County Council OKs revised SunRail pact, prepares to share in transit deal

The countdown has begun for the Florida Department of Transportation to hand over ownership of SunRail and much of the commuter-rail system’s costs to Volusia County and other local partners — and the phased change begins just months from now.

With the originally envisioned SunRail system now almost complete — extending from Poinciana in Osceola County to DeLand — the FDOT is set to reduce its role as the operator and bill-payer for the Orlando-centered transit service.

“The tracks are being laid. The cement is being poured, and the train is coming,” Volusia County Manager George Recktenwald told the County Council March 19. “It’s time to start the transition.”

Indeed, the long-promised weekday commuter-rail service from DeLand — the north terminus of the SunRail line — may begin later this spring. The DeLand SunRail depot is supposed to be finished in May, and regular runs will start shortly thereafter.

Without objection, the council ratified a pair of agreements on the operations and governance of the 61-mile-long SunRail route. The transition from state to local ownership of SunRail will be in phases, rather than an abrupt change.

“This has been a long time in coming,” Assistant County Attorney Laura Coleman said.

Coleman was one of the negotiators of the new arrangement.

Looking back and looking ahead

County officials hailed the agreements as the best deal Volusia and the state agency could forge for a venture whose costs and deficits have greatly exceeded the projections made well before SunRail became a reality. 

The inter-local governance and operating agreements were originally inked in 2007 among leaders of Volusia, Seminole, Orange and Osceola counties and the City of Orlando, also known as the local partners in SunRail and future owners of the transit system.

Since the adoption of the agreements in 2007, SunRail’s costs and conditions have changed greatly. Those higher — and possibly projected higher still — costs and shortfalls prompted Volusia County’s leaders to secure some legal safeguards.

The operating agreement has been amended three times, and the latest version is supposed to safeguard Volusia and the local owners/funders against mounting costs incurred by adding more operating hours and/or more destinations outside the established SunRail corridor.

“Expanded or extended service requires a unanimous vote,” Coleman said.

That is a big change from the current arrangement, which would allow for major changes in SunRail service by a supermajority vote of the Central Florida Commuter Rail Commission. The CFCRC is the body representing the five local government partners in the SunRail venture. 

Thus, if for example, another local partner or two, decide to begin regular SunRail service to and from Orlando International Airport or to and from Apopka, Volusia County will be given the opportunity to approve the extension. Similarly, if a SunRail partner wants to run trains on Saturdays, Sundays and holidays, or begin regular night service, that partner would need to have the support of all other partners — or at least those willing to pay their share of the service while excluding the dissenting member’s jurisdiction. 

“It will come back to you,” Coleman said.

What else is in the deal?

Key points of the transition deal are: 

— The five local governments destined to own SunRail have an agency known as the Central Florida Commuter Rail Commission. The governing board of the CFCRC has five members, each of which is an elected official of a local jurisdiction served by the system. For example, County Chair Jeff Brower represents Volusia on the CFCRC.

— The FDOT will continue to operate SunRail and pay all of its expenses through Dec. 31, 2024. In the case of Phase 2, which includes DeLand, the local partners and the state agency will operate and pay for SunRail, beginning Jan. 1, 2025, and continuing through Dec. 31, 2027.

— The purpose of the extra time during which the FDOT will operate SunRail is to enable the CFCRC to gain experience in overseeing the system and contracting with an agency to handle the day-to-day operations. That “third party operating entity” is supposed to be in place “beginning Jan. 1, 2028,” a county memorandum notes.

Past discussions about the future operating entity have pointed to LYNX, the tri-county bus system serving the Greater Orlando area, as the likely contracted agency to operate SunRail. Moreover, on Pages 8 and 9 of the revised operations phasing agreement is a timeline that contemplates LYNX as the future operator of SunRail.

— The FDOT “will contribute annually to positive train control costs,” the memo reads. Positive Train Control is a federally mandated safety system that costs SunRail $10 million each year. The state agency has agreed to a cost-sharing formula that “is expected to result in a contribution of more than $5 million next year.” 

When the original commuter-rail pacts were signed, Positive Train Control did not even exist.

— The FDOT “will contribute $10 million for the first vehicle overhauls occurring in 2025.”

— The FDOT will maintain all “FDOT-owned rail bridges along the SunRail corridor.”

— Each local partner must pay its share of SunRail’s debts quarterly.

— If a local partner fails or refuses to pay its share of the system’s deficits, the FDOT will take the amount owed from “the FDOT Work Program in the geographic area” of that defaulting partner and pay the debt to the CFCRC.

— The revised SunRail agreements are in effect through 2036. At that time, Volusia County can “opt out” of SunRail, Coleman said.

SunRail and $$$

SunRail has a budget of $81.6 million for the 2023-24 fiscal year that began July 1, 2023 and ends June 30, 2024.

SunRail’s projected revenues, according to the system’s website, will amount to almost $31.4 million. Thus, SunRail has an annual deficit of approximately $50.2 million. 

Currently, the Florida Department of Transportation is covering the deficit, but that agency’s handoff of SunRail to the future owners, meaning the local funding partners, means Volusia County and the four other local governments, will become responsible for paying the debt.

As for Volusia County’s possible share of the deficit, County Manager George Recktenwald estimated it would be about $6 million-$7 million per year under the current operating routine. That expense for the county could increase to approximately $10 million annually, “if nights and weekends are added,” he said.

The fares paid by SunRail’s riders total about $2.2 million, or only about 2.6 percent of the system’s cost. Other sources of cash for SunRail come from other trains, mainly Amtrak and CSX, who pay to use the state-owned rails, advertising, train charters, and federal and state grants.

Not to be railroaded

Further protection for those who do not support the cost of the additional operations of SunRail is within the following paragraph, which reads in part:

“… [I]f one or more Local Government Partners agree in writing to fund the Expanded Service Cost and/or Extended Service Cost in addition to their respective Share of Local Operating Support and Share of Local Capital Support, the action to approve the proposed Expanded Service Cost or Extended Service Cost shall require unanimous approval of only those Members whose Local Government Partners have agreed in writing to fund such Expanded Service Cost and/or Extended Service Cost. In such event, any Expanded Service Operating Cost, Expanded Service Capital Cost, Extended Service Operating Cost and Extended Service Capital Cost shall be accounted for separately by the Commission. Any Expanded Service Operating Cost and/or Extended Service Operating Cost shall be allocated to only those Local Government Partners that have agreed in writing to fund such Expanded Service Operating Cost and/or Extended Service Cost … but excluding those Local Government Partners that have not agreed in writing to fund such Expanded Service Cost and/or Extended Service Cost….”