Loading...
HomeMy WebLinkAboutMinutes 04-27-2017 1 APPROVED 5/16/2017 MINUTES BOARD OF COMMISSIONERS WORK SESSION April 27, 2017 7:00 p.m. The Orange County Board of Commissioners met for a work session on April 27, 2017 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. 1. Consideration of the Final Draft Durham — Orange Light Rail Cost Sharing Agreement and Final Draft Orange County Transit Plan BACKGROUND: On April 20, 2017 the Board of Commissioners participated in a work session to discuss the Draft Durham-Orange Light Rail Cost Sharing Agreement and the Draft Orange County Transit Plan. Based on feedback received during that meeting, final draft documents were prepared for the Board's consideration. Cost Share Agreement The Final Draft Cost Share Agreement (Attachment A) specifies the amount of funding each County will contribute to the project. Paragraph #7 specifies Orange County's share of the project that is eligible for federal reimbursement at $149.5 million. This is consistent with financial Scenario EE-10 which distributes eighty-one and one half percent capital cost of the light rail project to Durham County, sixteen and one half percent (16.5%) to Orange County, and two percent (2%) to outside funding. This outside revenue is used to offset Orange County's contribution to the project. For operating costs, it distributes eighty percent (80%) to Durham County and twenty percent (20%) of the operating cost to Orange County through 2036 and eighty-one percent (81%) to Durham County and nineteen percent (19%) of the operating cost to Orange County through theend of the debt repayment. The Cost Share Agreement has been modified to codify the cost shares described above. The final agreement also reorders paragraphs eight through twelve for readability. Finally, the final draft removes the provisions that would allow an individual County Board of Commissioners to withdraw from the agreement. As an alternative, the Agreement adds a new paragraph fifteen (15) which describes a mediation and arbitration process to settle disputes that cannot be resolved voluntarily. Financial Analysis 2 Based on the final cost share agreement, Davenport & Company has updated its financial analysis to represent the precise provisions of Scenario EE10-3 (Attachment B). The attached memo from Go Triangle (Attachment C) details the changes in this version of the financial model. This version adds the cost of an administrative position to administer the Transit Plans, the cost of a short range Bus Planning Study for Orange Public Transportation (OPT) and GoTriangle for services in Orange County, and corrects the amount for Bus Operations and Maintenance to reflect actual service increases next year. As a result of these changes, the minimum cash balance during construction is $3.77 million in 2019, and the minimum cash balance after construction is $15.39 million in 2030. Transit Plan The Final Draft Transit Plan (Attachment D) has been updated to include the final cost share percentages for the light rail project as well as a summary of assumptions in the financial plan (page 45). The Transit Plan was also updated to explicitly include an administrative position to administer the Transit Plans. Interlocal Implementation Agreement The allocation of funding for expansion bus service is governed by an Interlocal Implementation Agreement between Orange County, the Durham-Chapel Hill-Carrboro Metropolitan Planning Organization, and Go Triangle. The original Agreement was approved in October of 2012 and specified a funding formula for new bus services. The formula allocates sixty-four percent (64%) of expansion funding to Chapel Hill Transit, twenty-four percent (24%) to Go Triangle for regional bus services provided in Orange County, and twelve percent (12%) to Orange Public Transportation. Several changes have occurred since the original Interlocal Agreement was adopted, and the Board discussed the possibility of renegotiating the provisions of the Implementation Agreement. GoTriangle has provided a letter to the Board of Commissioners expressing its intent to participate in those negotiations (Attachment E). The timeline for the discussions would include an initial meeting prior June 30, 2017 and completion of negotiations before November 2017. FINANCIAL IMPACT: The Final Draft Cost Share Agreement allocates $149.5 million in Orange County transit taxes and fees to the capital cost of the light rail project. The total amount of transit taxes and fees allocated by the Transit Plan through 2062 is $981.7 million. Travis Myren made the following PowerPoint presentation: Durham-Orange Light Rail Cost Sharing Agreement & Orange County Transit Plan Board of Orange County Commissioners April 27, 2017 Whitted Meeting Facility Work Session Topics O Final Draft Durham-Orange Light Rail Cost Sharing Agreement O Financial Analysis of Final Draft Cost Share O Final Draft Orange County Transit Plan O Offer to Renegotiate the Interlocal Implementation Agreement 3 O Consider and act on Durham-Orange Light Rail Cost Share Agreement and Orange County Transit Plan Cost Share Agreement Changes O Cost Shares (#7 & #12) • Cost shares memorialized in Cost Share Agreement and Transit Plan (page 45) • Capital Cost - $149.5 Million = 16.5% of Local Share • Operating Cost & State of Good Repair—20% through 2036 and 19% thereafter O Mediation and Arbitration (#15) • Discussions regarding loss of State or Federal Funds, Private funds, funding shortfall or cost overrun reach impasse • Any party may request mediation • If mediation fails, arbitration used to reach final decision Financial Analysis Update O Financial Model Updated and Corrected • Adds the cost of administrative