What is the RMA?
The Richmond Metropolitan Authority is an independent authority and political subdivision that was created by an act of the Virginia General Assembly in 1966. It was formed originally to build and maintain a toll expressway system to serve the Richmond metropolitan area. Although the act has been amended to authorize the RMA to own and operate other facilities, including parking decks and The Diamond, the act and the Authority's several bond resolutions prohibit the commingling of funds of various projects. Thus, for example, tolls collected on the expressway system cannot and do not subsidize operations of The Diamond or the parking decks.
What is the makeup of the RMA Board of Directors?
The RMA has an 11-member board of directors. The board is comprised of six members appointed by the Richmond City Council; two appointed by Chesterfield County's Board of Supervisors; two appointed by Henrico County's Board of Supervisors; and one from the Commonwealth of Virginia Transportation Board.
Why isn't there equal representation on the RMA board?
When the RMA was originally established, the City of Richmond lent the Authority $10 million. The money was used as the reserve fund required to issue debt to construct the expressway system (see bond questions below). The $10-million debt was repaid when the bonds were refinanced in 1992.
In addition, during the earlier years of operation of the expressway system, the City provided additional operating subsidies that have resulted in more than $47 million in subordinated debt (principal and interest) that the RMA owes the City. The other localities have not provided any financial assistance or subsidies to the expressway system.
The act provides that when the bonds are paid off on the RMA's expressway system, the system will be transferred to the City of Richmond.
Why does the RMA exist?
At the time the RMA was formed, there was a strong need for an expressway system to handle the increase in traffic from the growing suburban development south and west of downtown Richmond. The city streets could not handle the number of vehicles traveling to and from these areas. Drivers also needed another route to cross the James River.
To explain the value of the RMA, we have to flash back to the climate of Richmond in the late 1960s. The RMA was created during a time of virtually no regional cooperation in the Richmond metropolitan area. The localities were embroiled in such issues as annexation and busing.
Thus, the General Assembly created an independent authority that would have the flexibility and freedom to address these regional problems: the Richmond Metropolitan Authority. The RMA could issue bonds to cover the expenses of building and operating the roadway, thereby providing a solid base of regional cooperation.
With the RMA, the localities solved many of their traffic and economic development problems, and drivers have a fast, safe and convenient route to and from downtown Richmond. This was accomplished, because tolls are used to repay the bonds. Without tolls, the Downtown Expressway, Powhite Parkway and Powhite Parkway Bridge would likely not exist.
What is the history of toll roads and their benefits?
Toll roads have been around since Roman times. The concept is to build a road and then charge only the people who use it to cover the expense of constructing and maintaining it. The first toll roads in this country were right here in Virginia.
How is paying a toll different from paying taxes?
It may appear that a toll is another form of taxation, but there is a crucial difference. Taxation cannot be avoided. A toll road can. It is an option. There are alternate routes drivers could use instead of taking a toll road. Paying a toll is a prime example of a user fee. The drivers who use the toll road pay for it.
Exactly which toll roads are operated by the RMA?
The RMA owns and operates the Downtown Expressway (which includes the connecting ramps to I-95), the Powhite Parkway from the Carytown on-ramps to Chippenham (which includes the Forest Hill on- and off-ramps), and the Boulevard Bridge.
The RMA does not operate the he Powhite Parkway Extension (and its associated tolls at Midlothian Turnpike, Courthouse Road, and near Route 288). Nor does it operate Interstate 195, which is characterized by the twin rail lines running down the middle of the highway. Those facilities are operated by the Virginia Department of Transportation (V-DOT). The RMA does not own or operate the Pocahontas Parkway--Interstate 895. This facility is owned by a private company.
The RMA has planned and coordinated closely with V-DOT the implementation of electronic toll collection. Since we share the same customers, it is natural that our systems would be compatible, and through working closely with V-DOT, they will be "seamless" to the patrons.
Where does the RMA get its money?
The RMA gets income from fees charged at its facilities. On the expressway, the fee is in the form of tolls. The tolls are required by law and contract with the bondholders to be sufficient to maintain and operate the expressway system and pay debt service on the outstanding bonds.
