profile - cbbt

T o provide the traveling public with a safe, cost effective, and unique

driving experience across the scenic Chesapeake Bay. MISSION

F or fifty-six years, the Chesapeake Bay Bridge-Tunnel has captured worldwide attention as a

modern engineering wonder and an important East Coast travel convenience. Crossing over and under open waters where the Chesapeake Bay meets the Atlantic Ocean, the Bridge-Tunnel provides a direct link between Coastal Virginia and the Delmarva Peninsula (Delaware plus the Eastern Shore counties in Maryland and Virginia), and saves 75 miles along the journey between Virginia Beach and points north of Wilmington, Delaware, as compared to the I-64/I-95 corridor. The Chesapeake Bay Bridge and Tunnel Commission is the governing body of the District. The Commission consists of eleven members who are appointed by the Governor of the Commonwealth of Virginia. One member represents the Commonwealth Transportation Board and the remaining ten members represent the

localities within the District. The District is comprised of six cities: Virginia Beach, Norfolk, Portsmouth, Chesapeake, Hampton, Newport News; and the two Eastern Shore counties of Northampton and Accomack. Following its opening on April 15, 1964, the Bridge-Tunnel was selected “One of the Seven Engineering Wonders of the Modern World” in a worldwide competition that included more than one hundred major projects. In addition, in 1965, it was distinguished as “The Outstanding Civil Engineering Achievement” by the American Society of Civil Engineers. In 2000, the Bridge-Tunnel was recognized by Structural Engineer magazine as one of the “Seven Structural Engineering Wonders of America for the 20th Century.” In 2007, the Chesapeake Bay Bridge-Tunnel was selected as one of Virginia’s “Top Seven Manmade Wonders” in an online poll conducted by the Richmond Times-Dispatch.

PROFILE

The members of the Chesapeake Bay Bridge and Tunnel Commission have worked diligently during 2020 in administering the affairs of the District in the best interest of the bondholders and the traveling public. In May, the Commission approved the operating expense budget for the District for fiscal year 2020-2021, in the amount of $16,063,835, which was a 2.5 % increase versus the prior year. The Commission, working through the Commission Alumni Society, continues to prioritize its communication with former Commission members and to update them on the Commission and the District, as the Commission Alumni continue to serve as ambassadors of the Chesapeake Bay Bridge-Tunnel.

COMMISSION

FREDERICK T. STANT, III Chairman, City of Virginia Beach

THOMAS W. MEEHAN, SR.

Vice Chairman, City of Newport News

JOHN F. MALBON Secretary-Treasurer, Commonwealth

Transportation Board

PAUL E. BIBBINS, JR., PhD Northampton County

JEFFREY K. WALKER

Northampton County

CHRIS SNEAD City of Hampton

JEFFREY A. ROWLAND City of Chesapeake

KAREN S. JAMES

City of Portsmouth

REEVES W. MAHONEY City of Norfolk

GREGORY L. DUNCAN, SR. Accomack County

KEITH COLONNA

Accomack County

JEFFREY B. HOLLAND Executive Director

February 5, 2021 The Honorable Ralph S. Northam Governor, Commonwealth of Virginia Office of the Governor Post Office Box 1475 Richmond, Virginia 23218 Dear Governor Northam: We are pleased to submit the Annual Report on the operation of the Chesapeake Bay Bridge and Tunnel District for the year January 1 through December 31, 2020, in accordance with the provi-sions of Chapter 22, Title 33.2 of the Code of Virginia, formerly Paragraph 16, Chapter 714 of the 1956 Acts of the General Assembly. Like the Commonwealth, 2020 was a unique year for the District. We continue to experience, and manage, the financial impact of the COVID-19 pandemic. The Report includes information on the District’s traffic volumes, revenue bonds, financial status, operations, maintenance, promotional activities, and community involvements.

If you have any questions concerning the Report or the operation of the Chesapeake Bay Bridge-Tunnel, please advise and we would be pleased to discuss them with you. CHESAPEAKE BAY BRIDGE AND TUNNEL COMMISSION Frederick T. Stant, III, Chairman

COMMISSION MEMBERS FREDERICK T. STANT, III CHAIRMAN CITY OF VIRGINIA BEACH THOMAS W. MEEHAN, SR. VICE CHAIRMAN CITY OF NEWPORT NEWS JOHN F. MALBON SECRETARY-TREASURER COMMONWEALTH TRANSPORTATION BOARD PAUL E. BIBBINS, JR. PhD NORTHAMPTON COUNTY JEFFREY K. WALKER NORTHAMPTON COUNTY CHRIS SNEAD CITY OF HAMPTON

COMMISSION MEMBERS

JEFFREY A. ROWLAND CITY OF CHESAPEAKE

KAREN S. JAMES

CITY OF PORTSMOUTH

REEVES W. MAHONEY CITY OF NORFOLK

GREGORY L. DUNCAN, SR.

ACCOMACK COUNTY

KEITH COLONNA ACCOMACK COUNTY

JEFFREY B. HOLLAND EXECUTIVE DIRECTOR

CHESAPEAKE BAY BRIDGE AND TUNNEL DISTRICT

32386 LANKFORD HIGHWAY

CAPE CHARLES, VIRGINIA 23310

757/331-2960 FAX 757/331-4565

WWW.CBBT.COM

1 |

T he Parallel Thimble Shoal Tunnel (the “PTST”) project is being undertaken by the Chesapeake Bay Bridge and Tunnel District (“the District”) to provide a

second tunnel under Thimble Shoal Channel. When complete, the new tunnel will carry two lanes of traffic southbound and the exis ng tunnel will carry two lanes of traffic northbound, thereby improving the safety for the travelling public. The Project Development Team u lized the design‐build delivery method wherein pre‐qualified teams, ve ed by the District, were selected to submit proposals to design and build the project. The District developed a set of technical requirements, which were supplied to the teams, and then over the course of several mee ngs, the bid package was revised to refine the project scope, minimize risk, and reduce costs. In July 2016, the contract was awarded to the low bidder, Chesapeake Tunnel Joint Venture (“CTJV”), in the amount of $756 million. The new tunnel will be slightly longer than the exis ng tunnel due to alignment, approximately 6,500 feet in length, and will be constructed using a tunnel boring machine, or TBM. A TBM excavates and erects the tunnel as it mines, and the PTST Project is the first transporta on tunnel in the Mid‐Atlan c region to be

constructed using this methodology. The islands at the end of each tunnel require extensive work to allow the TBM to pass, including the expansion of each island via an engineered berm. A TBM is a mobile mining machine, but it must mine through soils. Sand and several different types of rock will be imported to expand the islands and create the berms. Sand placement comes first and then the rock, smaller sizes lowest and largest sizes on top, to protect the expanded islands from the elements. A groundbreaking ceremony was held in September 2017.

Construc on Work: Deep founda on work to create the TBM launching/receiving pits, which will eventually be transformed into

the open approaches of the tunnel roadway, are complete. The deep founda on work u lized slurry panels, which involves digging a rectangular hole straight down into the body of the island using specialized excava on equipment. The hole, once excavated, is then filled with reinforced concrete. The slurry panel

Parallel Thimble Shoal Channel Tunnel

Work completed in 2020

| 2

work was completed in mid‐2020. Concrete struts, horizontal structural elements that

ensure the ver cal open approach walls do not bow in towards the new roadway, are being placed. Four of the struts are now in posi on.

On Two Island, CTJV is working to install the cap beams, structural elements that e the individual slurry panels together at the surface of the island.

A por on of the exis ng western open approach wall on One Island has been demolished, and the contractor has removed approximately 35% of the soil on One Island required for the new tunnel approach.

The soils under the island areas over and through which the TBM will pass are being strengthened and improved to ensure the TBM does not sink into the so soils or create a sinkhole above the machine. The soil strengthening involves injec ng a cemen ous material called grout into the soil and mixing it with the in‐situ soils. This jet grout work has been completed on One Island and is ongoing on Two Island.

Expansion of the engineered berm on the north end of One Island commenced in early 2019, and currently is on hold due to CTJV evalua ng a redesign of this work that will reduce the risk profile. This berm, which is comprised of rocks and stone, will provide cover for the new tunnel.

CTJV is installing temporary enabling works off of the western and southern sides on Two Island that will permit them to do jet grou ng and geotechnical work.

