July 9, 2012

The Honorable Robert McDonnell, Governor Commonwealth of Virginia Patrick Henry Building, 3rd Floor 1111 East Broad Street Richmond, VA 23219 Dear Governor McDonnell, On behalf of the citizens of Reston, I want to thank you for your commitment to helping finance the construction of Phase 2 or Metrorails Silver Line that will pass through our community. The $150 million you have pledged and the General Assembly has approved will be a significant contribution to making rail to Dulles a reality. We are concerned, however, about the terms of the $150 million the state intends to contribute to the rail lines construction. Numerous press accounts indicate the state intends to provide the $150 million in three annual $50 million tranches over the next three years to help pay for interest on bonds issued to cover the cost of the lines Phase 2 construction. In an e-mail exchange with Mr. Andy Rountree, MWAAs Chief Financial Officer, the Reston Citizens Association (RCA) has learned that the states $150 million contribution may facilitate the issue of lower interest rate current interest bonds (CIBs) than more costly capital appreciation bonds (CABs) that may have been issued in the absence of Virginias participation in the funding of the Silver Lines Phase 2 construction. In our view, using state funds to pay interest on MWAAs debt, whether CIBs or CABs, is an inefficient way to use scarce transportation funds and taxpayer money. In effect, in using the $150 million to help pay down the interest payments on MWAAs forthcoming revenue bonds for the Silver Lines Phase 2, the payments will contribute much less than $50 millionmaybe as little as $30 million--to Phase 2s overall $3 billion capital cost. Given that these forthcoming state payments for Metrorail will be made as the line is being built between 2013-2016, we believe it would be much a much wiser use of Virginia taxpayer money to apply the payments directly to the capital costs of construction. In short, the same amount of funds would buy about four times as much of the construction costs of the line. In fact, it would be more costeffective than the $450 million interest financing aid proposal considered and rejected by the General Assemblybecause it would go to buy down capital, not pay interest. Aside from being a wiser use of the funds from a state perspective, this approach would reduce the amount of MWAA revenue bonds needed to pay for the balance of the lines construction and,