proposed fy2021 budget work session - capital · capital budget six-year capital improvement...
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Finance and Capital Committee
Information Item IV-A
December 12, 2019
Proposed FY2021 Budget Work Session - Capital
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Washington Metropolitan Area Transit Authority
Board Action/Information Summary
Action Information MEAD Number:202145
Resolution: Yes No
TITLE:
Metro Capital Program
PRESENTATION SUMMARY:
In this session, staff will provide additional information on the proposed capital budgetfor the Committee’s consideration.
PURPOSE:
Staff will provide the Committee with an update on the capital program, as well asadditional information in response to Board member and jurisdictional staff questionsfor the work session on the fiscal year (FY) FY2021 proposed capital budget.
DESCRIPTION:
The following vendors are our top non-personnel multi-year contractors through FY19and to date ($500m). They have contracts spanning through FY21 as well.
Transdev Services, Inc.First Transit, Inc.Diamond Transportation Service, Inc.Direct Energy BusinessKawasaki Rail Car IncPEPCODOMINION ENERGY VIRGINIAWashington Gas Energy ServicesUnitedHealthcare Insurance CoDell Marketing LPMV TransportationChallenger Transportation, Inc.Mott MacDonald I&E, LLCKaiser Foundation Health PlanCarefirst BlueCross BlueShieldSonny Merryman Inc.LTK Engineering ServicesGiesecke & Devrient MobileAECOM, USA, INC.
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Goodyear Tire & Rubber Co
A full list of 2019 Procurement Awards are available athttps://www.wmata.com/business/procurement/solicitations/index.cfm#main-content
WMATA has labor agreements with the following collective bargaining units:
Fraternal Order of Police/Metro Transit Police Labor Committee, Inc. (FOP)The Office and Professional Employees International Union Local No.2, AFL-CIO (Local 2)Local 639, International Brotherhood of Teamsters Law Enforcement Division(Local 639)Local Union 689 of the Amalgamated Transit Union, AFL-CIO (Local 689)Local 922, International Brotherhood of Teamsters (Local 922)
Key Highlights:
Following the General Manager/Chief Executive Officer's (GM/CEO) proposalof the FY2021 budget in November, the Finance and Capital Committee isconvening work sessions to review the budget in greater detail. This worksession will be focused on delivery of the capital program and how theproposed capital budget supports this program. The session will also includean updated FY2020 Capital Budget forecast and details of what has beenspent to date on strategic investments.
Background and History:
The GM/CEO's recommended budget totals $3.8 billion, including $2.0 billionof operating expenses and $1.8 billion in capital program investments inFY2021 and is grounded in the principles set forth in the Keeping Metro Safe,Reliable and Affordable (KMSRA) strategic plan adopted by the Board in 2019.
Objectives of the Capital Program are action-oriented with our customers inmind:
Keep Metro safe, reliable and affordablePrioritize rehabilitation and replacement of assets that improvepassenger and employee safetyRegularly evaluate the condition of assets for high performance to meetcustomer needsInvest in new technology to modernize how people travel
Discussion:
The FY2021 Capital Budget and FY2021-2026 Capital Improvement Program(CIP) address longstanding challenges in customer safety, comfort, andservice reliability through projects such as platform reconstruction, track
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rehabilitation, railcar procurement and bus garage construction.
The capital program focus is on delivery of a long-term vision through thefollowing concrete actions:
Active Capital Planning. Linking the Capital Program to our strategicgoals to align proposed projects with priority needs.Bolstering Project Delivery. Increasing our capacity to quickly andefficiently execute priority capital projects.Transparency and Performance Tracking. Building Capital Programperformance measures to enable preemptive action for proactive assetmaintenance and timely project delivery.