Ongoing work at the Li le Creek project office loca on includes fabrica on work for some of the temporary support structures that will be needed to allow the contractor to expand the islands, as well as the assembly of reinforcing steel cages for the slurry panel

Parallel Crossing Phase II

work. CTJV is taking delivery of temporary structural

elements at Li le Creek that will facilitate the assembly of the TBM. These elements will eventually be installed in the open approach on One Island, and once the TBM has travelled far enough they will be removed.

Tunnel Boring Machine (TBM): The TBM has been constructed and is being stored

at the factory un l CTJV arranges to have it shipped to the site.

Tunnel Segments: Concrete Systems, Inc. (CSI) erected a facility in

Chesapeake, VA, to produce the precast concrete tunnel segments, and produc on began in 2019.

A total of 9,900 tunnel segments that make up the 990 tunnel rings have been produced. CSI employed local labor for fabrica on of the segments.

CSI completed segment produc on in December 2020.

DBE Goal: CTJV has exceeded the Disadvantaged Business

Enterprise (DBE) goal of $20.7 million for the project and current payments to date total $20.9 million. Various businesses have been retained to provide design, construc on services and material supply.

The Project Connect e‐Newsle er con nues to provide more than 750 interested par es with general updates and milestones related to the Parallel Thimble Shoal Tunnel Project.

3 |

TRAFFIC and Revenue

T he Chesapeake Bay Bridge‐Tunnel (the “CBBT”) provides the only direct north/south route across

the lower Chesapeake Bay and completes the coastal transporta on corridor stretching from Maine to Florida. Traffic totaled 3,226,616 vehicles in 2020, a decrease of 815,743, or 20.2% under the 4,042,359 vehicles recorded in 2019. Cars and light trucks accounted for 89.4% of the total traffic or 2,884,649 vehicles, a decrease of 21.3% versus 2019. Heavy trucks totaled 338,329 vehicles or 10.5% of total traffic, a decrease of 7.7% from 2019. Buses totaled 3,638 vehicles or 0.1% of the total traffic, and regis‐tered a decrease of 69.2% from 2019. A comparison by classes on a monthly and yearly basis can be found on page ix of the a ached financial report. A review of traffic changes since incep on of the facility is indicated in the graph below.

| 4

Gross toll revenue for calendar year 2020 totaled $52,362,644, a decrease of $12,400,982 or 19.1% below gross toll revenue received in 2019. The District accepts cash, E‐ZPass, scrip, credit cards, debit cards, Google Pay and Apple Pay in the toll lanes for customer convenience. E‐ZPass u liza on for 2020 totaled 72% of the total revenue for calendar year 2020, as compared to 70.1% in calendar year 2019. In calendar year 2020, the District incurred total E‐ZPass and credit card fees of $853,382 for processing electronic payments as compared to $1,223,779 during the previous year. As a result, net toll revenues for 2020 totaled $51,209,572 versus $63,410,284 in the prior year. Li le Creek Property The District purchased property at Li le Creek in 1995 to be used as a staging area for the

construc on of the Parallel Crossing Project, and Phase I of the Project was completed in 1999. The property on Li le Creek Harbor is now being leased exclusively to the parallel tunnel construc on contractor, CTJV, and con nues to produce excellent income for the District. In 2020, income from the lease of the Li le Creek property totaled $938,077.

Virginia Originals Gi Shop Virginia Originals LLC, operated by Chris and Kellson Savvides of Virginia Beach, con nues to offer Bridge‐Tunnel memorabilia as well as other unique items from the Commonwealth and beyond within a small retail space located at the North Toll Plaza Rest Area Building. This retail space experienced an elongated closure in 2020 as a result of COVID‐19.

BONDS

F inancing for the District’s Parallel Thimble Shoal Tunnel Project closed in November

2016. The Project financing included the issuance of $321,515,000 First Tier General Resolution Bonds, Series 2016 (the “Series 2016 Bonds”), a subordinate loan from the United States Depart‐ment of Transportation under the TIFIA program (the “TIFIA Loan”) in the amount of up to $338,528,672, plus capitalized interest, and a subordinate loan from the Virginia Transportation Infrastructure Bank (the “VTIB Loan”) in the amount of $50,000,000, plus capitalized interest. The Series 2016 Bonds are term bonds maturing from July 1, 2041 through July 1, 2055 with coupon interest rate of 4.0% to 5.0%. The proceeds from

the Series 2016 Bonds, along with the proceeds of the TIFIA Loan and VTIB Loan and cash contributed by the District will be utilized to finance the development and construction of the Parallel Thimble Shoal Tunnel Project. The TIFIA Loan and the VTIB Loan are highly sought after funding sources for major transportation projects as they offer low long‐term interest rates and flexible repayment schedules. The TIFIA Loan and the VTIB Loan are issued on the Subordinate Lien of the 2016 General Revenue Bond Resolution and bear interest rates of 2.88% and 2.90%, respectively. The loans do not incur interest until drawn, which began in August 2018.

Customer Service During 2020, the Opera ons Division rendered assistance to 299 customers who experienced some type of difficulty with their vehicles while crossing the facility.

Customer Assistance The CBBT’s Driver Assistance Program con nues to be well received by the traveling public. Opera ons Division employees will drive a customer’s personal vehicle across the facility to pre‐empt an unsafe incident from occurring due to any phobia when driving across the facility. This is a free service for customers who are traveling in a car, van, SUV or pickup truck. In 2020, the

Opera ons Division assisted 162 customers with driving over the facility as a result of gephyrophobia, acrophobia, etc. In March, this service was suspended for the safety of the public and District employees due to COVID‐19 poten al exposure.

In‐Service School The Chesapeake Bay Bridge‐Tunnel Police Department conducted two Law Enforcement In‐Service Schools, which were a ended by a total of 15 District Police Officers as well as 33 other Police Officers from local departments on the Eastern Shore including Accomack and Northampton County Sheriff’s Offices,

OPERATIONS

On August 13, 2019, the District issued First Tier General Resolution Revenue Bond Anticipation Notes, Series 2019 in the aggregate principal amount of $378,140,000 pursuant to its General Revenue Bond Resolution, adopted by the Commission on October 24, 2016 (the “General Resolution”) and its Fourth Supplemental Resolu‐tion, adopted by the Commission on July 9, 2019 (the “Fourth Supplemental Resolution”). The Series 2019 BANS will mature on November 1, 2023. The proceeds of the Series 2019 BANS will be used to provide funds to pay capitalized interest on the Series 2019 BANS, finance a portion of the costs of the Parallel Thimble Shoal Tunnel Project, and pay certain costs of issuing the Series 2019 BANS. The Series 2019 BANS are being issued in anticipation of the proceeds to be received by the District from disbursements requisitioned by the District in accordance with the terms of the TIFIA Loan Agreement and the VTIB Loan Agreement. The issuance by the District of the Series 2019 BANS as interim financing in anticipation of the receipt of the TIFIA Loan and VTIB Loan proceeds is expected to provide $39 million in interest cost savings for the District.

As a result of the damaging effects of COVID‐19 on the revenues of transportation entities, the TIFIA

program started allowing organizations with outstanding TIFIA loans to pursue resetting the interest rates on their loans in late 2020. The TIFIA loan rates are based on the current 30‐year U.S Treasury rate which sank to historic lows during the summer of 2020. The District had been in discussions with the TIFIA program since the spring of 2020 regarding our interest in just such an opportunity. The District was asked to submit a formal Letter of Interest (LOI) near the end of the year. Our LOI was officially submitted on January 14, 2021. The District anticipates the process to be expedited but will still take several months to finalize. As of February 1, 2021, the current U.S. Treasury rates would yield approximately a 36% reduction in interest costs for the District.

The underlying credit rating on the Series 2016 Bonds is Baa2 and BBB by Moody’s Investors Service and S&P Global Ratings, respectively. The TIFIA Loan is also rated Baa2 and BBB by Moody’s Investors Service and the S&P Global Ratings, respectively. The VTIB Loan is unrated.

All of the District’s outstanding debt portfolio is fixed rate debt.

5 |

Chincoteague, and Eastville Police Departments. The In‐Service schools were offered at the conference room of the Sunset Beach Resort to op mize the physical distancing that was necessary during COVID‐19.

