Keeping Track
WINTER 2025
A Word From Our CEO
Well, 2024 is a wrap! What a very interesting year for our country and Stacy Witbeck. We entered the year as a 100% ESOP company for the first time in our history, and although it has added some short-term debt liability, it is the right choice for our future. A major benefit of this change is that the company is no longer required to pay tax distributions on a yearly basis, which will help our cash flow position.
This past year also had the significant challenge of drawn-out pre-construction periods on several large projects. We planned to sign contracts and begin construction on at least 50% of projects won over the past three years, but due to these pre-construction delays, we did not meet this 50% expectation and therefore missed our planned revenue and cost burn expectations. We were, however, successful in finalizing one construction contract – the LA Metro’s G-Line BRT Improvements Project at $458 million. Congratulations to all who were involved!
As a result, the immediate gain from becoming a 100% ESOP company has been stalled due to this slow ramp-up to construction and has created a cash flow concern for the next two years as our successful jobs underway wrap up and we wait on these large, negotiated projects to get out of the gate.
We should note, relating to the above, that we made progress on three very significant projects, Amtrak Frederick Douglass Tunnel Package B in Baltimore, FrontRunner FR2X in Salt Lake City, and East San Fernando Valley Light Rail in Los Angeles. I would also be remiss to not mention our gratitude to our Las Vegas team who has done an outstanding job solidifying our Stacy Witbeck-led joint venture as the team to build the track and systems for Brightline West. However, due to the new administration and congressional make-up, there are major questions (and frustrations) around whether the project will be built. It is a valid question, but I for one am bullish on its success and am confident we will be under contract by the end of this year.
Closing out my 2024 rant, we cannot overlook our successes, as there were many, and I want to congratulate the hard work of our regional teams on smaller projects, as well as strong performances by our MRS group on their sole projects. Because of these efforts, we nearly reached our net income value goal even though our revenue dropped significantly. Great job!
Moving into 2025, we must accept the fact that we are now a large contractor. This will not and, from what I’ve seen, has not affected the great culture we have developed and worked so hard to maintain. We are also what the business world calls a “mature employee-owned company.” This is evidenced by how the company has experienced and handled increased levels of retirees.
I am confident that all of us, as employee owners, are up for the task that is at hand and all of us will be called upon to contribute to our growth in 2025. Due to the slow-to-start projects, we must focus on closing out our remaining work expeditiously and profitably, as well as starting and expediting our new projects so that billing can begin on this work to help stabilize our cash balance. You will all be hearing about cash flow this year and how you can help so we can focus on how we will manage this aspect of the business to strengthen our bridge into the future.
You have the commitment of me as your CEO, and your entire executive team, to support you and your teams by working hard to get contracts negotiated and finalized through collaboration with our transit partners executives so we can start construction.
Lastly, please look for a notice announcing the dates for our regional meetings. As announced at last year’s Annual Meeting, we will not be meeting at a single location, but instead will have regional meetings with the executive team. We’ll continue to communicate the benefits of being a 100% employee-owned firm, advising on our new vision and structure for the next five years, as well as hearing from each region, including MRS, as to goals for this year and the future. We are extremely excited about this adventure, occurring in May, to spend some time focusing on business goals for 2025 and how we will attain them within these smaller regional groups throughout the country.
Thanks for your time and stay well.
George Furnanz
CEO | STACY WITBECK
A Message From MRS
As we step into 2025, it’s essential to reflect on our past achievements and challenges to effectively chart our course for the future. First, I would like to acknowledge that our success is built on the strength of the MRS team. This is especially true for 2024 where we had another great performance year! Secondly, as we embark into 2025, we are aware that this is a transitional year, our key projects that have sustained us over the past few years are winding down and our introduction into the Progressive Design-Build world is commencing. MRS has established and obtained industry recognition for our technical expertise and initial design efforts on three PDB projects: G-Line BRT Improvements, East San Fernado Valley Light Rail, and UTA FrontRunner Double Track Project. While these projects, $375M in total for MRS, will sustain our backlog for the next five years, we now need to focus our attention on immediate quick burn projects.
