HomeMy WebLinkAboutMinutes 11-09-2010 APPROVED 1/20/2011
MINUTES
ORANGE COUNTY BOARD OF COMMISSIONERS
BUDGET WORK SESSION
November 9, 2010
7:00 p.m.
The Orange County Board of Commissioners met for a budget work session on Tuesday,
November 9, 2010 at 7:00 p.m. at the Southern Human Services Center in Chapel Hill, N.C.
COUNTY COMMISSIONERS PRESENT: Chair Valerie P. Foushee, and Commissioners Alice
Gordon, Pam Hemminger, Barry Jacobs, Mike Nelson, Bernadette Pelissier, and Steve Yuhasz
COUNTY COMMISSIONERS ABSENT:
COUNTY ATTORNEYS PRESENT:
COUNTY STAFF PRESENT: County Manager Frank Clifton and Clerk to the Board Donna S.
Baker (All other staff members will be identified appropriately below).
Willie Best said that he was sitting in for Frank Clifton tonight, who is recuperating from
shoulder surgery.
1. GASB Statement No. 54 Fund Balance Reporting and Governmental Fund Type
Definitions
The Board discussed the implementation of Government Accounting Standards Board
(GASB) Statement No. 54 fund Balance Reporting and Governmental Fund Type Definitions,
and the implications on the financial reporting of the County.
Financial Services Director Clarence Grier said that the importance of this is that it
completely changes the way the County reports fund balance through the financial statements.
•Effective For Fiscal Year
June 30, 2011
•To provide an update on GASB Statement No. 54 and the implications it will present with:
• Changes in Financial Reporting
• Changes in the Fiscal Year 2011-12 Budget
Scope
•Changes how fund balance is presented
•Clarifies use of governmental fund types
•Used exclusively for governmental funds
What is Fund Balance?
•Fund Balance is the difference of Assets minus Liabilities.
•Additionally, Fund Balance represents the net worth of the County at one point in time.
How do we currently allocate Fund Balance?
•Reserved —
-Reserve by State Statute
-Reserve for encumbrances
•Unreserved
-Designated - Reserved for future expenditures
-Undesignated - Unrestricted Fund Balance
FUND BALANCE - CURRENT STANDARD
Traditional focus = Fund resources available for appropriation (budgeting)
•Reserved Fund Balance = Not available
•Unreserved Fund Balance = Available
Reserved Fund Balance = Not available
•Resources not available for spending in the current year's budget. Example: supplies
inventories, encumbrances
•Legal restrictions impose a limitation on purpose of the fund. Example: Reserved By State
Statute
•Designated Fund Balance - intended use of resources by management or governing body.
Example: Future Year Expenditures
WHY THE NEED FOR CHANGE?
•Widespread confusion about terminology
•Categories often applied inconsistently
•Challenges to focus on availability for appropriation
GASB 54 ESTABLISHES NEW FUND BALANCE CLASSIFICATIONS
Components of Fund Balance:
•Nonspendable
•Restricted
•Committed
•Assigned
•Unassigned
NEW FUND BALANCE CLASSIFICATIONS
Nonspendable
Restricted Currently - Reserved Fund Balance
Committed
Assigned Currently - Designated
Unassigned Essentially what is unreserved fund balance
NOT SPENDABLE FUND BALANCE
•Not in spendable form
.Cannot ever be spent (e.g., supplies inventories and prepaid)
.Cannot currently be spent (e.g., the long-term portion of loans receivables
•Legally or contractually required to be maintained intact (e.g., principal of a sinking
fund)
RESTRICTED FUND BALANCE
•Amounts constrained to being used for a specific purpose by:
•External parties (i.e., creditors, grantors, contributors, or laws or regulations of other
governments
•Imposed by law through constitutional provisions or enabling legislation - RSS
COMMITTED FUND BALANCE
Amounts whose use is constrained by limitation that the government imposes upon itself
•Constraint on use imposed by the government's highest level of decision making authority
•Same type of action required to remove or change the specified use
•Action to constrain resources should occur prior to end of fiscal year
ASSIGNED FUND BALANCE
•Amounts intended to be used for specific purposes. Intent is expressed by the governing
body itself, or an official delegated by the governing body (appropriated fund balance for next
year expenditures).