Personnel Training and Con nuing Educa on The District provides opportuni es throughout the year for its employees to par cipate in specialized trainings and/or con nuing law enforcement educa on classes. Throughout 2020, Opera ons personnel a ended the following: Alco Sensor FST Supervisor Computer‐Based

Training Asset Forfeiture Training Customer Service Workshop Department of Motor Vehicles Highway Safety

Office FY21 Grant Applica on Workshop and Grant Awards Banquet

FBINAA (FBI Na onal Academy Associates) State Conference

Federal Motor Carrier Safety School Field Training Officer (FTO) Cer fica on School Safe Driver Course VACP Implicit Bias Training Virginia Associa on of Chiefs of Police 2020

Midyear Conference Virginia Transporta on Safety and

Management Conference VRSA Use of Force Overview Training

Cer fica ons: Basic Gang Specialist Cer fica on Breath Alcohol Operators Recer fica on

CPR Training Field Training Officer Recer fica on Firearms Familiariza on and Qualifica ons

Training General Instructor Cer fica on and

Recer fica on Radar/Lidar Cer fica on and Recer fica on Virginia Criminal Network (VCIN) Terminal

Recer fica on Training Virginia Criminal Network (VCIN) Training Addi onally, one District Police Officer graduated

from the Hampton Roads Criminal Jus ce Training

Academy (HRCJTA) in 2020.

Traffic Summonses and Arrests The Police Department issued 3,502 traffic summonses, of which 32 were for driving under the influence. Addi onally, the department handled 33 felony arrests during calendar year 2020. Total traffic summonses increased by 13% when compared to last year. Of important note, the Chesapeake Bay Bridge‐Tunnel does not receive summons proceeds from the Courts. All proceeds are credited to the Commonwealth’s Literary Fund.

Accidents and Safety Benchmarks During 2020, 18 reportable vehicular accidents occurred on the facility, which involved five personal injuries and two fatali es. This represents a 33% decrease when compared with 27 accidents in 2019. As a result of the 18

| 6

Annual Inspec on The FY2021 Annual Inspec on of the Lucius J. Kellam, Jr. Bridge ‐ Tunnel was performed by Jacobs Engineering Group Inc. (Jacobs) during September of 2020. This inspec on is conducted annually as required by Sec on 504 of the District’s Revenue Bond Resolu on Covenant. The inspec on of the facility was performed using inspec on procedures that followed the general

accidents, es mated vehicle damage totaled $291,800, and damage to District property totaled $94,850. Since comple on of the Parallel Crossing Project in 1999, the injury rate on the CBBT is 11.410 injuries per 100 million miles traveled, or approximately one‐seventh of the na onal average, which is 84 injuries per 100 million miles traveled, according to the Na onal Highway Traffic Safety Administra on. The Na onal Highway Traffic Safety Administra on

gauges the fatali es per 100 million miles driven

na onwide as 1.10 in the latest repor ng year of

2019. The fatality rate on the CBBT per 100 million

miles driven is .6634, or approximately 60% of the

na onal average.

Wind Restric ons Occasionally, the District will have to restrict certain traffic from crossing the facility as the result of strong winds or storm cells moving across the Bay. In 2020, a total of 150 hours and 24 minutes of restric ons were put in place, with winds ranging from 40 mph to greater than 65 mph. The facility was closed to all traffic for a total of 8 hours and 25 minutes. To decrease delay mes for some travelers, the

District offers complimentary wind vans to assist in

transpor ng exterior cargo that would otherwise

restrict passenger cars and pickup trucks from

crossing during the restricted periods. This service

was suspended in March 2020 due to safety

concerns for customers and employees working

close together during the COVID‐19 pandemic.

The District con nues to use Twi er to

disseminate any wind restric on informa on to

the traveling public.

Tunnel Lane Closures During 2020, a total of 18 vehicles were disabled in the tunnels, which required traffic control un l District‐provided wrecker service arrived. This resulted in 8 hours and 19 minutes of traffic stoppages. Addi onally, the Opera ons Division/Police Department escorted 595 oversized loads, which required traffic to be stopped at both ends of each tunnel, resul ng in 175 hours of traffic stoppages. Nigh me work details in the tunnels during calendar year 2020 totaled 160, resul ng in 1,436 hours of traffic stoppages. In summary, during the calendar year 2020, there were a total of 773 lane closures in the tunnels, which resulted in a total of 1,643 hours of traffic stoppages.

Engineering, Maintenance AND Management Information Systems

7 |

recommended guidelines and regula ons of the Na onal Bridge Inspec on Standards (NBIS), as defined in the Code of Federal Regula ons, the Federal Highway Administra on (FHWA), and the Virginia Department of Transporta on (VDOT). The FY2021 Facility Annual Inspec on was submi ed to the District on December 18, 2020. Addi onally, effec ve August 13, 2015, as defined in the Code of Federal Regula ons, the FHWA established the Na onal Tunnel Inspec on Standards (NTIS) for highway tunnels. The NTIS require tunnel owners to establish an inspec on program with the minimum standard to inspect the tunnels, to maintain a tunnel inventory, to report inspec on findings to the FHWA, and to correct any cri cal findings found during the inspec on. In accordance with this mandate, an inspec on of the Thimble Shoal Tunnel was performed following the recommended guidelines and regula ons of NTIS, as defined in the Code of Federal Regula ons, by the FHWA, and by VDOT.

Underwater Inspec on During the FY 2021 Underwater Inspec on, Jacobs

inspected the substructure units of Trestles C‐NB,

following the guidelines of the NBIS. Jacobs

retained the diving services of Cro on Diving

Corpora on for the underwater inspec on

por on of this work. Jacobs/Cro on provided an

on‐site engineer/inspector, as appropriate. The

underwater inspec on of these trestles con nue

the inspec on cycle for the facility’s bridge and

trestle structures in accordance with the NBIS

mandated requirement that the frequency of

underwater inspec on not exceed five years.

The following table shows the summarized

findings of the FY 2021 Annual Inspec on Report

and represents condi on ra ngs to support the

requirements of Statement No. 34 of the

Government Accoun ng Standards Board; Basic

Financial Statements – and Management’s

Discussion and Analysis – for State and Local

Governments (GASB 34):

Maintenance and Management Informa on Systems The Maintenance and Management Informa on Systems (MIS) Divisions oversee and maintain the following throughout the year: Approach roads totaling eight lane miles 12 low‐lying concrete bridges totaling 50 lane

miles Four high level steel bridges over naviga on

channels Four manmade islands totaling 20 acres 13 buildings totaling just under 100,000 square

feet Approximately 100 fleet vehicles, ranging from

police units to heavy construc on equipment, to underdeck bridge inspec on vehicles with ar cula ng work pla orms

Electrical distribu on system, complete with its own Transformer Sta on and four sets of double‐ended switchgear to adequately power every aspect of the facility

State‐of‐the‐art fiber op c network u lizing “Next Genera on” hardware, spanning 40 miles and providing high‐speed connec vity for the District’s communica ons, security and control systems

Complex Electronic Toll Collec on System providing 10 lanes for payment using E‐ZPass, all major credit cards, cash or scrip

Drinking and domes c use wells, storm water and sanitary systems

Water and sewer lines from Virginia Beach at South Plaza and Li le Creek

A 37‐acre commercial port, with bulkhead and finger pier, accommoda ng a 20‐foot dra

Cluster Item Ra ng

A. Approach Roads 8

B. Fisherman Island Causeway 8

C. Tunnels 7

D. Portal Islands 8

E. Toll Plaza Infrastructure 8

F. Site‐Wide U li es 8

| 8

Capital Projects The Commission approved its Capital Projects in the District’s Long‐Term Capital Projects Plan, which extends to 2037. The following lists some of the major projects that were completed or were in construc on in FY 2021: Replace Lights in Chesapeake and Thimble

Shoals Tunnel – The District has been working on an energy saving project consis ng of replacing exis ng fluorescent light fixtures with LED fixtures designed for the District by Kenall Ligh ng. When completed, the LED light replacement project is expected to provide a 25% energy savings for the District. In addi on, the District expects to reduce tunnel lane closures for maintenance by approximately 300 hours per year, or approximately 30%. Currently both tunnels are 95% complete. This project is expected to be completed by June 2021.

Mill & Repave Trestles, Replace End Dams –

This project consists of removing the exis ng asphalt, making deck and joint repairs and placing new asphalt. To date, the awarded contractor, Allan Myers Inc., has completed paving on all Northbound Trestles and C South‐bound (CSB). The District was able to work with Allan Myers to ramp up paving schedules due to lower traffic volumes created by COVID‐19. The last two trestles, A Southbound (ASB) and B Southbound (BSB) will be paved in the spring of 2021.