The Capital Program was built through a series of steps starting withunderstanding existing and anticipated needs, outlining the vision and goals forcapital investments, documenting the long-term vision for the capital programthrough the 10-year plan, and providing a specific list of priority investmentsthrough the FY2021 and FY2021-2026 CIP. This is accomplished through thefollowing elements:
Capital Needs Forecast which documents the current understanding ofexisting safety and rebuilding needs as well as anticipated costs toachieve and maintain a state of good repair (SGR) and provides insightto establish overall capital program priorities.Capital Program Strategy which establishes the vision behind the high-level strategy and goals for capital investments and outlines the capitalprogram priorities and outcomes of what the capital program is expectedto achieve.10-Year Capital Plan which details how Metro will achieve the CapitalProgram Strategy, identifies and explores initiatives and projects thatalign to the strategy by highlighting project-level detail for selected capitalinitiatives and listing all projects included in the plan.6-Year Capital Improvement Program which provides a specific list ofpriority projects and programs for the FY2021-2026 Capital ImprovementProgram and the Capital Budget request for FY2021.
As Metro continues its strategic transformation of our capital program, effortsare underway to maintain, modernize, and upgrade infrastructure by targetingassets before they deteriorate, bolstering project delivery, and monitoringcapital project and program performance. The FY2021-2030 capital planningprocess introduced new, more robust methodology that included:
Capital project prioritization based on alignment to strategic goals,readiness for execution, and review of available resourcesEnhancement of project development including proposing studies,business cases, or alternatives analyses, to fully understand the need forprojects and evaluate project proposals and refine appropriate courses ofaction
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The Capital Program builds on demonstrated progress in rehabilitating,replacing and modernizing our system to meet the needs of customers. Thepresentation highlights major projects expected to have a large impact onaddressing longstanding challenges. Specific investments to be reviewedinclude:
Customer Facilities & ExperienceStation Platform reconstruction for customer safety and servicereliability
VehiclesRailcar procurement and related infrastructure for customer safety,comfort, and reliability – including railcar design, acquisition andtesting for the 8000-series railcars
Infrastructure, Systems, and Support FacilitiesAutomatic Train Control (ATC) Room rehabilitationTrack rehabilitation to safely keep trains moving as scheduledMetro Office Consolidation projects in DC, Virginia, and Maryland
The proposed FY2021-2030 Capital Program will continue Metro’s rebuilding ofinfrastructure through an agency-wide investment plan funded by historiclevels of capital investment for the National Capital Region. Metro takesseriously the responsibility to be good stewards of the dedicated capitalfunding. Metro will continue to move capital planning and programming to amore proactive approach with visible enterprise-wide capital planning, updatedand consolidated capital asset inventory information, and incorporatingperformance measures to assess investments against baseline need and Stateof Good Repair targets.
FUNDING IMPACT:
Information item only, no immediate impact on funding.
TIMELINE:
Previous Actions March 2019 - The Board approved the FY2020 operatingand capital budget and the FY2020-2025 CapitalImprovement Program. (Note: The FY2020 capital budgetwas amended at the Board Meeting on June 25, 2019 toraise the approval total to $1.74 billion.)
July 2019 - Metro began executing the Board-approvedFY2020 Capital Program with focus on successfully
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delivering the Capital Program and improving planningand programming capabilities
November 2019 - Release of Operating & Capital Budgets
Anticipated actionsafter presentation
Winter 2019/Spring 2020 - Board Review of ProposedCapital Program, Public Hearings on Capital Program
March 2020 - Return to the Board with a Compact PublicHearing Staff Report
Spring 2020 - Request Board Approval of Capital Programfor FY2021 and FY2021-2026 Capital ImprovementProgram
July 2020 - Start of the 2021 fiscal year
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Capital Program
Work Session
Finance and Capital CommitteeDecember 12, 2019
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Purpose
Overview
▪ Provide an overview of Metro’s capital program and investment
highlights and respond to Board questions on the proposed
FY2021-2026 Capital Improvement Program
2
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Capital Program Overview ($B)
Overview
$1.8 $1.9
$1.6 $1.5 $1.5 $1.5
$2.1 $2.1 $2.1 $2.1
FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030
Investments Continuing Beyond the 10-Year Plan of Approximately $3-5B include:
• Continued Required State of Good Repair and Safety Investments
• 8000 Series Railcar Acquisition• Next Generation Signal
System• Tunnel Ventilation
Improvements• Water Intrusion Remediation• Passenger Circulation Station
Improvements • Railyard Optimization
