Reston Funding Plan

County of Fairfax, Virginia

Reston Funding PlanPotential Sources of Revenue for Funding

Reston Transportation Improvements

Reston Network Analysis & Funding Plan Advisory GroupDecember 14, 2015

Janet NguyenFairfax County Department of Transportation


Reston Funding Plan

1. Overview2. Status3. Sources of Revenue4. Tysons Cost Allocation Model5. Next Steps

Department of Transportation 2


Funding Plan Overview

Strategy for providing financial resources to pay for transportation improvements in the Reston Phase I Comprehensive Plan Amendment, Approved February 11, 2014.

•Years FY2015-FY2054 (40 years)•Project priorities•Project Cash Flows•Cost allocations



Status of Funding Plan

• Drafted:– Projects list– Preliminary cost estimates, in FY2015 dollars – Potential revenue sources

• In Development:– Project prioritization– Cost allocations



Transportation Improvement Categories

1. Reston-wide Improvements– Road transportation improvements1 (Overpasses, Widenings,

Extensions, Interchanges) to enhance connectivity – Intersection improvements required for adequate traffic

operations

2. Grid of local streets in Reston TSA areas– Enhance pedestrian and vehicular circulation in, around, and

through, station areas


1 All roadways will be designed with pedestrian facilities. Many will also have bike facilities.



ProjectsMajor Components of Reston Phase I Infrastructure:

Reston-Wide Projects, $1.345B•Roadway (Overpasses, Widenings, Extensions, Interchanges), $1.280B•Intersection Projects, $0.065B

Grid Network, $1.284B

Total $2.629B


Shared Funding SolutionsPublic and private investment in Reston is both critical and responsible for ensuring

Reston’s future success. While each solution is unique to the situation, there are a range of transportation funding mechanisms available.

Public sector funding will come from federal, state, local, and regional sources.•Multiple sources within each category

Private sector funding can come from:•Proffers•Cash contributions, Road Fund(per square foot/per dwelling unit contributions)•In-kind Contributions•Tax Districts/Service Districts and/or•Other



Public and Private Investment

Public and private sources of revenue identified to potentially fund plan include the following:

•Existing and historical funding sources that have been allocated to transportation projects

•Existing or potential funding sources available to Fairfax County, as permitted by law



Public | Federal Revenue Sources


Congestion Mitigation Air Quality (CMAQ)•Primarily for capital projects that relieve congestion and improve air quality. •Allocated and approved annually by the Northern Virginia Transportation Authority (NVTA).

Regional Surface Transportation Program (RSTP)•Can be used for many transportation capital improvements.•Allocated and approved annually by NVTA.

Discretionary Grant Programs•Competitive process, not a predictable source of revenue.•Amount of funding varies by cycle.•TIGER – Transportation Infrastructure Generating Economic Recovery.•Allocated by USDOT.


Public | Federal Revenue Sources


Attributes:•Can provide lump sum of revenue.•Can be used to leverage other sources of revenue.•Can provide fairly flexible revenues, e.g., RSTP.•Tend to increase overall project costs due to additional Federal requirements. •Tend to lengthen overall project schedule to meet these requirements.•Requires project funding agreements, which can be a lengthy process.•Unreliable/Unpredictable due to competitive process for discretionary grants.

Source and Estimated Annual Allocation to CountyCongestion Mitigation Air Quality (CMAQ) $14M

Regional Surface Transportation Program (RSTP) $18M

Discretionary Grant Programs $N/A

Total Estimated Annual Allocation to County $32M


Public | State Revenues SourcesRevenue Sharing•Can be used for many transportation capital improvements.•Requires 100% local cash match.•Between $15 million and $200 million can be allocated and approved annually by the CTB.•Limited availability, $10M max application per locality per year.•The state has allocated approximately $180 million for the program in FY 2016 and has proposed reducing the funding over the next five years:

– $150 million in FY 2017 – $100 million in FY 2018 and 2019 – $50 million in FY 2020 and 2021



Public | State Revenues SourcesHB2 and HB1887HB 2 provides for the development of a prioritization process for projects funded by the Commonwealth Transportation Board (CTB).•Considers congestion mitigation, economic development, accessibility, safety, and environmental quality.•CTB weights these factors for each of Virginia’s transportation districts and can assign different weights to the factors for various regions.•Congestion mitigation must be weighted highest in Northern Virginia and Hampton Roads.HB 1887 created a new funding formula for the Commonwealth’s roadway construction projects:•45% of the funding goes to state of good repair. •27.5% of the funding goes to statewide high-priority projects program (projects of statewide importance that will be evaluated and selected using the HB2 process).•27.5% of the funding to highway construction district grant programs (localities would compete for funds under a regional version of the HB2 process).

