**Dulles Corridor Metrorail Project -- Extension to Wiehle Avenue**

**Northern Virginia**

(November 2007)

The Metropolitan Washington Airports Authority (MWAA), in cooperation
with the Washington Metropolitan Area Transit Authority (WMATA), is
proposing to construct an 11.9-mile extension of the region's Metrorail
system from west of the existing East Falls Church Metrorail station
through the large Tysons Corner employment and retail center to Wiehle
Avenue in the Reston area of Fairfax County. The project will be
operated as a separate Metrorail line under a new service configuration
that terminates in Washington, DC at the existing Stadium-Armory
Metrorail station. The proposed project scope includes construction of
five new stations, a major park-and-ride lot at Wiehle Avenue, and
expanded storage capacity at WMATA's West Falls Church rail yard. The
project also includes the purchase of 64 heavy rail vehicles. The
extension would be operated by WMATA, with trains operating at seven
minute peak frequencies from the Wiehle Avenue station through East
Falls Church, continuing along the existing Metrorail Orange Line track
east through Arlington County, downtown Washington, DC, Capitol Hill,
and terminating at Stadium-Armory. The 11.9-mile extension is the first
phase of a proposed 23.1-mile extension of Metrorail west to Dulles
International Airport and Loudoun County.

+------------------------------------+---------------------------------+
| **Summary Description**            |                                 |
+------------------------------------+---------------------------------+
| **Proposed Project:**              | Heavy Rail                      |
+------------------------------------+---------------------------------+
| ** **                              | 11.9 Miles                      |
|                                    |                                 |
|                                    | 5 Stations                      |
+------------------------------------+---------------------------------+
| **Total Capital Cost (\$YOE):**    | \$2,960.78 Million (includes    |
|                                    | \$412.00 million in finance     |
|                                    | costs)                          |
+------------------------------------+---------------------------------+
| **Section 5309 New Starts Share    | \$900.00 Million (30.4%)        |
| (\$YOE):**                         |                                 |
+------------------------------------+---------------------------------+
| **Annual Forecast Year Operating   | \$83.30 Million                 |
| Cost:**                            |                                 |
+------------------------------------+---------------------------------+
| **Ridership Forecast (2030):**     | 85,700 Average Weekday          |
|                                    | Boardings                       |
+------------------------------------+---------------------------------+
| ** **                              | 18,400 Daily New Riders         |
+------------------------------------+---------------------------------+
| **Opening Year Ridership Forecast  | 69,600 Average Weekday          |
| (2012):**                          | Boardings                       |
+------------------------------------+---------------------------------+
| **FY 2009 Local Financial          | # Medium-Low                    |
| Commitment Rating:**               |                                 |
+------------------------------------+---------------------------------+
| **FY 2009 Project Justification    | **Not Rated**                   |
| Rating:**                          |                                 |
+------------------------------------+---------------------------------+
| **FY 2009 Overall Project          | **Not Rated**                   |
| Rating:**                          |                                 |
+------------------------------------+---------------------------------+

The project justification and overall project rating are shown as *Not
Rated*. The capital cost estimate included in this report assumes
approximately \$250 million in capital cost reductions that have not yet
been confirmed by MWAA.  The final capital cost will not be known, and
the cost effectiveness, project justification and overall project
ratings cannot be calculated, until MWAA provides the requisite
documentation for these cost reductions, including documentation
from Dulles Transit Partners, the design-build contractor for the
project.

**Project Development History and Current Status**

Following years of study, a phased bus/rail system in the Dulles
corridor was adopted into the region's long range plan in October 1999.
In March 2000, FTA approved initiation of preliminary engineering (PE)
for the Dulles Corridor Bus Rapid Transit Project. Upon completion of a
Draft Environmental Impact Statement (EIS) in November 2002, a 23.1-mile
Metrorail extension to Route 772 in Loudoun County replaced BRT as the
locally preferred alternative (LPA). Due to funding concerns, the
Virginia Department of Rail and Public Transportation (DRPT), the
project's original sponsor, and WMATA identified a project terminating
at Wiehle Avenue as the first phase of implementation of the LPA. FTA
approved a Supplemental Draft EIS in October 2003 reflecting this
terminus. FTA approved DRPT's request to initiate PE for the Extension
to Wiehle Avenue project in June 2004. DRPT received a Record of
Decision on the Final EIS for both this project and the full LPA in
March 2005.

