Virginia Beach Light Rail Extension to Town Center Update

DCM Dave Hansen September 1, 2015

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Virginia Beach Light Rail Extension to Town Center Update

I. NEPA conclusion

II. Light Rail Vehicle Purchase

III. Estimated cost savings on steel associated with Buy America

IV. Estimated cost savings on labor associated with Davis Bacon

V. Project Schedule

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NEPA Conclusion

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NEPA is Federal law applies to governmental agencies on projects where there is Federal funding, Federal decision, or other Federal action.

On major transit projects with Federal participation, the Federal Transit Administration (FTA)

is the lead Federal agency that must comply with NEPA. FTA requires the NEPA process to be

initiated on all transit projects where it is anticipated that Federal dollars will be required for

the completion of the construction of that project.

When the construction financing for the project is determined, if no Federal dollars are

included and there is no other Federal action required, the requirement for NEPA no longer

applies. With no FTA funding, decision, or action for that construction project, the NEPA

process is discontinued.

For the Light Rail extension into VB, it was assumed from early project stages that federal

dollars would be required for construction of the project for alternatives to Rosemont and to

the Resort Area; therefore, FTA approved the initiation of the NEPA process concurrent with

early development and design of the project.

NEPA Conclusion

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City Council’s LPA decision limiting the scope of the project to a 3.1 mile extension on an existing

rail line prompted FTA Region III to consider whether an FEIS and ROD were required. FTA

Region III has suggested a Categorical Exclusion might be the appropriate “Class of Action” for

compliance with NEPA.

Because the funding (State and local) for the construction of the LPA no longer included Federal

funding, FTA no longer has a mandatory role in the project as defined by NEPA.

FTA has indicated an intention to discontinue the NEPA process at this time. We anticipate

receiving formal FTA correspondence confirming this decision.

If federal funding were to be requested, FTA would pursue a Class of Action known as a

Categorical Exclusion. A Categorical Exclusion would be considered and potentially issued only

after a request for federal funds was made.

If determined at a later date, based on unforeseen conditions, that Federal funds would be

required to complete the construction of the transit project, the appropriate project sponsor

would request a final determination of the Categorical Exclusion in order to complete the NEPA

process and apply for Federal funds.

Going forward the City will be required to comply with all environmental and historical permit regulations of federal, state and local jurisdictions.

NEPA Conclusion

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Once FTA issues their process decision correspondence we expect a communication from HRT

advising how they will respond to the substantive public comments of the DEIS phase.

Use of funds to-date to advance the project development were necessary for the decision

making process that lead to the selection of the Town Center Alternative as the Locally

Preferred Alternative. On-going use of funds are necessary to advance project engineering

and other required environmental clearances such as wetland permitting. (i.e. - money wasn't

"wasted" on NEPA studies to-date as these were otherwise required for project development

and decision making)

Use of Federal funds for the purchase of the former NS ROW and use of Federal funds for

development of the project through the current design efforts have been covered under

legally separable and independent Federal decisions and independent of NEPA requirement.

Future use of Federal funds for operations and maintenance of the State/City funded project

are not jeopardized by not completing the NEPA process.

Future use of Federal funds for study or construction of follow-on extensions of transit is not

jeopardized by not completing the NEPA process for the current extension into Virginia Beach.

Source Documents

June 26, 2015 HRT letter to FTA Region III discussing NSRR ROW acquisition and

requesting clarification on the NEPA process when no Federal funding is involved with

the construction. (Attachment A)

June 30, 2015 FTA Region III response “FTA concludes that HRT’s intended use of

Federal funds for acquisition of the NSROW does not necessitate a NEPA review for a

future locally- funded transit project utilizing the same right-of way.” (Attachment B)

August 28, 2015 email from HRT asking, “Generally, would a decision to fund a transit

project entirely with State and City funds negate the need for the Federal Transit

Administration completing a NEPA review under current Federal environmental

requirements?” (Attachment C)

August 28, 2015 FTA Region III response, “FTA will not act as the lead Federal agency for

a proposed action if the project sponsor intends to fund a project entirely with State

and City funds.” (Attachment D)

6 Council Discussion on NEPA

Light Rail Vehicle Purchase

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Study identified need for 4 additional vehicles

Estimated cost of $5.1M/vehicle for a total cost of $20.4M.

Minneapolis MetroRail has options to purchase 44 vehicles by same manufacturer (Siemens ) that built the original TIDE vehicles.

HRT/State are pursuing piggy-back option to acquire four of those vehicles.

MetroRail order cost per vehicle is $4.3M or $17.2M total for a total potential savings of $3.2M.

The option order is required to be placed by September 29, 2015 to take advantage of savings.

DRPT will fund purchase of rail vehicles.

State to hold City harmless on vehicle purchase.

September 15, 2015 City Council agenda item for approval IAW FY16 budget ordinance.

