HomeMy WebLinkAboutMinutes 04-20-2017 1
APPROVED 5/16/2017
MINUTES
BOARD OF COMMISSIONERS
WORK SESSION
April 20, 2017
7:00 p.m.
The Orange County Board of Commissioners met for a reconvened meeting of the April 18,
2017 Regular Meeting as a BOCC Work Session tonight on Thursday, April 20, 2017 at 7:00
p.m. at the Whitted Building in Hillsborough, N.C.
COUNTY COMMISSIONERS PRESENT: Chair Dorosin and Commissioners Mia Burroughs,
Mark Dorosin, Barry Jacobs, Earl McKee, Mark Marcoplos, Renee Price and Penny Rich
COUNTY COMMISSIONERS ABSENT:
COUNTY ATTORNEYS PRESENT: John Roberts
COUNTY STAFF PRESENT: County Manager Bonnie Hammersley, Deputy County Manager
Travis Myren and Clerk to the Board Donna Baker (All other staff members will be identified
appropriately below)
Chair Dorosin called the meeting to order at 7:02 p.m.
Additions or Changes to the Agenda
NONE
1. Discussion Regarding the Draft Durham — Orange Light Rail Cost Sharing
Agreement and Draft Orange County Transit Plan
Ted Cole, Senior Vice President Davenport and Company, referred to the first
presentation below:
D-O Light Rail Discussion Materials
Orange County, North Carolina
Scenario 23 V8 M -Attachment B in the abstract - page 13
Ted Cole reviewed the highlights of this scenario.
The Board chose not to review this scenario.
Chair Dorosin said to go onto the scenarios that have Orange County at 16.5% of the
cost share.
General Assumptions & Major Capital
Scenario 36 V3 Z— page 7
2
.1 Scenr.irilo Descriptilon Under Consideration/
Requested by
Working Group
2
3 URT Cost Shrire Assumptilons (Durnr-im / Orr-inge / Prilvr.ite)
4 Capital Cost 82/ .16/ 2
5 Shared Borrowings 82/ 18
6 Operations and Maillterlar'ice
7 Through 2036 81/ 19
8 After 2036 8.1/ .19
9 State of Good Rer...)air
.10 Through 2036 8.1/ .19
After 2036 81/ 19
.12
.13 Durhr.im / Vtir.ike CRT Scenario P
.14
15 Orr-inge County Srilles Tx Assumptilons
.16 II"'Y 2017 2046 Moody's Baselille
:17 IFY 2047 - 2062 371%
:18
:19 Reserve Assumptilons
20 Cash Balarice Mantan 1positive
Balarice
21 Operating Reserve 3 Months/ 25 % of
CH/OPT Bus O&M
22 11""")ebt Service Reserve :10% of 11""")ebt Ilssued
3
1 LRT frlitial Capital Cost
1 Ian New Starts Grant Capital Costs $ 1,194,284,214 50.00%
3 State Funding-Capital Costs 138,856,843 10.00%
4 Iln (Kind Contributions
S Orange County 3,487,758 0.15%
6 IDurham County 15,888,675 0.67%
7 Joint Development Grants
8 Orange County 11 716,7417 0.49%
9 Durham County 53,376,190 2.23%
10 local Share (Private Capital Campaigns 18,110,000 0.76%
11 Local Share-Orange County 138,651,411 5.80%
12 Local Share II:)urham County 714,185,t79 29.90%
13 Total LRf Initial Capital Cost 1 1,088,568,418 100.00%
1.41
15 Orange County LRT State of Good Repair through 2062 $, 89,948,:360
16
17 Other Orange County Tax District Funding through 2045
18 Bus O&M $ 139,669,159
19 DO LRT O&M 83,857,130
20 Bus Facilities and Capital(projects((Including Replacements) $ 8,059,4 76
21 Vehicles(Including Replacements) 14,14 1,696
22 NS BRT Project(Construction Costs) 4> 6,1.15,000
23 Hillsborough Train Station Project(Construction Costs) 686,000
1 First S18.12 million Applied to Orange County
Commissioner McKee referred to $100 million mentioned by David King on Tuesday
night, and asked if the $18.1 million aligns with that.
Travis Myren said the goal of private contributions is $100 million, and the $18.1 million
is what staff believes to be realistically secured by the time of the Full Funding Grant
Agreement (FFGA) is submitted to the Federal Transportation Authority (FTA).
Commissioner Price asked if Orange County would have to pay this money back.
Ted Cole said he understands that no repayment will be expected.
John Talmadge, GoTriangle Regional Services Development Director, said GoTriangle
staff has been working with the Funding and Community Collaborative (FCC) regarding these
funds.
Commissioner Marcoplos said this $18 million are right of way grants that have been
procured so far.
Tammy Bushell, GoTriangle Attorney, said $19 million has been secured in right of way
grants with the Universities. She said formal appraisals of these properties have yet to be
completed. She said the $18 million reflected here is in addition to the $19 million. She said
part of the $18 million is included in the present right of way donations, because of the
conservative cost that has been included.
Gary Toper, GoTriangle Real Estate Manager, said private and public commitments
have been secured, and the $18 milllion represents about 67 parcel commitments to right of
ways. He said this is believed to be a conservative amount.
Commissioner Price asked if the difference between line 5 and line 10 could be
clarified.
Ted Cole said line 5 was the original amount for right of ways, and line 10 is a more
recent concept that is tied to finding private donations, which may be in the form of more right
of ways, or in the form of cash.
4
Ted Cole said the first 2% will be used to offset Orange County's share according to
the Cost Share Agreement. He said any funds beyond that will be discussed as they are
received.
Commissioner Jacobs said the Board of County Commissioners (BOCC) is concerned
about Orange County's percentage of contribution. He said a Durham Commissioner spoke to
him today about splitting it 0.5% and 1.5%, so that Durham contributors could be told that the
support was going to Durham and Orange County. He said he is not sure that this will make
any difference to the County's financial position, but the proposal was raised.
Ted Cole said 0.5% should be somewhere between $4 and $5 million.
Ted Cole said the local shares are on lines 11 and 12, and round out the total initial
capital budget of$2.38 billion.