Capital Budget
Six-Year Capital Improvement Program (CIP) Total Investment $9.7B
10-Year Capital Plan
Total 1-Year Investment $1.8B
FY2027 – FY2030 Average Spend
Total Investment $18.0B
Program
Plan
10-Year Capital Plan
$18.0BFY2021 Capital Budget
$1.8BSix-Year Capital Program
$9.7B
Capital Program Portfolio
3
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Capital Investment Categories & Funding Sources
Financial Plan by Investment Category
Capital Investment Categories
($M)
FY2021
Budget
FY2022
Plan
FY2023
Plan
FY2024
Plan
FY2025
Plan
FY2026
Plan
6 Year
Total
Railcar $280 $257 $333 $347 $454 $565 $2,236
Rail Systems $165 $131 $163 $153 $147 $132 $891
Track and Structure Rehabilitation $148 $176 $166 $193 $161 $170 $1,014
Stations and Passenger Facilities $546 $526 $391 $252 $192 $179 $2,085
Bus and Paratransit $208 $225 $293 $313 $284 $216 $1,539
Business Support $475 $550 $218 $236 $243 $227 $1,949
Total Capital Investments $1,821 $1,865 $1,563 $1,493 $1,481 $1,490 $9,714
Revenue Loss from Capital Projects $23 $24 $25 $25 $26 $27 $149
Debt Service - Dedicated Funding $31 $52 $84 $104 $121 $140 $533
Total Capital Program Cost $1,875 $1,941 $1,672 $1,623 $1,628 $1,657 $10,396
Capital Program Funding Sources
Funding Sources
($M)
FY2021
Proposed
Budget
FY2021-
FY2026
Plan
Federal Grants
Formula and Other Grants $352 $2,110
PRIIA $149 $149
Subtotal Federal Grants $500 $2,258
State and Local Contribution
District of Columbia $331 $2,035
State of Maryland $305 $1,871
Commonwealth of Virginia $282 $1,727
Subtotal State and Local $918 $5,633
Jurisdiction Reimbursable Projects $62 $239
Metropolitan Washington Airports Authority $27 $44
Debt $369 $2,222
Grand Total $1,875 $10,396
Note: Does not assume reauthorization of Federal PRIIA
4
Overview
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Transformation of Metro’s Capital Program
Capital Program Management Updates
Active Capital Planning
Linking the Capital Program to strategic goals
to align proposed projects with priority needs
• Prioritization based on alignment to strategic
goals, readiness for execution, and availability
of resources
Bolstering Project Delivery
Increasing Metro’s capacity to quickly and
efficiently execute priority capital projects
• Focusing resources to highest priority needs
Informed Decision Making
Advancing the development of project
concepts to inform investment decisions
• Justify the need for projects and evaluate project proposals and alternatives
Transparency & Performance Tracking
Building Capital Program performance
measures to enable preemptive action for
proactive asset maintenance and timely delivery
• Bi-annual updates for major capital investments
5
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Capital Program Publications
High-level vision and goals for
capital investments▪ Establish priorities
▪ Expected outcomes
Individual planned investments to
accomplish strategy
▪ Project-level detail
▪ Preliminary cost estimates and
schedules
▪ 10-year investment plan
Capital Program Strategy & 10-Year PlanSix-Year Capital
Improvement ProgramCapital Needs Forecast
Existing safety and rebuilding
needs and anticipated costs to
achieve and maintain a state of
good repair
FY2021-2026 Proposed Capital
Improvement Program
▪ Capital Budget for FY2021-
expenditure forecast and funding
plan
Program Documents
Understanding existing &
anticipated needs
Outlining the vision and goals for
capital investments
Investment plan over next 10 years
to accomplish the strategy
Investment proposal with list of priority
projects & programs recognizing
resource and capacity constraints
6
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Capital Program Elements
Program Documents
Capital Needs Forecast (CNF)
Includes existing and anticipated asset-related
needs necessary for a state of good repair
and modernized system
Capital Strategy & 10-Year Plan
Identifies viable initiatives to address needs
identified in the CNF in the next 10 years
Six-Year Capital Improvement Program (CIP)
Provides detailed list of prioritized projects and
programs beginning in FY2021-FY2026
One-Year Capital Budget
Focuses on expenditure schedule for priority
investments that are ready for
execution in FY2021
* Additional CNF-identified needs will be further defined in FY2022 Capital Planning Cycle7
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Strategic Investments
▪ Building on demonstrated progress in rehabilitating, replacing and modernizing our system
• Customer Facilities & Experience— Station platform reconstruction for customer safety and service reliability
• Vehicles— Railcar procurement and related infrastructure for customer safety, comfort, and
reliability – including railcar design, acquisition and testing for the 8000-series railcars
• Infrastructure, Systems, and Support Facilities— Automatic Train Control (ATC) Room rehabilitation— Track rehabilitation to safely keep trains moving as scheduled— Radio infrastructure replacement and band relocation— Bus garage replacement and rehabilitation
Strategic Investments
8
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8000 Series Railcar Acquisition Description: Acquire approximately 360 new 8000 Series railcars to replace aging 2000 and 3000
Series railcars. Evaluate need to acquire additional railcars for a total purchase of up to 800
railcars. Total potential investment of ~$2.3B.