COMMITTED VS. ASSIGNED
•Both constrained to being used for specific purposes by actions taken by the government
itself
•Assignment is not required to be made by the government's highest level of decision making
authority
•Same action is not required to remove or modify an assignment
UNASSIGNED FUND BALANCE
•Available for any purpose
•General fund should be the only fund that reports a positive unassigned fund balance
•Deficit balance possible in any governmental fund
ENCUMBRANCES
•Encumbrances should not be displayed as restricted, committed, or assigned categories.
•Amounts are classified as restricted, committed, or assigned based on the source and
strength of the constraints placed on them—encumbering those amounts does not further
affect them.
NOTE DISCLOSURE
Description of authority and actions that lead to committed and assigned fund
Balance for Committed Fund Balance:
—The government's highest level of decision making authority and the formal action that is
required to be taken.
•For Assigned Fund Balance:
—The body or official authorized to assign amounts to a specific purpose.
—The policy established by the governing body pursuant to which that authorization is given.
•Government policy regarding order of spending
— Restricted and unrestricted fund balance
—Committed, assigned, and unassigned
•Stabilization arrangements
—Authority for establishing
— Requirements for additions
—Conditions under which amounts may be used
Governmental Fund Type Definitions
GENERAL FUND
•Current Definition: The general fund is used to account for all financial resources except
those required to be accounted for in another fund.
■GASB 54 Definition: The general fund is used to account for and report all financial
resources not accounted for and reported in another fund.
SPECIAL REVENUE FUND
Current Definition:
•Special Revenue Funds are used to account for the proceeds of specific revenue sources
that are legally restricted to expenditure for specified purposes.
Statement 54 Definition:
•Special Revenue Funds are used to account for and report proceeds of specific revenue
sources that are restricted or committed to expenditure for specified purposes other than
debt service or capital projects.
•Proceeds of specific revenue source that are restricted or committed should be recognized as
revenue in the special revenue fund and not in the fund initially receiving them.
•If the government no longer expects that a substantial portion of the inflows will derive from
restricted or committed revenue source, then the resources should be reported in the general
fund.
CAPITAL PROJECT FUNDS
Current Definition:
•Capital Project Funds are used to account for financial resources to be used for the
acquisition or construction of major capital facilities.
•All Capital Reserve Funds must now be combined with the Capital Projects Fund.
■The restricted portion of the reserve will not be either restricted or committed fund balance
within the fund.
Statement 54 Definition:
•Capital Project Funds are used to account for and report financial resources that are
restricted, committed, or assigned to expenditure for capital outlays, including the acquisition
or construction of capital facilities and other capital assets.
CAPITAL RESERVE FUNDS
GASB Statement 54 does not prohibit the use of capital reserve funds; the General Statutes
authorize the use of these funds. Statement 54 only provides guidance on how to classify and
report these funds according to fund type. Under previous guidance they were reported as
special revenue fund types; under new guidance they will be reported as capital projects, as
part of the capital projects fund or as a debt service fund, depending on how the moneys in the
capital reserve fund are used.
WHAT TO DO
•Communicate the fund balance changes to the BOCC, Manager and others so the changes
are reflected in the FY 2011-12 Budget.
•Establish a fund balance policy that implements GASB 54.
•Change the Fund Definitions and consolidate funds to comply with the new standard.
Commissioner Gordon made reference to pages 16-17 and the statement, "all capital
reserve funds must now be combined with the Capital Projects Fund." She asked how funds
could be reserved for certain things.
Clarence Grier said that the funds could still be kept separate, but for reporting
purposes, they would be collapsed into one fund.
