Fed­eral aid for Pur­ple Line un­cer­tain, ques­tions mul­ti­ply

The Washington Post Sunday - - METRO - BY KATHER­INE SHAVER

The cel­e­bra­tion af­ter Mary­land Gov. Larry Ho­gan’s ap­proval last month of a light-rail Pur­ple Line for the Washington sub­urbs has given way to hand-wring­ing over whether his fi­nan­cial con­di­tions can be met.

New fig­ures pro­vided by the Mary­land Depart­ment of Trans­porta­tion show a $170 mil­lion gap be­tween its latest es­ti­mated con­struc­tion cost—$2.16 bil­lion, down from $2.45 bil­lion — and the amount of fund­ing lined up. MDOT of­fi­cials em­pha­sized that the dol­lar fig­ures are “work­ing num­bers” that will change by the time a con­tract is awarded, but the ques­tion of who will cover any short­fall — and how — has added a layer of un­cer­tainty.

“This is not a done deal,” said state Sen. Brian J. Feld­man (D-Mont­gomery), chair­man of the Se­nate Fi­nance Com­mit­tee’s trans­porta­tion sub­com­mit­tee. “The fact that the gover­nor said we’re mov­ing for­ward doesn’t make it so un­til all the other pieces of the puz­zle fit to­gether. . . . There’s still a mul­ti­tude of

ques­tions that need to be an­swered to be able to say defini­tively this pro­ject will be built in the near fu­ture.”

Ne­go­ti­a­tions are un­der­way be­tween MDOT and Mont­gomery and Prince Ge­orge’s coun­ties, both of which must cough up more money for the rail line’s con­struc­tion, the gover­nor said. The likely stick­ing point: How much cash the state will de­mand in ad­di­tion to the coun­ties’ “inkind” con­tri­bu­tions, such as county-owned land along the 16-mile align­ment be­tween Bethesda and New Car­roll­ton.

Mean­while, Pur­ple Line sup­port­ers are keep­ing a wary eye on Congress be­cause Ho­gan (R) also tied his ap­proval to the state se­cur­ing $900 mil­lion in fed­eral aid that the Obama ad­min­is­tra­tion has rec­om­mended for Pur­ple Line con­struc­tion.

The state’s re­vised fi­nan­cial plan won’t come in time for the pro­ject to re­ceive the first $100 mil­lion in fed­eral grants ap­pro­pri­ated to it in this fis­cal year, which ends Sept. 30.

That will leave the Pur­ple Line com­pet­ing against about five other U.S. transit projects for fed­eral money in the next fis­cal year, start­ing Oct. 1, and that money could be rel­a­tively scarce. So far, both the House and Se­nate trans­porta­tion ap­pro­pri­a­tions bills in­clude $542 mil­lion to $582 mil­lion less in fed­eral con­struc­tion funds than the Obama ad­min­is­tra­tion re­quested for new transit projects, like the Pur­ple Line.

The state has bought some time to fig­ure out how to close that gap. MDOT re­cently an­nounced that it has pushed back the pro­ject’s bid dead­line from mid-Au­gust to Nov. 17, and the state ex­pects that a con­tract won’t be fi­nal­ized un­til next spring.

“The gover­nor’s num­bers don’t pre­clude ev­ery­one com­ing to­gether — as long as we’re as­sum­ing the gover­nor re­ally meant it that the Pur­ple Line will be go­ing for­ward,” said Gre­gory San­ders, vice pres­i­dent of the ad­vo­cacy group Pur­ple Line Now. “It’s a big lift, but it all seems in the realm of pos­si­bil­ity if ev­ery­one is ne­go­ti­at­ing in good faith.”

Ho­gan, a vo­cal high­way sup­porter, had crit­i­cized the Pur­ple Line as too ex­pen­sive but said last month that the state plans to build a stream­lined ver­sion and drop its cash con­tri­bu­tion from $700 mil­lion to $168 mil­lion.

Although the pro­ject re­mains alive, the sig­nif­i­cant cut in state funds means that sub­stan­tial and com­plex parts of the pro­ject — its fi­nan­cial plan and what a scaled-back rail line would look like — must be re­worked. MDOT re­leased a 2,075-page re­vised bid so­lic­i­ta­tion last week.

The pro­ject, pre­vi­ously on pace to have con­struc­tion start this year and trains run­ning in 2020, is now al­most a year be­hind sched­ule.

Tim­ing is crit­i­cal. The pro­ject won’t re­ceive any fed­eral con- struc­tion money un­til the state signs a fund­ing agree­ment with the Fed­eral Transit Ad­min­is­tra­tion. But the FTA won’t sign an agree­ment un­til Mary­land has a fi­nal plan de­tail­ing the pro­ject’s costs and who will pay for what.

Many of the de­tails will be hashed out be­hind closed doors over the next four months as the four teams of pri­vate com­pa­nies com­pet­ing for a 35-year con­tract to de­sign, build, op­er­ate and main­tain the Pur­ple Line in­cor­po­rate Ho­gan’s cost-cut­ting changes into their bids.

