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

Department of Environmental Services FY 2019 PROPOSED BUDGET HIGHLIGHTS Crystal City, Potomac Yard and Pentagon City Tax Increment Financing (TIF) & Transportation Capital Fund (TCF) County Board Work Session Thursday, April 5, 2018

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. 1

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

Summary of Proposed Budget Changes - TCF TIF % FY 2018 FY 2019 Change Change Adopted Proposed 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 • 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 3

TIF Increment Decrease from 30% to 25% • 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 4

Fund Trends Crystal City, Potomac Yard, and Pentagon City Tax Increment Financing Fund (TIF) 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 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. 5 .

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) 6

Recent Accomplishments Old Dominion Drive Improvements W&OD Trail Improvements Lee Highway & Glebe Road ART Fueling and Bus Wash Facility 7 Intersection Improvements - Phase 1

Construction Starts and Transit Expansion in 2018 Over $63M of projects • ART Fleet Expansion – 13 40-foot buses • Ballston Station Multimodal Improvements moving into • Boundary Channel Drive Extension construction this • S. Carlin Springs Road – Signal Upgrades calendar year • 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 8

Summary of Proposed Budget Changes - TCF % FY 2018 FY 2019 Change Change Adopted Proposed 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 • 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) 9

Ongoing Costs Planned for TCF Percent of TCF revenues directed to operations and program administration is increasing - from 16% in FY 2018 to 20% proposed for FY 2019 $(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. 10

Fund Trends Transportation Capital Fund – Commercial & Industrial Tax (C&I) FY 2017 FY 2018 FY 2019 ( in $ Millions) Actual Re-estimate Proposed 122.3 135.2 112.3 Opening Balance, July 1 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 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. 11

Fund Trends Transportation Capital Fund – NVTA Local 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 40.4 45.4 43.5 Total Balance & Revenues Expenses* (7.1) (13.9) (22.8) 33.3 31.5 20.7 Closing Balance, June 30 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. 12

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 13

Key Budget Considerations – Funding Risks • 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. 14