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HomeMy WebLinkAboutAgenda - 09-04-2018 6-b - Authorization for the Chair to Sign a Letter Regarding Measures to Address the State Funding Shortfall in the Durham-Orange Light Rail ProjectORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: September 4, 2018 Action Agenda Item No. 6 -b SUBJECT: Authorization for the Chair to Sign a Letter Regarding Measures to Address the State Funding Shortfall in the Durham- Orancie Light Rail Proiect DEPARTMENT: County Manager's Office ATTACHMENT(S): 1 — Draft Letter from BOCC Chair Mark Dorosin to Jennifer Robinson (GoTriangle Board Chair) Regarding Tentative Funding Agreement 2 — August 27, 2018 Approved Letter from Chair Wendy Jacobs (Durham County) to Jennifer Robinson (GoTriangle Board Chair) Regarding Tentative Funding Agreement INFORMATION CONTACT: Travis Myren, 919 - 245 -2308 PURPOSE: To consider authorizing the Chair to sign a letter to the GoTriangle Board of Trustees affirming Orange County's current funding commitment to the Durham - Orange Light Rail Project ($149.5 million) and communicating a tentative agreement between Orange County and Durham County to use Durham County dedicated transit revenues to supplant reduced State funding. BACKGROUND: In April 2017, the Board of Orange County Commissioners approved an Interlocal Agreement for Cost Sharing for the Durham - Orange Light Rail Transit Project. The parties to this Agreement are Orange County, Durham County, and GoTriangle. The Cost Sharing Agreement, along with the Orange County Transit Plan, specify the amount of dedicated local transit revenue' that each County will contribute to the light rail project. Orange County's contribution is $149.5 million in year of expenditure dollars while Durham County's contribution is $738.4 million. The Cost Sharing Agreement also specifies a decision making and dispute resolution process for changes that may occur in either project revenues or expenditures. In the event of a material change in revenue, the parties are obligated to meet within fifteen (15) business days to discuss measures to address the shortfall. I Dedicated local transit revenue includes revenue produced by the Article 43 '% cent Transit Sales Tax, Article 50 five percent (5 %) vehicle rental tax, Article 51 three dollar ($3) GoTriangle Regional Vehicle Registration Fee, and the Article 52 seven dollar ($7) County vehicle registration fee. P During the adoption of the State Budget, the North Carolina General Assembly placed several limitations on the Light Rail Project. One of these limitations was to limit the maximum amount of State funding to $190 million. The light rail financial model that was included in the Orange County Transit Plan and the Cost Sharing Agreement assumed a total State contribution of ten percent (10 %) or $247.6 million. The $190 million limitation created a shortfall of $57.6 million. Consistent with the terms of the Cost Sharing Agreement, the parties convened an initial meeting on June 21, 2018 to begin discussing potential solutions to the funding shortfall. Orange County was represented by BOCC Chair Mark Dorosin and Commissioner Mark Marcoplos who met throughout the summer with two representatives from Durham County. Using updated financial modeling, GoTriangle demonstrated that Durham County's dedicated transit revenues were sufficient to compensate for the $57.6 million revenue shortfall created by the State. The negotiating team agreed to present this solution to their respective governing boards prior to September 7, 2018 when GoTriangle is required to submit a project progress document to the Federal Transit Administration. The negotiated solution for Durham County to commit additional dedicated transit revenue is recognized in two letters, one from the Chair of the Durham County Board of Commissioners and one from the Chair of the Orange County Board of Commissioners. Both of these letters are attached. The Durham County Board of Commissioners considered and approved its letter on August 27, 2018. Both Orange and Durham counties will be asked to formally amend the Cost Sharing Agreement and each County's Transit Plan to codify the change in funding commitments on a schedule that supports GoTriangle's application for a September 2019 Full Funding Grant Agreement. FINANCIAL IMPACT: The negotiated agreement between Orange County, Durham County, and GoTriangle does not create new financial obligations for Orange County. Orange County's contribution to the Durham - Orange Light Rail Project would remain at $149.5 million in year of expenditure dollars. SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goals are applicable to this agenda item: Public Transportation provides access to jobs and services to many individuals. • GOAL: FOSTER A COMMUNITY CULTURE