Does anyone audit the RMA's financial records?
Each year, the RMA is audited by the accounting firm of Cherry, Bekaert & Holland. The RMA's annual financial report has received the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association for twelve consecutive years. The RMA is required by law and does furnish a copy of its annual financial report to the Counties of Chesterfield and Henrico, the City of Richmond, and the Commonwealth Transportation Board. By law, the RMA's books and records are also subject to examination by the same bodies.
Doesn't the RMA get tax dollars?
The RMA does not receive state or federal tax dollars. We do not get any of the gasoline tax. The toll road operates on toll income. The tolls paid go back into the operation and maintenance of the road used by its patrons.
When was the last time the RMA increased tolls?
In January 1998, tolls were increased to a level roughly equivalent to the rate of inflation to provide, among other things, for the installation of an electronic toll collection system to reduce substantial delays experienced at the toll booths and to revitalize the pavement of the Downtown Expressway. Prior to 1998, the last toll increase occurred in 1988.
Why does the Boulevard Bridge still have a toll?
The Boulevard Bridge is part of the RMA expressway system. In 1992-93, the Boulevard Bridge underwent an $8 million renovation that was paid for with money earmarked for that purpose when the RMA refinanced its bonds in 1992. The bonds issued are for the entire RMA expressway system, therefore tolls are collected throughout the system to repay that debt.
How are tolls determined?
The toll rates are certified by the RMA's traffic and revenue consultants after determining the amount needed to pay for operating costs, repair and contingency fund deposits, and expressway debt service. Each year, they send a certification letter. The bond indentures require the RMA to repay a specified portion of the principal each year as well as payments on the interest.
How are traffic projections determined?
The RMA's budget is developed based on the revenue our traffic and revenue consultants estimate from their traffic projections. Based on traffic predictions, we also have to budget for annual pavement repairs among other items.
What can throw traffic projections off?
Traffic projecting is not an exact science, but it is the best method we have to determine how much money will come in and when and how we can meet our expenses with that income. Unforeseen incidents can impact the traffic projections. Severe winter weather that causes school and business closings over several days, for example, has an impact when commuters stay off the expressway.
What are bonds?
Bonds are another element to the RMA's financing. When the RMA's expressway was built, funds were not available to cover the expense. The RMA issued revenue bonds, basically borrowing money from our bondholders, to pay for the construction.
When the RMA undertakes a major project -- such as the implementation of an electronic toll collection system and the resurfacing of the Powhite Bridge that was done several years ago -- we do not have millions of dollars on hand to cover the expense. So, we have to borrow it. We do that by issuing bonds. In recent years, major projects have been paid for with the money generated when the bonds were refinanced in 1992.
What responsibilities does the RMA have to its bondholders?
Our bondholders lend us the money that we repay with interest. They are similar to stockholders in that they make this investment to make money.
When you borrow money to purchase an automobile, for example, the bank will hold the title as collateral. The RMA's collateral is the revenue we earn collecting tolls. Just like the person who borrows to buy a car or a home, the RMA must repay the principal borrowed and interest.
The bond indenture (the contract between the RMA and the bondholders) specifies the repayment conditions of the loan. The RMA's bond indentures require the Authority to maintain a cash reserve to protect the bondholders should some catastrophic event prevent the repayment of the bonds. The reserve would cover the debt service (payments) during the recovery period.
How much were the original bonds?
The original bonds issued in 1972 to develop and construct the Powhite Parkway and Downtown Expressway were for $130 million. They were originally scheduled to be paid off in 2013.
How much are the bonds now? How much will they be when they are paid off? When will the RMA's bonds be paid off?
The total of the outstanding Expressway Revenue Bonds was $129.7 million as of June 30, 2007. A 1992 refinancing allowed the RMA to renovate the Boulevard Bridge and to resurface the Powhite Parkway's James River Bridge without a toll increase. Currently, the bonds are scheduled to be paid off in 2022.
Why not just pay them off now and then take down the tolls?
