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Review of FY 2020 Financial Projections & Preliminary FY 2021 Financial Outlook

Budget & Finance CommitteeMay 12, 2020

Joseph G. CostelloChief Financial Officer

Sherry FosterInterim AVP, Business Planning & Analysis

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FY 2021 Budget and Financial Calendar Planning Process Calendar

Finance Department

Date Subject

May 12 • Review of FY 2020 Financial Projection & Preliminary FY 2021 Financial Outlook

May 26 • Review of FY 2020 Financial Projection & Preliminary FY 2021 Financial Outlook

Jun 9 • Review of FY 2020 Financial Projection & Preliminary FY 2021 Financial Outlook

Jun 23 • Review of FY 2020 Financial Projection & Preliminary FY 2021 Financial Outlook

• FY 2021 Budget and Financial Planning Process – Departmental Budget Presentations

Jul 7 • Briefing on FY 2021 Budget and Financial Planning Process - Draft FY 2021 Annual Budget & Twenty-Year Financial Plan

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FY 2021 Budget and Financial Planning Process Calendar (Cont.)

Finance Department

Date Subject

Aug 11 • Budget & Finance Committee recommends approval to COTW/Board to send FY 2021 Budget and Twenty-Year Financial Plan to Service Area Cities

• Board approves sending FY 2021 Budget and Financial Plan to Service Area Cities

Aug 25 • Budget and Finance Committee recommends approval of the FY 2021 Annual Budget and Twenty-Year Financial Plan

Aug • DART Presentation of Proposed FY 2021 Annual Budget and Twenty-Year Financial Plan to the Service Area cities

Sep 22 • Board Approval of FY 2021 Annual Budget and Twenty-Year Financial Plan

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• Financial Plan Priorities• Order of Magnitude• Summary• Potential Resulting Key

Performance Indicators

Presentation Outline

Finance Department

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Financial Plan Priorities

Finance Department

• The Financial Plan demonstrates the financial sustainability of the agency with the following priorities. SGR: Preserve the capital assets of the agency (state-of-

good-repair). Workforce: Retain agency institutional knowledge and

expertise. Service: Provide the highest levels of effective mobility

service.

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Financial Plan Priorities (continued)

Finance Department

• The potential budget and financial plan actions, below, preserve the financial sustainability of the agency within these priorities as follows:Action (priority)o Secure maximum federal and other funding. (All)o Draw on agency reserves. (All)o Defer projects other than state-of-good-repair projects.

(SGR)

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Financial Plan Priorities (continued)

Finance Department

• Retain employees required to provide service. (Service)• Achieve operating budget savings through non-personnel

cost reductions, program deferrals, and personnel related cost constraints. (Workforce)

• Review SGR projects for effectiveness. (All)• Modify service levels as appropriate for existing demand.

(All) • Examine personnel and procedures for efficiencies and take

actions necessary to enact. (All)

7Finance Department

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Sales Tax Loss

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10Finance Department

11Finance Department

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*$1 million is a placeholder and the amount may range from $1 to $3.*Hazard pay is not yet decided.

13Finance Department

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15Finance Department

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Capital Projects

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Capital Projects – (continued)

18Finance Department

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CARES Act Funding

• On March 27, President Trump signed the CARES Act into law.

• FTA allocated $25B to grantees receiving formula funds.

• The Dallas Area Urbanized Area (UZA) was allocated $318,629,129. • DART’s allocation was $229,627,520.

• DART is working with FTA to file our grant application for operating expense reimbursement beginning on January 20, 2020.

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Order of Magnitude Summary

Finance Department

21Finance Department

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Appendix

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FTA Quarterly Meeting No. 64 April 23, 2020

D2 SubwayProject

• Specific schedule impacts to the PE/EIS efforts are unknown at this time. Potential impacts to Final EIS schedule could result based on cancellation of City of Dallas board and commission meetings that need to provide reviews and approvals on specificenvironmental topics

• Initial assessment of financial plan impacts indicate delay up to three years

• Delay could be greater if external funding is not available

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COVID-19 Impacts

• DART provided a letter to FTA on August 29, 2019, to confirm interest in re-entering Capital Investment Grant (CIG) program

