realizing transit: clearing the funding hurdle. · presentation to the 8th international hydrail...
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Realizing Transit: Clearing the funding hurdle.Presentation to the 8th International Hydrail ConferenceJune 11th & 12th Ryerson University, Toronto, Canada
Toronto, Metrolinx is not alone: How do we pay for transit?
Charlotte Area Transit System
Denver’s Eagle Project
Tucson’s Streetcar
Cleveland’s Bus Rapid Transit
LA’s Crenshaw Light Rail Line
Dulles’ Metro Rail Line
Denver’s Union Station
NJ’s Light Rail Line
2030 Transit Corridor System Plan
Adopted by the Metropolitan Transit Commission in 2006o Guide for growth of mobility options in the region
30‐year long range plano Build‐out of a multimodal transit systemo Introduction of rapid transit modes of transportation
Federal Transit Administration (FTA) and the NC Department of Transportation (NCDOT) are key financial and technical partners
FTA is the largest investor in projects i.e. 50% of eligible projects
Every $ received from NCDOT is matched ≥ 100% with local half‐cent sales tax funds
$8.8billion
$5.1 billion
Local Sales Tax
2006
Federal
State
$2.5 billion
$971 millionFinancial model through 2035 included:• Capital and Operating expense• 3 main sources:
• Local Sales Tax• Federal Grants• State Grants
• Other revenue from fares, interest and property tax / vehicle registration
2006 Funding Plan
2006 System Funding Plan
Economic Impact on Sales Tax
Economies Impact on Sales Tax Receipts
2006 Revenue Estimate
2013 Revenue Estimate
LYNX Blue Line Extension (BLE)o +9.4 mileso Implementation in 2017o +25,000 daily riderso Improvements to North Tryon Streeto Connects UNC Charlotte campuses
FTA issued Record of Decision in December 2011
Request to enter Final Design in March 2012
Financially sustainable projecto $1.16 billion (YOE) o FTA approved project & FFGAo NCDOT approved project & FFGA
Our Next Major Project:LYNX Blue Line Extension
Next Major Project: LYNX Blue Line Extension
LYNX Red Line (Commuter Rail)
• Commuter rail from downtown Charlotte to Town of Davidson (or Iredell County)
• Currently not eligible for federal funding grantsfor construction
• NCDOT participation necessaryo Financial partnerso Leadership with private railroads
• Proposed build‐out in 2018o P3 (Public‐Private‐Partnership)
• Candidate for design‐build
LYNX Red Line: North Corridor
• Dual Benefit Corridor o Integrates the efficient movement of both goods (freight) and people (transit)
• Economic Benefit o Attract new residents, employment and private business, strengthening the North Corridor as a focal point for the regional economy
• Unified Benefits Approacho Maximize regional value creation, value capture and value distribution though a Joint Powers Authority (JPA)
LYNX Red Line (Commuter Rail)
LYNX Red Line (Commuter Rail)
• Rosa Parks Place to Eastland• Serves many travel markets• Catalyst for development• PE funded by City of Charlotte• Federal grant for 1.5 mile starter project
CityLYNX Gold Line Streetcar
Gold Line Airport ‐West Corridor
2025 System Plan (2002) • Bus Rapid Transit• Light rail not FTA cost-effective
2030 System Plan (2006) • Streetcar extension– post 2030• Light rail not FTA cost-effective
TodaySprinter Service
Gold Line Streetcar – West CorridorAirport Connection
$5 billion ( Projected - remaining corridors - 2045)
$3.3 billionCapital
2045
$1.7 billionOperating
Funding Gap
$5 billion gap needed to advance the remaining corridors
• Red Line – North Corridor
• Gold Line – Center city
• Gold Line Airport ‐West Corridor
• Silver Line – Southeast Corridor
Funding Gap
Transit Funding Working Group• Metropolitan Transit Commission working committee• Specifically focused on:
• Identifying & building awareness for funding challenges faced to complete the 2030 Transit Plan
• Recommend a set of funding and financing tools and strategies
• Diverse cross‐section of local business, industry and elected officials• Finance, Development, Small Business, Transit• Local Town, City, County and State elected officials