Continuing what we began last year and moving forward, we will build upon our new railroad services work, capitalizing on additional design opportunities and expanding our construction services in both the Class 1 and Short Line freight markets. Additionally, 2025 promises to have significant opportunities, but to ensure our success, we must remain true to our core strengths - maintaining current relationships, fostering new relationships in established markets, working with our partners, and winning projects with low risk and superior delivery. MRS’ customer commitment, technical expertise, and individual talent continues to garner recognition. Customers, existing and new, appreciate our customer first mentality, and our strong industry presence continues to grow with CHSR, APTA, AREMA, CRC, and RSSI. Employee training and process improvements will be in the forefront this year to fortify our overall delivery.
MRS’ success is our people. I recognize that everyone plays an important role to ensure our success and appreciate everyone’s efforts – the traveling, long hours, and weekends that we expend to strengthen our culture, ESOP, and bottom line. The future is incredible for MRS and there will be more to come. As we navigate 2025, stay true to our core values and remember we are all ambassadors of MRS, be proud and be respectful.
Thank you.
Paul Rieger
PRESIDENT | MODERN RAILWAY SYSTEMS
Regional Updates
NORTHWEST
Our Northwest region continues to build on our legacy in the area, with two large projects at opposite ends of their schedules. In Seattle, the Redmond Link Extension R200 segment is nearing completion. Pre-revenue services have started on the guideway, giving primary access to KCM Simulated service. Full KCM turn-over is scheduled to start late March. The revenue service date is expected to be announced for May 2025, with crews focused on those turn-over dates and closing the project out.
In Portland, the Earthquake Ready Burnside Bridge project continues to progress through pre-construction. Work on test shafts began in early January and is slated to finish by the end of February, with a rebar cage currently being built.
F210, a traffic mitigation contract for Sound Transit, received NTP in January. Construction is anticipated to be complete this Fall in advance of the Federal Way Link Extension opening, so work will ramp up quickly with two types of wall to start construction: a Soldier Pile wall with pre-cast lagging, and a cast in place wall. The Sounder Maintenance of Way team is also continuing various task-orders throughout Washington.
NORTHERN CALIFORNIA
In Northern California, our construction teams are busy wrapping up some of our most successful projects in recent years. The Caltrain San Mateo Parking Track and Grade Crossing projects have recently reached substantial completion, and the SMART Petaluma Station has been put into revenue service within a year from starting the project. The Windsor Extension for SMART is also on track to go into full revenue service in early spring. The teams have leveraged our project first mentality for bid-build and alternative projects alike and have put in the work to ensure the successful delivery of them.
The next wave of NorCal projects will directly benefit from this recent experience and success. The team has been competitive on several local, bid-build jobs, and our focus is firmly locked on several upcoming large alternative-delivery projects for owners such as SMART, Caltrain, City of Oakland, Alameda County, and others. We are also preparing for upcoming mega projects like Valley Link and California High Speed Rail Track and Systems, both of which are expected to be released in the coming months.
SOUTHERN CALIFORNIA
The SoCal Region has been hard at work on multiple projects. The Trancas Creek Bridge Replacement team has finished construction of Abutment 1, Abutment 5 and all Pier Caps, and is currently setting Phase 2 girders. Elsewhere on the PCH, the Median Pavement Improvements project was completed in just 21 working days, furthering our strong reputation in the area.
The NCTD Bridge 224.5 Survey and Repair Project, an emergency repair of an existing bridge, has been completed. The team worked closely with NCTD to provide many cost and time savings, resulting in a successful project and stronger relations with the owner. This led into winning and completing the MTS 69th Street Emergency Repairs Project for the remediation of damage to MTS's Trolley infrastructure. All work was completed during a four-day shutdown.
Additional repair work came with the Taylor Yard Emergency Bridge repairs project, for the repair of a steel girder bridge that was damaged during a fire, with work about 60% complete. We also are continuing to expand into the water market, performing all of the civil work and mechanical work on the Caltrans Humboldt to Sheldon Pump Stations, including the installation of new pumps and piping at each of the pump stations.
Our Long Beach jobs look to provide more opportunities for future work. We broke ground on the Port of Long Beach Pier B East Expansion Project, the first of a series of projects that will be issued over the next 3-4 years. The second project, Port of Long Beach Peir B Locomotive Facility, had its contract fully executed in January and expects NTP soon.