Financings and Total Cost- page 8
1 LRT IraG�G I C put I and Borrovdng Cost
2 F...l...A New Starts Grant... Capital and Borrowing Costs $ 1235,427,397 37.53%
3 State Funding- Capital and Borrowing Costs 245,026,598 7.44%
4 In Kind Contributions
Orange County 3,487,758 0.11%
6 Durham County 15,888,675 048%
7 Joint Development Grants
8 Orange County 11,716,747 0.36%
9 Durham County 53,376,290 1..62%
10 I.....ocal Share Private Capital Campaign' 18,120,000 0.55%
11 Local Share - Orange County 292,663,252 8„89%
12 I.....ocal Share Durham County t415,790,368 43.01%
13 Total I_R-I Initial Capital and Borrowing Cost $ 3,291,497,084 100.00%
14
15 Orange County LRT State of Good Rep R throLfgh 2062
16 Cash Funding $_ 17,948,360
17 Debt Funding 72,000,000
18 Interest and Borrowing Costs 10,773,118
19 Total State of Good Repair 1.00,721,478
20
21 Orange County H.narajng Assu.rrnptG ns
22 I.....ocally Funded I.....° s Initial I R7::: 72,500,000
23 Grant Funded LOBs - Initial LRT 55,800,000
24 1IFIA I.....oan Initial I R1 77,400,000
25 Locally Funded LOBs -State of Good Repair 72,000,000
26 total Orange County Financings $ 277,700,000
First $18,12 million Applied to Orange County
Commissioner McKee referred to line 26, and asked if this goes out to 2062, plus about
$138,562,000 for the capital outlay.
5
Ted Cole said line 26 is the total financings attributable to Orange County, which is just
principle and does not include the issuance expense or the interest expense. He said to get a
total one must add issuance costs and interest expense.
Commissioner Price asked if there is a range of years for the issuance of this debt.
Ted Cole said lines 22-24 all refer to the initial cost of the system and will all be issued
in advance of operations. He said line 25 is debt issued after operations, as the County
reinvests in the system for repair and replacement. He said there are specific fiscal years in
the model, and he can provide these to the BOCC.
Key Financial Statistics
Cash Reserve —with scale adjustments- PAGE 9
Cash BaVarnces-TotttD
>¢UU,000UU0
P>,00 000000
>coo000UUU
,.,00000000
,400000000
>300000 UUU
2U U UUU UUU
A00000: iII Iiliii111111111111IIII1
Financial Health Criteria
T IFI2 State of Gory Repay 1.T ,,'
2+-r csh =:F:srr-I ` eai i 54,990.R2'5 '221
t I.0 mum Cash =:`t-Srarce A.el
0 '1e3 $19 37S 313
D9rhar- Fscal Yeah 53,920 39S 2035
6
Cash Balances-Durhatarn
5¢og000000
Psog000000
5eog000000
5s(((((uuu
54UQ000,UUU
5300000000
5100000000
510000000(
M 1101
Cash Balances-Orange
s60 000000
6,,0000000
540000000
Sao000000
6)0000000 1 P 1 1 1 - 1 - 1 - 1
51,000000 D Hil
so
Key Financial Statistics
Page 10- Cash reserves ( without Scale Adjustments)- Scenario 36 v3 Z
Cumulative Cash Balance
7
Cash Ballances-
,,,R00,000,000
d>,00,000,000
d>600,000,000
d>500,000,000
d>400,000,000
d.:300,000,000
d,r00,000,000
d,100,000,0: iii1111 . 11 . 11111111111111111111111
1 Financial Heath Criteria
2 Minimum Aggregate DSCIIR
3 LOBs LIRT) 1.,1.8x
4 Grant 117t.inded LOBS (Ilnitial LRT) 1...27x
5 II HA & State of Good IRepair 1.,08x
6 Minimum Cash Balance During Construction
7 Orange (Fiscal Year) $4,990,825 (2019)
8 Durham (II"'iscal Year) $3,669,400 (2028)
9 Mininriurn Cash Balance After Construction
10 Orange (II"'iscal Year) $19,5"78313 (2030)
1..1. Durham (Fiscal Year) $3,820,398 (2035)
County Cash II'allaneos
Cash Balances-Din h a rn
d,R00,000,000
d>,00,000,000
d>600,000,000
d>500,000,000
d>400,000,000
d.:300,000,000
d,r00,000,000
d>100,000,000
011011H ., 1 . _ _ 1111011 _ uV111110111
8
Cash Balances-Orange
$800,000,000
$.700,000,000
$6,00,000,000
$500,000,000
$400,000,000
$300,000,000
$2.00,000,000
$100,000,000
„. 111 Ill M ii ii iii iii iii ii li M i l a iii iii M ii Ji Ji m iii iii iii ii JJ.. ii ii iii J1 J1 ii ii ii Ji. ii J1 Ji ii It 11. II
E E E
Scenario 40 v9 EE
General Assumptions & Major Capital
page 12 on ppt
Genera° Assu„Amptbns
9
.1 Scenr.irilo Description Under Consideration
/ Requested by
Working Group
2
3 URT Cost Shrire Assumptilons (Durnr-im / Orr-inge / Prilvr.ite)
4 Capital Cost 81.5/ .16.5/ 2.0
5 Shared Borrowings 81.5 / 18.5
6 Operations and Mairiterlarlce
7 Through 2036 80/ 20
8 After 2036 8.1 / 19
9 State of Good Repair
.10 Through 2036 80/ 20
After 2036 81/ 19
.12
.13 DurIhr.,m / Vtir.ike CRT Scenario P
.14
.15 Orr-inge County Srilles Tx Assumptilons
.16 II"'Y 2017 20/16 Moody's Baselirle
:17 FY 2047 - 2062 3.71%
:18
:19 Reserve Assumptilons
20 Cash Balarice MakiLan Positive
Balance
2:1 Operating Reserve 3 Months/ 25 % of
CH/OPT Bus O&M
22 11""")ebt Service Reserve :10% of 11""")ebt Ilssued
Major Captall
10
1 ILRT Initial Capital Cost
2 PTA New Starts Grant Capital Costs $ 1,194,284,214 50.00%
3 State Funding-Capital Costs 238,856,843 10.0000
4 Iln kind Contributions
5 Orange County 3,584,640 0.15Vo
6 [Durham County 15,791,793 0.66%
7 Joint Development Grants
8 Orange County 12,042,212 0.50%
9 Durham County 53,050,825 2.22Vo
10 Local Share- Private Capital Campaign" 18,120,000 0.76%
11 Local Share-Orange County 143,007,212 5.99Vo
12 Local Share- IDurharn County 709,830,690 29.72%
13 Total LR I Initial Capital Cost $ 2,388,568,428 100.00Vo
14
15 Orange County ILRT State of Good Repair through 2062 89,948,360
16
17 Other Orange County Tax District Funding through 2045
18 Bus O&M $ 139,669,259
19 DO LRT O&M $ 85,651,778
