Loudoun County supervisors Wednesday night voted overwhelmingly to oppose a deal that would extend guaranteed annual toll rate increases and start limited distance-based tolling on the Dulles Greenway.
The deal, negotiated by County Chairwoman Phyllis J. Randall (D-At Large) and state delegates John J. Bell (D-87) and David A. Reid (D-32), would extend the guaranteed annual toll increases on the Greenway through 2056, when the state takes control of the road. Under the state’s current deal with the Greenway, which expires at the end of the year, the State Corporation Commission must approve toll rate increases equal to the increase in the Consumer Price Index plus one percent, the increase in real Gross Domestic Product, or 2.8 percent annually—whichever is highest.
The new deal would also implement distance-based tolls of a dollar per mile up to five miles during off-peak hours for EZ Pass customers.
But supervisors voted 8-1 to oppose that bill in the General Assembly, with only Randall voting against.
Supervisors spent much of the meeting trying to get to the bottom of the Greenway’s complicated and murky finances. Under questioning, Greenway CEO Greg Woodsmall could not tell supervisors how much money the Greenway nets annually; when the Greenway would be profitable; its owner equity, meaning its assets minus its liabilities, what Vice Chairman Ralph M. Buona (R-Ashburn) called “the most basic equation there is in all of accounting;” or, without searching his documents, the toll rates on the road.
“There has been no return provided to the owners that have contributed the equity of this road,” said Timothy Biller of the lobbying firm Hunton Andrews Kurth, which represents the Dulles Greenway. “There was only one, maybe two distributions that didn’t even give back their first investment, let alone a return on their investment.”
Supervisors also wanted to know how the Greenway came to have an approximate one billion dollars of debt after spending what they said was $400 million building and improving the road. The Greenway’s representatives put that down to refinancing and the types of bonds the Greenway sells. Buona commented that the Greenway’s debt rating, B-, is near junk-bond status.
Woodsmall said the deal comes out of the Greenway’s efforts by its new leadership to put forward a new face in the community, and that the company had “decided it was time to turn the page and set the stage going forward in a more positive light, not having these fights every time we’re going for a toll increase.”
The deal’s supporters argue it would stop the Greenway from winning even higher toll increases from the SCC when the current guaranteed raises expire in 2020. Hunton Andrews Kurth Senior Director of Governmental Affairs Myles Louria said there is no better deal in the offing, and the Greenway’s representatives at the meeting said they would not be willing to negotiate again in the future.
“All we can tell you is this: the only thing we can bring to you is what has happened from a historical perspective, and before CPI plus one came online and basically became an effective cap on the rate increase, we received no less than CPI plus 4.7,” Louria said. “So, I know there are some folks who have said the CPI plus one is a boon and a boondoggle in term of the Greenway. I can tell you that historically, from the SCC’s perspective, if you don’t like CPI plus one, you’re really going to love CPI plus 4.7.”
“This doesn’t benefit a lot of people, and it doesn’t benefit them very much, I don’t disagree with that,” Randall said. “But if this is what we have, whether it benefits a lot of people or not … it’s better than what we have right now.”
“For many users of the Greenway, I don’t think this limited distance-based tolling will be particularly beneficial, nor will it hurt them,” said Supervisor Kristen C. Umstattd (D-Leesburg). “So, for me it boils down to one thing: Is the SCC likely to approve higher rate increases than what is being proposed her? And I think the SCC will.”
But other supervisors have indicated they welcome the fight. If the current deal expires, under state law, the Greenway must demonstrate toll increases do not materially discourage use of the road, provide the user a reasonable benefit for the cost, and provide the operator “no more than a reasonable rate of return.”
The Greenway’s representatives maintain that tolls on the road do not discourage people from using the road; Supervisors Ron A. Meyer Jr. (R-Broad Run) and Matthew F. Letourneau (R-Dulles) said it’s obvious they do.
“Have you driven in the morning on Loudoun County Parkway going toward Waxpool Road?” Meyer said. “No? Well you ought to. It backs up a half-mile, sometimes three-quarters of a mile from people avoiding the Greenway.”
It is an argument some supervisors feel has already been demonstrated. The county joined a lawsuit against the Greenway by then-state Delegate David I. Ramadan (R-87) to stop toll increases, which they lost in the state Supreme Court. However, the court ruled that the section guaranteeing the Greenway’s annual increases supersedes all other parts of the law—including the requirements around discouraging use.
Former state delegate Joe T. May, who with then-state senator Mark Herring introduced the 2008 bills that guaranteed the Greenway toll increases, came out against extending his bill’s provisions the next day.
“This plan guarantees profits for the Greenway without implementing true distance-based tolling and at the cost of massive toll hikes that will harm Northern Virginia commuters, seniors on a fixed income and small businesses,” May said in a prepared statement.
At the time that May and Herring introduced that bill, it was seen as a way to slow down the Greenway’s toll increases. While it does not prevent higher tolls, subject to the normal criteria of toll rate increases, it gives the Greenway a relatively ironclad guarantee at those levels. It was unanimously approved in the General Assembly.
Assuming annual increases of 2.8 percent from the current $5.65 toll, the deal raise the one-way peak tolls between Leesburg and Rt. 28 to at least $15.70 by in 2056.
The three-hour debate Wednesday night marked the first time the current Board of Supervisors has gone into “committee of the whole,” an unusual parliamentary procedure that takes the normal time limits off of discussion, allowing the full board to discuss topics in an unlimited way normally reserved for work in its committees.
“You said the answer is because you’ve got a new board, you’ve got new owners,” Buona said. “I want to believe you’re sincere with that answer, I really do, but my own theory of that would be: why now? Because the sweetheart deal ends at the end of this year.”