Proposed FY2021 Budget Work Session - Capital · Capital Budget Six-Year Capital Improvement Program (CIP) Total Investment $9.7B 10-Year Capital Plan Total 1-Year Investment $1.8B

Finance and Capital Committee

Information Item IV-A

December 12, 2019

Proposed FY2021 Budget Work Session - Capital

Page 85 of 107

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.

Page 86 of 107

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

Page 87 of 107

https://www.wmata.com/business/procurement/solicitations/index.cfm#main-content

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

Page 88 of 107

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

Page 89 of 107

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

Page 90 of 107

Capital Program

Work Session

Finance and Capital CommitteeDecember 12, 2019

Page 91 of 107

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

Page 92 of 107

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

Page 93 of 107

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

Page 94 of 107

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

Page 95 of 107

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

Page 96 of 107

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

Page 97 of 107

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


8

Page 98 of 107

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.


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

Page 99 of 107

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.


Pro

ject

Ph

ase

Act

ivit

y/D

eliv

era

ble


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


Risk Profile

Risk of Failure:


M

H


10

Page 100 of 107

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.


Pro

ject

Ph

ase

Act

ivit

y/D

eliv

era

ble


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


$30


❑ Site design, Train Control Room bungalow fabrication, and installation of wayside equipment at Alexandria Yard

❑ Replace switch machines❑ Programmatic cable meggering and

replacement


Risk Profile

Risk of Failure:


H

H


11

Page 101 of 107

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.


Improving Safety

Risk Profile

Risk of Failure:


M

L


Pro

ject

Ph

ase

Act

ivit

y/D

eliv

era

ble


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



$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


12

Page 102 of 107

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.


Pro

ject

Ph

ase

Act

ivit

y/D

eliv

era

ble


Esti

ma

ted

Spen

d

$131 $131


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


Risk Profile

Risk of Failure:


M

H


13

Page 103 of 107

Bus Garage Replacement &

RehabilitationDescription: Replacement and rehabilitation of Metro’s oldest bus garages. Total potential

investment of ~$947M.


Pro

ject

Ph

ase

Act

ivit

y/D

eliv

era

ble


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:


M

H


14

Page 104 of 107

$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

Page 105 of 107

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

Page 106 of 107