20 Bus IFacilities and Capital Projects(lIncluding Replacements) $ 8,059,476
21 Vehicles(Including Replacements) $ 14,247,696
22 NS BRI Project (Construction Costs) $ 6,125,000
23 Hillsborough-Frain Station Project(Construction Costs) $ 686,000
First $18.12 million Applied to Orange County
Financings & Total Cost - page 13
11
1 LRT Ilnitiai Capital and Borrowing Cost
2 PTA New Starts Grant ... Capital and Borrowing Costs 1..,235,1.26,61.2 37.53%
3 State Funding Capital and Borrowing Costs 244„939„841 7..44%
4 In Kind Contributions
5 Orange County 3,584,640 0..11%
6 C.......)urham County 1.5,791.,793 0.48%
7 Joint Development Grants
8 Orange County 1.2,042,21.2 0.37%
9 Durham County 53,050,825 1..61%
10 I.....ocal Share ... Private Capital Campaign' 1.8,1.20,000 0.55%
11 Local Share - Orange County 301,256,525 9..15%
12 I.....ocal Share ... Durham County 1.,406,983,067 42.75%
13 Total ILRT Initial Capital and Borrowing Cost $ 3,290,895,515 100..00%
14
15 Orange County LRT State of Good Repair through 2062
16 Cash Funding 1.7,948,360
17 Debt Funding 72,000,000
18 Interest and Borrowing Costs 1.0,773,1.18
19 Total State of Good Repair 100,721,478
20
21. Orange County Financing Assumptions
22 I.....ocally Funded I.....0Bs ... Initial $ 72,500,000
23 Grant Funded ILOBs - Initial ILRT 57,350,000
24 TIFIA I.....oan ... Initial 79,550,000
25 Locally Funded ILOBs State of Good Repair 72,000,000
26 Total Orange County Financings 281.,400,000
' First $1.8.1.2 million Applied to Orange County
Key Financial Statistics- page 14
Cash Reserves (with Scale Adjustments) — Scenario 40v9EE
Cumullatove Cash II'allance
12
Cash BaVances-TbtaV
$800,000,000
$.700,000,000
$600,000,000
$500,000,000
$400,000,000
$300,000,000
$200,000,000
$100,000,000
111111111111111111i111111111111111
Cou„Anty Cash 11',',',3allances
Cash Balances-Durham
hfflffl
$800,000,000
$.700,000,000
$600,000,000
$500,000,000
$400,000,000
$300,000,000
$200,000,000
$100,000,000
Cash Balances-Orange
!Y.I5,000,0 00
!Y•10,000,0 00
!:a 5,000,0 00
!:a 0,000,0 00
!:2.5,000,0 00
1 1 ,
!:fl5,000,0 00
, 1 ,
!:fl 0,000,0 00
!;;5,000,00 JJ1J iJJJ1
13
1 Financial HeaRld Criteria
2 Minimum Aggregate D;:Cl:::
3 ILOBs (Ilnitial ILIRT) .1...18x
4 Grant Funded LCBs (Ilnitial LIRF) 1 S1x
5 TIIII IIA & State of Good IRepaiir 1.07x
6 Minimum Cash Balance During Construction
7 Orange (Fiscal Year) $4,382,360 (2019)
8 Durham (Fiscal Year) $3,427,523 (2027)
9 Minimum Cash Balance After Construction
10 Orange (Fiscal Year) $16,353,375 (2029)
1..1 Durham (Fiscal Year) $3,410,09..1 (2035)
Ted Cole said it changed cash balances to the tune of about $83,000.
Chair Dorosin said the minimum cash available for Orange County between scenarios z
and ee would go down, due to the percentage change from 16.5% to 16%. He asked if there
is a reason why Durham's also goes down (page 13 of abstract - last 4 lines). He said it could
just be an anomaly and to move on in the discussion.
Commissioner McKee referred to attachment B, page 13, line 80, and said previously
the minimum cash balance was $210,000 in 2045, and now, under scenario ee, the minimum
cash balance is $16 million. He asked if there is a reason for the radical change.
Ted Cole said an element of it will be driven by shifts in percentage allocation in capital
and operations. He referred to line 68, and said, as one goes across, the amount of debt
being issued is going up, and less is being financed with cash and more with debt, which will
build the reserves. He said one of the other key drivers is the assumption on how much is
funded with debt and when.
Commissioner McKee asked if the total sum of money spent by Orange County in 2062
could be identified, including interest, financing costs, construction, pay as you go (not
principal) tax revenues, in kind, etc.
Ted Cole said he may need to get back to Commissioner McKee on this number.
Commissioner McKee said he asked this question as he has seen the figures move so
much in the last few weeks, and he has had a hard time keeping up and understanding the
amounts. He asked if this information could be provided by the end of the meeting.
Commissioner Marcoplos requested to know the projected revenues for this period of
time, as well.
Commissioner Marcoplos referred to the development funds, and said a few weeks ago
there was $130 million in this fund (page 7, line 7-9), and now there is $65 million in this fund.
Commissioner Marcoplos asked if the potential uses for these funds could be identified.
Chair Dorosin said on attachment B, lines 23-25, these funds are shown to be the
same in scenarios c, m and z, with a slight variation in ee.
Commissioner Marcoplos said but it started at $130 million.
Patrick McDonough, GoTriangle Manager of Planning and Transit Oriented
Development, said last year it was thought that there may be an opportunity to leverage
federal funds to achieve goals deemed important by Orange and Durham counties, such as
affordable housing. He said the idea here is that, under joint development and the New Starts
regulations, if there is development around the stations, as opposed to a parking deck only,
14
then local dollars can be leveraged for federal matches. He said the $65 million would be the
potential local dollars, and the other $65 could be matched with federal dollars.