The pro­pos­als will re­veal how much a slimmed-down pro­ject would cost to build and op­er­ate and how much of the con­struc­tion ex­penses the pri­vate sec­tor is will­ing to fi­nance. But the public likely won’t hear much un­til the state se­lects a win­ning pro­posal early next year. Bid doc­u­ments, MDOT of­fi­cials say, are ex­empt from the state public records law.

Mary­land Trans­porta­tion Sec­re­tary Pete K. Rahn said the state will re­quire the pri­vate teams to fi­nance more of the con­struc­tion, be­yond the $670 mil­lion the state pre­vi­ously planned on. The state would cover the pri­vate con­trac­tor’s debt-ser­vice pay­ments over time. Hav­ing the pri­vate sec­tor fi­nance more won’t add much to the state’s costs, Rahn said, be­cause a “sig­nif­i­cant” por­tion of the pri­vate fi­nanc­ing prob­a­bly will come via a low-in­ter­est fed­eral loan that is “cheap” com­pared with other kinds of bor­row­ing.

Mont­gomery of­fi­cials have said that Rahn also has men­tioned the pos­si­bil­ity of Mont­gomery and Prince Ge­orge’s coun­ties each con­tribut­ing an ad­di­tional $50 mil­lion. Mont­gomery County Ex­ec­u­tive Isiah Leggett (D) has said he is “very pos­i­tive” a deal can be reached, but Prince Ge­orge’s County Ex­ec­u­tive Rush­ern L. Baker III (D) has been more guarded, say­ing the county has al­ready “com­mit­ted an ex­tra­or­di­nary amount” to the pro­ject.

Rahn said the dol­lar amount re­mains part of the ne­go­ti­a­tions.

“I’m not pre­pared to use a $100 mil­lion fig­ure” for both coun­ties’ ad­di­tional con­tri­bu­tions, he said.

MDOT spokes­woman Erin Hen­son said the state hopes to reach an agree­ment “in con­cept” with the coun­ties in the next sev­eral weeks and a “firm com­mit­ment” this fall.

Feld­man, the state sen­a­tor, said he is con­cerned thatHo­gan’s re­quire­ment that the coun­ties pitch in more will threaten the Pur­ple Line’s fi­nan­cial vi­a­bil­ity. He noted that the gover­nor has not re­quired lo­cal gov­ern­ments to help fund state high­way projects.

“Does the gover­nor re­ally want to build the [Pur­ple Line] pro­ject, or did he set this up as a mech­a­nism that’s very dif­fi­cult to make work?” Feld­man said. “Then the gover­nor could say he sup­ported the pro­ject, but if the lo­cals can’t come up with the money, [he could say] they lacked the po­lit­i­cal will.”

Rahn said he is “con­fi­dent” that the state can reach a deal with the coun­ties.

“We’re go­ing to make it work,” he said.

Pur­ple Line ad­vo­cates say they, too, think the coun­ties will find the money. But where?

“Do you mean, where’s the pot of gold at the end of the rain­bow?” said Nick Brand, pres­i­dent of the Ac­tion Com­mit­tee for Transit. “Like a lot of these things, it won’t be one so­lu­tion. There will be lit­tle short­cuts found and com­pro­mises made.”

How much will come from the fed­eral gov­ern­ment — a cru­cial source of con­struc­tion money — re­mains un­cer­tain. Although the FTA has rec­om­mended the Pur­ple Line for $900 mil­lion in to­tal fed­eral aid, Congress would have to ap­pro­pri­ate that in an­nual pay­ments of $100 mil­lion.

An FTA spokesman said the $100 mil­lion in grants ap­pro­pri­ated to Pur­ple Line con­struc­tion this fis­cal year will re­main avail­able for five years. The pro­ject would re­ceive that money only af­ter it reaches a fi­nan­cial agree­ment with the FTA.

FTA of­fi­cials also have said that Congress tra­di­tion­ally hon­ors the agency’s an­nual fund­ing com­mit­ments made in such agree­ments. But be­cause the Pur­ple Line doesn’t yet have a fed­eral fund­ing deal, it must still com­pete for money against other transit projects at the same stage in the fund­ing quest.

The Se­nate ver­sion of the trans­porta­tion ap­pro­pri­a­tions bill in­cludes lan­guage in­serted by Sen. Bar­bara A. Mikul­ski (D-Md.) that would make the Pur­ple Line’s first $100 mil­lion in­stall­ment a pri­or­ity for what­ever new transit con­struc­tion aid Congress al­lots. The House bill does not di­rect the money to any par­tic­u­lar projects. The ques­tion is whether Mikul­ski’s lan­guage will re­main in the fi­nal bill. Rahn said he is not con­cerned. “I be­lieve the $900 mil­lion is go­ing to be there,” he said.


Mary­land Gov. Larry Ho­gan (R), left, has tied his ap­proval of the Pur­ple Line pro­ject to the state se­cur­ing $900 mil­lion in fed­eral aid. State Trans­porta­tion Sec­re­tary Pete K. Rahn is at right.

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