The bond indenture prevents paying off the bonds before 2022. To give an idea of how much it would cost to provide for paying off (or defeasing) the bonds ahead of time, it would have cost more than $152 million to defease the bonds at the end of the last fiscal year, June 30, 2007. That debt includes principal on the bonds, the prepayment premium due on the call date, and more than $56 million in subordinate debt the RMA owes the City.
How much toll revenue does the RMA take in each year?
The Powhite Parkway, Forest Hill Interchange, Downtown Expressway, Boulevard Bridge and all the toll machines at on- and off-ramps generated $25 million in fiscal year 2006-07.
How much does it cost to run the expressway system?
The total expense of the expressway system includes not just operating expenses, but also the repayment of bonds and payments into the Repair and Contingency (R&C) Fund. The bond debt is repaid with one annual payment to principal and two payments to interest.
The RMA also maintains a reserve that was established when the bonds were issued. That money is held by the trustee and invested.
Cash remaining at the end of the fiscal year goes toward debt. Fifty percent of cash remaining at the end of each fiscal year is applied toward paying off the subordinate debt with the City, and 50 percent goes to retire the 1973 bonds.
In fiscal year 2006-2007, of the $25.7 million generated in revenues, $9.6 million was used for the direct operating expenses for the expressway, $11.8 million was used for the debt service, approximately $3.3 million was used for maintenance-related expenditures, $77,000 was applied toward paying off the subordinate debt with the City of Richmond.
How many transactions does the RMA conduct annually, monthly, daily?
In fiscal year 2006-2007, the RMA conducted 59.5 million transactions on its expressway system. The toll rates for two-axle vehicles are 50 cents for the Downtown Expressway, Powhite Parkway, and Forest Hill Interchange; 25 cents for the Boulevard and 2nd Street Ramps, 20 cents for the 11th Street Ramps, and 15 cents for the Douglasdale Road Ramps. Also, rates are higher for vehicles with more than two axles. Therefore, it would be inaccurate to multiply 59.5 million by 50 cents to determine annual revenue, as some have tried to do.
It is difficult to estimate a daily average since there is a dramatic difference in traffic numbers between a weekday and a weekend day. The RMA's expressway system is primarily a commuter route. The numbers drop significantly on the weekend.
There are a lot of factors that impact traffic: weather, summer vacation, major events with large attendance (such as a race at Richmond International Raceway) to name a few.
When accidents occur on other major commuter routes, traffic increases on the RMA's expressway system, as drivers use it to avoid the accident area.
Generally speaking, traffic might reach its highest on a sunny Friday in May and its lowest on an icy Tuesday in February. Traffic might boom over Labor Day weekend but be very slow Christmas Day.
What is ETC?
ETC stands for "Electronic Toll Collection" system. ETC is a method of collecting tolls that differs from coin machines and manned toll lanes because it allows the driver to pass through a toll without stopping to pay. The RMA's ETC system is called "E-ZPass," formerly known as Smart Tag.
Why did the RMA install E-ZPass (formerly Smart Tag)?
It was important that the RMA reduce the delays at the toll plazas and process transactions more quickly. We cannot widen the Powhite Parkway due to nearby homes, the Powhite Creek, a rock quarry and a train track. Based on the growth south and west of the City, and the development along the river front downtown, our traffic engineers predicted that the wait at the Powhite Parkway Toll Plaza would extend by a minute or two each year. However, the Parkway is currently under construction to extend the roadway through the anticipated split plaza project. This project, scheduled to be completed in fall 2008, will add an Open Road Toll Lane to the northbound and southbound roadways. Open Road Toll Lanes, similar to those along the Pocahontas Parkway, will allow motorists to maintain highway speeds through the toll plaza without encountering gates.
Why don't you just raise the toll gates?
The RMA and its consultants studied this issue extensively. After evaluating several factors, we decided that it was in the best interest of our customers and employees to continue to use gates on all of our toll lanes.
The safety of our customers and employees is extremely important to us. Since the RMA's toll lanes are surrounded by concrete barriers, persons traveling through these barriers at excessive speeds could cause serious injury to themselves, other drivers and RMA employees. The gates help drivers to maintain the plaza-design speed limit, which is 10 m.p.h. in the E-ZPass-only lanes.