Patrick McDonough said if these opportunities do not exist, then this portion will come
out of the plan.
Travis Myren gave a brief overview of the draft cost share agreement found in
Attachment A, page 5. He made the following PowerPoint presentation:
Durham-Orange Light Rail Cost Sharing Agreement & Orange County Transit Plan
April 20, 2017 Work Session
Whitted Meeting Facility
Work Session Topics
O Durham-Orange Light Rail Cost Sharing Agreement
• Discuss the financial scenario to be included in the draft Agreement - Davenport
& Company to review three scenarios
• Discuss provisions contained in the Draft Cost Share Agreement
• Discuss changes to the Orange County Transit Plan
• Review approaches to increasing available bus hours
• Direct staff to prepare final draft documents for consideration by the Boards of
Commissioners, GoTriangle Board of Trustees, and the MPO
Cost Share Agreement Provisions
O Share of Orange County Capital Cost (#7)
• Scenario M — 18%
• Scenario Z— 16%
• Scenario EE — 16.5%
O Private funds contribution of two percent (#8)
• Monetary and in-kind contributions
• $18 million applied to Orange County
• Must be committed by the time Full Funding Grant Agreement is
submitted — estimated in calendar 2019
O Allocation of Operating Cost (#10)
• Scenario M —20%
• Scenario Z— 19%
• Scenario EE —20% through 2036; 19% after 2036
O Federal and State Funding Contingency (#13)
• Funding not available or reduced in an amount that requires additional
local funds, parties must meet within fifteen days.
• Responses include delay, suspension, phasing, scope reductions,
discontinuation, outside revenue sources
• If consensus is not reached, Board of County Commissioners may vote
to withdraw from agreement
O Cost Overruns or Funding Shortfall Contingency (#14)
• Quarterly reports to monitor costs and revenue
• Decrease from projected revenues of 5% or more as set in the 2017
Plan
• Increase in project cost included financing of 5% or more
• Increase in projected operating costs of 5% or more
15
• Same responses triggered.
Travis Myren said that GoTriangle has suggested an amendment that if a consensus
cannot be reached, then mediation would occur.
Commissioner Burroughs referred to paragraph #13, on page 8 of attachment A, and
asked if this is in response if the federal or state funds are less than expected, and is it just
narrowly focused on that.
Travis Myren said yes, as it is currently written.
Chair Dorosin said paragraph #13 is about state and federal funding, while paragraph
#14 is about other cost issues.
Commissioner Price asked if the full amount of state and federal funding is not
received, will the FTA abort the plan.
Travis Myren said, in the absence of federal funding, the project is probably not
possible, and the absence of state funding makes the project very difficult.
Commissioner Jacobs said this draft document appears to address these concerns
adequately. He sees no reason to make the process any more complicated.
Katharine Eggleston, Light Rail Engineer, said the current schedule has GoTriangle
applying for the full funding grant agreement (FFGA) in mid-2019. She said the local and state
funding commitments would need to be in place by that point. She said if local and state funds
are not in place by this point, then a reassessment would be necessary. She said the state
funds should be determined and known by December 2018, based on the typical schedule of
the state funding process.
Tammy Bouchelle, GoTriangle Attorney, said both Durham County and GoTriangle
raised concerns about the inclusion of the unilateral termination provision, and she is not sure
if the FTA will accept this inclusion on #13, as the provision is quite pessimistic. She said
GoTriangle and Durham oppose the inclusion of this provision.
Commissioner Jacobs clarified that paragraph 2 in provision #13 is not acceptable to
GoTriangle.
Tammy Bouchelle said not as currently written, given that the FTA would take a very
pessimistic view of it. She said GoTriangle has proposed alternative language, which is a
dispute resolution process, which she thinks will be more palatable to the FTA.
John Roberts said Durham County and GoTriangle object to the unilateral withdrawal
language, and he said he has no specific objection to a mediation provision if it is the will of
the Board. He said Orange County is better protected by a unilateral withdrawal provision, but
it would need more meat on it than how it is currently written. He agreed that the FTA would
likely view such a provision pessimistically. He said he has attempted to craft a unilateral
withdrawal provision, which Durham County and GoTriangle have not seen. He feels neither
will be satisfied with it. He said this proposed language is at the Commissioners' places.
Jill Jaworski, PFM Financial Advisor, said FTA requires this grant to have a full
commitment, and if there is a withdrawal clause it is unlikely that the FTA will accept it. She
said the FFGA grant program is the single largest discretionary grant program that the federal
government has. She said there are high standards for this, and the FTA requires a full
commitment to stay in the program. She believes that the FTA will not accept the unilateral
withdrawal provision.
Commissioner Marcoplos said if federal or state funds are withdrawn then no one
should be legally bound to stay in this process. He asked if there is a way to allow elected
officials to withdraw if the federal or state funds are withdrawn.
Tammy Bouchelle said if all federal funds are withdrawn, then it is absolutely
acceptable for the County to withdraw. She said if state funding ends up being lower than
16
10%, there are other mechanisms by which to mitigate the state funding shortfall. She said if
this should occur then the parties should come together to determine a reasonable path
forward.
Jill Jaworski said the federal government can have delays or budgetary cutbacks, and
typically full grant agreements have variations on an annual basis but will make it up at some
point.
Tammy Bouchelle said there is a provision for mutual termination should all the federal
funding be lost.
Chair Dorosin said the scenario that is more concerning, in paragraph #14, is what if
the revenues do not come in. He said John Roberts has given the Board two options, and he
asked what would happen if two parties required to agree, instead of four. He said he does
not want to submit an agreement that will fail, but what if#14 comes to pass and Orange
County gets less revenue than projected, and Orange County wants to scale back and the
others do not.
Jill Jaworski, PFM Financial Advisor, said if one or two parties are able to withdraw,
then that introduces a significant risk to the commitment, and the FTA will not look favorably on
this. She said some nuance could be added, such as the ability to pull out before the federal
grant is awarded. She said there are many other entities who want this money, and if the FTA
is unsure of Orange County's commitment then it may award monies elsewhere.
Katharine Eggleston said if a trigger occurs, an implementable solution would be
needed. She said there would need to be a way to reduce the cost of the project, or secure
additional revenue. She said there is FTA oversight of the project, and the FTA must deem
any and all solutions viable.
