Fairfax County officials are finalizing their plans for how they will pay for the remainder of the county’s share of costs for building the Silver Line.
The county is responsible for more than $1 billion of the $5.9 billion project, which will extend Metrorail service to Tysons Corner, Reston, Herndon and Washington Dulles International Airport.
Special business tax districts along the corridor will finance $730 million of the costs, and the county expects to cover the cost of building parking garages at two of the stations via a public-private partnership or through parking fees. This leaves an estimated $185 million to be funded through other means, although the county’s costs could come down depending on the total final cost of the project’s second phase.
The first section of the project that was bid out came in about $300 million less than expected. The Metropolitan Washington Airports Authority is expected to award that contract this month.
Next week, the Fairfax County Board of Supervisors is expected to take actions that support the rail project funding partners’ efforts to secure federal Transportation Infrastructure Finance and Innovation Act (TIFIA) financing for the project.
The airports authority and Fairfax and Loudoun counties are jointly applying for up to a $1.9 billion TIFIA allocation. While not a grant, the TIFIA allocation would significantly reduce the parties’ borrowing costs, thereby reducing the eventual impacts on Dulles Toll Road users and county taxpayers. The airports authority is using future toll revenues to back its bonds to pay for the construction.
“The TIFIA really represents an opportunity for us, otherwise we would only have one [financing] option,” said Len Wales, the county’s debt manager.
If the project receives the full TIFIA amount, Fairfax would be able to borrow $475 million at an interest rate as low as 2 percent, according to county staff.
“We wouldn’t be able to get that in the open market,” Wales said.
The TIFIA loans would be backed by the special tax district set up to help fund Phase 2 of the rail construction, which is capped at $330 million, and the county’s commercial and industrial tax, which is designated for transportation projects.
If for some reason the TIFIA financing is not approved, the county would revert to its original plan for funding its share of the project, which was to issue bonds backed by those same tax sources.
“We feel pretty confident that the loan will come through,” said Joe LaHait, county debt coordinator.
The county is projecting that the funding partners will close on the TIFIA loan at the end of this year.