The County submits applications for both Statewide and District Grant programs, in accordance with Board priorities and the Programs’ requirements.



Public | State Revenue Sources


Source and Estimated Annual Allocation to CountyRevenue Sharing $10

(HB2/HB1887) Statewide High Priority Projects Program (HPPP) $N/A

(HB2/HB1887) Construction District Grant Program (CDGP) $N/A

Total Estimated Annual Allocation to County $10

Attributes:•HB 2/HB1887 programs unpredictable due to competitive project selection process.•Can provide large sums of revenue, e.g. HB2/HB1887•Can be used to leverage other sources of revenue, e.g. HB2/HB1887, Revenue Sharing.•Proposed reduction in Revenue Sharing funds may make it more difficult for County to receive the same amount of funding as in years past.•Use of State funds requires project funding agreements, which can be a lengthy process.


Public | Local Revenue Sources


General Fund•The General Fund is the County’s primary operating fund and supports all general purpose functions in the County.•Revenues derived mostly through real property and personal property taxes.•Significant portion of General Fund revenues are transferred to finance other county priorities, the public schools (FCPS), human services, public safety, and debt service among other things.

Attributes:•Currently, transfers are primarily for transit projects•FY 2016 Transfers:

– County Transit $34.5M;– Metro $11.3M;– Transportation $7.8M;– debt-service on transportation related G.O. Bonds N/A.

Source and Estimated Annual Revenue to CountyGeneral Fund Transfers to Transportation FY2016 $53.6M




Commercial and Industrial (C&I) Taxes•For projects that increase transportation capacity.•Currently set at $0.125/$100 assessed value on commercial and industrial properties.•Generates approximately $50M annually•Allocated by the Board.

Attributes:•Reliable source of revenue•Flexible source of revenue and can be easily shifted between projects.•Must be used to increase capacity.Source and Estimated Annual Allocation or Revenue to County

Commercial and Industrial (C&I) Taxes $52M




General Obligation (G.O.) Bonds•Form of long-term borrowing to help finance public facilities.•Enacted/Approved by referendum.• In 2014, $100M transportation bond was approved – bicycle, pedestrian, and spot

projects. Projects proposed for bond funding were identified through extensive public outreach and engagement, called the Countywide Dialogue on Transportation.

•Allocated by the Board.

Attributes:•Reliable source of revenue.•Creates long-term future obligation to the county, debt-service.•Proceeds of bond sales must be used for purpose specified in the referendum question.•Bond program is not designed to contribute to an increase in tax rate.

Source and Estimated Annual Allocation or Revenue to CountyG.O. Bonds $20M


Public | Local/Regional Revenue SourcesHB2313Provides approximately $300 million per year to regional transportation by: •Increasing Northern Virginia sales tax by 0.7%, for total of 6% •2% Transient Occupancy Tax (hotel tax) •Imposes a Congestion Relief Fee (grantors tax) of $0.15 per $100 valuation

All of the taxes and fees collected under HB 2313 are sent to the Northern Virginia Transportation Authority (NVTA). Dollars are divided into one of two categories:

•NVTA 30% Local Distribution Funds•NVTA 70% Regional Revenue Funds



Public | Local Revenue SourcesHB2313 - NVTA 30% Local Distribution Funds•30% of funds will be distributed to the individual localities on pro-rata basis for transportation. •Must be spent on: urban or secondary road construction; capital improvements that reduce congestion; projects included in NVTA’s long-range plan; or for public transportation purposes.•Distributed monthly to the County from NVTA; County receives about $45 million annually.•Allocated to projects by the County Board.