Strategic Investments
Pro
ject
Ph
ase
Act
ivit
y/D
eliv
era
ble
FY2020 ($M) Six-Year CIP ($M) 10-Year Plan ($M)
Esti
ma
ted
Spen
d
$7 $745 $1,930
Project Development ImplementationImplementation
Operations Activation
❑ Complete technical evaluation of vendor proposals
❑ Award contract
❑ Inspection and approval of model railcar
❑ Delivery of additional railcars❑ Begin disposal of 2K/3K railcars
❑ Continue 2K/3K disposal❑ Evaluate 8K options execution❑ Potential execution of additional
options
Improving Safety & Reliability
Risk Profile
Risk of Failure:
Consequence of Failure:
M
H
Risk Profile of 10-Year SGR Needs (Source: 2019 CNF)
9
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Track RehabilitationDescription: Rehabilitate railroad track and infrastructure throughout the Metrorail system. Work
includes rehabilitation or replacement of track components or assets such as third rail, third rail
insulators, running rail, crossties, fasteners, ballast rock, and track signs.
Strategic Investments
Pro
ject
Ph
ase
Act
ivit
y/D
eliv
era
ble
FY2020 ($M) Six-Year CIP ($M) 10-Year Plan ($M)
Esti
ma
ted
Spen
d
$548 $895
Implementation Implementation
❑ Rehabilitate/replace trackcomponents to improve servicedelivery based on key performanceindicators
❑ Rehabilitate/replace trackcomponents to improve servicedelivery based on key performanceindicators
$114
Implementation
❑ Programmatic replacement of trackcomponents including concrete, groutpads, cross ties, third rail, running rail,and insulators
❑ Repair minor leaks and clean drains
Improving Safety & Reliability
Risk Profile
Risk of Failure:
Consequence of Failure:
M
H
Risk Profile of 10-Year SGR Needs (Source: 2019 CNF)
10
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Automatic Train Control (ATC)Description: Near-term rehabilitation and replacement of ATC components, including marker coils, signals, relays, track circuits, interlockings and switches, to maintain state of good repair while concurrently evaluating and initiating implementation of next generation technology for ATC. Significant investments of over $1B beyond the 10-Year Plan will be necessary to implement Next Generation ATC technology.
Strategic Investments
Pro
ject
Ph
ase
Act
ivit
y/D
eliv
era
ble
FY2020 ($M) Six-Year CIP ($M) 10-Year Plan ($M)
Esti
ma
ted
Spen
d
$236 $488
❑ Develop workplan and begin implementing next generation technology
❑ Replace ATC components to maintain state of good repair
❑ Continue implementation of next generation technology
❑ Replace ATC components to maintain state of good repair
Project DevelopmentImplementation
Project DevelopmentImplementation
$30
Project DevelopmentImplementation
❑ Site design, Train Control Room bungalow fabrication, and installation of wayside equipment at Alexandria Yard
❑ Replace switch machines❑ Programmatic cable meggering and
replacement
Improving Safety & Reliability
Risk Profile
Risk of Failure:
Consequence of Failure:
H
H
Risk Profile of 10-Year SGR Needs (Source: 2019 CNF)
11
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Platform Rehabilitation Description: Rehabilitation and repair of platforms at multiple outdoor stations to
address potentially unsafe and deteriorating structural conditions. Total potential
investment of ~$1.3B.