Northbound CNC‐LUS Reloca on – This project consists of replacing nine Communica on Node Cabinets (CNC) and Ligh ng Unit Substa ons (LUS), currently on pla orms suspended off of the bent caps on the northbound span. The new equipment was relocated to the east side Emergency Pull Offs (EPO)s, reducing the need for lane closures while servicing this equipment. E.G. Middleton Inc. was awarded the project, which was completed in November, 2020.

PTST Replacement of Fan Motor Control

Centers – This project generally consists of the replacement of 24 motor control centers for the ven la on fan motors at all four (4) ven la on buildings of the Chesapeake Bay Bridge‐Tunnel facility and the integra on of the new motor control centers into the exis ng facility‐wide Supervisory Control and Data Acquisi on (SCADA) network. Systems East, Inc. was awarded the project. Four of the 24 motor control centers have been delivered to 3 Island. Installa on is expected to begin in February, with project comple on in the fall of 2021.

Repair Fender System – North Channel Bridge,

Southbound Pier 9 – This project consists of the replacement of damaged sec ons of the fender system from a barge strike incident that occurred on September 3, 2020. McLean Construc on Company was awarded the project with comple on slated for the late Spring of 2021.

9 |

| 10

Roof Replacement – Administra on Building – This project consists of replacement of the membrane roofing system por on of the Administra on Building using a 3‐ply SBS modified system consis ng of 2 plies of SBS modified base shee ng and 1 ply of SBS cap sheet with heat welded seams. Roof Services, a Tecta America Company, LLC was awarded the project, which was completed in December, 2020.

Con nuing Educa on, Training and Conferences Due to the COVID‐19 pandemic, most of the District’s employee conferences, training and educa on opportuni es were cancelled. However, throughout 2020, Maintenance Division personnel a ended the following:

A 2‐day Cer fica on Training course for Under Bridge Access Equipment Opera ons, held in Bedford, VA.

A 2‐day Pes cide Recer fica on course.

Monthly Safety Mee ngs conducted at the District. Topics for 2020 included:

Driver Safety Classes Confined Space Monitoring and Sniffer

Safety Heat Exposure Safety Safe Use of Elevated Work Pla orms Hazardous Communica ons Maintenance of Traffic Safety and

Procedures Transporta on Related Snow Removal

Opera ons Respirable Silica Regula ons

General Adver sing Despite the pandemic’s impact on day‐to‐day travel around the world, the District con nued to promote the Chesapeake Bay Bridge‐Tunnel as an integral part of the Commonwealth’s transporta on system. Adver sing and public rela ons con nues through coopera ve adver sing and promo onal efforts with surrounding locali es, the Virginia Tourism Corpora on, the Coastal Virginia Tourism Alliance, and the Eastern Shore of Virginia Tourism Commis‐sion. Response was made to more than 700 individuals reques ng literature and informa on on the Chesapeake Bay Bridge‐Tunnel and surrounding areas. In addi on to requests made by individuals for literature, more than 33,000 pieces of bulk mail (promo onal brochures and toll schedules) were shipped to individual businesses for display in their brochure racks. The District develops and publishes informa onal brochures, flyers, and newsle ers for its employees and re rees throughout the year. As a result of the pandemic, addi onal marke ng materials were developed for placement through‐out the workplace as well as in all public areas. Addi onally, in an effort to keep everyone informed and safe, a weekly newsle er was developed and distributed to all employees, specific to COVID‐19, its impacts on the workplace

and areas outside of the District. The “Follow the Gulls” promo onal brochure, which is distributed at all Virginia Welcome Centers as well as along the eastern seaboard, not only includes important travel informa on about the facility but also includes general informa on on the Parallel Thimble Shoal Tunnel Project. An E‐ZPass brochure, specific to its use on the CBBT, addresses frequently asked ques ons about the E‐ZPass system, including account replenishment and toll discounts offered by the CBBT. An informa onal brochure en tled “Meet Chessie” is also popular with visitors at the Eastern Shore Welcome Center, as it highlights interes ng facts on the tunnel boring machine as well as general project informa on. While all brochure distribu on was discon nued in the early winter of 2020 as a result of COVID‐19, distribu on commenced in area markets in June 2020, as travel restric ons were slowly li ed in many states. Digital Marke ng Social media con nues to be a posi ve extension of the CBBT marke ng. Twi er con nues as a pla orm to inform followers of up‐to‐date traffic and weather condi ons on the facility, with 14,022 direct followers to date. Facebook is used to provide general informa on, photography, and history, as well as an addi onal means to disseminate informa on to the social public. Our

Marketing and community relations

11 |

| 12

“friends” community con nues to grow with a current following of 33,092. Instagram is used as an extension of Facebook, with a current following of 2,737. In addi on to search engine op miza on and Google ads, CINIVA created addi onal digital adver sing to enhance the organic following and engage poten al customers in key markets through the social media pla orms. The District’s responsive website offers an abundance of informa on to the many varied visitors, including travelers, students and contractors and also provides a library of all per nent documents and informa on as it pertains specifically to the Parallel Thimble Shoal Tunnel Project. Website visits remain strong, with 401,993 recorded in 2020. An addi onal 21,122 pageviews were recorded on the microsite that was launched in 2019 in conjunc on with digital marke ng efforts.

Tours While “behind‐the‐scenes” tours of the facility could not be hosted as a result of the pandemic as well as ongoing construc on on the islands, the District transi oned into the “virtual” world to con nue to share its history and project updates to many organiza ons throughout the year via ZOOM and other digital pla orms. Presenta ons were provided to area civic organiza ons,

providing par cipants with a vast amount of transparent knowledge regarding the District, its

history and mission, general opera ons and maintenance, and the Parallel Thimble Shoal Tunnel Project. The District welcomed film crews to the CBBT at various

mes throughout the year. ABC’s 20/20 film crew was on site in early spring to capture B‐roll for a documentary update being produced on the 2004 Suitcase Murder. In late fall, Hampton Roads Film Office, along with New York Ad Agency Robbins Digital Media, spent a day filming along por ons of the facility, as they captured film and photography for use in upcoming marke ng materials for Mercedes Benz’ 2021 E‐Class. Also in the fall, CINIVA and Loud Cat Crea ve filmed across the facility for the

produc on of 2021 digital ad campaign materials for the CBBT.

Partnerships The CBBT’s partnership with the Eastern Shore Tourism Commission remains strong. The Eastern Shore Southern Gateway Welcome Center is located within the North Toll Plaza Rest Area and operated by the Eastern Shore of Virginia Tourism Commission. The travel ambassadors, comprised largely of volunteer staff led by Welcome Center

13 |

Manager Christy Betz, con nue to ac vely and safely engage the visitors when they come into the Center in order to determine their vaca on preferences and to convert them from “travelers” to “visitors,” as they guide them to the Eastern Shore’s many a rac ons and ameni es. A total of 40,003 visitors were welcomed during the 2020 calendar year, a 59.3% decrease over visita on in 2019, which can be largely a ributed to the Center’s closure for 95 days as a result of the pandemic. Since opening its doors in the fall of 2009, this center has welcomed more than 1,143,324 visitors.

E‐ZPass Serving both a local and na onal popula on, the District remains focused to do its part to slow the spread of COVID‐19. While efforts con nue to encourage travelers to u lize E‐ZPass for touchless travel through the toll lanes, pay sta ons were installed in six of the ten toll lanes at the CBBT in May 2020. These pay sta ons accept cash and credit cards, resul ng in no physical interac on with a toll collector. Revised signage was installed to direct travelers to the appropriate toll lane, depending on their preferred method of payment. While this eliminates physical interac on with a toll collector, the lane transac on me increases from approximately 12 seconds to one minute. More than 72% of the customers traveling the Chesapeake Bay Bridge‐Tunnel use E‐ZPass. The CBBT’s Administra on Building, which houses a full‐service E‐ZPass Customer Service Office, was closed to the public on March 23, 2020. Despite the closure, this E‐ZPass office con nues to provide valuable assistance to customers with account maintenance and updates, payments and

sales. In 2020, the District assisted more than 3,000 customers with their Virginia E‐ZPass accounts and sold more than 800 “On‐the‐Go” retail transponders, including E‐ZPass FLEX tags, which work on the nearby 64 Express Lanes. Because of the office closure to the general public, a large por on of these transponders were sold from the E‐ZPass vending machines that were installed at the North and South Toll Plazas in January 2019. These vending machines provide 24/7 purchase access to CBBT customers, and the CBBT’s E‐ZPass Customer Service Specialist is then able to provide account assistance safely over the phone. These vending machines con nue to be the only machines available in the Commonwealth.