In March 2006, the Commonwealth of Virginia accepted the MWAA proposal
to assume control of the Dulles Toll Road and responsibility for
construction of the project. Such authority is intended to enable MWAA
to accelerate implementation of not only the Metrorail Extension to
Wiehle Avenue but the full LPA using Dulles Toll Road revenues. The
project was formally transferred to MWAA in July 2007.

**Significant Changes Since FY 2008 Evaluation** (**November** **2006**)

The capital cost of the project has increased by over \$1 billion as a
result of greater detail obtained during PE, the addition of finance
costs, and negotiations between the project sponsor and Dulles Transit
Partners, the design-build consortium contracted to build the project.
The project transfer to MWAA has resulted in significant changes to its
financial plan, which is very reliant on toll revenues.

**[Project Justification Rating: Not Rated]{.underline}**

The project is *Not Rated* for project justification because a cost
effectiveness rating cannot be calculated until MWAA provides the
requisite documentation for approximately \$250 million in proposed cost
reductions, including documentation from Dulles Transit Partners, and
the final capital cost is known.  The project received a *Medium* rating
for transit-supportive land use. The rating for the project's *Making
the Case* document was not factored into the project justification
rating for FY 2009.

####### *Making the Case Rating: Low*

The project would extend the Washington Metrorail system through the
"edge city" of Tysons Corner and into the northwestern suburbs of
Fairfax County. The "case" for the project rests on its provision of
through-routed rail service from the corridor to the core of
metropolitan Washington and its direct connections to current activities
and future development within Tysons Corner. Current bus services in the
corridor, and service assumed in the project's "baseline" alternative,
make substantial use of the Dulles Airport Access Roadway that permits
congestion-free operation of express routes along most of the length of
the corridor. The "case" for the Metrorail Extension to Wiehle Avenue
does not address why a nearly \$3 billion rail project is a better
investment than enhancements to bus service on this facility. It
provides few insights into the performance of the project, little focus
on its key functions, and no analysis of benefiting transit markets,
including off-peak riders elsewhere in the system which benefit from the
increased service the project provides to the Metrorail system's core.
Instead, the "case" cites uniformity of services, transit capacity, and
aggregate ridership statistics as evidence of project merit while
providing little evidence or explanation of the underlying corridor
problems and issues.

####### 

####### *Cost Effectiveness Rating: Not Rated* 

The project is *Not Rated* for cost-effectiveness because MWAA has not
provided the requisite documentation for approximately \$250 million in
proposed capital cost reductions. Hence, the final capital cost is not
yet known. The project's travel-time benefits are estimated to be 19,700
hours each weekday. Over 40 percent of travel-time benefits result from
additional off-peak rail service provided between the East Falls Church
and Stadium Armory Metrorail stations.

+------------------------------------------+---------------------------+
| **Cost Effectiveness**                   |                           |
+------------------------------------------+---------------------------+
| Cost per Hour of Transportation System   | **[New Start vs.          |
| User Benefit                             | Baseline]{.underline}**   |
|                                          |                           |
| Incremental Cost per Incremental Trip    | Not Available             |
|                                          |                           |
|                                          | Not Available             |
+------------------------------------------+---------------------------+

####### \* Indicates that measure is a component of Cost Effectiveness rating.

***Transit-Supportive Land Use Rating: Medium***

The *Medium* rating is based upon the average of the ratings assigned to
the subfactors below, each of which contribute one-third to the land use
rating. The rating reflects conditions as of November 2006.

**Existing Land Use: Medium-Low**

-   Land use around proposed stations is highly oriented toward large
    office and retail developments designed for automobile commuting.
    Just under 76,000 jobs are located within ½-mile of the proposed
    stations and approximately 12,500 residents live within ½-mile of
    the stations.

-   The project provides direct rail access to the region's central
    business district, which contains over 670,000 jobs.