Clarence Grier made reference to Attachment 2, draft Fund Balance Policy, which is
shown below:
ORANGE COUNTY BOARD OF COMMISSIONERS
DRAFT FUND BALANCE MANAGEMENT POLICY
The purpose of this policy is to establish a fund balance policy to address the needs of Orange
County (County) and establish adequate reserves to ensure against unanticipated events that
will not adversely affect the financial condition of the County and not jeopardize the
continuation of necessary public services. This policy will ensure the County maintains
adequate fund balance and reserves in the County's Governmental Funds to provide the
capacity to:
1. Provide sufficient cash flow for daily financial needs,
2. Secure and maintain investment grade bond ratings,
3. To provide adequate reserves to offset significant economic downturns or revenue
shortfalls, and
4. Provide adequate reserves for unforeseen expenditures related to emergencies.
Fund Balance for the County's Governmental Funds will be comprised of the following
categories:
1. Nonspendable — amounts that cannot be spent because they are either (a) not in
spendable form or (b) legally or contractually required to be maintained intact.
2. Restricted — amounts externally imposed by creditors (debt covenants), grantors,
contributors, laws, or regulations of other governments.
3. Committed — amounts used for a specific purpose pursuant to constraints imposed by
formal action of the government's highest level of decision-making authority.
a. Amounts set aside based on self-imposed limitations established and set in
place prior to year-end, but can be calculated after year end.
b. Limitation imposed at highest level and requires same action to remove or
modify
c. Ordinances that lapse at year-end
4. Assigned — amounts that are constrained by the government's intent to be used for
specific purposes, but are neither restricted nor committed.
5. Unassigned — amounts that are not reported in any other classification.
The General Fund will be the only fund that will have an unassigned fund balance. The
Special Revenue Funds and Capital Project funds will consist of only nonspendable,
restricted, committed, and assigned categories of fund balance.
Unassigned Fund Balance — General Fund
Orange County ha adopted a fiscal policy that provides for capital projects to be financed with
debt and pay-as-you-go funding. In order to obtain the best possible financing, the unit has
adopted policies designed to maintain bond ratings at or better than AAA (Fitch), Aa2 (Moody's
Investor Services) and AA+ (Standard and Poor's). Part of the County's fiscal health is
maintaining a fund balance position that is adequate to meet the County's needs and
challenges.
Orange County has therefore adopted a policy that directs management to maintain an
unassigned balance as follows:
1. The County will strive to maintain an unassigned fund balance in the General Fund of
17% of budgeted general fund operating expenditures each fiscal year. The amount of
unassigned fund balance maintained during each fiscal year should not fall below 8%
of budgeted general fund operating expenditures as recommended by the North
Carolina Local Government Commission.
2. To the extent that the General Fund unassigned fund balance exceeds 17% the
balances may be utilized to fund capital expenditures or pay down outstanding County
debt.
3. The County's budget and revenue spending policy provides for programs with multiple
revenue sources. The Finance Services Director will use resources in the following
hierarchy: bond proceeds, Federal funds, State funds, local non-county funds, county
funds. For purposes of fund balance classification, expenditures are to be spent from
restricted fund balance first, followed in order by committed fund balance, assigned
fund balance, and lastly unassigned fund balance. The Finance Services Director has
the authority to deviate from this policy if it is in the best interest of the County.
4. Management is expected to manage the budget so that revenue shortfalls and
expenditure increases do not impact the units total unassigned fund balance. If a
catastrophic economic event occurs that requires a 10% or more deviation from total
budgeted revenues or expenditures from unassigned fund balance can be reduced by
action from the Board of County Commissioners; the Board will also adopt a plan on
how to return spendable fund balance back to the required level.
Enterprise Funds — (Solid Waste, Efland Sewer, and the Orange County Sportsplex) —The
County will strive to maintain unrestricted net assets greater than 8% of total operating
revenues at fiscal year end, net of any donated assets recognized, to provide reserves for
operations and future capital improvements.
Restrictions, reservations, and designations of Net Assets for Enterprise Funds
For external reporting purposes, net assets will be reported as restricted or unrestricted in
accordance with GAAP. For internal purposes, net assets will be reserved or designated as
follows:
1. Encumbered balances to continue existing projects are designated.
2. Designations for funding of planned projects in a future period to reduce the
financial demands placed upon a subsequent budget.