Employee Rela ons From healthy snack op ons in the vending machines, to biometric screenings, and a flu shot clinic, the District con nues to promote a healthier work environment. To encourage ac vity through‐out the fall season, the “Fall into Fitness ‐ 90 Miles in 90 Days” walking program returned for a third year to encourage employees to get moving. Designed to be achievable for all, this program helped bring awareness to individual daily habits and will con nue to serve as a stepping stone for future programs. A fitness room equipped with a treadmill, ellip cal, and Smith machine, is available around the clock to all employees.

Community Rela ons The Commission and District con nue to donate funds to Eastern Shore Rural Health, which in turn are used to purchase scrip toll ckets for local residents who need to travel across the

| 14

Chesapeake Bay for medical reasons. This Medical Tolls Program has benefited many Eastern Shore residents over the past twenty‐eight years. The Educa onal Toll Program was created in 2010, to provide assistance to students commu ng across the Chesapeake Bay Bridge‐Tunnel for the purpose of furthering their post‐secondary educa‐

on. This successful program is a partnership between the Chesapeake Bay Bridge‐Tunnel and the Eastern Shore Community College, who administers the program.

Each year, in partnership with Coastal Virginia Tourism Alliance and in recogni on of Na onal Travel & Tourism Week, the CBBT par cipates in the “Thank a Visitor Day,” hosted at the Norfolk Interna onal Airport. As a result of COVID, this year’s event was cancelled but the CBBT par cipated in a “Virtual Roadtrip” digital campaign that was conducted across social media channels.

In February of each year, a “Super Bowl Food Blitz” to benefit the local Foodbank of Southeastern Virginia, including Virginia’s Eastern Shore, is conducted at the CBBT. In 2020, 289 pounds of food and $123 was collected, which will provide more than 240 meals.

District employees con nue to support the Eastern Shore of Virginia’s United Way campaign. Employees pledged $15,825 to this year’s campaign, “The Shore Needs You NOW,” providing valuable support to community organiza ons and non‐profit agencies. While the COVID‐19 pandemic presented 2020

with much uncertainty and brought a substan al decrease to daily traffic, it created opportuni es to express generosity and aid to others in need. CBBT employees volunteered their me and efforts to assist with the crea on and implementa‐

on of Shore Delivery Corps, a free service providing delivery of groceries and prescrip ons to the at‐risk members of the Eastern Shore community with li le to no contact. Shore Delivery Corps con nues to provide services two days a week, in a con nued effort to keep our at‐risk community members safe and at home. COVID‐19 Care Kits, containing “hard to come by” necessi es including toilet paper, paper towels, hand sani zer, face mask and gloves, were distributed to all CBBT employees in an effort to keep them and their families safe, well and stocked with these essen als. Addi onal thanks were expressed to all employees during the holidays with the distribu on of Holiday Picnic Packs. These packages contained all the “fixins’” for an at‐home family picnic in an effort to lessen holiday stress and to create fellowship around the family dinner table.

Birdwatching Tours The CBBT’s habitat of concrete, steel, asphalt and rocks located in open water create an invi ng rest stop for birds during spring and fall migra on. The District con nues to offer birding enthusiasts the opportunity to observe the many birds and waterfowl from areas along the facility. During the 2020 calendar year, there were 4 bird‐watching tours conducted on #4 Island. Birding tours con nue to be limited to the northernmost island as a result of the ongoing construc on for the Parallel Thimble Shoal Tunnel.

CHESAPEAKE BAY BRIDGE AND TUNNEL DISTRICT

FINANCIAL STATEMENTS FOR CALENDAR YEAR 2020

15 |

CHESAPEAKE BAY BRIDGE AND TUNNEL DISTRICT Notes to the Financial Statements & Governor’s Report

As of December 31, 2020

Overview of the Financial Statements

The Chesapeake Bay Bridge and Tunnel District’s (the “District”) financial report for the years ended December 31, 2020 and 2019 provides long-term and short-term information about the District’s overall financial status. This report consists of two parts: management’s discussion and analysis and the basic financial statements, including notes to the basic financial statements. Management’s discussion and analysis introduces the basic financial statements and provides an analytical overview of the District’s financial activities. The basic financial statements are the statements of net position as of December 31, 2020 and 2019 and the related statements of revenues, expenses, and changes in net position. The notes to the basic financial statements consist of information that is essential to a user’s understanding of the basic financial statements.

As it is considered a special-purpose government engaged only in business-type activities, the District follows enterprise fund reporting; accordingly, the basic financial statements are presented using the economic resources measurement focus and the accrual basis of accounting. Under this basis, revenues are recognized in the period in which they are earned, expenses are recognized in the period in which they are incurred, and depreciation of nonbridge-tunnel infrastructure assets is recognized in the statements of revenues, expenses, and changes in net position. All assets and deferred outflows of resources and liabilities and deferred inflows of resources resulting from the operation of the District are included in the statements of net position.

Financial Highlights for Year ended December 31, 2020

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States. On March 17, 2020, the Governor of Virginia issued a public health emergency order. On March 23, 2020, the Governor issued an order to close all nonessential businesses until further notice and all schools for the remainder of the academic year. The District is considered critical infrastructure, and has remained open throughout the pandemic. The Governor issued a “Stay at Home” order for citizens of the Commonwealth on March 30, 2020. On May 15, 2020, the Governor allowed most of the Commonwealth to proceed into the first phase of the “Forward Virginia” plan to safely and gradually ease public health restrictions while containing the spread of COVID-19. On June 2, 2020, Executive Order 65 and Order of Public Health Emergency Six implemented Phase Two, continuing to ease business, gathering, and traveling restrictions originally imposed by Executive Order 53 and Executive Order 55 issued in March of 2020. The COVID-19 pandemic continues to affect the Country. While the District expects this matter to negatively impact its results of operations, cash flows and financial position, the long term impact cannot be reasonably estimated at this time. Subsequently, the District’s traffic and revenue results have improved since the onset of COVID-19, however traffic continues to be lower than projected for the year ending 2020. Gross toll revenues before deductions for the year ending 2020 were $52,362,644 and were 19.14% less than toll revenues in the previous year. During 2020, 3,226,616 total revenue vehicles crossed the District’s facility. This represents a 20.2% decrease in vehicular traffic over 2019.

Other revenues in 2020 totaled $1,321,898, which is an increase of 12.5% over other revenues in 2019. The increase in other revenue is due to an increase in lease income as a result of leasing additional parcels to CTJV at the Little Creek property. The entire property is now leased by CTJV as a staging area for Parallel Thimble Shoal Tunnel (PTST) construction.

Operating expenses in 2020, before District facility expenses, totaled $15,330,637, which is an increase in operating expenses of $462,429 or 3.1% from 2019.

Total net position at December 31, 2020 was $768,008,891, a 1.7% increase over total net position at December 31, 2019.

| i

Contacting the District’s Financial Management

This financial report is designed to provide the bondholders, customers, and other interested parties with a general overview of the District’s finances and to demonstrate the District’s accountability for the money it receives. If you have any questions about this report or need additional financial information, address your request to the Executive Director or the Deputy Executive Director of Finance and Operations, 32386 Lankford Highway, Cape Charles, Virginia 23310.



ii |

CHESAPEAKE BAY BRIDGE AND TUNNEL DISTRICT Statement of Revenues, Expenses, and Changes in Net Position

Years ended December 31, 2020 & 2019

| iii

CHESAPEAKE BAY BRIDGE AND TUNNEL DISTRICT Statements of Net Position

December 31, 2020 and 2019

iv |

| v

CHESAPEAKE BAY BRIDGE AND TUNNEL DISTRICT Statements of Net Position

December 31, 2020 and 2019

CHESAPEAKE BAY BRIDGE AND TUNNEL DISTRICT Statements of Cash & Investments


vi |

| vii

CHESAPEAKE BAY BRIDGE AND TUNNEL DISTRICT Statement of Investments As of December 31, 2020


viii |


| ix

x |


| xi



xii |

| xiii



1) Organization and Summary of Operations

The Chesapeake Bay Bridge and Tunnel District (the “District”) was created as a political subdivision of the Commonwealth of Virginia by Chapter 693 of the Acts of Virginia of 1954. Chapter 693 was subsequently amended by the following Chapters of the Acts of Virginia: Chapters 462 and 714 of the 1956 Session, Chapter 24 of the 1959 Extra Session, Chapters 228 and 605 of the 1962 Session, Chapter 348 of the 1964 Session, Chapter 203 of the 1990 Session, Chapter 548 of the 1998 Session, Chapters 238 and 705 of the 2000 Session, and Chapters 270 and 297 of the 2005 Session, (collectively, the “Acts”). All such Acts have been codified into Title 33.2 Code of Virginia, Chapter 22. The District comprises the area, all within the Commonwealth of Virginia, in Accomack and Northampton Counties, the Cities of Virginia Beach, Hampton, Newport News, Chesapeake, Norfolk, and Portsmouth, and the area of the Chesapeake Bay between these subdivisions.