Commissioner Jacobs said where in the Cost Share Agreement are the material
changes referenced.
Travis Myren said it is at the bottom of#14, small letter (i).
Commissioner Jacobs asked if this is a structured mechanism to review where the
parties find themselves and to come to an agreement. He said he does not want to be in a
situation that the other 3 entities want to add 5% more, and Orange County deems it too
expensive, but loses by majority vote. He said he wants to protect Orange County, and this
was the primary basis for him in all of these negotiations. He said he would like the attorneys
to bring something back on the 27th, and if not, he will vote no as he is worried about Orange
County's general fund. He said if all are committed to the project, then all will act in good faith
to make this work; but sometimes people punish a dog who misbehaves by killing a chicken
and tying it the dog's neck. He does not want a dead chicken tied to Orange County's neck.
He said he trusts the attorneys to have conversations, and bring a solution to the Board. He
said Orange County has to be able to make its own decisions.
Commissioner Rich asked if there are provisions to prevent the 5% increase scenario
that Commissioner Jacobs referenced.
Travis Myren said in provision #15 there is a prohibition requiring the dedication of other
revenues, and he said there are other responses, in addition to just contributing money, on
which the parties may not agree.
Commissioner Rich said she is not fond of a unilateral withdrawal, as it gives future
BOCCs the option to pull out simply because it does not like the project.
Commissioner Jacobs said #14 describes the process of material changes that must be
completed prior to withdrawal, and if they are not completed it would be a violation of the
agreement. He said he is unsure if there is a penalty for being in violation of the agreement.
Commissioner Rich said she has concerns about this for just those reasons, and she
feels more comfortable with mediation than unilateral withdrawal.
17
Commissioner Jacobs said unilateral withdrawal has a connotation that you are not a
team player
Chair Dorosin referred to provision #15 and Commissioner Jacobs' hypothetical 5%
scenario, and asked what would happen if the triggering event is a lack of local transit
revenues. He said it seems that the County would have to reach into its general funds to
make up the difference.
Travis Myren said that is right in terms of financial exposure, but there are other
responses listed in #14 that would not require the application of additional local funds.
Commissioner Jacobs asked what would happen if the three parties decide that they
want to start cutting the line in Orange County, and it is a 3-1 vote. He asked if the BOCC
would want to continue funding a system that is not beneficial to Orange County. He said
there should be opportunity for recourse, and a process that is more amenable to their
relationships.
Commissioner Rich said mediation could help with this.
Commissioner Jacobs said mediation should have a time limit in place.
Commissioner McKee said once Orange County has spent over $100 million, even he
would not walk away though he has opposed this plan from the beginning. He said he would
still walk away at this point, but not at some future point when so much money has been
invested. He said this sentiment would likely effect future boards as well.
Commissioner McKee referred to #14 and said the language calls for meetings and
good faith efforts, which gives him comfort. He said the Board has a fiduciary responsibility to
the people of Orange County. He asked if the County could be required to put in additional
resources.
John Roberts said he understood Davenport's presentation to say that the County
could be required to do that if it had agreed to be a backstop for GoTriangle, or for the project
in some other way.
Ted Cole said Davenport was trying to convey that Orange County may be required to
contribute additional revenue in order to maintain the viability of the project, regardless of
whether there is a contractual requirement to do so. He said the Board may decide to
contribute even if there is not a contractual obligation.
Commissioner McKee referred to page 11 of the April 4th presentation, and said he
does not read the language the same way.
Ted Cole said the intent of the language is that Orange County may be required to
spend additional funds, based on a previous commitment to do so; or the BOCC may decided
to commit funds, even without the requirement to do so.
Commissioner McKee said if the withdrawal language is included, he hears GoTriangle
saying that the FTA will not commit funds; but without the withdrawal language, he feels
Orange County has no teeth.
Commissioner Marcoplos asked if there is a way to contact someone at the FTA to find
a way to protect the County's financial health.
Katharine Eggleston said the FTA will not review a draft and provide feedback. She
said it is GoTriangle's experience that the FTA will not provide help at this point, and she said
without a full commitment agreement the FTA is unlikely to provide funding.
Commissioner Marcoplos asked if there is any way to read the FTA's denials of other
projects.
Katharine Eggleston said FTA shared this information verbally on the phone.
Commissioner Burroughs said she is a grant writer, and this feedback from the FTA
does not surprise her at all. She referred to provision #15, and asked if GoTriangle has
concerns about this point and the potential reaction of the FTA.
18
Travis Myren said no one has expressed concerns about that provision.
Commissioner Burroughs said that is good, because this provision gives her comfort.
She said she does not expect, or want to see a situation, where part of the line is cut. She
said she is interested to see what the attorneys can create.
Commissioner Price said she concurred with Commissioners Jacobs and McKee, and
the Board needs to be able to control Orange County's funds. She said a provision for
unilateral withdrawal may not sit well with the FTA, but she thinks the County needs to have
some control. She said she is also concerned about another recession, and lost revenues.
Chair Dorosin referred to page 8 and said there are only three signatories: Durham
County, Orange County and Go Triangle.
Travis Myren said that is correct, there are only three parties.
Chair Dorosin gave a status review: the Board will pick one of the four scenarios; the
Board will come to some consensus on language in Cost Sharing Agreement, with concerns
having been raised on provisions #13 and #14; and the Board must still review attachment C:
recommended changes to the Orange County Transit Plan.
Commissioner Price asked if there are any concerns about provision #16.
Travis Myren said this provision addresses the scenario of additional transit funds being
authorized by the legislature.
Commissioner Price asked if Durham decides to raise taxes, would Orange County
have to do so as well.
Travis Myren said no, there is no obligation for Orange County to do so.
Commissioner Price asked if there is a process in place to determine the fares.
Travis Myren said GoTriangle will do this.
Commissioner Jacobs said John Roberts had previously written language with which
the other two entities were not comfortable, and he would like John Roberts to address what
he believes to be in the County's best interests.
John Roberts said Durham County's Attorney has composed some language as well,
but is not yet authorized to share it. He said he would like to talk with Durham's Attorney prior
to making a final recommendation.
Commissioner Jacobs said the alternative would be to get the attorneys together and
the chairs to participate in this discussion to work out this language.