position to administer the Transit Plan ($24,500) • Adds short range bus planning study for Orange Public Transit and GoTriangle for Orange County Services ($100,000) • Corrects amount for bus operations and maintenance to reflect services next year - $450,000 • Minimum cash balance during construction: $3.77 million • Minimum cash balance after construction: $15.39 million Transit Plan Updates O Added Cost Share Percentages and Financial Assumptions on Page 45 Interlocal Implementation Agreement O Allocation of bus hours governed by Implementation Agreement • 64% Chapel Hill Transit • 24% GoTriangle • 12% Orange Public Transit O Letter from GoTriangle • Implementation Agreement Renegotiation o Bus hours allocation o Bus service planning o Disposition of the potential rail dividend o Potentially add Chapel Hill Transit as party Next Steps O Consider and Act on Two Documents • Durham-Orange Light Rail Cost Share Agreement Attachment A • Orange County Transit Plan Attachment D 4 Commissioner McKee referred to slide 2, and he asked if there is a reason why this does not show up on item number 9, on page 7. He asked if this means that the percentages of the debt will be paid at 81.5% and 18.5%. Travis Myren said yes. Commissioner McKee asked if there is a reason that this information was not memorialized in the slide. Travis Myren said it was not in the slide, but it is in the agreement. Commissioner McKee asked if this is the debt up to 2035 or 2062. Travis Myren said it is the debt until 2035. John Tallmadge, GoTriangle Regional Services Development Director, said it is the shared borrowings out to 2062. Commissioner Jacobs asked Travis Myren if he could provide an update on bus hours and services. Travis Myren said some analysis of what is affordable has been completed, and he said part of this looks at the desired amount of cash balance for potential revenue short falls or cost overruns. He said if$3 million was chosen as a minimum, 4,000 hours of additional bus service was the yield, spread across all transit providers. He said there will be discussions about how existing and future funds may be divided among the bus service providers in the County. Commissioner Jacobs asked if County staff is recommending a cash balance of$3 million. Travis Myren said that is a figure that he chose as a place to start, and the Board did not make a policy. Commissioner Jacobs said parties that have no financial stake in the funding may advocate for a lower balance. Chair Dorosin opened the floor for discussion. Commissioner Jacobs said the Board appreciated all the emails received from the public, which were often thoughtful and rarely derogatory. He said it was a good example that people in the Community are willing to educate themselves and be involved. He highlighted three misconceptions that he noted: • the 1/2 cent transit tax is a separate funding mechanism unto itself, and cannot be applied to anything other than transit. • year of expenditure: the cost of the project did not jump dramatically from 2012 to 2016, but rather the way the dollars were defined changed. • Borrowing money: the State was expected to make a 25% contribution, and it was dropped to 10%. The funds that were to be used for bus are now going to make up the money that the State cut. Commissioner Rich said the Board heard from a lot residents slamming the University of North Carolina (UNC) because it does not pay taxes. She said the County has a good relationship with the University, and the students spend a lot of money in the County. She said it is not true that UNC does not spend money, and it is important to continue building this relationship. She said all need to be at the table having discussions, the University and the Towns. Commissioner Rich said the County will be at the table with the Town of Chapel Hill when it builds the station at Gateway to make sure transit oriented development is pushed forward, including: affordable housing, economic development, mixed use, form based code, etc. 5 Commissioner Burroughs said the starting point to her decision process was the funding changes made by the State, and the resulting shortfalls. She said she was not on the Board until 2014, and she has learned a lot about the details in the last few months. She said the corridor that the rail will serve is heavily traveled. She said the extensive work of trained professionals has produced a great design. She said she focused heavily on finances in this process, and she is grateful to her peers that asked for an independent analysis by Davenport and Company. She said Commissioner Jacobs and Chair Dorosin negotiated in good faith with Durham County, and there are now manageable financial splits, with adequate reserves for Orange County. Commissioner Burroughs said she has read all of the emails submitted to the Board, and noted that some emails referred to the 2% committed funding raised by GoTriangle through private fundraising. She said this 2% funding has to be contractually committed by the time the final application is submitted to the Federal Transit Authority (FTA) in summer 2019, and without it, the FTA will reject the application. She said GoTriangle has the right people at the table to be able to raise these funds. Commissioner Burroughs said one of the key factors is cost overruns, but 10 years ago the FTA instituted strong risk management processes, and the majority of projects come in at budget. She said people need to know this information, and the County does know what it is getting into with this project. Commissioner Burroughs said ultimately transit is something that requires the long view. She said this is a vote for the future. She and her family have lived in