By the Acts, the Chesapeake Bay Bridge and Tunnel Commission (the “Commission”) was created as the governing body of the District. These Acts authorized the Commission to acquire, establish, construct, maintain, repair, and operate a project comprising public ferry service over and across the waters between any two points within the boundaries of the District, where such public ferry services would form a connecting link in the system of state highways.

Under the Acts, the Commission was also authorized to establish, construct, maintain, repair, and operate a bridge or tunnel or a bridge and tunnel project from any point within the boundaries of the District to a point in the County of Northampton, including such approaches and approach highways as the Commission deemed necessary to facilitate the flow of traffic in the vicinity of such project or to connect such project with the highway system or other facilities in the state.

The Chesapeake Bay Bridge and Tunnel (the “Bridge-Tunnel”) is a 20-mile, four-lane trestle and bridge and two-lane tunnel crossing at the mouth of the Chesapeake Bay between the City of Virginia Beach and Northampton County on the Eastern Shore of Virginia. The Bridge-Tunnel consists principally of low-level trestles, four bridges, two tunnels, approach highways, and an earth-fill causeway. The Bridge-Tunnel is designated as part of U.S. Route 13, the main north-south highway on Virginia’s Eastern Shore and the only direct link between Virginia’s Eastern Shore and the metropolitan area of south Hampton Roads, Virginia.

The District sold a revenue bond issue of $200,000,000 (“1960 Bonds”) under a Trust Indenture dated July 1, 1960, and constructed the two-lane bridge and tunnel project. The project was opened to traffic on April 15, 1964. The Commission discontinued ferry service following the opening of the two-lane bridge and tunnel project.

On April 15, 1964, the Bridge-Tunnel opened as a two-lane facility. A three-staged parallel crossing project began in 1995. Stage 1 of this project was completed in April 1999. This stage included construction of parallel trestles, bridges, roadways, and rehabilitation of the original two-lane facility. Stage 2 will consist of construction of an additional two-lane tunnel under Thimble Shoal Channel. Stage 3 will complete the parallel crossing with construction of an additional two-lane tunnel under Chesapeake Channel.

2) Summary of Significant Accounting Policies

The District is accounted for under the economic resources measurement focus and the accrual basis of accounting as a special-purpose government engaged in business-type activities, which follows enterprise fund reporting. Special-purpose governments engaged in business-type activities are used to account for the ongoing activities that are financed and operated similar to those often found in the private sector. Accordingly, revenues are recognized in the period earned and expenses are recognized when they are incurred. The District distinguishes operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from the District’s ongoing operations. Operating revenues include revenue from toll collection, recognized when travelers cross the bridge and tunnel, and lease income.

xiv |



Operating expenses include District facility and administrative expenses. All revenues and expenses not meeting these definitions are reported as nonoperating revenues and expenses.

The statements of net position reports all assets, deferred outflows of resources, liabilities, deferred inflows of resources, and the residual net position of the District. Deferred outflows of resources are defined as a consumption of net position by the District that is applicable to a future reporting period. Similarly, deferred inflows of resources are defined as an acquisition of net position by the District that is applicable to a future reporting period.

a) Cash and Investments

Cash includes cash on hand and various checking accounts.

In accordance with GAAP, the District reports its investment securities at fair market value. Fair market value is determined as of the statements of net position date. The fair value is based on either quotations obtained from national security exchanges or on the basis of quotations provided by a pricing service, which uses information with respect to transactions on bonds, quotations from bond dealers, market transactions in comparable securities, and various relationships between securities.

b) Restricted Assets

In accordance with applicable covenants of certain bond issues, cash, investments, and accrued interest receivables have been appropriately restricted. When both restricted and unrestricted resources are available for use, it is the District’s policy to use restricted resources first, and then unrestricted resources, as they are needed.

c) Capital Assets

The bridge and tunnel assets and construction in progress are stated at cost and include previously capitalized interest. In FY2020, the District implemented Governmental Accounting Standards Board (“GASB”) Statement 89 – Accounting for Interest Cost Incurred before the End of a Construction Project which no longer requires the capitalization of interest during construction projects beginning with FY2020. The new statement is only applied prospectively. No provision for depreciation or obsolescence of the Bridge-Tunnel facilities is provided as the District has adopted the modified approach to account for these assets. All other assets excluding bridges and tunnel assets are being depreciated straight-line over their estimated useful lives of three years up to 50 years.

d) Net Position

Net position is classified into four different components: net investment in capital assets, restricted for debt service, restricted for forfeited property, and unrestricted. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any bonds notes or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. Net position restricted for debt service is reported when constraints are placed on the use of assets either externally by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments, or imposed by law through constitutional provisions or enabling legislations. Net position restricted for forfeited property represents assets lawfully seized by the District’s police and restricted for expenditures in accordance with the Virginia Department of Criminal Justice regulations. Unrestricted net position contains the revenue fund, reserve maintenance fund, and the general fund net position. The reserve maintenance fund and general fund are expended to preserve the capital assets by planned and unplanned extraordinary maintenance projects. The general fund will also be used for current and future construction projects.

| xv



e) Management’s Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and deferred outflows and liabilities and deferred inflows and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

f) Revenue Recognition

Toll revenues represent the tolls collected, net of any deductions such as credit card fees, E-ZPass fees and medical and educational toll discounts. Revenues are recognized when earned.

g) Accounts Receivable

A significant portion of the District’s toll revenues are collected electronically via credit card, debit card of E-ZPass. E-ZPass allows tolls to be paid from a prepaid account between a participating group of toll agencies throughout the northeastern and mid-Atlantic United States. The payment of the tolls is governed by a reciprocal agreement between the participating agencies. Electronic toll payment via all three methods is usually received within one to three days following the toll charge. The lagged toll payment is recorded as a receivable on the District’s statement of net position. In management’s estimate an allowance for doubtful account is unnecessary given the reliability of payment under the reciprocal agreement.

h) Pensions

The Virginia Retirement System (VRS) Political Subdivision Retirement Plan is a multi-employer, agent plan. For purposes of measuring net pension liability, deferred outflows of resources and deferred inflows of resources, related to pensions, and pension expense, information about the fiduciary net position of the District’s Retirement Plan and the additions to/deductions from the District’s Retirement Plan’s net fiduciary position have been determined on the same basis as they were reported by the Virginia Retirement System (VRS). For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

i) Postemployment benefits other than pensions (OPEB)

District employees participate in two postemployment benefits other than pensions (other postemployment benefits or OPEB) plans:

The Chesapeake Bay Bridge and Tunnel District Retiree Health Insurance Plan (“RHIP”) is a single employer, defined benefit plan that provides health, vision and dental benefit plans for eligible members through a self-funded plan administered by the District. For purposes of measuring the net RHIP OPEB liability, deferred outflows of resources and deferred inflows of resources related to RHIP OPEB, and RHIP OPEB expense, information about the fiduciary net position of the RHIP and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis as they are reported by the RHIP. For this purpose, the RHIP recognizes benefit payments when due and payable in accordance with the benefit terms.

The VRS Group Life Insurance Program is a multiple employer, cost sharing plan. It provides coverage to state employees, teachers, and employees of participating political subdivisions. The GLI Program was established pursuant to §51.1-500 et seq. of the Code of Virginia, as amended, and which provides the authority under which benefit terms are established or may be amended. The Group Life Insurance Program is a defined benefit plan that provides a basic group life insurance benefit for employees of participating employers. For purposes of measuring the net Group Life Insurance Program OPEB liability, deferred outflows of resources and deferred inflows of resources related to the Group Life Insurance Program OPEB, and Group Life Insurance

xvi |



Program OPEB expense, information about the fiduciary net position of VRS Group Life Insurance program OPEB and the additions to/deductions from the VRS Group Life Insurance Program OPEB’s net fiduciary position have been determined on the same basis as they were reported by VRS. In addition, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

j) Deferred Outflows and Inflows of Resources

Deferred outflows of resources are defined as a consumption of net position by the District that is applicable to a future reporting period. Similarly, deferred inflows of resources are defined as an acquisition of net positions by the District that is applicable to a future reporting period. The pension and OPEB deferred inflows and outflows related to the difference between expected and actual experience and changes in assumptions are recognized using a systematic and rational method over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions and OPEB through the plans. The pension and OPEB deferred inflows and outflows related to investment experience are recognized using a systematic and rational method over a closed five-year period. The pension and OPEB deferred outflows of resources related to contributions subsequent to the measurement date are recognized as a reduction of the net pension and OPEB liabilities in the subsequent fiscal year.