Chair Dorosin said he would like to hear from all the Commissioners regarding their
opinions on the inclusion of a provision for a unilateral withdrawal.
If, after having meetings in good faith, the Parties do not reach consensus as to reasonable
steps to address the significant cost overrun or unmitigated funding shortfall, a County Board
of Commissioners may, by majority-voter withdraw from this Agreement and amend its
county transit plan accordingly.
New paragraph
Proposal 1—Unilateral w'jtlhdirawall upon a determination by a County. Board of
Commissioners that the D II,,,,.R°1f is not financially.sustainable:
A unilateral withdrawal pursuant to this paragraph may only occur as herein provided.
A. The Parties have met in good faith as provided in Paragraphs 13 and 14.
B. The Parties are unable to reach consensus on a course of action during the
meetings provided by Paragraphs 13 and 14.
C. The County Board of Commissioners considering withdrawal makes a determination
that
19
a. The County's continued Ipairtliclilpatlion lin the wI11111 cause sulbstantliall
financliall harm to the County linclludling but not Illimlited to negative limlpacts to
its ciredlit rating, Iborrowling alblilllity, or ; and
b. The County's continued Ipairtliclilpatlion lin the IDO....II.....R..V lis not fiscal111y
sustalinalblle for the County.
11:x. the County Board of Commlisslioneirs votes to wlithdiraw from the Agreement.
Shoulld a County Board of Commlisslioneirs exeirclise the authority granted by thus paragraph
and unlillateiralllly wlithdiraw from thus Agreement that County Board of Commlisslioneirs sha1111 have
no further oIbllligatlion or IIIialblilllity pursuant to thus Agreement. The wlithdirawling party sha1111 iremalin
Ilialblle, sollelly through fits share of the D11.....R, for fits portion of any debt or oIbllligatlion lincuirired up to
the date of wlithdirawall.
urm���s ulll 'urmliilll Aeon ulll wliitlllio,our urmlll wliitlll�liiurm a rc°IlCilurmc tliiur°uirc pc �
A o„AnIIillat:erall wlit:lhdrawall po„„urso„„uant to t:lhIIs p, arairap, Iliu may u1ot: occu.uu° after'the date out wlliuliclllu 'the
Partlies have execuut:ed and entered liu1t:o 'the IC::u.uIIII :u.undliuii Grant AHreement couit:eimplllat:ed
leu°eiu1.
SIIiuou.ulld a Couunty IC:3a rd of Colmlmllssliouluer: rc se y srau-ut:ed by hubs p, arasrap, lliu
exe° li,� 'the au.ut:ll�uou°ot:.
and u.uuilillat:eralllly wlit:lliudraw from tll1uli5 A.reeimeuit: that Cou.uu1 y IC:3a rd of Coimimlisslioulers sIlhuaIll° have
u�o fu.urtlliueu° olbllli,at:liou1 or Illialblilllit:y p, u.ursuuant: to t:lhIIs A.reeiment:. Die wlit:llidrawlluii party sIlhuaIll° rumaliu1
I i ablle„ :ollell y tabrou.,u lit5 share of'the IC::'.tIL...IC for lits portIIon of au-u y debt or liuicu.,urred u„„up to
t:llie date of wlit:lliudrawall.
Chair Dorosin said he wants the BOCC to give some guidance to John Roberts.
Commissioner Marcoplos said paragraph 15 protects the County in a lot of ways, and
on a lot of issues. He said there is room for a more expanded view of this, and he would like
to see what the attorneys come up. He is concerned about the unpredictability of the FTA.
Commissioner Burroughs said she takes comfort in paragraph 15, and she is happy
with the attorneys meeting and coming back with a proposed solution. She said the potential
for withdrawal would not be the topic for which she would vote against this project.
Chair Dorosin said he thinks that mediation or arbitration would work, and would not
want to include language that would torpedo the project.
Commissioner Marcoplos agreed with Chair Dorosin.
Commissioner McKee said GoTriangle mentioned mitigation avenues to use if the
revenues were not there, and he said one area that would not trigger provision #15, but could
trigger concern for the BOCC, is a continuing escalation of local costs. He asked what would
happen if the state funding goes to 5%, and the County is still able to pay for escalated
expenses out of tax revenues. He sees the County being the only option to bear the cost
burden.
Danny Rogers, GoTriangle Project Manager, said that scenario would be a trigger, and
the agreement has a cap on the County's participation level. He said if the state lowers its
funds to 5%, the BOCC would be approached to determine a plan to move forward. He said
there is no requirement for additional local revenue from Orange or Durham County.
Commissioner McKee said cutting costs has never been presented as an option, but
rather only an increase in local funding.
Katharine Eggleston said within the next two years leading up to the FFGA, GoTriangle
will be pursuing other funding sources. She said the Funding and Community Collaborative
(FCC) is private monetary and in-kind contributions. She said the goal of this group is $100
million.
Commissioner McKee asked if the FCC will be added as a signatory to this agreement.
Katharine Eggleston said no.
20
Commissioner McKee asked if the FCC is under any contractual agreement to raise
$100 million.
Katharine Eggleston said no. She said if state funding decreased, the parties would
meet to see if there are alternative funds that can fill the gap, and the FCC funds may fill such
a need.
Commissioner McKee asked how the BOCC would remove itself from the project, if the
unilateral withdrawal language is removed, and the state funding drops to 5% and the BOCC
no does not want to absorb the additional 5%.
Katharine Eggleston said there may be funds from the FCC, and there may be cost
cutting strategies.
Commissioner McKee asked what options there would be if the BOCC does not agree
with the cost cutting measures, such as removing a stop in Orange County.
Tammy Bouchelle said the BOCC is not obligated to submit any additional funds under
this agreement. She said any substantial change to the project, such as removing a stop,
would have to be approved by the FTA prior to proceeding. She said the Counties would also
have to approve such a change in the County transit plans. She said GoTriangle has no
ability to act unilaterally.
Commissioner McKee said he does not understand what happens if a scenario arises
that Orange County cannot accommodate; when it has signed an agreement to the plan, FTA
has approved the project, and the state says it will only give 5%. He says without a unilateral
withdrawal provision, he feels Orange County is bound to commit funds.