• DART shared draft roadmap with FTA and PMOC in March• Spring 2020 – DART would begin to prepare readiness documents• August 2020 – CIG Submittal for rating and six-month advance notice

of request to enter engineering• Entry into Engineering in early-mid 2021

– After FEIS/Record of Decision (ROD) approval– Project rating required

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Re-entry to CIG Program

• 20% Design Submittal completed March 6, 2020• Design Review Process underway:

– 60-day review period– City of Dallas staff received documents; virtual meeting planned– DART staff review underway; 4 WebEx workshops held– Follow-up meeting with utility companies to be held– Cost Estimate under internal review

• 30% design – Fall 2020

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Design Progress

TxDOT Interface

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• Meeting held with TxDOT, City, NCTCOG on April 16– City of Dallas street network concepts with portal west of I-

345 to allow for at-grade I-345 crossing– TxDOT review of below-grade I-345 concept

• Process may identify possible additional funding or infrastructure support from the City of Dallas and/or NCTCOG that would be required to advance a coordinated design or to modify the D2 profile

• DART will continue to advance the D2 Subway project as planned concurrent with the TxDOT effort

• Revised Project Cost in Year of Expenditure (YOE) has beencompleted as part of 20% submittal– Cost estimate is in internal review

• Cost estimate retains 30% design contingency and 10% unallocated contingency

• Value engineering and risk assessment activities will refine cost further

Project Cost Estimate

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D2 Second Light Rail Alignment COST SUMMARY(in millions of dollars)

Control Budget(3)

Current Commitme

nt(1)

Future Commitment

CurrentWorkingEstimate

Expended to Date (2)

D2 – Second Light RailAlignment $1,412.5 $17.0 $1,395.5 $1,412.5 $15.2

Notes:1) Committed values reflect activity through 03/31/20.2) Expended to date values reflect activity in DART’s General Ledger through 03/31/20.3) Control Budget reflects scope related costs only and does not include projected financing costs.4) Total FY19 Financial Plan value of $1,489.5 includes projected financing costs.5) D2 Expended to Date (Prior to Removal from CIG 3/20/18) – $4,733,460;

D2 Expended to Date (3/20/18 to 03/31/20 after removal from CIG) - $ 10,459,488.

Contingency Remaining Per Contractas of 03/31/20

Contract(s) Pending $0.00

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Key Milestones for FTA ScheduleActivity Date20 percent design/Initiate readiness documents March 2020Draft Supplemental Environmental Impact Statement March-June 2020- Notice of Availability May 2020- Public Hearings on Draft EIS June 202030 percent design Aug/Sept 2020Final EIS/Record of Decision (FEIS/ROD) Aug/Sept 2020Core Capacity Submittal/Project Rating/Six-monthadvance notice to enter Engineering

Aug/Sept 2020

Entry into Engineering- FTA Rating- Readiness documents review complete

Early-Mid 2021

Anticipated grant execution Late 2021Revenue service date 2024*

* Subject tochange.

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Cotton Belt Silver Line Project

FTA Quarterly Meeting No. 64 April 23, 2020

Cotton Belt

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COVID-19 Impact

• Roadway Worker Protection (RWP) classes cancelled. Exploring options for remote or online training structure for social distancing practice. Minimal impact right now due to FRA extending RWP renewals

• DART Construction Safety worked with contractors on safe practice and precautions– COVID-19 job site precaution elements have been

incorporated into the DART Construction Safety daily checklists for monitoring compliance

Cotton Belt

COVID-19 Impact

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• The following contractors have submitted force majeure letters to DART– AWH, Design-Build– Stadler, Vehicle and EMF Design, including Urban Engineers,

subcontractor for design– AWC, EMF CMGC

• DART has acknowledged receipt; contractor to monitor and inform

Cotton Belt

Procurement Status Update

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Contract Solicitation Award NTP

Regional Rail Design-Build Completed Completed 1/4/2019

PMOR Completed Completed 1/4/2019

Vehicle and EMF Design Completed Completed 4/1/2019

EMF CMGC Completed Completed 1/8/2020

Comm Duct Bank Material In-progress

Comm Duct Bank Construction In-progress

TVM In-progress

Cotton Belt

Procurement Status Update (continued)

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• Duct bank AWH Design progress:̶ 30% design - received November 6, 2019̶ 60% design - received February 21, 2020̶ 100% design is in progress

