Chairman Marty Williams said that if the Board feels they are getting behind they will step up their meeting schedule. Director Jennifer Mitchell told the Board that based on what is heard at the meeting, DRPT will be able to determine how much analytical work needs to be done over the next 4-6 weeks. The meeting schedule can then be revised to incorporate more meetings.
  1. Update on Approach for Capital Program Prioritization – Jen DeBruhl from DRPT began the program and shared that she would be presenting along with Tom Harrington from Cambridge Systematics. She shared that a lot of work had been done on prioritization with the TSDAC since the last Revenue Advisory Board meeting. She showed the Board the revised prioritization structure that will incorporate minor enhancement projects. There will be two pots of funding, one for major expansion projects and one for State of Good Repair (SGR)/minor enhancement projects. Money would not be able to be moved from SGR projects to major expansion projects, but could be moved from major expansion projects to SGR. Tom Harrington discussed the different project types and their measures. He stated that different scenarios will be run to determine the outcome of the prioritization process that has been created. The following discussion ensued.
  2. Marty Williams asked how points are assigned for asset condition. He said that he liked the idea of incorporating local priority into the scoring. He said that regions often don’t like us determining their projects based on a score that they don’t understand.
  3. Dr. James Toscano stated that he understood the testing but thinks that the Board should determine what the goals of the testing are. How do they determine if a measure is “good”.
  4. Director Jennifer Mitchell replied that the goal is to have fully funded projects. Fully funded projects would free up local resources for other projects. Tom Harrington shared that the list of projects run through the scenarios will be illustrative. The process will ensure that there is no bias to a particular region or type of projects. It will not show a list of what actually would or wouldn’t get funded.
  5. Dr. James Toscano stated that he worried that guiding principles need to be established to help determine what should be achieved. The board needs to look at the statute again.
  6. Chairman Marty Williams shared that projects in SMART Scale were scored while they were still working to determine the principles.
  7. Director Jennifer Mitchell said that guiding principles were established early on and submitted as part of the interim report. The board should go back and look at those again.
  8. Jeff McKay asked if WMATA had been considered when looking at the prioritization process. Their process is dramatically different than what is being proposed. Jen DeBruhl responded that she has had a lengthy conversation with NVTC about this issue. They are working with NVTC to identify solutions, possible based on the Federal asset management regulation.
  9. Mary Katherine Greenlaw asked how the evaluation process would be satisfied. Director Jennifer Mitchell responded that the Board has only been charged with developing a process, not implementing it. Should this go into effect, DRPT would need additional staff,as well as, input from the industry.
  10. Dr. James Toscano asked how the prioritization works on the highway side and if CTB is given a list of projects to approve. Jen DeBruhl shared that a list does go to CTB on an annual basis. CTB acts as the policy Board. CTB members work with their jurisdictions to make recommendations for changes. Jennifer Mitchell stated that this prioritization process would function in the same way. CTB will ultimately adopt a prioritization policy and the recommendations that come along with it.
  11. John McGlennon, Chairman of the Transit Service Delivery Advisory Committee shared some of the work of the TSDAC with the Board. He stated that a priority of the TSDAC is to maintain quality and efficiency of existing systems if no new funding becomes available. He stated that the TSDACwould like to see this principle in how the prioritization is shaped. Transit service providers need predictability and to be able to anticipate state support in the coming years. Local governments need to be able to plan. He shared that major priorities had been adapted from SMART Scale. The next step for the TSDAC is to look at what happens when the prioritization is applied.
  12. Marty Williams said that the General Assembly has very little experience with transit. Report has to be presented in a way that goes back to the larger goals of the Commonwealth. The report should focus on the consequences of not funding transit projects. The Revenue Advisory Board need to be able to show the General Assembly how projects will “fall off of the list” without additional funding.
  13. Jeff McKay stated that he felt prioritization should only be in place if there is new revenue. He also stated that SGR projects do not go through a prioritization process in SMART scale so should they go through one here? Jennifer Mitchell said that SGR projects do go through a prioritization, just not in Smart Scale. Chairman John McGlennon said that there are not enough available resources to fund all SGR projects so a prioritization of them is necessary.
  14. Chairman Marty Williams said that he is not sure that the prioritization process should be recommended without new funding. The board can vote when the time comes. The current system is not broken, just underfunded.
  15. Director Jennifer Mitchell said that the scenarios will help inform the board’s decision. They may find that there are benefits to the prioritization with declining resources. No decision should be made until the scenarios have been run.
  16. Jim Spore agreed that the prioritization becomes more important when there is less funding.
  1. Transit Capital Revenue Estimation Principles and Scenarios-Nate Macek of Parsons Brinkerhoff began his presentation on possible revenue sources to close the funding gap. In general his research looked into leveraging revenues that are already being collected. Nate Macekshared potential revenue packages that could address transit needs.
  2. Marty Williams said that the GA has generally resisted a regional gas tax.
  3. Jim Spore suggested looking around the country for ideas. He asked Nate if he had looked into project specific funding. Nate said that he had not but that it could be a useful tool. Jim Spore responded that it is a good way to get around having someone in a rural area pay for something in Northern Virginia that they don’t use.
  4. Nate shared a revised list that showed the most promising packages. Nate tailored rates for some packages to look at projections.