Katharine Eggleston said should such a scenario arise, the three parties would make
good faith efforts to find strategies that would be amendable to three parties.
Commissioner McKee said there may be no such strategies.
Chair Dorosin proposed the hypothetical of cutting one of the Orange County stations,
and asked if staff could walk the Board through the steps of what would happen.
Tammy Bouchelle said if there are significant changes in the scope of the project, the
FTA would have to approve them. She said the removal of a station would be an example of
such a change.
Chair Dorosin proposed the hypothetical of all parties approving of the station removal,
and asked if the steps thereafter could be identified.
Tammy Bouchelle said the FTA would be informed of this decision, and additional
studies would be needed to show there were no negative social justice, environmental or
ridership impacts. She said after receiving approval from the FTA, GoTriangle would need the
approvals of Orange and Durham counties, with the change being reflected in the County
transit plans.
Chair Dorosin proposed the scenario where the BOCC does not want to remove a
station from the line, and does not want to amend its transit plan. He asked if the steps
thereafter could be described. He asked what would happen if Durham and Orange counties
disagree on the cost cutting measure.
Commissioner McKee said his concern is what happens if there is an impasse, and the
parties do not agree.
Chair Dorosin said if an agreement and transit plan amendment are required to
proceed, but do not happen, then how does the project proceed.
Patrick McDonough said in the draft plan, there is an appendix B of mitigation
measures. He said the removal of a station is an unlikely scenario of a cost cutting measure.
He said there are items in the plan that can be cut down in price without the customer being
affected; for example, a bridge can be made more ugly. He said, conversely, there are areas
that can be cut that do affect the customer, such as the capacity for the speed of the trains.
21
He said GoTriangle's goal, if cutting costs were necessary, would be to minimize the impact to
either County or its residents.
John Talmadge said in the next item, which refers to proposed language changes to
the transit plan, includes that any deletion of stops or addition of stops requires Commissioner
approval.
Commissioner McKee said his concern is if the parties cannot agree.
Travis Myren said one mechanism is dispute resolution, like mediation or arbitration.
Commissioner Marcoplos said the financial shortfalls would be the more likely scenario
to occur. He said if the state gives 7% instead of 10%, and Durham is fine with this change,
but Orange County is not, then provision #15 gives Orange County permission to say it cannot
pay the difference and would be allowed to step back.
John Roberts said the County would still be in the agreement, but there would need to
be a meeting to determine how to proceed, with Orange County unable to provide additional
funds.
Commissioner Marcoplos asked if, in that case, Orange County is protected by
paragraph 15.
John Roberts said Orange County is not automatically in the agreement to find
additional funds.
Commissioner Marcoplos said this would allow Orange County to be out of it without
even voting.
John Roberts said the County is not automatically out of the agreement, and is still a
party to the agreement, but it could exercise its right under paragraph 15. He said the County
could state that the dedicated local revenues are its only contribution. He said, at this point,
the parties would have to work out a plan on how to proceed.
Commissioner Marcoplos said he wonders what the County's vulnerability would be at
that point, as it seems the County may be fairly well protected.
Commissioner Jacobs referred to page 6, and said it specifically speaks to material
changes. He said material changes would be part of the basis for reviewing the status of the
project. He said he thought there was a place where material changes were defined.
Travis Myren said this information has been recast to be called significant cost
overruns, or unmitigated funding shortfalls in provision #14. He said this mirrors the material
changes in previous document.
Commissioner Jacobs asked if there was a reason the language was changed.
Tammy Bouchelle said GoTriangle understood the request to be to link the definition of
unmitigated funding shortfall or cost overrun to the definition of material change that is in the
existing implementation agreements. She said this is what was done. She said the existing
implementation agreements are still in play and are valid documents.
Commissioner McKee said the process was in material change for a year, and yet it
was never triggered.
Commissioner Jacobs said quarterly and annual reports will be received, so that parties
can keep track of any material changes. He asked what will happen if the FTA receives a
document and takes issue with something within in it.
Katharine Eggleston said in this case the FTA has indicated in writing that GoTriangle
must provide documentation of the commitment by end of April and if not, FTA will withdraw
the project from the New Starts pipeline and project development.
Commissioner Jacobs said that relates back to what the FTA told GoTriangle verbally in
February.
Katharine Eggleston said yes.
Commissioner Jacobs asked if this process is standard in FTA's operating procedures.
22
Katharine Eggleston said there are specific requirements for four things that must be
completed within the two-year time frame of project development, and if these requirements
are not met, the project is withdrawn. She said this is very typical.
Travis Myren resumed the PowerPoint presentation:
Cost Share Agreement Provisions
O Prohibition on Other Local Revenues
• County is not obligated to use any revenue other than dedicated transit
revenue to pay its share
• Annual Reports
• Annual reports to Board of Commissioners on collection, allocation, and
expenditure of transit revenues
Commissioner McKee referred to page 6, and asked if there is a reason why the figure
of$2.4 billion is still being used as the total cost of the project. He said all interest out to 2062
should also be included.
Travis Myren said this agreement is only intended to reflect the part of the cost that is
covered by the FFGA. He said there are costs beyond that, but they are not required for FTA
purposes.
Jill Jaworski said the way the project costs are measured is by standard FTA
procedures, and they have outlined all of the costs that are included in that: design,
engineering, land acquisition, construction, etc. She said the interest, during the construction
period, can be included as one is allowed to up the project cost by that amount, and get the
federal reimbursement.
Commissioner McKee asked if the FTA is picking up part of the Transportation
Infrastructure Finance and Innovation Act (TIFIA) loans interest.
Jill Jaworski said the TIFIA loan is a low cost financing vehicle offered by the federal
government, not paid for by the government.
Commissioner McKee said the FTA requires that 30% of the $2.3 billion be committed
at this time.
Jill Jaworski said yes, 30% of the projects costs as defined by the FTA; 30% of the
local share of the project cost.
Chair Dorosin referred to page 7, and said the Board needs to fill in the dates as well
as the cost share.
Travis Myren said staff will insert the appropriate numbers into provisions 6, 7 and 10 if
the Board of County Commissioners picks a scenario.
Chair Dorosin said the Board has a spreadsheet that lays out all the scenario options.
Commissioner Burroughs referred to the ee option, and noted that staff mentioned
there have been some minor changes. She asked if the version before the Board is slightly
different than the most recent update.