Internal Service Funds — Dental Insurance Fund —total net assets shall maintain a positive
balance to illustrate the internal nature of recovery fees for services performed in self-insuring
employees of the County. Additionally, the net assets of the fund will demonstrate adequate
funding for incurred, but not reported claims.
Commissioner Jacobs made reference to the last sentence on #3 on page 36 and
asked if this should be "with" or"without" the review of the Board of County Commissioners
and Clarence Grier said it should be "with the review of the Board of County Commissioners."
He will make this change and will add the words "with the review of the Board of County
Commissioners" at the end of the sentence.
Commissioner Gordon said that there were some typographical errors. She also made
reference to enterprise funds and suggested taking out "donated assets" so that it is not
confusing to the public.
Commissioner Gordon made reference to internal service funds at the top of page 37
and suggested using another word other than "illustrate." Clarence Grier said that this fund
could be merged into the general fund and a lot of times it is not reported in the financial
statement in a detailed nature. He said that he could change the word "illustrate" to another
word.
Commissioner Gordon made reference to page 36, #1 and said that it was her
understanding that members of the General Assembly think that counties have considerable
fund balances. She asked if there was a downside to having a robust fund balance and if it
would make the County more of a target of the State.
Clarence Grier said that 8% is required. He does not think that the State would cause
any problems because Orange County has a 17% fund balance. The bond ratings are better
with a higher fund balance.
Chair Foushee said that today when the TJCOG Chairs met, it was an issue they
discussed that counties are concerned about higher fund balances being a target for use by
the state, She thinks the County will have to revisit this as they see what happens at the State
level.
2. Planning for Future Revaluation Schedule
The Board discussed current market trends including data for consideration in
timeframe planning for the County's next revaluation.
Tax Administrator Jo Roberson presented this item. She made reference to the
Revaluation Fact Sheet, which is shown below:
Revaluation Facts:
- The purpose of a revaluation is not to garner increased values and thereby be in
position to lower the tax rate. It is in fact to ensure that all citizens are having their
assets taxed fairly and equitably.
- The average growth has historically prior to 2009 been 4% per year. This 4%
represented actual increase in existing property value. When new construction was
factored into the equation the percent of growth averaged 6% per year. That equated
to 24% every four years.
- Beginning in the later part of 2007 and during the year 2009 we began to see a slowing
in new building permit issuance and number of actual completed sales. Additionally,
with an increased field presence of Orange County staff we were able to complete the
2009 revaluation with the closest to full market sales ratio since 1998. (Exhibit I
available through the North Carolina Department of Revenue).
- Factors currently affecting the market— over the past 22 months the number of sales
have dropped approximately 50% in comparison to prior years. Sales for the timeframe
of January 1, 2005 through December 31, 2006 were 4844. For the timeframe of
January 1, 2009 through October 31, 2010 total sales is 2178. Additionally, property is
remaining on the market for a longer average time than historically data indicates.
(please see Orange County Sales document included)
- Currently with the limited number of completed sales it is reasonable to state that at 22
months out from the 2009 revaluation we have basically established the equivalent to
less than 1 year of sales data historically.
- The sales market analysis which was presented to the Board of County Commissioners
in February of 2010 reflected an average ratio of assessed value to sales price of
100.40%. The median ration of assessed value to sale price was 100% and the
measure of how closely values clustered around the median (COD) was 9.68. As
reflected in the included sales market analysis covering January 1, 2010 through
October 31, 2010 you will find this data has shifted very little.
- The North Carolina Department of Revenue Property Tax Division sales ratio study of
January 1, 2010 reflected the Orange County median as 98.65%. The same timeframe
out from the 2005 revaluation the median for Orange County was 89.74%.
- The 2005 beginning ratio was 95.58% and by the end of the year of 2006 the median
was 88.29%. Our current reflected median from January 1, 2010 to October 31, 2010
is .99069 reflecting that our values are remaining flat.