-   Existing developments within Tysons Corner generally feature large
    setbacks with minimal walkways. Sidewalks are provided at about 60
    percent of approaches to intersections, and all stations are located
    on major auto routes.

**Transit-Supportive Plans and Policies: Medium-High**

-   Tysons Corner is an attractive area for commercial development, and
    is expecting up to 40 percent increases in development over the next
    25 years. Fairfax County has established a special tax district to
    support the rail system, and is permitting higher development
    densities in areas surrounding proposed stations. Higher density
    development allowed in rail station areas is considered an incentive
    for transit-oriented development on the few remaining vacant parcels
    and for redevelopment of some of the existing low-density strip
    malls in the corridor.

-   Fairfax County has begun the planning process needed to make the
    area more transit-supportive. Both regional and local plans focus
    high-density development in Tysons Corner and, specifically,
    adjacent to the proposed rail stations.

-   Fairfax County uses the proffer system and bonus/incentive zoning to
    control and direct development. Additional densities of floor area
    ratios (FAR) of 1.0 -- 2.5 are allowed within 1000 feet of station
    platforms compared to allowed FARs of 0.6 -- 1.0 beyond 1,600 feet
    of proposed stations.

-   Policies also support more mixed-use and residential development
    with a 3:1 density bonus for developments with at least one third
    residential use. Parking reductions are also offered to development
    adjacent to transit.

**Performance and Impacts of Policies:** **Medium-High**

-   Several aging office buildings near the proposed Tysons East station
    have been demolished, and construction is underway for office/mixed
    use around the proposed station site. The developer will provide
    improved access to the station site and is orienting the development
    layout towards the station.

-   Areas adjacent to rail stations throughout WMATA's system have
    experienced dense, mixed-use development, including the
    Rosslyn-Ballston corridor, Crystal City, Bethesda, and Silver
    Spring.

####### Other Project Justification Criteria 

+------------------------------------------+---------------------------+
| **Mobility Improvements Rating:          |                           |
| Medium-Low**                             |                           |
+------------------------------------------+---------------------------+
| **Transportation System User Benefit Per | **[New Start vs.          |
| Passenger Mile (Minutes)**               | Baseline]{.underline}**   |
|                                          |                           |
| **Number of Transit Dependents Using the | 1.6                       |
| Project**                                |                           |
|                                          | 14,183                    |
| **Transit Dependent User Benefits per    |                           |
| Passenger Mile (Minutes)**               | 1.1                       |
|                                          |                           |
| **Share of User Benefits Received by     | 65.2%                     |
| Transit Dependents Compared to Share of  |                           |
| Transit Dependents in the Region**       |                           |
+------------------------------------------+---------------------------+
| **Environmental Benefits Rating: High**  |                           |
+------------------------------------------+---------------------------+
| **[Criteria Pollutant                    | **[EPA                    |
| Status]{.underline}**                    | D                         |
|                                          | esignation]{.underline}** |
| > 8-Hour Ozone (O~3~)                    |                           |
| >                                        | Moderate Non-attainment   |
| > Particulate Matter (PM~2.5~)           | Area                      |
|                                          |                           |
|                                          | Non-attainment Area       |
+------------------------------------------+---------------------------+

# 

# [Local Financial Commitment Rating: Medium-Low]{.underline}

The *Medium-Low* local financial commitment rating is based on the
*Medium-Low* rating for the capital finance plan, the *Medium* rating
for the operating finance plan, and the *High* rating for the New Starts
share of project costs.

####### *Section 5309 New Starts Share of Total Project Costs: 30%* 

####### *Rating: High*

MWAA is requesting a slightly higher-than 30 percent New Starts share of
total project costs, which results in a *High* rating for this measure.