Attributes:•Reliable sources of revenue.•Flexible source of revenue and can be shifted between projects to optimize availability of funding.


Source and Estimated Annual Allocation or Revenue to County

NVTA 30% Local Distribution Funds $45M


Public | Regional Revenue SourcesHB2313 - NVTA 70% Regional Revenue Funds•70% will be provided to the Northern Virginia Transportation Authority (NVTA) to be used on:

– Regional projects included in TransAction 2040 or its updates; and – Projects evaluated by VDOT for reducing congestion as required by HB 599 (2012) – NVTA must give priority to selecting projects that are expected to provide the greatest

congestion reduction relative to cost of the project•Approximately $200 million available to be allocated by NVTA each year.

Attributes:•Can provide large and small sums of revenue.•Competitive process; NVTA 70% not guaranteed due to limited amount of funds available relating to amount requested. •Over the long-term, each locality’s total long-term benefit must be approximately equal to the proportion of the total of the regional fees and taxes attributable to the locality. •Projects must meet specific requirements to be eligible (no maintenance, inclusion in regional plan, etc.)



Public | Other Revenues Sales Tax: Local (Northern Virginia) sales tax rate is 6% •General sales tax rate for VA is 5.3 percent•Additional 0.7 percent state tax is imposed in localities in Northern Virginia for transportation; sent to NVTA to be distributed via NVTA 30% Local and NVTA 70% Regional Funds. The County generated roughly $106.4M from the additional 0.7 percent tax for transportation in FY2015.•Requires Virginia General Assembly authorization to increase the current rate.

Gas Tax: Regional gas tax of 2.1 percent on wholesale gas sales in Northern Virginia. •These funds are collected by the Northern Virginia Transportation Commission (NVTC) and distributed directly to the Washington Metropolitan Area Transit Authority (WMATA) on behalf of Fairfax County. •Covers portion of County’s subsidy for Metro operations, about $24.8M annually.•Requires Virginia General Assembly authorization to increase the current rate.



Public | Other Revenues

Real-estate tax (base rate): $1.09/$100 assessed value; Board of Supervisors has authority to annually amend and adopt a new tax rate. An increase of 1 cent could generate approximately $22M in additional revenues in FY2016.

Car Tax/Personal property tax: $4.57 per $100 of assessed value; Board of Supervisors has authority to amend and adopt a new tax rate. An increase of 1 cent could generate approximately $800k in additional revenues in FY2016.

Hotel and motel tax: 6% (2% general transient occupancy tax, 2% for tourism, and 2% transient occupancy tax for regional transportation (HB2313)). General Assembly authorization required to increase.

Grantor’s Tax: $0.15 per $100 of value on deeds (for transportation HB2313). General Assembly authorization required to increase.



Public | Other Revenues Meals Tax•Tax on prepared food and beverages at restaurants, cafes, coffee shops, etc.•Counties in Virginia are limited to a rate of up to 4 percent.•Tax would be in addition to the state’s sales tax (6 percent).•Virginia law requires voter referendum to levy meals tax.•Revenues can be earmarked to a specific purpose.

Sales tax on service: currently no sales tax on services in Fairfax County; requires General Assembly authorization to enact.Parking fees: currently no fees on county owned parking lots that charge for parking; requires approval for parking lots and on street parking.Local income tax: income taxes are collected by the state. The power to enact a 1% local income tax via referendum was repealed by HB2313. An additional local income tax would require General Assembly authorization to enact.Vehicles Miles Traveled (VMT): Tax on miles traveled by vehicles registered in Fairfax County. The County currently does not have a fee on VMT. This would affect businesses and residents with vehicles registered in Fairfax County. Requires General Assembly authorization to enact.