Jo Roberson pointed out that, historically, with prior revaluations, and specifically with
the 2005 revaluation, in a period of two years there was a total of 4,844 sales. The number of
sales has dropped approximately 50%. The number of sales recorded through the end of
October was 2,178. This is more than a 50% drop in the number of sales, and not a 50% drop
in the value that it sold for. She said that it is reasonable to state that Orange County has less
than one year of historical sales data to work from. She pointed out that in the past two years,
there has only been 1 and 1/3% growth in sales. Historically, at this point in a revaluation
nearly two years out, there is between 8% and 12% growth. She said that to successfully
complete a revaluation, it has to be studied thoroughly. She suggested hiring professionals to
review the Franklin and Rosemary Streets area.
She also pointed out that State economists have been issuing statements over the last
two years that the growth has dropped and is stagnant. The projection for the next two years
is no more than 2% growth. This has a direct impact on the property values.
She made reference to Attachment 2 and said that these figures are over and above
the standard costs for revaluation. There would be an additional $200,000 to complete a
successful revaluation.
Commissioner Jacobs asked clarifying questions about how much a revaluation would
cost, which were answered by Jo Roberson.
Commissioner Hemminger pointed out that if it is found that the tax values have
dropped after a revaluation, then property tax revenue would be less and the County would
have spent $200,000. Jo Roberson said that potentially that is true, but revaluation is really
not about increasing values, but ensuring that assets are fairly and equitably taxed. She said
that based on what assessors and economists are saying across the State and nation, North
Carolina has been very fortunate.
Commissioner Yuhasz asked if a revaluation might be able to catch those homes that
might be overvalued and adjust so that the component of equity is more balanced.
Deputy Assessor Judy Ryan said that it is possible to get closer to uniformity, but it is
also possible to get further away from uniformity if sales pick up in the time period of
calculation.
Commissioner Gordon made reference to the .99069 figure and said that this is about
as close as you can get to accurate valuation and this seems fair, and it could be argued that a
revaluation was not needed based on this.
Discussion ensued between Commissioner Gordon and Jo Roberson about the
timeframe for revaluation.
Commissioner Jacobs thanked the staffs that were involved in the revaluation. He said
that this does not change people's perception of revaluation that it is not an equitable process.
He initially is disinclined to delay because it undermines the citizens' confidence in Orange
County Government. He wants to be very cautious about thinking that things are not going to
change. Orange County is not recession proof.
Chair Foushee said that her personal opinion is in line with Commissioner Hemminger
and Commissioner Jacobs in that the County will be no closer to 100% and to place additional
uncertainty is not the way to go.
Commissioner Jacobs said that staff needs to give the County Commissioners a drop
dead date to make a decision.
Jo Roberson said that staff needs to know this by January 2011. She said that the
drop dead date would be the last meeting in December.
Commissioner Yuhasz said that he is hesitant to wait until the last meeting in December
to discuss this. He said that he does not want to delay because this is the first opportunity to
have a revaluation with the new PIMS system. He said that the Board stood behind the
revaluation and the need to have the revaluation and he thinks it would be a good message to
send to the public to go ahead and do the revaluation.
The Board agreed to have this on the agenda no later than the second meeting in
December.
3. Orange County and Regional Transit Initiatives
Planning Board Craig Benedict presented this item.
Orange County Transit Initiatives
1. Orange County Transit Plan (OCTP)
2. Orange Public Transportation (OPT) — Chapel Hill Transit Consolidation (CHTC) (a.k.a
Countywide Seamless Transit) Study
Orange County Transit Partnership
Staff Level
Orange County Orange Public Transportation
Chapel Hill Chapel Hill Transit
Carrboro Triangle Transit
Hillsborough DCHC Metropolitan Planning Organization
Mebane Triangle Area Rural Planning Organization
UNC Chatham County
Alamance County
Public Outreach
Collaborative development of a comprehensive mid-range bus service plan for Orange County.
Coordination of Orange and Durham County plans.