many places and have benefitted from the vision of those who came before. She said all of these places continue to expand their transit services. Commissioner Burroughs said the decision comes down to making the decision for the long run. She said she will vote in favor of this plan. She said she appreciates the tone of the conversation in the community, admires the advocacy skills of residents, and welcomes the tone of this plan. Commissioner Marcoplos said Commissioner Burroughs summed up a lot of his thought processes. He said when he first came on the Board in December 2016 he attended a 5-hour meeting about this issue. He said he began to appreciate the information and the feedback from the community, and he explored and digested it so that he could communicate his thought processes about why he supported this project. He said one item that has not been greatly discussed is the 500 developable acres around this project, which is a sizable amount. He said he looks upon this project as a great economic development tool, and he said what has been missing in the discussion is the economic development opportunities around this project. He added that this project promotes walkability and environmental benefits. Commissioner Marcoplos said he was in favor of the project, but was very concerned that the financial model was not working, and was afraid the project would be unviable. He said Commissioner Jacobs suggested hiring an outside consultant to look at the financials, and he appreciated the negotiations of Chair Dorosin and Commissioner Jacobs with Durham County. He said he will support this project. Commissioner Price said her constituency wanted the transit tax to be used for bus service rather than light rail. Commissioner Price thanked the Orange County community for its involvement in this process, and said she is very much in favor of mass transit and its benefits, but not for this project. She said the current light rail (LRT) project is economically unviable, environmentally unsound, and socially unjust. She said she is personally and professionally devoted to social and environmental justice, as well as civil rights. She said she maintains these values as a Commissioner, and cannot vote for this current project for the following reasons: 6 • Funding scheme puts Orange County at risk with its bond rating • Proposed route goes through green spaces as opposed to using existing thoroughfares and right of ways; and there is no firm data that this light rail will divert cars • She said every township will pay the transit tax but the proposed financial scheme disproportionally allots more funding to serve a small percentage of area residents who may use the LRT, and thus disproportionately allots less funding for buses to serve the residents of Cedar Grove, Little River and Bingham. • This project fails to serve transient dependent communities, and the proposed route fails to provide direct service to communities of low to moderate wealth, and/or communities of color, including Northside, Rogers Road, Efland, West Hillsborough and Fairview, and therefore continues to marginalize these constituents. Commissioner Price said, as a Commissioner, she is accountable to the Orange County constituents, and development planning should be long term, comprehensive and flexible, but she likened the newest plan proposals to shifting sand, without firm foundation and without confidence. She said County government needs to maintain control and oversight of its revenues and expenditures, and the Board of County Commissioners (BOCC) must wisely steward the County resources. Commissioner Price referred to the emails received from the community, and noted hundreds of residents voted no to the LRT, and her vote will be no as well. Commissioner McKee said he has had people tell him to stand down, or burn the place down. He said he will do neither. Commissioner McKee said he has been opposed to the LRT since 2012. He said he stood down from opposition when the residents voted in favor of the transit tax. He said he started raising objections back in the fall of 2016, when he saw numerous financial models that did not make sense. He said the original proposal had this project being paid off by 2036, but this was no longer the case. He said the long-term nature of loan repayment will use up any additional funds that may have been available for bus transit. Commissioner McKee said once Orange County has spent $50 to $100 million he will be quiet, because the County will be too invested at that point to walk away and waste the money. Commissioner McKee said the Board has received emails that have an approximate ratio of 3-1 being against this plan, and, interestingly, many of these emails are from the southern part of the County. He said he is not sure anyone on the Board fully understands every aspect of this issue, and no one knows what will happen if the BOCC approves this. Commissioner McKee said he would like to make a motion after comments have been received. Commissioner Jacobs said he actually did not make up his mind until yesterday. He said he came at this issue with a set of values that he includes in all of his decision-making: a sense of environmental responsibility and social justice. He said he has had moments of disquieting and reassurance during this entire process. He said he has been involved in Orange County planning for 30 years, and he believes in channeling growth where it should be, which is why the rural buffer is important, and two and five acre zoning to protect watersheds. He said he had to consider whether the LRT was a tool to channel growth. He said the Board has seen where the LRT line will run, and it is misleading to think