Regional Railroad Authority (WCRRA) 2019 Budget September 11, 2018 Donald J. Theisen, P.E. Director Good morning again Commissioners – I’m pleased to present the Regional Rail Authority 2019 budget proposal. The Washington County Regional Rail Authority is a separate taxing jurisdiction from Washington County. For this reason this presentation - and budget - is presented separate from Public Works. With that said, our Regional Rail staff are integrated in Public Works and work closely with others. It’s a very efficient model. In fact, Ramsey County is moving to that model.

Outline METRO Gold Line Progress Transportation Sales Tax WCRRA 2019 Levy Reduction in Levy Reduction in Expenses 2019 Policy Issues Today we will provide highlights on our METRO Gold Line Bus Rapid Transit project progress The transportation sales tax Highlights of the 2019 Regional rail levy And then foreshadow policy issues on the horizon in 2019

METRO Gold Line Progress What is Gold Line BRT? *Graphic from Metro Transit Gold Line Fact Sheet This type of dedicated roadway for transit is a first in our county, our region, our state. And we are already getting calls from regions across the nation asking us how they could do something similar in their city.

METRO Gold Line Progress METRO Gold Line Project Development expected completion Fall 2019 Next Phase is Federal Transit Administration (FTA) approval to enter into engineering On schedule for 2024 opening METRO Gold Line is now in Project Development under the management of Metro Transit. In Project development the design will move from 1% design to 30% design and obtain federal environmental clearances. This phase will be, and needs to be completed next fall. We are on schedule for this to happen. The next phase is engineering. Metro Transit will take the project from 30% design to plans and specifications that will be publicly bid. But the work going on is much more than designing the guideway for the buses that will run with all day service….

METRO Gold Line Progress An important part of public engagement is working with city councils and local residents and businesses to create a vision for the station area that maximizes the public investment in transit. With the help of $1.3 million in Federal transit oriented development planning grants funds secured by Washington County Regional Rail Authority staff, station area development plans are being created at each station location. Sara Allen has been leading this effort for the county in close collaboration with Gold Line cities. The Helmo Station Area Plan is finalized and has been adopted by the City of Oakdale, in an updated 2030 Comp Plan, incorporated into the 2040 Comp Plan, and as a Planned Unit Development which permits a mixture of uses, building, parking and site requirements, maintenance and development standards. Everything in color on this map is new or re-development, bringing a significant boost in tax base to the city and county.

METRO Gold Line Progress Helmo Station area plans propose density and a variety of uses around the METRO Gold Line station to encourage 18 hour activity. A mixture of retail, services, office, residential, supported by parks, trails, and open spaces will help make this an attractive new addition to the City of Oakdale.

Transportation Sales Tax Since October 1, 2017, Transportation Sales Tax has been collected On- track to meet or exceed $7.5M per year estimates With Counties Transit Improvement Board (CTIB) dissolution funds included, the 2018 end of year (EOY) fund balance will be $22.75M Use of funds guided by County Board principles endorsed in 2017 The Transportation Sale Tax the County Board adopted last year will provide the revenue to construct the Gold Line. We are on track to meet or exceed the $7.5M estimated when this tax was adopted. Once we have a full year of collections we will update the County Board with the actual figure. As a part of the Counties Transit Improvement Board dissolution we received funds from that action. This dissolution funds along with the sale tax revenue are projected to give us an End of Year fund balance of $22.75M dollars. The use of this fund balance, and future sales tax revenue is guided by principles the County board endorsed. These are…

Transportation Sales Tax Principles for Use of Revenue Utilize most restrictive funding sources first Interest earned should stay with the original fund i.e., Counties Transit Improvement Board guarantee Cash flow Gold Line so no bonding needed until Federal Full Funding Grant Agreement received To manage financial risk to County minimize commitments to other efforts until Gold Line Project Development is complete and actual experience with Sales Tax is known Shown here on this slide. Each revenue source has rules on how it can be used. We are utilizing the most restrictive funds first. Interest earnings are staying with the revenue source. We are being frugal so the project can be cash flowed as long as possible before there is a need to bond. Once we do have experience with the actual sales tax revenue, and the GOLD Line project estimates become more refined, it would be appropriate to revisit these principles.

Transportation Sales Tax 2019 Use of Sales Tax Fund Washington County staff working on Gold Line Project Development 2019 Expense $280.7K Expense is credited towards project local share requirement Partially fund operation of County transit stations $39K allocated towards total expense of $90K Our frugal use of the revenue includes using the sales tax to fund our staff that our working on this project. Why is this frugal? Because this cost is a credit towards our overall project share. And we have the added benefit of County staff in leadership positions to deliver this project. The sales tax will also partially fund the operation of our 2 transit stations in Newport and Forest Lake. This reduces the burden on property taxes through the regional Rail levy.

WCRRA 2019 Levy Reduction in Levy 2019 Levy $660K REDUCTION of $116.8K or 15% 2018 End of Year (EOY) fund balance estimate $1.5M We are recommending a $116,800 reduction in the Regional Rail levy for 2019. The next slide I will explain the reductions that make this possible. Even with this reduction the Regional Rail Authority is in a healthy position with a projected end of year fund balance of $1.5M.

WCRRA 2019 Levy Reduction in Expenses Commission Dues Gold Line Partners dues decrease $30K 2019 total $100K Red Rock Commission dues decrease $23.5K 2019 total $10K CTIB dues decrease $10K to $0 Salary adjustments $31K for Planning Director Gold Line work $77.8K Staff reallocation to Planning Division These are the highlight reductions in expenses that allow the Regional Rail levy to be reduced. Dues to commissions are dropping a combined $63,500. This won’t affect the commission’s work as each commission has adequate fund balances. We are also seeing savings from the Planning Director working on the Gold Line project and that salary paid for by the Sales Tax. I started this presentation with how efficient it is to have the Regional Rail staff integrated into Public Works. The planners work on other county priorities that are not regional rail activities. The 2019 budget reallocates this staff time to the Planning Division for transparency and accountability with the RRA fund.

2019 Policy Issues METRO Gold Line financial partnership with Ramsey County Determine structure needed for joint cost oversight and approvals Work performed in the past by CTIB METRO Gold Line financial policies County cost participation policy for non-federal project elements (if needed) Review Sales Tax revenue principles and revise as needed Looking ahead to 2019 we will be working on developing a formal financial partnership with Ramsey County to deliver the GOLD line project. It has been a great partnership so far. As we enter final design and construction, we need a structure to provide financial oversight and approvals. This is work that the Counties Transit Improvement Board use to do. Without this board, we need to provide that work. We also will develop for County Board consideration county cost participation policies with our local partners similar to our Highway cost policies. And as I previously mentioned, we will be able to review and revise as needed you principles for use of the transportation sales tax.

Questions and Discussion… Thank you for your support. It is an exciting time for the regional rail authority with delivery of the Gold Line project. Our communities and businesses are fully engaged and they are seeing the potential future that will make sure Washington County stays a great place to live, work, and play.