Presentation Format— Interactive
Discuss presented topics
Confirm assumptions
Ask questions
Seek guidance
Presentation Part 1
Orange County Transit Plan/
Triangle Regional Transit Program
(OCTP/TRTP)
Purpose of the Work Session:
Background
Financial Model
Transit Plan Components
Assumptions
Outreach
Timeline
Background
Session Law 2009-527 (House Bill 148)
MOBILITY BILL
Triangle Regional Public Transit
Orange-Wake-Durham
Funding Source
%2 cent sales tax (next year?)
$10 vehicle registration fee (county gets $7 and Triangle Transit- $3)
Orange County Transit Plan Finances
(Prepared by Triangle Transit)
Revenue:
%2 Sales Tax $5M
Vehicle Registration Fee $1.1M
Finances
Revenue Assumptions
- %2 cent sales tax in Orange County approximately $5 million/year (annual growth rate
approx. 2.0% to 2015, 2.5% beyond)
- $10 additional vehicle registration fee in Orange County - $1.1 million/year
- $460,000/year Triangle Transit Major Transit Investment fund (car rental dollars)
- Orange County and Local Government Contributions (assumption 4):
o Year 1 = Base $3.3 million + 0$
o Year 2 = Base $3.3 million + estimated $560,000
o Year 3 and beyond = Base $3.3 million + estimated $1.12 million
- $87 million in borrowing
- State and Federal contributions assumed
Financial Model 2035 Balances
• Light Rail Construction UNC — Leigh Village; 4.6 miles ( $347m) ( assumption 1)
• Bus Operations and Maintenance ( $132m)
• Debt Service ($87m)
• Rail Operations and Maintenance ( $61 m)
• Enhances MLK BRT Facilities Construction ($27m)
• Eleven new buses purchased and their replacement every 12 years ($12m)
Total Revenue: $673 million ( Orange County share approx. 20%)
Total Expenditures: $667 million
Funds Balance in 2035: +6million
Orange County Transit Plan
Main Components:
Fixed Guideway Service (Long Range) (A1)
Light Rail
- Durham-Orange Alternative 4 — UNC Hospitals to Alston Avenue
- UNC-Leigh Village —4.6 miles
- Leigh Village —Alston Avenue — 12.8 miles
Bus Rapid Transit (BRT) (A2)
2 potential corridors:
- Martin Luther King, Jr. Corridor; OR
- NC 54 Corridor
Bus Service (A3)
Countywide Mid-range Service Plan developed by Orange County Transit Partnership
Assumptions Introduction
Types of Services
Consistent with:
—Special Transit Advisory Commission Long Range Transportation Plan 2035; and
—Community Transportation Service Plan
Development of new regional transit services connecting smaller communities, rural and
urban areas:
—Light Rail
—Bus Rapid Transit (BRT)
—Expanded local bus services
ASSUMPTION 1
Orange County Rail Segment
•Durham-Orange Alternative 4 (D-O 4)
—Performance/Decision matrix available upon request
•UNC to Leigh Village (OC share):
—4.6 miles segment length
—1.6 miles in Durham County
•Estimated Cost in 2010 Dollars
—UNC to Leigh Village (4.6 miles) $300-350M
—UNC hospitals to Alston Avenue (17 miles) $1.2B
•Is it a fair share?
Assumptions Related Questions
- Are the assumptions correct and complete? If no, what should be changed?
- Can Orange County afford to pay for 4.6 light rail segment from UNC to Leigh Village?
- Is it a fair share?
Revenue/Year(1/2-cent tax + $10)
Durham - $18.7 million or 75%
Orange - $6.1 million or 25%
Total Durham-Orange 4 Cost
Durham - Leigh Village-Alston Avenue - $850 million or 71%
Orange — UNC-Leigh Village - $350 million or 29%
Commissioner Pelissier asked who developed this assumption and also made
reference to the light rail east of RTP and asked how much of that is in Durham County.
Craig Benedict said that the first assumption came from Triangle Transit. Also, no part
of the light rail east of RTP is in Durham County.