that it will only serve a very small area as the universities at either end of the LRT provide immense opportunities and employment in Orange County. Commissioner Jacobs said he was not challenging the route or the mode, but whether Orange County would be at risk financially. He said he does not want the BOCC to be compelled to spend money that could be used for schools, land protection, affordable housing, 7 etc. He said he and Chair Dorosin worked diligently with Durham on the Cost Share Agreement to avoid such a scenario, and the Durham County Commissioners listened. He said this is a university rail line, and adding North Carolina Central University (NCCU) changed the percentage of what Durham was getting, and Orange County has the fewest miles, the least number of stations and the least economic advantage. He said this plan had to work for both counties and GoTriangle. Commissioner Jacobs said he thinks the plan is now in a good place, and the BOCC has tried to protect Orange County's financial interest. He said two other items were promised to the voters in 2012, with the first being the Hillsborough train station, which is still intact and will be the first thing that Orange County will see as part of this project. Commissioner Jacobs said the County must fund buses as much as possible, as bus service was the second item promised in 2012. He said there is some indication that other monies can be found within the new executive transportation administration of the state. Commissioner Jacobs said there is a basic principle here, that this community is larger than just Orange County, and there is something to be said in being able to work with one's neighbors towards the greater common good, and this project is a way to do that. He said not all decisions are clear-cut, but the world requires little leaps of faith at certain times. He said if Orange County is fiscally protected, he is willing to take a leap of faith. Commissioner Jacobs thanked Chair Dorosin for his work on the negotiations, as well as Commissioner Wendy Jacobs and Ellen Reckhow from Durham County. He said he trusts that if concerns arise, the County's partners will work through them, and he hoped the County could build the same level of trust with GoTriangle. He thanked Orange County staff, especially Travis Myren, GoTriangle staff, and John Roberts. A motion was made by Commissioner McKee, seconded by Commissioner Price to delay a decision until further negotiations can occur between Orange County, Durham County and GoTriangle; to replace the language contained in item #15 of the current Cost Share Agreement pertaining to mediation and arbitration, and replace it with language used in the Cost Share Agreement seen on April 20th Commissioner McKee said GoTriangle needed a decision by April 30th not April 27th He said he is convinced, that without this language change in Item 15, the BOCC will be severely limited in controlling its own destiny. He said the language contained in item #15 speaks to arbitration, which leads to a panel making the decisions, not the BOCC. He said the language from the April 20th iteration of the Cost Sharing Agreement allows for good faith efforts to reach an agreement about cost overruns, or undesignated funding shortfalls, and allows either BOCC to vote to withdraw from the agreement, and amend its transit plan accordingly. Commissioner McKee said he prefers this language as it does not allow for easy or immediate withdrawal, but allows an option for withdrawal. He said the language proposed this evening does not allow for consensus, because Durham County and GoTriangle refuse to discuss making this linguistic change. He said item #15 may be used in business or other scenarios, but he feels that Orange County must have a way to maintain control over its own destiny. Commissioner Jacobs said he had some of the same concerns as Commissioner McKee about protecting Orange County's interest, and he called Durham County out on it yesterday. He said Orange County's concerns about protecting its own interests were mischaracterized as unilateral withdrawal, which was never the intent. He said he spoke with GoTriangle staff and two Durham County Commissioners, and he feels confident that if all partners are acting in good faith, then progress can continue. He said Durham County has 8 acted this way thus far, and he decided to stand down on opposing the language. He said he never expects to get to the point of the situation described in #15. Chair Dorosin said the language in #15 needs to be taken in context with the previous paragraphs, which he read. He said the important parts are the meetings and conferring meetings, which insure there is a process in place, with many opportunities for discussion and consideration of options. He said the way this has been structured and discussed has been misleading. He said this plan has to work for both counties, and it has been implied that all are muscling for position, but that is wrong. He said it has been a collective effort by both counties, and they were able to build consensus around this as a collaborative effort. Commissioner Marcoplos said this is a good time to read paragraph 16, and he said he could not see there being any type of issue with Durham County or GoTriangle other than a financial one. He read paragraph #16 and said this offers is a lot of protection. He said if the federal or state governments decide to pull its funding, then the project is done regardless. Commissioner McKee said this agreement is between human beings, who have a tendency to disagree. He said he sees a lot of things that he cannot identify, which may cause disagreement, and one is that the parties did not want