Potential Annual Revenue to County

Meals Tax at 1% rate $22.5M*

Meals Tax at 4% rate $90M*

*Based on calendar year 2013 taxable sales at Food and Drink Places in Fairfax County


Public Sources of RevenueEstimated annual public funds to County for transportation, County-wide from sources discussed:

However, public funding for Reston Funding Plan projects may not be readily available until FY2021:•Most of the public sources of revenue have already been committed to projects in the Board’s Six Year Transportation Project Priorities (TPP) for FY2015-FY2020, which includes about $12.5M for DTR overpasses (planning level funding only) that are included in the Reston Funding Plan.•Fairfax County bond packages are planned to fund specific projects. This means that all previous bond authorizations were planned for or are obligated to specific projects.•Even after FY2021, public funds for transportation must be programmed to projects throughout County. Example: Some of the public sources have been committed to the Tysons funding plan through 2050 or projects initiated during FY2015-2020 timeframe.

Additional funding from private sources of revenue required to fully fund projects in Reston.


Federal $32,000,000State $10,000,000Regional $90,000,000Local $171,000,000

Total Estimated Annual Public Funds to County for Transportation $303,000,000


Private | Proffers/ContributionsProffers•Voluntary commitment by landowners/developers to perform an act or to donate money, land, services or products to address/offset impact(s) arising from their proposed rezoning.

Proffers may be offered to offset public facility costs via two methods:

1.Cash Proffer: money voluntarily proffered in a writing signed by the owner of property subject to rezoning, submitted as part of a rezoning application.

– Funding can be pooled from multiple rezonings to fund one or more projects e.g. Road Fund.

2.In-kind Contribution: projects completed by the developer seeking rezoning; – On-Site: Improvements directly connected and/or needed for redevelopment.– Off-Site: Improvements not directly connected and/or needed for redevelopment.



Private | Road Fund/In-Kind ContributionsExample: Developers provide in-kind contributions and contribute to two funds to pay for Tysons improvements over 40 years.

Grid of Streets ($865M) – Will be paid entirely by developers through:Tysons Grid of Streets Contributions Fund ($304M): per gross square foot (gsf) or per dwelling unit contributionIn-kind Contributions ($561): Developers may elect to construct transportation improvements outlined in Tysons guidelines in lieu of cash contributions, as negotiated in individual proffer agreements.

Tysons-Wide Road Improvements – Developers pay for majority of projects inside Tysons and a portion of projects outside of Tysons ($506M):Tysons-Wide Developer Contributions Fund ($253M): per gsf or per dwelling unit contributionTysons Service District ($253M)



Private | Service DistrictService District:•Fund transportation improvements located within a defined geographic area.•Does not require landowner approval, approved and established by the Board of Supervisors.•Tysons Service District will fund approximately $253M worth of improvements or 50 percent of Tysons-Wide Road Improvements. Rate in FY2016 is $0.05 per $100 of assessed real estate value. Boundary is generally consistent with the Tysons Corner Urban Center.

Attributes:•Reliable source of revenue•Bondable•Applies to both residential and commercial property•Imposed by the Board of Supervisors


Source Potential Revenue FY17Example Reston Service District @ $0.01•Estimate using FY15 Assessed Values for properties in Reston TSAs•Assumes 3% annual growth in assessed value

$0.8M

For example purposes only.


Private | Tax DistrictTax District•Voluntary petition of landowners and approved by the Board of Supervisors.•Fund large projects in a defined geographic area.•Route 28 Transportation Tax District:1987 two-county district for specific purpose of widening the major arterial in a largely undeveloped area. Rate in FY2016 is $0.18 per $100 of assessed value of commercial and industrial property. Revenues estimated to be $11M in FY2016.•Dulles Rail Phase 1: $400M; Dulles Rail Phase II: $330M.

Attributes:•Reliable source of revenue•Bondable•Self-imposed


Source Potential Revenue FY17Example Reston Tax District @ $0.01•Estimate using FY15 Assessed Values for non-residential (including commercial residential(apartment))properties in Reston TSAs•Assumes 3% annual growth in assessed value

$0.6M

For example purposes only.


Tysons ModelMajor redevelopment over the next 40 years to capitalize on the four Metro stations in Tysons and transform Tysons into a transit-oriented mixed-use urban center.

A funding plan was developed to pay for $3.1B transportation improvements in Tysons to support development with public and private sectors sharing responsibility for cost of improvements.