Commissioner Pelissier asked if there were any plans for RTP adding residential in the
area. Craig Benedict said that there have been some meetings with the mayors and chairs in
the RTP area and they are working on a master plan to try and plug in additional residential
development. This is just a plan and has not hit the ground yet.
Commissioner Gordon said that the entire segment in either Wake or Durham-Orange
will not be put forward for federal funding. Whatever works the best will be chosen.
Commissioner Jacobs said that there are three assumptions. One is that if these
segments do not connect the County to the regional rail system, then what is the value in
investing huge amounts of money in it? Secondly, if the %2-cent sales tax cannot be advanced
next year, is there a geometric impact on the way in which this has been modeled? Third, if
there is less or not federal and state support for mass transit, then where does this leave the
transit plan? He said that maybe the County should go ahead and enact the license fee to
help make public transit in Orange County more robust. This could be a parallel thought
process.
Craig Benedict said that they are working on some alternate scenarios such as if there
is no light rail. He said that he could bring to the partnership some other alternatives.
Commissioner Gordon said that there are two different questions: what can be done
now according to the financial model, and what can be done with the revenues available
without federal and state support.
Chair Foushee said that the regional plan only works for Orange County if it makes
sense to Orange County. She said that the County Commissioners need to move forward to
make sure that how they feel about this regional plan becomes clear early. She said that she
is not for a plan that does not make sense for Orange County.
Commissioner Pelissier said that she has been worried about the speed at which this
plan has been unfolding from the regional level. She said that she sees this as an opportunity
to do the comprehensive planning at the local level since the referendum failed and there are
no other monies at this time. She said that what was discussed in the Special Transit Advisory
Commission was that the goal was to get people used to public transit and have it be
successful before having the light rail. She thinks that it will be hard for Orange County
citizens to accept that they will be paying for light rail in another county.
Commissioner Jacobs said that he had made comments about how this would need to
work for Orange County. If this light rail will not connect to RTP and other sites, then it cannot
be promoted as regional rail. He said that the 1%-cent sales tax should come before the %2-cent
for rail. He would rather have a lower grade plan that focuses on bus transit. He said that one
entity that is missing is Duke, which is a huge employer for Orange County. He said that he
would like to know from staff how they go about enacting a license fee. If there is a political
philosophy in Raleigh of no new taxes, then the ability to enact this license in the future may
be negated.
Commissioner Gordon said it would be important to continue to have a regional
approach transit.
Commissioner Gordon also said that there are certain conditions that a county would
need to meet before enacting a license fee.
The Board agreed by consensus to allow staff to get information on the process for
enacting this license fee.
Commissioner Pelissier said that the County should still look at the long-range light rail
planning and be ready in case the monies start flowing again in two years for transit. She
would also like to work at the County level on the issue of fares. Chapel Hill is fare free, but
the 420 line is not. She would like to have a model that is fair and equitable for everyone.
Commissioner Yuhasz asked if Durham County or Wake County has adopted this
licensing fee yet and it was answered that they have not. He asked for information about
whether there were any restrictions for where TTA could use the $3 of every $10.
Assumptions Related Questions
•Are the assumptions correct and complete? If no, what should be changed?
•Can Orange County afford to pay for 4.6 light rail segment from UNC to Leigh Village?
•Is it a fair share?
Revenue vs. Light Rail (D-O 4) Cost
Assumption 2
Bus Rapid Transit
2 Potential Corridors
Martin Luther King, Jr. OR NC 54
$27 million set aside
OC Bus Service Plan
Financial Model = 34,000 new bus service hours = $3.3 million
Identified Need = 75,000 bus service hours
Orange County Transit Partnership (OCTP)
Prioritize Identified Need
Annual $6.1M revenue - (LRT+BRT+$0.9M existing operations increase) = $3.3M for new bus
service hours
•OC Transit Plan (OCTP) overview & development
•What is the OCTP product?
•When is it due —timeline?
