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Fastracks-Assessment 2010 Financial Report.Pdf Denver Regional Council of Governments Proj ect Number 903010/503008 Contract Number 8X09081 Assessment of Denver Regional Transportation District 201,0 FasTracks Financial Plan Final Report July 21,2010 Prepared by [Jrban Engineers, Inc. In association with First Southwest Company Table of Contents I. Introduction Page L il. Executive Summary Page 3 III. Capital Cost Assessment Page 7 IV. Operating Cost Assessment Page 16 V. Revenue Assessment Prge 22 VI. f inancing Assessment Page 39 VII. Summary Assessment - Overall Financial Plan Page 46 VIil. Appendix A - Reference Data Prge 49 IX. Appendix B - Tabtes (6) Page 51 Key Terms ADA - Americans with Disabilities Act GMP - Guaranteed Maximum Price AGC - Association of General Contractors of IIOV - High Occupancy Vehicle America LOI - Letters of Interest Annual Report - Regional Transportation LRT - Light Rail Transit District's 2009 Annual Report to DRCOG on MPO - Metropolitan Planning Organization FasTracks dated April2010 OCIP - Owner Controlled Insurance Program APE - RTD's Annual Performance O&M - Operations and Maintenance Evaluation OSPB - Office of State Planning and Budgeting ARRA American Recovery and P3 or PPP - Public Private Partnership Reinvestment Act PE - Preliminary Engineering BNSF Burlington Northern -Santa Fe Penta-P - The Federal Transit Administration's Railroad Public Private Partnership Pilot Program BRT - Bus Rapid Transit Plan - RTD's FasTracks Financial Plan CAFR - Comprehensive Annual Financial PPI - Producer Price Index Report RFP - Request for Proposal CEM - Cost Estimate Methodology RFQ - Request for Quotation CIP - Capital Improvement Plan ROW - Right of V/ay CPI - Consumer Price Index RTD or the District - Regional Transportation CRMF Commuter Rail Maintenance District of Denver, Colorado Facility S&P - Standard & Poor's DIA - Denver International Airport SAF'ETEA-LU Safe, Accountable, and DMU - Diesel Multiple Unit (Commuter Flexible Efficient Transportation Equity Act: A Railcar) legacy for users signed into law on 8/1005 DBFOM Design-Build-Finance-Operate- State - State of Colorado Maintain TABOR - Taxpayer's Bill of Rights; a set of DRCOG Denver Regional Council of voter approved constitutional provisions in 1992 Governments to limit revenue growth for state and local DUS - Denver Union Station governments in Colorado and to require that any Eagle Project - Collective term given to tax increase be approved by the voters of the RTD FasTracks Commuter Rail network that affected government is planned as a P3 initiative TDP - Transit Development Plan EMU - Electric Multiple Unit (Commuter TIC - True Interest Cost Railcar) TCRP - Transit Cooperative Research Program FFGA - Full Funding Grant Agreement TIFIA - Transportation Infrastructure Finance Financial Plan - The Regional and Innovation Act of 1988 Transportation District's (RTD's) FasTracks T-REX - Denver's Southeast Corridor Light Rail 2010 Financial Plan dated April 13, 2010 Transit FRA - Federal Railroad Administration UPRR - Union Pacific Railroad FRSC - Front Range Systems Consultants Urban - Urban Engineers, Inc. FTA - Federal Transit Administration USDOT United States Department of First Southwest - First Southwest Company Transportation GARYEE Grant Application Revenue Vehicle Bond I. INTRODUCTION NI{,ERFN I Fomulatíng E r ce llenc ê Introduction Colorado Senate Bill 90-208, passed by the Colorado legislature in 1990 requires that a Metropolitan PlanningOrganrzation ("MPO") approve the financing and technology for all fixed guideway projects. The Denver Regional Council of Governments ("DRCOG") acts as the designated MPO for the FasTracks project and is responsible for the operation and maintenance of a continuing, comprehensive transportation planning process, including the preparation and adoption of transportation plans and programs. The Regional Transportation District ("RTD") has developed the FasTracks Plan, which provides a comprehensive, region-wide plan for transit development in the greater metropolitan Denver area and has assumed the ownership role for this highly complex program. As part of DRCOG's responsibility to continually assess and evaluate the FasTracks project, DRCOG contracted with Urban Engineers, Inc. (in association with First Southwest Company) to provide an independent and objective Assessment of RTD's 2010 Financial Plan. The original budget and plan for FasTracks, established in 2004, totaled $4.7 billion and called for 28 miles of light rall, 94 miles of commuter rail and 18 miles of bus rapid hansit improvements to be developed between 2005 and 2017. On an annual basis, through the Annual Program Evaluation ("APE") process, RTD updates the FasTracks Financial Plan with new revenue and cost projections, reflecting the