Looking forward, we’re ready to build on this momentum as we pursue more exciting projects in the first half of 2025. With these and the G-Line and East San Fernando mega projects in the area, 2025 looks to be an exciting year in Southern California!
MOUNTAIN STATES
We’re continuing to build on lasting partnerships with clients across the region. FR2X has started its CCP1 Estimate, critical to the Entry into Engineering phase. The formal NTP for Phase 2 Construction is planned for late 2026, with early work starting earlier that year. The area also continues to engage in BRT work, with Midvalley Express set to be substantially complete by the end of this year. We also won the High Valley Transit BRT CM/GC job in Park City, Utah, with the 30% estimate underway.
On-Call work is another successful revenue stream in the area. Our current contract with UTA is wrapping up, with a new contract kicking in for a variety of maintenance work including bus stops, grade crossings, tamping and more. In Phoenix, the Valley Metro JOC job has had a series of successes, performing multiple track repairs as well as a Bridge Art Lighting Replacement that received commendations from the client. We’re also working through pre-construction work on the Capitol Light Rail Extension in Phoenix, as the environmental review process is underway.
On the road, the 2100 S Reconstruction Project in Salt Lake City has continued to provide opportunities, with an original project value of $12.5 million organically growing to about $27 million through additional work requests based on the team’s successes. Further south in Bluffdale, Utah, the team is at 90% design, with construction starting early this year. A related project in the area, Storm Drain Outfall, is expected to be completed this year.
Finally, we’ve continued our relationship with Stadler with their East Building Expansion underway. Stacy Witbeck is serving as a track contractor in this series of contracts expanding their Utah facility. The region is continuing to pursue work with all the companies we’ve established relationships and more, including roadway reconstruction projects, underground utilities, stations, and bridges. We’re excited to pursue the upcoming FrontRunner Point Improvements job, currently valued at $250 million, with the same FFP JV as FR2X.
CENTRAL
The central region is poised to expand our footprint by both expanding on legacy work and re-entering markets, with the Dallas-Fort Worth area providing multiple opportunities for our teams. The Shiloh Equipment Maintenance Facility is getting through the underground portion of work, with the yard 80% cut to subgrade. DART On-Call has also been awarded 11 tasks to date, amounting to $15 million in contract value. MRS is actively working on two of these tasks, setting the stage for future collaboration on an upcoming Signal Unification program.
Our TEXRail job received a $25 million Raise Grant, pushing the project forward. It’s planned to move to construction in Q3, pending stakeholder agreements. In Nebraska, the Omaha Streetcar project continues to work through pre-construction, including design and constructability reviews, and cost estimates for design submittals. Stacy Witbeck is a dedicated track and stations sub to Kiewit on the job, with construction planned to begin in September. On the other end of the spectrum, the Kansas City Streetcar Extension continues to get closer to completion, with 100% of track and OCS installed. Test trains began operating this month.
EAST
Stacy Witbeck’s East regional office is approaching its third anniversary, continuing a focus on pursuing transit, rail, and now airport projects that improve the lives of the communities they serve. Special thanks to the dozens of Stacy Witbeck employees who have relocated to the east region to grow our company and deliver these projects.
The Amtrak Frederick Douglass Tunnel South Approach Project executed its first GMP amendment last summer, with NTP issued in October to kick off major utility and drainage culvert relocation. Current pre-construction efforts consist of constructability reviews, value engineering, and negotiating the second Guaranteed Maximum Price (GMP). Construction, including temporary water utilities and a duct bank, is already under way for the first GMP, with the project weeks away from beginning vertical shaft underwatering and excavation for siphon work.
We also established a strategic partnership with regional utility contractor to pursue and win the company’s first project at a major airport, Washington Dulles International. The project consists of rock blasting, deep excavations, and 36” sanitary sewer installation. Procurement, planning, permitting, and administrative submittals are underway. In Charlotte, Stacy Witbeck and MRS are also in the preconstruction phase of the CATS South End project. While MRS has an established presence in the area, it’s Stacy Witbeck’s first project in the Carolinas.