Also, the RMA has a fiduciary responsibility to its bondholders and customers. We have to minimize the number of people who violate the tolls, and a way to do this is to utilize gates. If we removed the gates, experience has demonstrated that many people would use this opportunity to NOT pay the tolls.
Utilizing video enforcement measures -- when a photograph would be taken of a toll violator’s license plate -- is not a good business decision, because capital and operating costs would exceed any returns we might receive.
How does E-ZPass work?
Three elements allow E-ZPass to work: a vehicle-mounted transponder, a roadside reader unit and a computer system for data processing. These three elements "talk" to each other.
As a driver with a transponder approaches the toll lane, the reader unit detects the transponder and reads the account information. The reader unit then passes that information on to the computer unit, which accesses the driver's account and debits the appropriate toll. The computer unit then "tells" the toll gate to raise and the driver passes through without stopping. The entire process takes only seconds. Basically, the reader unit works like the scanner at a grocery store. As the cashier passes the item over the reader, the reader recognizes the item and its cost and adds that to your total.
How much does E-ZPass cost?
E-ZPass does not cost any more than what customers would normally pay for tolls. However, customers are required to set up a prepaid account of at least $35, from which the cost of tolls will be deducted. A $15 security deposit is waived when customers enroll in the program with a credit card and choose the automatic replenishment option.
When traveling on the Downtown Expressway, Powhite Parkway, and Forest Hill Ramps, two-axle vehicles that use E-ZPass benefit from the 10-percent discount already enjoyed by RMA token users. For example, instead of 50 cents being deducted from drivers' prepaid accounts, 45 cents is deducted.
Do I have to use E-ZPass?
No, drivers are not required to use E-ZPass. There will always be a need for toll collection attendants to handle customers without exact change or a E-ZPass transponder. The drivers might be from out of town or might be local customers who choose not to participate in E-ZPass.
How much did it cost the RMA to install E-ZPass? What did that include?
The cost of purchasing and installing E-ZPass equipment was $6.8 million. This does not include the annual cost of operating the system each year. The $6.8 million includes three years of maintenance and other improvements such as signage and the cost of transponders.
What does it cost to operate the E-ZPass system, and what does that cost cover?
The average cost for annual E-ZPass operations is in the $800,000 to $1-million range. As customers set up their E-ZPass accounts, transponders need to be distributed, and those accounts need to be serviced. Statements need to be generated, processed and mailed to customers. Customer service representatives must be available to answer customer questions about their accounts. Payments must be credited to accounts so that the customer can use their E-ZPass transponders as quickly as possible. This entire process is coordinated by the Virginia Department of Transportation, which manages the E-ZPass Customer Service Centers.
Why spend more money on toll collection itself?
When the RMA's expressway system was built in the 1970s, no one knew how the traffic volume coming from south and west of the City would explode in the following 25 years. The RMA has widened the expressway where possible, built additional ramps, even widened the Powhite Parkway Bridge. Yet the traffic continues to outgrow these improvements.
Isn't that just increasing the debt?
We hear from drivers who are frustrated at waiting in line. We understand that an expressway should be fast and convenient. The best way to make major improvements in traffic throughput was to install E-ZPass. The improved service comes with a big price tag. And again, those drivers who want the improved service pay for it by paying a toll. Each day, thousands of drivers choose the toll roads.
How is the E-ZPass system progressing? Is it successful?
The E-ZPass program has proven to be very successful. Our customers enjoy the convenience of being able to use their E-ZPasses at the RMA toll plazas, the Powhite Parkway Extension, the Pocahontas Parkway, the Coleman Bridge in Yorktown, Virginia and the Dulles Toll Road and Dulles Greenway in Northern Virginia. Besides saving time, RMA customers are realizing a savings in money, since they receive a 10 percent discount at the Downtown Expressway, Powhite Parkway and Forest Hill ramps.
As of July 1, 2007, there were more than 141,000 E-ZPass transponders issued in the Richmond area.
E-ZPass usage is steadily increasing. At the Downtown Expressway during peak time, usage is approaching 60 percent. We have also witnessed an increase in throughput. The throughput of E-ZPass lanes at the Powhite Parkway and Downtown Expressway is almost double that of the exact-change lanes and three to four times greater than the full-service lanes.