Components of Tysons Infrastructure:1.Grid of Streets 2.Tysons-wide Improvements 3.Neighborhood and Access Improvements4.Transit


Cr. Tysons Partnership


Tysons Cost Allocation ModelComponents of Tysons Infrastructure Relevant to the Reston Funding Plan:

1. Grid of Streets – private sources (landowners/developers)

I. Grid of Streets Road Fund: Per square foot/per unit road fund

II. In-kind contributions

2. Tysons-wide Road Improvements

I. Outside of Tysons boundaries – primarily public sources

II. Inside of Tysons boundaries – primarily private

• Tysons-wide Road Fund: Per square foot/per unit road fund contributions

• Tysons Service District



Tysons Grid Cost Allocation ModelGrid of StreetsProjects: Improvements to transform superblock network to more urban model

Total: $865,000,000

Funding: Paid for entirely by developers through In-kind contributions and a Grid “Road Fund”


Grid of Streets Rate FY2016 Estimated Total Need, $865MIn-kind Contributions N/A $561MGrid “Road Fund” $304M• Per Sq. Ft. Commercial Property $6.71

• Per Unit of Residential Property $1,042


Tysons-wide Cost Allocation ModelIn June 2010, staff recommended to the Tysons sub-committee a cost allocation based on local and through traffic as follows:

Tysons-wide project costs should be a shared responsibility between the public and private sectors.

The cost share should be allocated based upon the ratio of through (35%) and local (65%) traffic volumes of 2030 Tysons projects.

Private responsibility: ½ of local traffic generated (32.5%)Public responsibility: All of through traffic (35%) and ½ of local traffic generated (32.5%)

Cost Split for Tysons-wide Projects ($810M):Private Sector 32.5% ($263M)Public Sector 67.5% ($547M)



Tysons-wide Cost Allocation Model

In December 2010, the updated funding plan for 2050 included additional projects totaling $1.208B.•The Tysons sub-committee recommended a more equitable cost allocation model that also included 2050 projects.•Staff worked in cooperation with the Tysons Partnership over many meetings arrived at a cost allocation model based on a 90/10 split (discussed in the next slide).•In June 2012, staff returned to the sub-committee with the 90/10 split allocation (discussed in next slide), which the sub-committee determined to be a correct basis for an appropriate allocation.



Tysons-wide Cost Allocation Model Tysons-wide Road ImprovementsProjects: These are larger projects, such as new ramps, new roads, and widening existing roads.

Total: $1,208,000,000


($mil) Public Private Total Public (%) Private (%)Outside Tysons

$653 $73 $726 90% 10%

Inside Tysons

$48 $434 $482 10% 90%

Total $701 $506 $1208 100% 100%

Share 58% 42%


Tysons Cost Allocation Model Tysons-Wide Transportation Fund (Private – Landowner/Developer contributions) ($506M):•“Road Fund” ($253) - Developer contributions to a per sq. ft./per unit fund

– Rates are subject to annual inflation adjustment based on CPI•Service district ($253)

– “Modified Bell Curve” model to meet $253M need.– Rates: $0.04 in FY 2014, $0.04 in FY 2015, and $0.05 in FY 2016.– Increases to $0.07 later in Tysons funding plan.


Tysons-Wide Transportation Fund Rate FY2016 Estimated Total Need, $506MService District $0.05 $253MRoad Fund $253M• Per Sq. Ft. Commercial Property $5.87

• Per Unit of Residential Property $1042


Tysons Transportation Funding Allocation


Reston Potential Cost Allocation • Reston-wide Improvements ($1.345B)

– Outside/Inside – Outside to be primarily funded by public sector – Inside to be primarily funded by private sector

contributions

• Grid Network ($1.284B)– Primarily funded by private sector contributions

• Total funding plan: $2.629 B



Next Steps• Advisory group feedback on potential revenue sources,

including others that should be evaluated• Development of proposed funding plan to include cost

allocations between public and private sector• Outreach to stakeholders and public• Revise plan based on feedback received• Share proposed funding plan with Board Transportation

Committee • Seek Board of Supervisors approval


Comments/Questions?



Contact Information

For questions and comments please contact:

Janet [email protected]

Ray [email protected]

News & Politics

Reston Funding Plan