Results of Light Rail Review City Council Presentation Tuesday, September 13, 2016 Lyndon S. Remias, City Auditor Chris Ford, Deputy City Auditor
Virginia Beach Transit Extension Project Background • Project expenditures to date related to the following three phases: 1. Acquisition of former Norfolk Southern Right-of-Way 2. PPEA unsolicited proposal process – Terminated in May 2014 3. Light rail project feasibility analysis for delivering transit extension as City and State capital project from May 2014 – present Note: Audit captures expenditures through June 30, 2016 2
Virginia Beach Transit Extension Project Background (continued) • Public Private Education Facility and Infrastructure Act (PPEA) of 2002 - legislative framework that encourages the private sector to propose alternative project delivery methods for qualifying projects that may deliver the project in a more timely or cost-effective manner. • On April 2, 2013, the City received an unsolicited PPEA proposal from a corporate group to extend the Tide Light Rail into Virginia Beach. In June of 2013, the City Council, by resolution, directed the City Manager to accept the unsolicited proposal. • Under the Act, proposals may be invited through solicitation or they may be considered when delivered by a private entity on an unsolicited basis. The City received one other light rail proposal and one maglev proposal. • PPEA process terminated by the City in May 2014 in part due to the Commonwealth of Virginia recommending a more competitive procurement process for its $155M project funding. 3
Virginia Beach Transit Extension Project Objective #1 Identify the various CIP projects and general fund budget units where Light Rail related expenditures have been recorded since the commencement of the project through June 30, 2016 and where future light rail expenditures will be recorded should the decision be made to continue with the construction phase of the project. 4
Virginia Beach Transit Extension Project Results The following are where expenditures are being captured: 1. Purchase of the Norfolk Southern railroad line from Newtown Road to Birdneck Road in Virginia Beach in September of 2009: • CIP Project #2301 - provides for acquisition of the former Norfolk Southern Right-of-Way • CIP Project #2186 - provides for the physical survey of the Norfolk Southern Right-of-Way acquisition 2. Transit Corridor Feasibility Analysis: • CIP Project #9011 - provides for a light rail project feasibility analysis for delivering The Tide extension as a City and State capital project in Virginia Beac h 5
Virginia Beach Transit Extension Project 3. Consultant Costs to Review and Analyze the three (3) PPEA Proposals received to extend Light Rail. – City Council adopted two ordinances; the first on November 12, 2013, the second on April 8, 2014 as a continuation to retain three (3) consultants, one each for engineering, legal, and financial assistance in reviewing the three (3) PPEA proposals received to extend light rail. The following General Fund accounts for the consultant costs: • 002.10510.603109 - Provides for the engineering consultant, Kimley-Horn and Associates, to assist in the review of the three (3) PPEA proposals. • 002.03010.603102 - Provides for the legal consultant, Nossaman LLP, to assist in the review of the three (3) PPEA proposals. • 002.04030.603120 - Provides for the financial consultant, Public Resources Advisory Group (PRAG), to assist in the review of the three (3) PPEA proposals. 6
Virginia Beach Transit Extension Project 4. Main Light Rail Project and the two (2) related projects providing for the design/build and completion of the project should it be approved: • CIP Project #2092 - This is the main CIP project, which will provide for the costs of the design/build project to extend light rail from its terminus at Newtown Station/Norfolk – Virginia Beach City line, east to the Town Center/Constitution Drive area. • CIP Project #2093 - A companion project to 2092, this project funds 12 transit buses to support enhanced public transportation throughout the City in addition to feeding the Tide light rail system. • CIP Project #2108 - This project will fund the design, construction, right-of-way acquisition (if needed) and site furnishings required to create a shared-use pathway within/along the former Norfolk Southern right-of-way in conjunction with the light rail extension project to provide additional modes of transportation. 7
Virginia Beach Transit Extension Project Objective #2 Identify the amounts and purpose of the light rail expenditures paid through June 30, 2016 by tracing expenditures to supporting documentation ex. Invoices, purchase orders, work orders, closing statements, and contracts. 8
Virginia Beach Transit Extension Project Results The following charts identify the amounts and purpose of the light rail expenditures paid through June 30, 2016. • We were able to trace expenditures to supporting documentation (i.e. invoices, purchase orders, work orders, closing statements, and contracts). 9
Allocation of Local Light Rail Expenditures Grand Total $16,331,979 $15,462,564 $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $463,837 $201,536 $88,115 $115,927 $0 Land Acquisition Feasibility PPEA Prosposal Light Rail Office Preliminary A & E Analysis Consultants Expenses 10 Analysis
Land Acquisition Expenditures $15,462,564 $16,000,000 $15,045,171 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $417,393 $0 11 Norfolk Southern Land Survey NFK Southern Land Acquisition
Feasibility Analysis Expenditures $201,537 $98,940 $100,000 $90,000 $80,000 $70,000 $60,000 $49,295 $50,000 $40,000 $40,000 $30,000 $20,000 $12,795 $10,000 $507 $0 Pembroke Station Virginia Transportation Standard Poors US Dept Transportation Other Extension Study Infrastructure Bank Indicative Bond Smart Cities Challenge 12 Application Rating/Consultation Submission
PPEA Proposal Evaluation Expenditures $463,837 $450,000 $406,301 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,608 $50,000 $6,175 $753 $0 Public Works City Attorney Finance Consulting PPEA Solicitation 13 Consultant Fees Consultant Fees Fees
Light Rail Office Expenditures $88,115 $50,000 $47,583 $40,000 $31,956 $30,000 $20,000 $8,576 $10,000 $0 Light Rail Office Lease (4801 Furniture & Fixtures for Office Technology Costs for Light Rail 14 Columbus) Office
Preliminary A&E Expenditures $115,927 $60,000 $51,177 $48,468 $50,000 $40,000 $30,000 $20,000 $14,633 $10,000 $1,649 $0 Architectural and Legal Expenses Other (Letter of General Engineering 15 Engineering Interest and Misc) and Consulting
Virginia Beach Transit Extension Project Objective #3 Identify/develop a reporting mechanism whereby City Council, City Management, and interested outside parties can be informed on the financial progress of Light Rail project should the decision be made to pursue construction. Results • Department of Finance has developed, through the report writing tool Discoverer, a report titled “Light Rail Expenditures” that queries and reports all light rail expenditures by CIP project and expenditure type. • Besides some minor items all expenditures were properly captured by Finance. 16
Virginia Beach Transit Extension Project Conclusion Based upon the results of our procedures we determined: • Expenditures are being fully captured. • Supporting documentation exist to support expenditures. – invoices, purchase orders, work orders, closing statements, and contracts • Finance has effective reporting tools in place to readily capture and report expenditures to provide accountability and transparency to the project. 17
Questions? For further information please contact: Lyndon S. Remias, City Auditor Office of the City Auditor 757-385-5870 lremias@vbgov.com Visit our website at www.vbgov.com/cityauditor 18
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