Department of Environmental Services FY 2019 PROPOSED BUDGET - - PowerPoint PPT Presentation

FY 2019 PROPOSED BUDGET HIGHLIGHTS

County Board Work Session

Department of Environmental Services

Thursday, April 5, 2018 Crystal City, Potomac Yard and Pentagon City Tax Increment Financing (TIF) & Transportation Capital Fund (TCF)

Tax Increment Financing (TIF)

• TIF fund pays for infrastructure improvements

that further revitalization of Crystal City, Potomac Yard and Pentagon City.

• Established in 2010 as an implementation tool

for the Crystal City Sector Plan.

• Projects funded via the TIF provide critical

transportation and open space infrastructure needed to support future redevelopment.

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TIF-area Projects

2 Boundary Channel Drive Interchange Improvements In Design Army Navy Drive Complete Street In Design Transitway Extension to Pentagon City In Design Long Bridge Drive - Phase 2 Construction Removal of Elevated Clark/Bell Streets Construction

Summary of Proposed Budget Changes - TCF

FY 2018 Adopted FY 2019 Proposed

Change % Change

Expenses $7,260,000 $13,415,000 +$6,155,000 +84.8% Revenue $6,304,880 $4,718,020

• $1,586,860
• 25.2%

Staff 6.5 FTEs 6.5 FTEs +0.0 FTEs

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• FY 2018 Adopted Revenue reflects the TIF at an increment of 30%; FY 2019 Proposed Revenue

assumes the TIF at 25%

• Fund balances will be use to cover a portion of FY 2019 expenditures, which include:
• Construction for Clark Street demolition, Long Bridge Drive Phase 2, 27th Street and Crystal Drive 2-way
• Design for Army Navy Drive complete street, Transitway extension to Pentagon City

TIF

TIF Increment Decrease from 30% to 25%

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• FY 2019 Proposed Budget recommends reducing the TIF increment from 30 to 25 percent

 Maintains County’s commitment to executing the TIF-funded projects in the CIP, based on information available during budget development

• Proposed FY 2019 TIF revenues at 25% = $4.7M (-$1.6M compared to FY 2018 Adopted)

$943,600 of the FY 2019 revenue change is due to the decrease in increment from 30% to 25%; $643,260 is driven by the 0.9% decrease in assessed value within the Crystal City TIF district for CY 2018

• TIF revenues are paired with other internal and external funding sources to deliver the

capital program

Fund balance is fully programmed to active projects. *FY 2017 Actual revenues include $1.3M grant reimbursement revenue and $780K developer contribution. **FY 2017 Actual expenses includes expenses against grant funds, etc. as well as TIF funds. .

Crystal City, Potomac Yard, and Pentagon City Tax Increment Financing Fund (TIF)

5 FY 2017 FY 2017 FY 2018 FY 2019 ( in $ Millions) Re-estimate Actual Re-estimate Proposed Opening Balance, July 1 12.2 12.2 17.8 19.2 Revenues* 5.3 7.5 5.2 4.7 Total Balance & Revenues 17.5 19.7 23.0 23.9 Expenses** (3.6) (1.9) (3.8) (13.4) Closing Balance, June 30 13.9 17.8 19.2 10.5

Fund Trends

Transportation Capital Fund (TCF)

Transportation Capital Fund is comprised of:

• 1. Local Commercial and Industrial (C&I) Tax
• Available for new construction/expansion of roads/transit, including debt service on

bonds to support capital costs.

• Has served as a basis for leveraging state, regional and federal transportation funds

for major capital projects.

• Vacancy rates impact revenues, resulting in tax fluctuations.
• $25M projected in FY 2019
• 2. NVTA Local (30% local allocation from HB 2313)
• 30 percent of revenues are returned to localities for eligible, locally selected

transportation projects.

• Available for new construction, capital improvements that reduce congestion, and

public transportation purposes.

• Has served as a basis for leveraging state, regional and federal transportation funds

for major capital projects.

• $12M projected in FY 2019 (subject to change based on state action)

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Old Dominion Drive Improvements ART Fueling and Bus Wash Facility W&OD Trail Improvements 7

Recent Accomplishments

Lee Highway & Glebe Road Intersection Improvements - Phase 1

Construction Starts and Transit Expansion in 2018

• ART Fleet Expansion – 13 40-foot buses
• Ballston Station Multimodal Improvements
• Boundary Channel Drive Extension
• S. Carlin Springs Road – Signal Upgrades
• Carlin Springs Road - Vermont St to Edison St
• Clarendon Circle Improvements
• Clarendon at 15th Street
• Columbia Pike Streets – Four Mile Run to Jefferson

(Segment H&I)

• Columbia Pike Streets - Oakland to Wakefield (Segment F)
• Columbia Pike Streets - 12th Street S. from Glebe Rd to