•How does it relate to other transit initiatives:
—TRTP
—OPT-CHT (Orange Public Transportation-Chapel Hill Transit) Consolidation/CTSP
(Community Transportation Service Plan)
Prioritizing Bus Service Needs
Staff Level
Step 1 — Partnership Members Ranking
- Each partnership member provided projects ranking....
BUT
- Each identified project was selected at least once, SO
Step 2 — Goal-Based Ranking
- Set of goals for countywide transit improvements
- Rank the goals
Step2. Prioritizing Bus Service Needs
5 Service Goals
50-point scale; each goal (at least 5, no more than 20 points)
1. Fill in gaps in existing service
2. Improve connectivity (county and region)
3. Maintain existing service
4. Improve weekend/night service (off peak)
5. Increase frequency in peak-hour high use corridors (work trips)
Step 2. Prioritizing Bus Service Needs
5 overall Plan Emphasis Areas
Rank on a 1 to 5 scale (1 – highest, most important goal)
1. Provide geographic equity/countywide service distribution (urban, rural, small towns)
2. Support improved capital facilities (pedestrian/bicycle connections, transfer facilities)
3. Provide positive impact on air quality
4. Improve mobility for transit dependent (senior, young, disabled, low-income, no car-
ownership)
5. Support transit-supportive land use
Assumption 3
Supporting Bus Operations
•Use a portion of the vehicle registration fee funds to support the increasing cost of existing
operations;
•Cap the amount at a certain level; and
•Capped amount is not to exceed the total annual amount generated by the vehicle
registration fee ($1.1M).
•Fare system
Assumption 4
Phased in Local Contribution
New Bus Service
Sales tax Local
Year 1 100% 0%
Year 2 75% 25%
Year 3 50% 50%
Thereafter 50% 50%
Assumption 5
Multi-County Bus Service
•Cost-sharing method options:
—by county (e.g. 33%, 33%, 33%)
—by population
—by ridership
—by mileage, etc.
Assumption 6
Bus Plan Capital Improvements
Use sales tax and vehicle registration fee revenues to pay for transit supportive capital
improvements:
— Park-and-Ride
—Transit supportive facilities
—Excludes bus purchases
•How much can we dedicate?
•A set amount or a set percentage of the total?
Assumption 7
New Service Date
House Bill 148 was signed into law on August 27, 2009.
New service date would be considered after this.
Orange County Transit Plan Outreach
1. Partnership staff level discussion
2. Managers, Mayors, Chairs, and UNC
3. Countywide open house
o OCTP public outreach —Jan-Feb 2011?
4. Plan "tour" of municipalities and UNC?
5. Countywide resolution of public transit support
Timeline at a Glance
Staff Draft December 2010
OCTP LG (Local Governments) & UNC outreach December 2010-February 2011
BOCC Financial Plan April — May 2011
MPO Financial Plan May 2011
TRTP (Triangle Regional Transit Plan) TT Financial Plan May 2011
%2 Sales Tax Ref. Authorized May—June 2011
OCT-CHT Consolidation/CTSP (aka, Countywide Seamless Transit)
- NCDOT— project manager/sponsor
- Scope/Contract— December 6, 2010
- Project Schedule (12-15 months)
- Committee — December 16, 2010
o Create Committee
o Develop Reporting System
Commissioner Pelissier made reference to the slide about bus service and picking the
NC 54 corridor or Martin Luther King, Jr. She asked about the process of making this decision.
Craig Benedict said that MLK was thought originally to connect Carolina North down to the
south. The NC 54 Corridor Study found that it cannot handle what is anticipated to come to
the corridor in the future.
Commissioner Jacobs said that before any committees are set up or before there is an
open house, he wants to decide about the %2-cent sales tax and whether or not to put it on the
ballot next year. Also, he would like to find out all information about the license fee.
A motion was made by Commissioner Nelson, seconded by Commissioner Jacobs to
adjourn the meeting at 9:28 PM.
VOTE: UNANIMOUS
Valerie Foushee, Chair
Donna S. Baker, CMC
Clerk to the Board