+-------------------------+-----------------------+--------------------+
| **Locally Proposed      |                       |                    |
| Financial Plan**        |                       |                    |
+-------------------------+-----------------------+--------------------+
| **[Source of            | **[Total Funds        | **[Percent of      |
| Funds]{.underline}**    | (\$mi                 | To                 |
|                         | llion)]{.underline}** | tal]{.underline}** |
+-------------------------+-----------------------+--------------------+
| **Federal:**            | \$900.00              | 30.4%              |
|                         |                       |                    |
| Section 5309 New Starts | \$580.40              | 19.6%              |
|                         |                       |                    |
| TIFIA Direct Loan       |                       |                    |
| Revenues                |                       |                    |
+-------------------------+-----------------------+--------------------+
| **State:**              | \$51.70               | 1.7%               |
|                         |                       |                    |
| Virginia Transportation |                       |                    |
| Act 2000                |                       |                    |
+-------------------------+-----------------------+--------------------+
| **Local:**              | \$940.68              | 31.8%              |
|                         |                       |                    |
| Dulles Toll Road        | \$488.00              | 16.5%              |
| Revenues                |                       |                    |
|                         |                       |                    |
| Fairfax County          |                       |                    |
| Transportation          |                       |                    |
|                         |                       |                    |
| Improvement District    |                       |                    |
+-------------------------+-----------------------+--------------------+
| **Total:**              | **\$2,960.78**        | 100.0%             |
+-------------------------+-----------------------+--------------------+

**NOTE**: The financial plan reflected in this table has been developed
by the project sponsor and does not reflect a commitment by DOT or FTA.
The sum of the figures may differ from the total as listed due to
rounding.

# *Capital Finance Plan Rating: Medium-Low*

The capital finance plan is rated *Medium-Low* based upon the weighted
average of the ratings assigned to each of the subfactors listed below. 
The agency capital condition is weighted 25 percent, the commitment of
capital funds is weighted 25 percent, and the capital cost estimate,
planning assumptions and capital funding capacity subfactor is weighted
50 percent.

#### Agency Capital Condition: Medium-Low

-   The average age of WMATA's bus fleet is 7.2 years, which is slightly
    older than the industry average.

-   The Dulles Toll Road Revenue Bonds have not been rated. A
    preliminary credit opinion prepared by Fitch assigned a rating of
    BBB to the senior toll revenue bonds.

#### Commitment of Capital Funds: Medium

-   Approximately 72 percent of non-New Starts funding is committed or
    budgeted. Sources of funds include a property tax levied in a
    Transportation Improvement District that encompasses the corridor
    served by the project, toll revenue from the Dulles Toll Road,
    general fund revenues from Fairfax County, and the Commonwealth's
    Transportation Act of 2000.

#### Capital Cost Estimate, Planning Assumptions, and Financial Capacity: Medium-Low

### MWAA's financial plan includes optimistic assumptions on toll road revenues, including frequent toll increases and a significant amount of growth in transactions. These assumptions differ significantly from historic experience.

### The financial plan indicates significant debt issuance, including Toll Road Revenue bonds and a sizable TIFIA loan. The plan shows deferred principal payments resulting in a steeply escalating debt service requirement after 2031. 

### The financial plan shows WMATA's infrastructure renewal needs being met over the long-term, but relies on a tripling of annual local capital funds, which is considered optimistic.

#### *Operating Finance Plan Rating: Medium* 

WMATA will be operating the project. The operating finance plan is rated
*Medium* based upon the weighted average of the ratings assigned to each
of the subfactors listed below.  The agency operating condition is
weighted 25 percent, the commitment of operating funds is weighted 25
percent, and the operating cost estimates, planning assumptions and
operating funding capacity subfactor is weighted 50 percent.

#### Agency Operating Condition: Medium

-   WMATA's current ratio of assets to liabilities as reported in its
    most recent audited financial statement is 1.3.

-   WMATA is in good operating financial condition. In the past five
    years there have been no cash flow shortages in the operating plan,
    while service has expanded.

#### Commitment of Operating and Maintenance Funding: High

-   All operating funding is considered committed. This reflects a
    requirement of the WMATA compact that each jurisdiction pay a share
    of operating costs based on an explicit formula.

#### Operating Cost Estimates, Planning Assumptions and Financial Capacity: Medium-Low

-   The assumptions of bus operating and maintenance cost growth are
    optimistic compared to historical experience.

-   Assumptions on passenger revenues and operating subsidies from local
    jurisdictions are in line with historical experience.

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