Strategic Investments
Improving Safety
Risk Profile
Risk of Failure:
Consequence of Failure:
M
L
Risk Profile of 10-Year SGR Needs (Source: 2019 CNF)
Pro
ject
Ph
ase
Act
ivit
y/D
eliv
era
ble
FY2020 ($M) Six-Year CIP ($M) 10-Year Plan ($M)
Esti
ma
ted
Spen
d
$582 $829
❑ Implement identified solutions for Platform Rehabilitation at Cheverly, Landover, New Carrollton, Addison Road, Ronald Reagan Washington National Airport, and Arlington Cemetery
❑ Further develop scope of Platform Rehabilitation at West Hyattsville, Prince George's Plaza, College Park-University of Maryland, and Greenbelt
❑ Implement identified solutions for Platform Rehabilitation at West Hyattsville, Prince George's Plaza, College Park-University of Maryland, and Greenbelt
Project DevelopmentImplementation
Project DevelopmentImplementation
$362
❑ Completed work south of National Airport
❑ Award contract and mobilize for Phase II work west of East Falls Church to begin Memorial Day 2020
Project DevelopmentImplementation
12
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Radio Infrastructure ReplacementDescription: Replace the existing radio communications system with a higher frequency (700 MHz) radio system. Project includes the design and installation of a distributed antenna system (DAS) that will bring radio and wireless cellular service to Metro’s underground system. Total potential investment of ~$386M.
Strategic Investments
Pro
ject
Ph
ase
Act
ivit
y/D
eliv
era
ble
FY2020 ($M) Six-Year CIP ($M) 10-Year Plan ($M)
Esti
ma
ted
Spen
d
$131 $131
Project DevelopmentImplementation
N/A
❑ Finish implementation of the radio system
❑ N/A
$75
Implementation
❑ Underground tunnel segment installations mostly completed
❑ Above ground tower installations in process
❑ Complete installation of radios in MTPD vehicles
Improving Safety & Reliability
Risk Profile
Risk of Failure:
Consequence of Failure:
M
H
Risk Profile of 10-Year SGR Needs (Source: 2019 CNF)
13
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Bus Garage Replacement &
RehabilitationDescription: Replacement and rehabilitation of Metro’s oldest bus garages. Total potential
investment of ~$947M.
Strategic Investments
Pro
ject
Ph
ase
Act
ivit
y/D
eliv
era
ble
FY2020 ($M) Six-Year CIP ($M) 10-Year Plan ($M)
Esti
ma
ted
Spen
d
$465 $655
D&EProject Development
ImplementationImplementation
❑ Design and begin to construct Northernand Bladensburg bus garage replacements
❑ Evaluate feasibility and alternatives ofadditional garage rehabilitations andreplacements, including Western garage
❑ Finish construction of Northern andBladensburg bug garage replacements
❑ Begin design and then construction ofWestern bus garage replacement
$26
D&EProject Development
❑ Award contracts for replacement ofBladensburg and Northern bus garagesand begin pre-construction activities
❑ Award construction of CNG facility atShepherd Parkway bus garage
Improving Affordability Safety, & Reliability
Risk Profile
Risk of Failure:
Consequence of Failure:
M
H
Risk Profile of 10-Year SGR Needs (Source: 2019 CNF)
14
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$0
$500
$1,000
$1,500
$2,000
Budget ($1.740B)
Actual
Forecast ($1.900B)
$1.90B
$1.74B
FY2020 Capital Budget Forecast
Overview
15
$ M
illio
ns
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Next Steps
• Board review of proposed FY2021-FY2026 CIP
• Public Participation and Hearings
• FY2020 Capital Budget Amendment – Q3
• Board approval of the FY2021-FY2026 CIP anticipated
in March 2020
• Start of FY2021 – July 1, 2020
16
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