The Best Minds – Best Ideas
National Experts / Projects• Learning from national experts• How they are:
• Advancing transit projects thru P3s• Using energy savings / carbon credits to finance projects• Leveraging partnerships to reduce project risk• Creating local jobs & providing ROI to private businesses• Assembling innovative funding / financing models
The Best Minds – Best Ideas
P3 Projects:Denver’s Eagle ProjectTucson’s StreetcarCleveland’s Bus Rapid TransitLA’s Crenshaw Light Rail LineDulles’ Metro Rail LineDenver’s Union StationNJ’s Light Rail Line
$2.05 billion
$114millionLocal Sales Tax
Revenue Bonds
GARVEE
Local/CDOT
Federal Grants
TIFIA Loans
Private Activity Bonds
Fed New Starts
$48 million
$40 million$16million
$62million
$280 million
$396 million
$1034 million
Project Delivery: Denver Transit Partners Design – Build – Finance – Operate – Maintain• For 34 years• Transit retain asset ownership• Set fares, customer service, safety,
standards
Denver – Eagle Project:• Transit FasTracks initiative• Multiple corridors advancing• Commuter rail / Bus Rapid Transit
One of Denver’s Models
The Denver Experience:
Energy Retrofit • Cross‐agency project for several Chicago city departments and the
Chicago Public Schools• $100 million retrofit of facilities to realize energy savings• Energy savings are shared with P3 to pay for project and provide a
return on investment
Chicago Infrastructure Trust
Chicago Infrastructure Trust• 501C organization• Appointed by Mayor with staggered terms• Allows for a more regional approach• Cross different agencies to obtain benefits and advance projects
The Chicago Experience:
• More robust and flexible funding & financing mechanisms
• Spreads risk across many entities
• Increased upfront development potential
Contrasting Models
TIFIA/RRIF Loans
Federal
Pay‐As‐You GoCapital
NCDOT
Fares / Adv./Other
Proposed Model
• Pay‐As‐Go• TIFs• SAD/MSD• Pennies for Progress• Expanded sales tax, etc.
Local Sales Tax
Federal
State
Contrasting Models
Current Model
Toolbox
Local Revenue Exploration Legislative
TIFIA Loan for BLE long‐term financingState authorizing legislation for all P3 methods
Define “System Plan” boundary for general TIF legislation
TIF and SAD legislation which makes revenue eligible for capital (and operating) costs of transit
Enact TIF district along BLE Corridor Extend SAD Legislation Sunset
Develop local infrastructure bankState legislative authority that may be needed to explore transit loan programs
Assess impact of changes to base by the General Assembly on the current ½% sales tax
Additional sales tax (including Pennies for Progress for capital)
Establish zoning incentives along corridors to attract development
Technical ‐ Planning/Engineering
Explore menu of options for ancillary revenue:Combine Streetcar and West Corridors into one project
o Advertising Define mode for the Southeast Corridor
o Air rights Revisit project scopes and cost estimates
o Naming rights Outreach
o Digital kiosks/boards Initiate and maintain contact with P3 market
o Carbon tax Educate other stakeholders on P3 methods
o VMT
o Parking
o Energy Related Revenue
o Debt RefundingCoordination/financial cooperation from Airport on West Corridor Streetcar
Revenue tools Metrolinx short‐listed:
Development charges Employer payroll tax Gas tax High‐occupancy toll lanes Highway tolls Land value capture Parking space levy Property tax Sales tax Transit fare increase Vehicle kilometres travelled
Cost Pressures Create an opportunity:
Construction Costs and Operations & Maintenance Costs Have to be included in the finance plans for transit lines.
Eliminating catenary can significantly reduce the cost of both.
Equipment OEM’s need to adopt the BMW approach and provide financing/leases that include maintenance in the cost and/or;
OEM’s should participate in P3 consortiums which provide a reliabletotal cost financing.
Cost Pressures
Questions
Questions?
Thank You
Presented by:
Bill Thunberg,Executive DirectorLake Norman Transportation Commission
Thank You!