Travis Myren said scenario eel 0 is the most recent update, and was created at the
request of Durham County to bolster some of their cash flow, and would not impact Orange
County other than to have an $83,000 positive impact starting in 2032. He said the ee in the
Davenport Analysis is almost exactly the same as eel 0.
Commissioner Burroughs said early scenarios were not good for Orange County, but
she believes scenario eel 0, which has minimum cash reserves at $4.4 million and the
County's local split at 16.5%, is one that she can support. She thanked the negotiators, as she
now sees cash reserves that work.
23
Commissioner Jacobs referred to page 8, provision #10, and noted that the
responsibility for 0 and M costs would be changed.
Travis Myren said these were placeholders, and staff will put in correct information
when the Board chooses a scenario.
Commissioner Jacobs agreed with Commissioner Burroughs, and he thinks Durham
County is a very accommodating partner.
Commissioner Jacobs said he is sure that the funds are not sufficient to do all that the
County would like to regarding bus service. He said there will be further discussions in which
the County can partake with GoTriangle and the Metropolitan Planning Organization (MPO) to
talk about bus cost sharing. He said any concerns he has about the project have nothing to do
with Durham.
Chair Dorosin said scenario eel 0 that the Board is discussing splits the cost share at
81.5% to Durham County, and 16.5% to Orange County, and 2% to the FCC. He said the
operating and maintenance and the state of good repair costs are split 80% Durham, 20%
Orange through 2036, and then 81% Durham and 19% Orange thereafter.
Chair Dorosin said the negotiation process with Durham County has been very
collaborative. He said one thing to remember is that this project only succeeds if all are
working together. He said all parties have an interest in making this work.
Commissioner Rich said it sounds like the Board is comfortable with eel 0, and she is
as well. She said this is a regional transportation system, and all are in it together. She
thanked all those involved in the negotiation process. She said she would like to see some
bus hours added, and revenues around development at the stations.
Commissioner Marcoplos said he agonized over the costs and their risks, but he
commended Chair Dorosin and Commissioner Jacobs on a remarkable job of bringing the cost
share down so low. He commended Durham as well. He said he is comfortable with Scenario
ee10.
Commissioner Jacobs thanked Travis Myren, Orange County staff, Durham County
staff, and GoTriangle staff.
Travis Myren referred to Attachment C, and said there are some suggested changes to
the Transit Plan at the Commissioners' places with track changes:
Recommended Transit Plan Changes
O Station Locations
• Patterson Place Station — no increase in environmental impact to the
New Hope Creek Watershed
• Gateway Station — move closer to Orange County to increase economic
development potential
• Approval of additions or deletions by Board of Commissioners
• Location changes presented to Board of Commissioners for input prior to
GoTriangle Board of Trustees approval
O Administrative Support
• Administrative position to administer the Transit Plan located at the MPO
O Annual Work Plans
• Describe program of capital and operating improvements using transit
tax funds
• Presented to Board of Commissioners each Spring
O Economic Development Partnership
24
• Engage with Durham County on economic development around the
Woodmont and Gateway Stations
O Light Rail Cost Sharing Agreement
• Review every four years with the update of each County's Transit Plan
O Annual Work Plans
• Describe program of capital and operating improvements using transit
tax funds
• Presented to Board of Commissioners each Spring
Chair Dorosin said the version at the Commissioners' places is redlined, and asked who
made these edits.
Travis Myren said GoTriangle led these changes at the request of the Commissioners
involved in the negotiations.
Commissioner Jacobs referred to the position in #4, and said it was not recommended
to go to the MPO, but rather merited further discussion.
John Talmadge said this was a mistake, and it will be discussed further.
Commissioner Jacobs referred to #7, and asked if there is a reason for the change in
language. He said the commissioners specifically wanted it to read that every four years the
County Commissioners would review the cost split.
John Talmadge said the red line version is the latest working document.
Commissioner Rich agreed with Commissioner Jacobs, and said she would like to see
this position work with the Council of Governments (COG), as opposed to the MPO.
Chair Dorosin asked if there is a reason for the deletion in bullet point 1 referring to
environmental impacts.
Katharine Eggleston said it was duplicative, and the same language appears in the
paragraph above.
Travis Myren resumed the PowerPoint presentation:
Bus Service Expansion
O Financial model may support some additional bus expansion
O Allocation of bus hours governed by Implementation Agreement
• 64% Chapel Hill Transit
• 24% GoTriangle
• 12% Orange Public Transit
O Potential Renegotiation of Agreement
• Bus hours allocation
• Bus service planning
• Disposition of the potential rail dividend
Commissioner Jacobs said he is supportive of this. He said when this agreement was
negotiated there was not a transportation department, plan or funding. He said the County
was usually just a pass through, and Chapel Hill had more funding. He asked if, going
forward, GoTriangle wants to commit its staff to the same process that the County is
committing its staff.
John Talmadge said yes GoTriangle is willing to enter into a renegotiation, and he has
reached out to the MPO and the Town of Chapel Hill.
Commissioner Jacobs suggested putting some time parameters on a start date, and
said it should start in this calendar year or fiscal year.
25
Travis Myren said yes.
Bonnie Hammersley said after the meeting on April 27th staff will start the next steps
with a timeline.
Chair Dorosin said there is an anticipated rail dividend that will free up bus hours now
covered by light rail. He said this will be a boost mostly to Chapel Hill bus services. He said
this could be added into the ultimate percentage that is resolved, so that other resources could
be directed to Orange Public Transportation or GoTriangle.
Travis Myren resumed the PowerPoint presentation:
Next Steps
O Discuss the Draft Cost Share Agreement and Changes to the Orange County Transit
Plan
O Direct staff to prepare final documents for consideration
Ted Cole said he has the answer to Commissioner McKee's question about costs. He
said the entire pro forma out to 2062, all of the Orange County Tax district revenues that are
collected are $1,020,000,000. He said at the end of 2062 there will be about $40 million in the
reserve, which means about $980 will be spent over that term.
2. Adjournment
A motion was made by Commissioner Rich, seconded by Commissioner Burroughs to
adjourn the meeting at 9:52 p.m.
VOTE: UNANIMOUS
Mark Dorosin, Chair
Donna Baker
Clerk to the Board