• Duct bank/Fiber Installation Contract procurement documents being prepared̶ Owner Furnished Materials procurement for fiber, conduit,

handholes̶ IFB procurement for construction, installation and testing

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COMMUTER RAIL(in millions of dollars)

Control

Budget

(1,3,4,5)

Current Commitme

nt(1)

Future Commitment

CurrentWorkingEstimate

Expended to Date (2)

Cotton Belt Rail Line General $1,099.0 $944.9 $205.3 $1,150.2 $125.3

OPS / Maintenance Facility 50.0 7.5 46.6 54.1 0.4

Commuter Rail Cars 94.0 119.1 12.6 131.7 12.9

Cotton Belt Program $1,243.0 $1,071.6 $264.5 $1,336.1 $138.6

Notes:

1) Control Budget and Current Commitment reflect activity through 03/31/20.2) Expended to date values reflect activity through 03/31/20, as reported on DART’s General Ledger.3) Control Budget reflects Proposed Baseline Budget and FY20 Financial Plan.4) Control Budget reflects scope related costs only and does not include projected financing costs.5) DART approved FY20 Financial Plan (Board Resolution No. 190119) increased control budget by $108M to $1,243M.6) Cotton Belt Expended to Date (Prior to approval of RRIF Loan 12/19/18) -

$8,265,211 Cotton Belt Expended to Date (After approval of RRIF Loan 12/19/18) - $130,334,415

Contingency Remaining Per Contract as of03/31/20

DB Contract $ 30,500,721

PMOR Contract $ 1,434,025

Vehicle Manufacturer / EMF Design $ 3,195,144

EMF CMGC Pre-Construction Contract $ 74,988

Ductbank / Fiber Installation Contract Pending TBD

DART Silver Line Funding

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Silver Line FundingLoan Amount Received Source Awarded Category YearRRIF Loan $908,000,000 $11,706,343 DOT Yes Loan 2018

FTA Grants Amount Received Source Awarded Grant Number YearDesign & Preliminary Engineering $3,300,599 $3,300,599 FTA Yes TX-2018-043 2018Construction $17,025,000 $17,025,000 FTA Yes TX-2019-041 2019Construction $10,000,000 $10,000,000 FTA Yes TX-2019-041 2019Construction (Addison) $5,000,000 $0 FTA Yes TX-2019-041 2020Construction $29,200,000 $29,200,000 FTA Yes TX-2019-041 2020Subtotal: Grants Awarded $64,525,599 $59,525,599

Construction $19,000,000 $0 FTA No TX-2019-041 2020Construction $16,400,000 $0 FTA No TX-2019-041 2020Construction $44,400,000 $0 FTA No TX-2019-041 2020Subtotal: Grants Pending $79,800,000 $0

Total: Federal Funds $144,325,599 $59,525,599

Cotton Belt

RRIF Loan Status

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• Loan was approved on December 20, 2018.• DART has received $11,706,343 in loan proceeds.

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Program of Interrelated Projects

Dallas Central Streetcar Link

FTA Quarterly Meeting No. 64 April 23, 2020

Remaining Alignments:• Elm/Commerce• Main Street• Young Street

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Central LinkStatus of ILA with City of Dallas

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• DART Board and City Council approved Master ILA• Copy provided to FTA Region Office Counsel• Project Specific Agreement will be developed for the Central Link

project when advanced

• Streetcar workshop held with City of Dallas on January 17, 2020 to focus on Streetcar Master Plan and interface with Central Link

• Anticipate request entry into Project Development under FTA Small Starts program in 2020 or 2021 pending:– City of Dallas decision on Convention Center Loop (may

integrate all or part into Central Link) – City review in progress

– Potential input from Streetcar Master Plan (DART) - 2020– Knox-Henderson M-Line study (NCTCOG/City) – 2020-2021

• Task will be done as part of next General Planning Consultant contract; will need to refresh scope and cost estimate

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Central LinkUpdate on Project Progress

• DART FY20 Financial Plan– $96.2M in YOE dollars– Assumes $48.1M FTA Capital Investment Grant

(approximately 50% Small Starts)– DART funding since project is part of Program of

Interrelated Projects– Project costs, CIG share, and other funding partners will be

refined during Project Development• Schedule to be determined pending DART Board direction and

City decision on Convention Center Loop

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Central LinkCost and Schedule