3) Cash Deposits and Investments

a) Deposits

The carrying value of the District’s deposits (unrestricted and restricted) were $10,942,513 and $1,304,919 at December 31, 2020 and 2019, respectively. The bank balance of these deposits was $11,179,228 and $1,144,848 at December 31, 2020 and 2019, respectively. The entire bank balance was covered for both fiscal years by federal depository insurance or collateralized in accordance with the Virginia Security for Public Deposits Act (VSPD Act). In accordance with the VSPD Act, the District’s depository institution pledged collateral in the form of federal agency obligations with a market value equal to 110% of the District’s deposits with a third-party trustee in the name of the Treasurer of the Commonwealth of Virginia. In the event that the banking institution fails, the Treasurer will take possession of the collateral, liquidate it, and reimburse the District up to the value of its deposits. The State Treasury Board is responsible for monitoring compliance with the collateralization and reporting requirements of the VSPD Act and for notifying local governments of compliance by banks.

b) Investments

The District is authorized to invest in obligations of the United States or agencies thereof; obligations of any state or territory of the United States and any political subdivision thereof; obligations permitted by the laws of the Commonwealth of Virginia; repurchase agreements with respect to the foregoing obligations; certificates of deposit, time deposits, or interest in money market portfolios issued by any bank, banking association, savings and loan association, or trust company insured by the FDIC or Federal Savings and Loan Insurance Corporation; commercial paper, shares in one or more open-ended investment funds provided that the funds are registered under the State Securities Act or the Federal Investment Company Act; bankers’ acceptances; and units representing beneficial interests in investment pools created pursuant to the Government Non-Arbitrage Investment Act of the Commonwealth of Virginia.

c) Credit Risk

Credit risk is defined as the risk that an issuer or other counterparty to an investment will not fulfill its obligations. As required by state statute, the policy requires that commercial paper have a short-term debt rating of no less than “A-1” (or its equivalent) from at least two of the following: Moody’s

| xvii



Investors Service, Standard & Poor’s, Fitch Investors Service, and Duff and Phelps. Corporate notes, negotiable certificates of deposit, and bank deposit, notes maturing in less than one year must have a short-term debt rating of at least “A-1” by Standard & Poor’s and “P-1” by Moody’s Investors Service. Notes having a maturity of greater than one year must be rated “AA” by Standard & Poor’s and “Aa” by Moody’s Investors Service.

The District’s investment securities using the Standard & Poor’s credit quality ratings scale are presented below:

d) Concentration of Credit Risk

The District’s investment policy establishes guidelines on portfolio composition by investment type in order to control concentration of credit risk. As of December 31, 2020, the District’s portfolio was invested as follows:

e) Interest Rate Risk

Interest rate risk is defined as the risk that changes in interest rates will adversely affect the fair value of an investment. The District’s investment policy limits the investment of funds as a means of limiting exposure to fair value losses. Investments in the General Resolution Debt Service Reserve Fund are limited to investments with maturities less than five years. Investments in the General Resolution General Fund are limited to investments with maturities that are consistent with the schedule of planning, development, and construction of parallel tunnels that would complete the parallel crossing.

Investments are selected based on the current perception of the direction of interest rates with a greater emphasis on yield and a lesser emphasis on liquidity.

`Standard & Poor Credit Rating

Total AAA AA+ AA AA- A-1 A+US Treasuries 193,115,158$ - 193,115,158 - - - -

Supra-National Agency 6,656,283 6,656,283 - - - - - US Agencies 170,203,264 - 170,203,264 - - - -

Federal Agency Mortgage-Backed 1,577,791 - 1,577,791 - - - - Commercial Paper 4,648,703 - - - - 4,648,703 -

Certificate of Deposit 2,763,797 - - - 2,763,797 - - Corporate Notes 16,775,569 - 4,820,739 7,294,095 2,555,754 - 2,104,981

395,740,565$ 6,656,283 369,716,952 7,294,095 5,319,551 4,648,703 2,104,981

2020 PercentageInvestment type Fair value of portfolio

U.S. Treasuries $ 193,115,158 27.83%U.S. Agencies 170,203,264 24.52Federal Agency Mortgage-

Backed 1,577,791 0.24Supra-National Agency 6,656,283 0.96Certificate of Deposit 2,763,797 0.40Money Market Funds 298,356,937 42.98Commercial Paper 4,648,703 0.67Corporate Notes 16,775,569 2.40

$ 694,097,502 100.00%

xviii |



Proceeds from the sale of bonds issued by the District are invested in compliance with the specific requirements of the bond covenants without further restriction as to the maximum term of securities purchased.

As of December 31, 2020, the District had the following investments and maturities:

4) Capital Assets

Capital assets include bridge and tunnel assets, capitalized interest and financing expenses, and other capital assets. The bridges, trestles, approach roads, Fisherman Island Causeway, tunnels, portal islands with all attached improvements, toll plaza infrastructure and the rest area facility, and site-wide utilities are classified as bridge and tunnel assets. Capitalized interest and financing expenses include the amount of money that was funded from the 1960 Bonds issued for debt service and associated costs of the bonds during construction until the opening of the Bridge-Tunnel in 1964. Miscellaneous capital assets include all other assets that the District has capitalized such as land, buildings, fleet vehicles, and equipment.

The District utilizes the modified approach to infrastructure reporting on bridge and tunnel assets and capitalized interest and financing expenses. In lieu of reporting depreciation on bridge and tunnel assets, the costs incurred for maintaining bridge and tunnel assets at the condition level that is specified by Commission policy are reported as preservation expenses on the accompanying statements of revenues, expenses, and changes in net position.

The District has elected to continue to use the traditional approach or depreciation method for buildings, fleet vehicles, and equipment that are depreciable, as stipulated in the District’s Capital Asset Policy.

U.S. generally accepted accounting principles (GAAP) requires that governmental entities that utilize the modified approach for infrastructure reporting must have their governing board set a policy for the condition levels at which modified approach assets will be maintained. GAAP also requires that a third party perform condition level assessments of the modified approach assets annually and that the condition levels for the current and prior two fiscal years be disclosed in the notes to the financial statements.

The Commission’s preservation policy is to maintain 90% of the bridge and tunnel assets at a maintenance rating program (MRP) condition level of “good” or better.

Less than Between Greater than NotInvestment type Fair value 1 Year 1 to 3 Years 3 Years Fixed

US Treasuries 193,115,158$ 27,026,557 144,381,991 11,706,610 -

Supra-National Agency 6,656,283 5,705,670 950,613 - - US Agencies 170,203,264 1,722,683 112,391,024 56,089,557 -

Federal Agency Mortgage-Backed 1,577,791 9,890 87,830 1,480,071 -

Commercial Paper 4,648,703 4,648,703 - - Certificate of Deposit 2,763,797 - 2,763,797 - - Money Market Funds 298,356,937 - - - 298,356,937

Corporate Notes 16,775,569 4,636,251 10,331,924 1,807,394 - 694,097,502$ 43,749,754 270,907,179 71,083,632 298,356,937

| xix



Jacob’s Engineering, Inc., the District’s consulting engineer, has inspected the District’s bridge and tunnel assets. Jacob’s Engineering, Inc. determines the MRP condition level for the bridge and tunnel assets as a numeric scaled rating. The numeric scaled rating is based on a condition index utilized by the Virginia Department of Transportation whereby 0 is a failed condition level and 9 is an excellent condition level. The table below defines the numeric scaled ratings assigned by Jacob’s Engineering, Inc.:

The following two tables derive percentages in different ways. Trestles and bridges that have an MRP numeric condition level are described as a percentage of lane miles. All other bridge and tunnel assets that have an MRP numeric condition level are described as a percentage of that specific bridge and tunnel asset.