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Projects Receiving Federal Funding • Compliance with Buy America Requirements • Representative end products used in construction such as iron and steel must be produced in the United States • Includes Structures, bridges, and track work construction • Costs for materials typically higher than other sources

Non-Federally Funded Projects

• Buy America requirements not applicable • 25% Reduction in source cost of steel products may be realized • Estimated Steel Track Material Savings $3.2M • Estimated Steel Savings for structural construction $3.2M • Total Estimated Steel Material Savings $6.4M

Estimated Cost Savings on Steel

associated with Buy America

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Projects Receiving Federal Funding • Compliance with Davis Bacon Act for projects in excess of $2,000 • Prevailing wages must be paid to laborers and mechanics • Prevailing wages are typically higher • Federal Oversight Compliance required for Contract & Program Support, Project Management Services, & Technical Review Services

Non-Federally Funded Projects

• Davis Bacon Act requirements not applicable • 22% Reduction in wages may be realized • Estimated Project Labor savings $13M • Federal Project Oversight Compliance not applicable $1.1M • Total Non-Federal Procurement Savings $14.1M

Estimated Cost Savings on Labor

associated with Davis Bacon

Total Estimated Savings to the Project

Rail Cars $ 3.2M

Buy America $ 6.4M

Davis Bacon $14.1M

TOTAL $23.7M

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Virginia Beach Light Rail Extension to Town Center – Project Schedule

Project Schedule of Key Milestones Date(s) Agency Lead FTA Review/Approval of Draft Environmental Impact Statement (DEIS) Nov. 2014 – March 11, 2015 HRT

Final DEIS Published/NOA, Circulated & Formal Public Comment (45 days) March 20 – May 5, 2015 HRT

City Staff Briefing to City Council with Locally Preferred Alternative

Recommendation to extend The Tide LRT to Town Center (Alternative IA)

March 17, 2015 City Staff

Locally Preferred Alternative selected by City Council (LRT to Town Center) May 12, 2015 City Council

Resource Management Plan adopted including Light Rail related CIP projects May 12, 2015 City Council

Commonwealth of Virginia approves Six Year Improvement Program June 17, 2015 CTB

Preliminary Engineering 30% (60% Utilities) Design/NEPA Conclusion July 2015 – October 2016 HRT – City Staff

City-DRPT-HRT Negotiation and Execution of Memorandum of Agreement July 2015 – July 2016 City-DRPT-HRT

Light Rail Vehicle Procurement City Council Consideration September 15, 2015 City Council

Light Rail Vehicle Contract Option exercised September 29, 2015 HRT

Bridging Documents January 2016 – October 2016 City Staff

Issue Letter of Interest (LOI) to Construction Industry October 2015 City Staff

RFQ Posted and Design-Build Team RFQ Response Development December 2015 – Feb. 2016 City Staff

RFQ Process - Prequalification of Design Build Teams March 2016 – April 2016 City Staff

Resource Management Plan adopted including Light Rail related CIP projects May 10, 2016 City Council

Record of Decision November 2016 HRT

RFP Issued to Prequalified Design-Build Teams/Proposal Development Phase December 2016 – Feb. 2017 City Staff

Bid Opening of Design-Build Contractor February 2017 City Staff

RFP City Evaluation Phase February 2017 - April 2017 City Staff

City Council Closed Session Brief of Proposals Received April 2017 City Council

Design-Build Team Selection and Negotiations April 2017 to June 2017 City Staff

City Council Approval of Comprehensive Agreement June 2017 City Council

Design-Build Contract Implementation Phase July 2017 – July 2019 City Staff

System Testing and Turnover Light Rail Operation to HRT July 2019 – December 2019 HRT

The Tide Light Rail System service to Virginia Beach Town Center Open to Public December 2019 HRT 11

State/Local Cost Share Funding Schedule

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Proposed Pay-out Schedule for Virginia Beach Light Rail Project

Fiscal Year Project Cost Funding Split State Local

FY 17 $ 77,500,000 80/20 $ 62,000,000 $ 15,500,000

FY 18 $ 77,500,000 60/40 $ 46,500,000 $ 31,000,000

FY 19 $ 77,500,000 40/60 $ 31,000,000 $ 46,500,000

FY 20 $ 77,500,000 20/80 $ 15,500,000 $ 62,000,000

Total $ 310,000,000 $ 155,000,000 $ 155,000,000

September 15, 2015

Excerpt from the FY16 Budget Ordinance

Section 14. Notwithstanding Sec. 2-154 of the City Code and although this Capital Improvement Program includes funding for such purpose, the City Manager or his designee shall not authorize or approve the use of any funds appropriated herein to pay for any portion of a light rail vehicle until such time as the City Council provides, by ordinance or resolution, approval of such order or contract. This limitation shall include the City Manager or designee authorizing such an action on the behalf or at the behest of the City by another entity or body, whether state, local, or regional in nature.

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Council Discussion

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