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The Club for Growth

Phillip Rodokanakis


 

Footing the Bill

Fairfax County has promised to make good any cost overruns in the Rail-to-Dulles project. Supervisors should warn taxpayers that they could wind up footing the bill.  


 

“Clearly, they are making broad policy decisions out of the light of day. It is completely inappropriate” – Charles W. Hall (D), primary challenger to Supervisor Linda Smyth (D), Fairfax County Board of Supervisors, Providence District.

 

The debate over extending the Metrorail service to Dulles Airport has been raging for several years now. Constituencies for the project and against it have emerged, websites erected, e-mail lists and dozens of newspaper articles have been written. But the public remains largely in the dark.

 

Much of the conversation is taking place outside the publics’ earshot. For example, the Fairfax County Board of Supervisors has been discussing the project behind closed doors -- possibly in direct violation of the state’s open meeting laws.

 

The same Board of Supervisors has been on record complaining about the lack of transparency in the state negotiations. Clearly, in the board’s view what’s good for the goose is not good for the gander.

 

In recent months, Supervisor Dana Kauffman, D–Lee District, has questioned the final price tag of the project. More importantly, Kauffman has also questioned the State’s unilateral contract award for the first 11.6-mile phase of the project.

 

The award to Dulles Transit Partners (a consortium of companies, including the mammoth Bechtel Corporation) also was negotiated behind closed doors. The award was not derived through a competitive bidding process, which is common for large government procurements and construction projects. 

 

While the Fairfax Country Board of Supervisors was holding closed meetings, the DC Examiner reported that the first half of the Dulles Corridor Metrorail Project could cost $2.64 billion. In the past, the projections had ranged from $2.4 to $2.7 billion.

 

The $2.64 billion figure appears in materials prepared by Fairfax County staff. This is the first time a firm figure has been proposed for the project’s wildly varying price tag.

 

To qualify for partial federal funding the project must meet the Federal Transit Administration’s (FTA) strict cost-benefit threshold, which determines whether the Agency can fund the project. The Fairfax County staff estimates the threshold to be less than $2.5 billion, while the FTA maintains that the number has yet to be determined.

 

In response, the project partners (both private and public) have apparently been scheming to “pull out” about a quarter of a million of the anticipated construction costs from the project, in order to make it more palatable to the FTA and its cost-benefit formula.

 

The eliminated improvements are not being phased out of the project, however. On the contrary, government officials hope to fund these through state and local dollars. “The scope of the project hasn’t changed,” said the projects spokeswoman, Martha MacAllister. “Nothing is coming out.”

 

This is another game of smoke and mirrors, designed to appease the FTA. It is simply a case of robbing Peter to pay Paul, since the taxpayers — whether at the federal, state or local level — are ultimately going to foot the entire bill.

 

The ultimate price tag for this project is critical to all Fairfax Country property owners. That is because Fairfax County Executive Anthony H. Giffin, in a letter to the Secretary of Transportation Pierce Homer dated Nov. 1, 2005, guaranteed the State that the county would pick up the slack for cost overruns. The letter states:

Fairfax County has also committed to fund its share of increases to the estimated project costs that may arise during final design, negotiation of a Full Funding Grant Agreement with the Federal Transit Administration or due to other circumstances. We intend to either use a “pay-as-you-go” approach using general revenue or through bonding approval through a referendum.

The reference to “pay-as-you-go” should send chills down the spines of every homeowner in Fairfax County. That is because the County’s major source of funding is based on real estate property taxes, meaning that the County would have to raise the real estate tax rate to make up any funding shortfalls.

 

Since 2000, real estate taxes have increased three times faster than inflation in Fairfax County. According to the Fairfax County Taxpayers Alliance, the typical homeowner in Fairfax County will pay a real estate tax of $4,830 this year. However, had tax increases been held to the rate of inflation for the past seven years, the typical homeowner would be paying $3,079.

 

If the cost overruns for the Rail-to-Dulles project are passed on to Fairfax County taxpayers, homeowners can expect significant increases to their real estate tax bills.

 

Most polls have shown that the public generally favors the extension of rail to Dulles. The same polls also show that the majorities that favor this project also do not plan on using the Metro extension. These polls, however, never ask the next logical question, "Would you still favor the project if you had to personally pay for it through additional taxes or tolls?"  

 

Instead of holding closed door meetings, Fairfax County Supervisors should be leveling with local taxpayers and warning them that their reported support for extending Metro will leave them footing the bill.

 

-- April 30, 2007

 

 

 

 

 

 

 

Phillip Rodokanakis, a Certified Fraud Examiner, lives in Oak Hill. He is the managing partner of U.S. Data Forensics, LLC, a company specializing in Computer Forensics, Fraud Investigations, and Litigation Support. He is also the President of the Virginia Club for Growth.

 

He can be reached by e-mail at phil@philr.us.

 

Read his profile here.

 


 

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