Monroe St

• Clark Street Demolition
• Crystal City Streets - 23rd Street: Eads to Route 1 (Phase I)
• Crystal City Streets - 27th Street and Crystal Drive 2-way
• Lee Highway and Glebe Road - Streetscape
• Lynn Street Esplanade/Lee Highway
• Old Dominion Drive Missing Link
• Pershing Drive Complete Street
• Walter Reed Drive - 5th Street to Columbia Pike
• Walter Reed Drive - Arlington Mill to Four Mile Run
• Wilson Blvd-Virginia Square Improvements

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Over $63M of projects moving into construction this calendar year

Summary of Proposed Budget Changes - TCF

FY 2018 Adopted FY 2019 Proposed

Change % Change

Expenses $65,023,000 $60,370,000

• $4,653,000
• 7.2%

Revenue $38,323,698 $37,225,429

• $1,098,269
• 2.9%

Staff 22.0 FTEs 29.0 FTEs +7.0 FTEs

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• Fund balances will be use to cover a portion of FY 2018 and FY 2019 expenditures
• Increase of 7.0 FTEs in FY 2019 includes:
• Shifting four positions from General Fund to TCF (2 Budget Analysts, 1 Grant

Compliance Specialist, 1 Transportation Program Manager)

• Adding three positions to address program delivery gaps (2 TE&O Design Engineers,

1 Community Relations Specialist)

Ongoing Costs Planned for TCF

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$(000) FY 2016 FY 2017 FY 2018 FY 2019 Operating Costs: ART Service Increases* 581 594 1,067 2,395 WMATA – Columbia Pike 341 Capital Bikeshare** 513 481 870 1,058 ART Interim Satellite Parking*** 331 505 Crystal City Potomac Yard Transitway 97 36 36 eBuilder 200 66 68 Subtotal – Operating Costs 1,094 1,372 2,370 4,403 Transportation Capital Program Admin. 2,467 3,659 3,714 3,204 Total 3,561 5,031 6,084 7,607

* FY 2019 includes ART 41 and 45 service expansions and a proposed ART service overlay to Metrobus 22. ** County plans to diversify Bikeshare funding sources with sponsorships. *** Cost for interim satellite parking would cease after purchase of Shirlington Road property.

Percent of TCF revenues directed to operations and program administration is increasing - from 16% in FY 2018 to 20% proposed for FY 2019

11 FY 2017 FY 2018 FY 2019 ( in $ Millions) Actual Re-estimate Proposed Opening Balance, July 1 122.3 135.2 112.3 Revenues Grant Revenues 5.1 Developer Contributions 3.1 Commercial Real Estate Revenues 25.0 25.5 25.2 Total Revenues 33.2 25.5 25.2 Total Balance & Revenues 155.5 160.7 137.5 Expenses* (20.3) (48.4) (37.5) Closing Balance, June 30 135.2 112.3 100.0

Transportation Capital Fund – Commercial & Industrial Tax (C&I)

Fund Trends

Fund balance is fully programmed to active projects. *FY 2017 Actual expenses include expenses against grant funds, etc. as well as TCF-C&I funds.

12 FY 2017 FY 2018 FY 2019 ( in $ Millions) Actual Re-estimate Proposed Opening Balance, July 1 25.4 33.3 31.5 Revenues Capital Bikeshare – User Fees 0.8 Grant Revenues 1.8 APS Revenue 0.1 NVTA Local Revenues 12.3 12.1 12.0 Total Revenues 15.0 12.1 12.0 Total Balance & Revenues 40.4 45.4 43.5 Expenses* (7.1) (13.9) (22.8) Closing Balance, June 30 33.3 31.5 20.7

Transportation Capital Fund – NVTA Local

Fund Trends

Fund balance is fully programmed to active projects. Revenue estimate is subject to change based on state action. *FY 2017 Actual expenses include expenses against grant funds, etc. as well as TCF-NVTA Local funds.

Key Budget Considerations – Funding Risks

• General Assembly/Governor developing plan for Virginia’s dedicated funding for WMATA:
• General Assembly conference committee bill redirects the regional Transient Occupancy Tax

and Grantor’s Tax to WMATA, reducing the amount of NVTA funding available

• Current proposed language requires NVTC localities to provide an increment of $27.12M to

WMATA (Arlington’s share would be roughly $8M over and above existing commitments)

• DRPT “fiscal cliff” unresolved at this time (affects FY 2020 and future planned state transit

grant revenues)

• GO Bond capacity is limited by existing commitments to Metro and Arlington Public Schools
• Paygo funding is limited

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Key Budget Considerations – Funding Risks

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• The transportation CIP will have to be scaled and prioritized

depending on the outcome of external funding decisions.

• This may also affect future transit expansion as outlined in the

County Board adopted 10-year TDP, which is funded from dedicated transportation sources.