The following tables detail the MRP condition level of bridge and tunnel assets for the last three years:

MRP Numeric code scaleNumeric Narrative

code code Definition

9 Excellent Component has been recently put in service or remains in new condition8 Very Good No problems noted, potential exists for minor preventative maintenance7 Good Potential exists for minor maintenance6 Satisfactory Potential exists for major maintenance5 Fair Potential exists for minor repair or rehabilitation4 Poor Potential exists for major repair or rehabilitation3 Serious Major repair or rehabilitation required immediately2 Critical The need for repair or rehabilitation is urgent1 Imminent Failure Component is out of service; study feasibility for repair or rehabilitation0 Failed Component is out of service and beyond repair, replacement required

Percentage of land miles at an MRP condition Level 7 or betterBridge and tunnel assets 2020 2019 2018

Original bridges 100% 100% 100%Parallel crossing bridges 100 100 100Original trestles 84 100 100Parallel crossing trestles 100 100 100

Percentage of capital assets at an MRP condition Level 7 or betterBridge and tunnel assets 2020 2019 2018

Approach roads 100% 100% 100%Fisherman Island Causeway 100 100 100Tunnels 88 87 87Portal islands 85 85 90Toll plaza infrastructure 100 100 96Site-wide utilities 100 100 100

xx |

5) General Resolution Revenue Bonds

Bond activity for the year ended December 31, 2020 was as follows:

In July 2016, the Commission awarded a contract to Chesapeake Tunnel Joint Venture to design and build the Parallel Thimble Shoal Tunnel Project (the “Project”). On October 24, 2016, to finance the costs of the Project, the Commission adopted and approved a new General Revenue Bond Resolution (the “2016 Resolution”) along with three Supplemental Resolutions authorizing the issuance of $321,515,000 First Tier General Resolution Revenue Bonds, Series 2016 (the “Series 2016 Bonds”), a loan from the United States Department of Transportation under the TIFIA program (the “TIFIA Loan”) in the amount of up to $338,528,672, plus capitalized interest and a loan from the Virginia Transportation Infrastructure Bank (the “VTIB Loan”) in the amount of up to $50,000,000, plus capitalized interest.

The Series 2016 Bonds are term bonds maturing from July 1, 2041 through July 1, 2055 with coupon interest rate of 4.0% to 5.0%. The proceeds from the Series 2016 Bonds, along with the proceeds of the TIFIA Loan and VTIB Loan and cash contributed by the District will be utilized to finance the development and construction of the Parallel Thimble Shoal Tunnel Project. The remaining portion of the proceeds from the Series 2016 Bonds will be utilized to (i) pay capitalized interest on a portion of the Series 2016 Bonds to and including July 1, 2021, (ii) to obtain a municipal bond debt service reserve insurance policy for the Series 2016 Bonds, and (iii) to pay the related issuance expenses, including bond insurance premiums.

The Series 2016 Bonds are subject to optional redemption prior to maturity by the District on or after July 1, 2026, in whole or in part, at par plus accrued interest. The Series 2016 Bonds are subject to mandatory sinking fund redemption in part prior to maturity on July 1 of each year starting in 2035.

The 2041 Term Bond and the 2055 Term Bond are insured by Assured Guaranty Municipal Corporation. The Series 2016 Bonds Debt Service Reserve Fund Requirement of $24,774,566 is secured by a debt service reserve fund policy also issued by Assured Guaranty Municipal Corporation.

The TIFIA Loan and the VTIB Loan are issued on the Subordinate Lien of the 2016 Resolution and bear interest rates of 2.88% and 2.90%, respectively. The loans do not incur interest until drawn which is in the Fall of 2018. Both loans have first semi-annual interest repayments commencing January 1, 2021 and first annual principal repayments commencing on July 1, 2025. Final repayment on both loans is July 1, 2054.

On August 13, 2019, the District issued First Tier General Resolution Revenue Bond Anticipation Notes, Series 2019 in the aggregate principal amount of $378,140,000 pursuant to its General Revenue Bond Resolution, adopted by the Commission on October 24, 2016 (the “General Resolution”) and its Fourth Supplemental Resolution, adopted by the Commission on July 9, 2019 (the “Fourth Supplemental Resolution”). The Series 2019 BANs will mature on November 1, 2023. The proceeds of the Series 2019

AmortizationBalance, of costs, Balance, Amounts due

December 31, Bond premiums, Capitalized December 31, within2019 proceeds discounts, net Interest 2020 one year

First Tier General ResolutionSeries 2016 Bonds $ 321,515,000 - - - 321,515,000 - Series 2016 Issuance Premiums 35,931,392 - (1,535,754) - 34,395,638 - Series 2019 BANs 378,140,000 - - - 378,140,000 - Series 2019 Issuance Premiums 51,267,336 - (13,374,087) - 37,893,249 -

Subordinate Tier General Resolution TIFIA Series 2016 9,412,340 - - 134,795 9,547,135 - VTIB Series 2016 1,390,565 - - 20,049 1,410,614 -

$ 797,656,633 - (14,909,841) 154,844 782,901,636 -



| xxi

BANs will be used to provide funds to pay capitalized interest on the Series 2019 BANs, finance a portion of the costs of the Parallel Thimble Shoal Tunnel Project, and pay certain costs of issuing the Series 2019 BANs. The Series 2019 BANs are being issued in anticipation of the proceeds to be received by the District from disbursements requisitioned by the District in accordance with the terms of the TIFIA Loan Agreement and the VTIB Loan Agreement. The issuance by the District of the Series 2019 BANs as interim financing in anticipation of the receipt of the TIFIA Loan and VTIB Loan proceeds is expected to provide substantial interest cost savings for the District.

The underlying credit rating on the Series 2016 Bonds is Baa2 and BBB by Moody’s Investors Service and S&P Global Ratings, respectively. The TIFIA Loan is also rated Baa2 and BBB by Moody’s Investors Service and S&P Global Ratings, respectively. The VTIB Loan is unrated.

The bond premiums for General Resolution Revenue Bonds are being accreted using the straight-line method, which is not materially different from using the effective-interest method, over the period the bonds will be outstanding.

Tolls and other revenues derived from the operation of the Bridge-Tunnel are pledged as security for the General Resolution Revenue Bonds. The General Revenue Bond Resolution includes covenants such as minimum toll rate covenant ratios and minimum debt service reserve requirements.

6) Fair Value Measurements

The District utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The District determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at measurement date.

Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantively the full term of the asset or liability.

Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identified assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements).

The level in the fair value hierarchy within which a fair value measurement, in its entirety falls in, is based on the lowest level input that is significant to the fair value measurement in its entirety.

Portfolio investments are assigned a level based upon the observability of the inputs which are significant to the overall valuation. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

All of the District’s investments in debt securities are in one of the four categories below and therefore the entire portfolio of debt securities is Level 2.



xxii |

Debt securities classified in Level 2 are valued using the following approaches:

U.S. Treasuries, U.S. Agencies, and Supra-Nationals: quoted prices for similar securities in the market are used to draw appropriate correlations;

Corporate Notes and Municipal Bonds: relevant trade data, benchmark quotes and surveys of the dealer community are incorporated into the evaluation process;

Certificates of Deposit: matrix pricing based on various market makers and dealers;

Federal Agency Mortgage-Backed: solicited prices from market buy and sell side sources, including primary and secondary dealers, portfolio managers and research analysts are used.

The fair value of investments in money market funds is based on the published net asset values per share of those funds.

The District has the following recurring fair value measurements as of December 31, 2020:

Fair value measurements using

Quoted

prices in

active Significant

markets for other Significant

Fair identical observable unobservable

value assets inputs inputs

2020 (Level 1) (Level 2) (Level 3)

Investments by fair value level:

U.S. Treasuries $ 193,115,158 — 193,115,158 —

Supra-national agency 6,656,283 — 6,656,283 —

U.S. agencies 170,203,264 — 170,203,264 —

Federal agency mortgage-backed 1,577,791 — 1,577,791 —

Certificate of deposit 2,763,797 — 2,763,797 —

Commercial Paper 4,648,703 — 4,648,703 —

Corporate notes 16,775,569 — 16,775,569 —

Total investments by fair

value level 395,740,565 — 395,740,565 —

Investments measured at the net asset

value (NAV):

Money market funds 298,356,937

Total investments measured

at the NAV 298,356,937

Total investments measured

at fair value $ 694,097,502



| xxiii

profile - cbbt

Documents