We will continue to evaluate and make improvements to the E-ZPass system.
How has the RMA's expressway system influenced economic development?
For more than 35 years, the Richmond Metropolitan Authority has served the citizens of the Richmond metropolitan area and others who travel Richmond's expressway. Throughout these years, we have strived to provide the best services possible to our patrons, employees, and bondholders. We take this responsibility and the public's trust seriously. We also realize that these services are significant and will become even more so as we enter the 21st century.
• Quality of Life.
A 1997 Greater Richmond Chamber of Commerce transportation study conducted by Alan Newman Research revealed that "eight in 10 Richmond metropolitan residents agree that a major factor in the quality of life of Richmond is the ease of getting around from place to place (84% agree strongly or somewhat), and equal numbers agree that maintaining the ease of getting around should be a high priority (85%)." We agree and also believe that the Richmond community is blessed with an excellent transportation system. In November 1997, Fortune magazine rated Richmond one of North America's 10 most improved cities. In the category of "quality of life," the average commute time was compared to those of the other recognized cities. Richmond's average was the best -- better than such cities as Atlanta, Indianapolis and Raleigh-Durham. The Richmond Metropolitan Authority takes pride in the part it plays in improving the quality of life in our community by moving people safely and quickly to their destinations.
• Capital Initiatives and Improvements.
Many of the RMA's projects have been undertaken in response to community requests. When the Boulevard Bridge was purchased by the RMA in 1969, several improvements were made to the bridge, including the installation of automated toll equipment. In response to escalating demands for another route to cross the James River, the RMA built the Powhite Parkway in 1973. The Downtown Expressway, linking Interstates 195 and 95, opened to the public in 1976. The connecting ramps and remaining portions of I-95 were completed the following year. The RMA demolished and replaced the aging Parker Field with a state-of-the-art baseball stadium, The Diamond, in the mid-1980s. Since 1991, three parking facilities have been built in the downtown Richmond area. In 1993, extensive renovations to the Boulevard Bridge were completed. Specifically, the concrete deck was replaced, which allowed the RMA to widen the lanes and the single walkway. All the while, the historic look of the bridge and toll plaza building was maintained. In 1996, the RMA resurfaced the Powhite Parkway Bridge with a layer of modified concrete with latex. The overlay will extend the life of the structure. Also, the project included re-striping the bridge thereby expanding the northbound lanes from four to five. These numerous constructions and improvements help us to be more efficient, while at the same time improving service to our customers.
• Economic Development.
Since the Powhite Parkway and Downtown Expressway connection were completed in 1976, the areas along the expressway corridor have flourished. Carytown has become a highly successful retail district, attracting shoppers from the suburbs and being an easy hop across the Powhite Bridge from south side. The same can be said of Shockoe Slip and Shockoe Bottom, which have been transformed from abandoned warehouses to thriving districts with shops, galleries and restaurants. The RMA's expressway system provides convenient, safe access to these areas. Every week, thousands of commuters use the Powhite Parkway and Downtown Expressway to reach their offices in the Federal Reserve Bank, James Center and Riverfront Plaza. The Powhite Parkway leads into the Powhite Extension, where office parks at The Boulders and The Arboretum are located. Economic development has followed the expressway. In 1973, when the Powhite Parkway Bridge opened, there was little to foretell the economic boom that would hit western Chesterfield County. In the more than 20 years since then, Midlothian Turnpike has rivaled Broad Street as a major thoroughfare offering restaurants, shopping centers, automobile dealerships and more. The RMA has reinvested more than $50 million in the expressway system, because we realize it is an integral factor in the economic climate of the region and in people's lives.
The RMA is a good neighbor and friend to the Richmond community and has demonstrated a high-level of social responsibility since 1966. In turn, the Richmond community has been a great neighbor and friend to the RMA. This is evident in our many accomplishments -- the construction of a major expressway system, the creation of a renowned baseball stadium, the establishment of parking decks throughout the city -- all of which are the result of collaborative efforts by the City of Richmond, Chesterfield County and Henrico County and their residents.
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