to negotiate the clause from the April 20th meeting. He said the BOCC has a fiduciary responsibility to every resident of Orange County. He said he does not have a clue as to what may or may not cause a disagreement, but without the language that he read before the County is at a disadvantage. He said he is open to mediation, but not arbitration, as arbitration does not allow for an exit strategy. Commissioner Jacobs said the agreement calls for mediation before arbitration. Commissioner Rich called the question. VOTE: Ayes, 2 (Commissioner McKee and Commissioner Price); Nays, 5 (Chair Dorosin, Commissioner Rich, Commissioner Jacobs, Commissioner Marcoplos, Commissioner Burroughs) Motion failed. A motion was made by Commissioner McKee, seconded to Commissioner Price to reject the cost share agreement and the plan associated with it. VOTE: Ayes, 2 (Commissioner McKee and Commissioner Price); Nays, 5 (Chair Dorosin, Commissioner Rich, Commissioner Jacobs, Commissioner Marcoplos, Commissioner Burroughs) Motion failed. A motion was made by Commissioner Rich, seconded by Commissioner Jacobs to approve and authorize the Chair to sign the Durham-Orange Light Rail Cost Share Agreement (Attachment A). Chair Dorosin said there is a meeting and confer clause in the agreement, as well as the creation of an administrative position that will provide oversight and regular updates of the plan, which will allow the BOCC to know before a material change is triggered. He said all involved have worked very hard on this plan, and the best interest of the County has been at the forefront. He commended the Durham BOCC, and said this is a good agreement. He said this is a big project, and as such it was right to scrutinize it carefully. He said the County is at a juncture of regional growth, and bold action is required. 9 Commissioner Jacobs said the administrative position is funded by Orange County and Durham County, and as such, is responsible to both counties. He said there will be quarterly updates, an annual update, and every four years there will be a review of the Cost Share Agreement, to insure it is working properly for the two counties. VOTE: Ayes, 5 (Chair Dorosin, Commissioner Rich, Commissioner Jacobs, Commissioner Marcoplos, Commissioner Burroughs); Nays, 2 (Commissioner McKee and Commissioner Price) A motion was made by Commissioner Rich, seconded by Commissioner Burroughs to approve and authorize the Chair to sign the Orange County Transit Plan (Attachment D). Commissioner Jacobs referred to page 104, the second bullet under further cost cutting, and made a friendly amendment to remove the option of cutting half the stations in Orange County as a cost cutting measure. Patrick McDonough, GoTriangle Manager of Planning and Transit Oriented Development, said the stations that were listed as cost cutting measures have the lowest ridership, and he said one station is in Durham County and one is in Orange County. Commissioner Jacobs said he would like to remove that reference and to delete the second bullet, which reads "Removing the Hamilton Road and Woodmont stations. This strategy would negatively affect customers in these station areas, and could affect the New Starts rating for the DO LRT Project. However, these two stations were selected because they are among the lowest-ridership stations in current projections, and are both relatively closely spaced with the Friday Center station." He said including this language infers that the County would support this as a cost cutting option. He said it may be necessary at some point, but that would require discussion rather than an upfront inclusion. Commissioner Rich asked if this change would have to go back to Durham County. John Talmadge said the language in this plan does not have to go back to Durham, but the same language is in the appendices of the Durham County Transit Plan. He said the change could be managed. Commissioner Rich and Commissioner Burroughs accepted the friendly amendment. Commissioner McKee said the BOCC has yet to approve the document, and it has already found a point of disagreement with Durham. He said he will vote to take this language out, as he has a serious objection to these stations being proposed for removal. Chair Dorosin clarified that the motion is to approve the plan, with the deletion of the second bullet point on page 104. Commissioner McKee said he will vote for the amendment first, and then the plan. Chair Dorosin said the two items are in the same motion. Commissioner McKee said he has shared his sentiments. VOTE: Ayes, 5 (Chair Dorosin, Commissioner Rich, Commissioner Jacobs, Commissioner Marcoplos, Commissioner Burroughs); Nays, 2 (Commissioner McKee and Commissioner Price) Chair Dorosin echoed everyone else about the process. He said it has been an incredible experience with local government and local democracy. He said it is important to investigate, educate, advocate, and agitate; and all involved have done just this. He thanked the staff for its diligent efforts, and the BOCC for its commitment to transparency and trust. Commissioner McKee said this is merely a skirmish and not a battle or the war. He said the issue moves forward, and he encourages all to stay involved in the discussions. 10 Commissioner Rich thanked Chair Dorosin and Commissioner Jacobs for their time and dedication to the negotiations. Commissioner Price addressed those residents that came out and spoke in opposition to the plan, and said that these residents were heard. Chair Dorosin said all voices were heard. A motion was made by Commissioner McKee, seconded by Commissioner Rich to adjourn the meeting at 8:17 p.m. VOTE: UNANIMOUS Mark Dorosin, Chair Donna Baker Clerk to the Board