  5. Tom Rust asked if other non-existent taxes like the internet sales tax had been looked at. Nate said that he had not because of the challenges that come from establishing new taxes. He said that the best path forward is through existing taxes.
  6. Jim Spore asked why the gas tax was not included in the packages. Nate said that relative to other revenue streams it is not as predictable and doesn’t have the same revenue potential but that he could add it into his analysis. Dr. James Toscano said that there may be political viability in the gas tax since it is familiar to legislators and is debated every year. Jim Spore said that they may need to look further into the future beyond the gas tax, possibly looking at vehicle miles.
  7. The meeting broke for lunch at 12 pm.
  8. Nate presented the illustrative funding packages to the group. He shared that the assumption is that regional taxes would stay in the region. The Board needs to think about how much of the problem should be solved statewide and how much should be solved in the region. A recommendationshould be made on this.
  9. Jeff McKay asked if funds collected in the Northern Virginia region that stay in that region would be ultimately counted against that region because of itseffect on statewide funds. Marty Williams told him that it has normally helped the region with VDOT projects.
  10. Nate shared with the group that they have an opportunity to link prioritization with the funding package to see how things work together.
  11. Tom Rust observed that in the early years of the new revenue sources more is generated than needed. He asked if it would it be bonded or put into a savings account for future years. Nate replied that it could or that the revenue collection could be phased in and more closely tailored to the gap. Chairman Marty Williams asked that a chart showing the phasing in of the revenues be brought to the next meeting.
  12. Dr. James Toscano said that he can’t really see a package that has been developed that the General Assembly would respond well to. Tom Rust said that Hampton Roads will have to be incorporated.
  13. Josh Baker said that he wants to see charts that show what part of the gap is unmet SGR needs and what part are unmet major expansion needs.
  14. Chairman Marty Williams said that the next meeting would be a good time to look at why the regions themselves can’t raise revenue. What would the impact be on the region if the state let go of raising and distributing funding. Marty Williams would like to see that formula at the next meeting. Dr. James Toscano agreed that it may be a good time to look at what other states do in regards to using regional boards to fund transit and to look at if that policy question could be addressed in Virginia. Tom Rust reminded the board that the GA gave Northern Virginia the authority to raise its own taxes for transportation use. Mary Williams would like to see information on this idea and examples from across the nation at the next meeting. Director Jennifer Mitchell pointed out that looking at entities like NVTC and PRTC as a way to achieve something like this without creating new structures could be useful.
  15. Josh Baker suggested that maybe the state plays more of a role in funding SGR projects and the localities raise funding for the major expansion projects in their region.
  16. Marty Williams agreed with Josh Baker that the legislature will want to see SGR needs broken out from major expansion needs. They will want to see what needs to be done to maintain the existing level of service.
  17. Tom Rust agreed that he liked the combined approach and that local regions could help themselves. He stated that he believes going back to the well for general state transportation funds is not a viable option. Tom Rust asked that at the next meeting the top 5 revenue sources that were eliminated from the presentation package be shared with the Board for discussion.
  18. Jeff McKay said that he gravitated towards packages 1 and 4. The Board needs more pointed conversation on the relationship between state and local government.
  19. Josh Baker asked Nate Macek if Motor Vehicles would really be a steady stream of revenue. Nate Macek noted that he would look into more recession resistant packages.
  20. Jim Spore commented that the demonstration of needs may have been too conservative. Director Jennifer Mitchell responded that there would not have been a benefit to showing unlimited resources.
  21. Marty Williams asked that establishing a floor on regional gas taxes in Northern Virginia and Hampton Roads be reviewed. He also asked that options including expansion of HRTAC eligibility to include transit be reviewed.
  1. Public Comment-Brian Smith of Hampton Roads Transit signed up for public comment. Chairman Marty Williams asked him to come forward and speak. Brian Smith introduced himself and shared that he is a member of the TSDAC committee and wanted to speak to offer the Hampton Roads perspective. He said that he appreciated the consideration of regional input into the plan, that this is all part of a bigger picture to push local and regional governments to help absorb costs. He pointed out that in the absence of local or regional funds it is very difficult to compete for federal grants. He said that HB 2313 was not a success in Hampton Roads and asked what Hampton Roads could do. Marty Williams encouraged him to work with the chamber, the business roundtable and the Virginia Port. He said that he should engage groups in bipartisan efforts and narrow the list of their biggest needs to 5.
  2. Wrap Up/Next Steps-Jen DeBruhl said that DRPT would begin looking at dates for 3 upcoming meetings. The first meeting would consolidate feedback and determine timeframes. The next meeting will give members an opportunity to react to the information, and the third meeting would wrap everything up prior to the report due to the General Assembly on August1st. Jen DeBruhl said that she will look into the possibility of doing a joint TSDAC and Revenue Advisory Board meeting. Cambridge Systematics is working on running scenarios to present to TSDAC at the end of the month. Marty Williams encouraged members to share any funding ideas they have with DRPT in the interim between now and the next meeting. Director Jennifer Mitchell said that DRPT will identify the policy questions and tee up the guiding principles so they can be sent out to members, this will give members the ability to make decisions quickly after the scenarios are run. Jen DeBruhl also said that she may send out interim surveys to the Board before the next meeting to help inform DRPT in their work.
  3. Chairman Marty Williams adjourned the meeting at 1:55 pm.