most up-to-date economic conditions and technical advancements. RTD's 2010 Financial Plan, dated April 13, 2010 provides a revision to the FasTracks budget resulting in a current estimated cost of approximately $6.7 billion. This figure indicates a reduction from the $6.9 billion budget in 2009, primarily resulting from project progression and modifications to material, right-of-way, frnancing, and labor cost estimates. According to the 2010 Financial Plan, RTD's "...ability to implement the FasTracks plan depends on a variety of financial assumptions and projections which have been developed using the best available current estimates of costs, reasonable anticipated federal funding based on current federal law and regulations, and revenues from other sources including RTD sales tax and fare collections". The 2010 Financial Plan goes on to say that,"...on April 13, 2010, the RTD Board of Directors adopted a financial plan scenario for the 2010 FasTracks APE that assumes the passage of 0.4o/o sales and use tax increase commencing January 2013 and successful receipt of an additional Full Funding Grant Agreement (FFGA) for the East and Gold Line Public Private Partnership Corridors (EAGLE Project) in the amount of $1 billion. This scenario results in the completion of the full FasTracks program by 2019 .. .." It should be noted that the current schedule indicates a two-year delay from the original FasTracks schedule (Plan) which had proposed a full program completion date in 2017. Further, RTD recognizesthat in the event its Board elects to not seek the proposed tax increase, or if the tax initiative were to be voted down, the Financial Plan would need to be updated atthat time to reflect the opportunities and constraints that would exist. Lastly, RTD states that ít, "...cannot guarantee that each separate assumption (in the Financial Plan) will be met, and expects that over a nine year time- frame (2010 - 2019) certain adjustments and modifications will be required". As part of the contractual engagement, Urban and First Southwest reviewed the RTD's 2009 Amual Report to DRCOG, which includes the 2010 FasTracks Financial Plan. Further, in performing the independent assessment of RTD's 2010 Financial Plan, Urban and First Southwest met with representatives from DRCOG and RTD and reviewed many documents provided by RTD in support of the assumptions and projections which formed the basis for the current Financial Plan. A list of documentation reviewed is presented as Appendix A to this report. The contracted Scope of Services called for Urban and First Southwest to review RTD's Core Financial Assumptions that formed the basis for the Financial Plan, and to analyze and opine on a host of questions within five subsections, titled: 1. Capital Cost Estimates 2. Operating Cost Estimates 3. Revenue Estimates 4. Financing 5. Summary Assessment of Overall Financial Plan This report is formatted to present an analysis and assessment of each of these subsections, with the final Summary Assessment providing a more consolidated review of the overall 2010 Financial Plan. 2 II. EXECUTIVE SUMMARY \\I*E.RFN I Fomulatittg E r c e llerc ê Executive Summary A. Capital Costs The construction item unit costs and estimating methodology for construction costs incorporated in the 2010 Annual Program Evaluation ("APE") exhibit a reasonablyhigh level of detail relative to the design stages and progress of the various corridors. The construction cost estimates are based on a combination of historical unit prices derived from bids (top down), and bottom up estimating, which is based on more refined FasTracks corridor attributes broken down by particular cost elements. In 2010, with the exception of four corridors, RTD was able to employ the use of bottom up estimating methodology, which generally yields a higher level of confidence in the estimating and budgeting. As in past years, RTD relied predominantly on an independent report on the cost estimates for commuter railcar (Electric Multiple Unit - "EMIJ" and Diesel Multiple Unit - "DMU") procurements. While Urban did not review the model in depth due to its similarities to the report that was assessed last year, the assumptions are considered appropriate and reasonable for estimating rail vehicle costs as it is generally based upon accepted industry practices. RTD has successfully advanced the acquisition of land to support the FasTracks program in the last year, with special recognition for RTD's purchase of the Right-of-V/ay (ROW) needed from Union Pacific Railroad (UPRR) to build the North Metro Corridor. This significant milestone reduces a large element of risk associated with this corridor. 'West Additionally, RTD has indicated that 86Yo of the properties for construction of the Corridor have been acquired. Although
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