THAT REJECTS OPPRESSION AND INEQUITY The fair treatment and meaningful involvement of all people regardless of race or color; religious or philosophical beliefs; sex, gender or sexual orientation; national origin or ethnic background; age; military service; disability; and familial, residential or economic status. • GOAL: ENSURE ECONOMIC SELF - SUFFICIENCY The creation and preservation of infrastructure, policies, programs and funding necessary for residents to provide shelter, food, clothing and medical care for themselves and their dependents. RECOMMENDATION(S): The Manager recommends the Board consider authorizing the Chair to sign the attached letter to GoTriangle affirming Orange County's financial commitment and communicating a solution to the funding shortfall created by the State budget. Attachment 1 Draft Orange County Letter Jennifer Robinson, Chair, GoTriangle Board of Trustees Dear Jennifer: 3 I am writing in support of a corresponding letter written by Wendy Jacobs, Chair, Durham County Board of Commissioners to reiterate Orange County's support for the Durham - Orange Light Rail Transit Project and to convey to you the outcome of recent meetings to satisfy obligations as outlined in the Interlocal Agreement for Cost - Sharing for the Project. As you know, recent legislative action by the North Carolina General Assembly placed several limits on the Light Rail Project. According to the legislation, the Project remains eligible for a maximum of $190 million provided that all other non - federal funds for the project are committed by April 30, 2019, and that federal funds are committed no later than November 30, 2019. The Light Rail Project will be allowed to continue through the state's data - driven transportation funding prioritization process, which has tweice attributed high scores to the Project. However, the financial plan for the Project states that the State of North Carolina will contribute $247.6 million. Given the new $190 million maximum, there is now a shortfall in the financial plan of $57.6 million. The Cost - Sharing Agreement states that if state funds to be used for the D -O LRT Project are cancelled, terminated, withdrawn, do not materialize, or otherwise become unavailable for the D -O LRT Project, the Parties shall meet within fifteen business days to determine how to address the situation. On June 21st, I met with Wendy Jacobs, Chair of the Durham County Commissioners, Mark Marcoplos, Orange County Commissioner, and Ellen Reckhow, Durham County Commissioner, to satisfy this obligation, and we have subsequently met to continue discussion of how we will address the $57.6 million shortfall. According to the Cost - Sharing Agreement, Orange County has committed $149.5 million YOE to the Project from Dedicated Local Transit Revenues. Based on updated modeling with still conservative estimates, Durham County's dedicated transit revenues are robust and sufficient to cover the revenue shortfall, and both Durham and Orange County are in agreement on the plan to use these additional funds for this purpose. The Durham - Orange Light Rail Transit Project connects 3 major universities, 3 major hospitals, and 3 of the top ten employers in North Carolina, but it does more than that. It will lay the foundation for the next century of progress in our region and it will play an essential role in North Carolina's continued success. For these reasons, Orange County continues to support the Project. Sincerely, Mark Dorosin, Chair, Board of Orange County Commissioners C! w t Jennifer Robinson Chair, GoTriangle Board of Trustees GoTriangle PO Box 13787 Research Triangle Park, NC 27709 Dear Jennifer Robinson: I am writing to reiterate Durham County's support for the Durham - Orange Light Rail Transit Project and our ongoing commitment to satisfy obligations as outlined in the Interlocal Agreement for Cost - Sharing for the Project. As you know, recent legislative action by the North Carolina General Assembly placed several limits on the Light Rail Project. The Project remains eligible for a maximum of $190 million provided that all other non - federal funds for the project are committed by April 30, 2019, and that federal funds are committed no later than November 30, 2019. Given that the original financial plan for the Project contained a $247.6 million contribution from the State of North Carolina, there is now a shortfall in the financial plan of $57.6 million. The Cost - Sharing Agreement states that if state funds to be used for the D -O LRT Project are cancelled, terminated, withdrawn, do not materialize, or otherwise become unavailable for the D -O LRT Project, the Parties shall meet within fifteen business days to determine how to address the situation. On June 21st, I met with Mark Dorosin, Chair of the Orange County Commissioners, Mark Marcoplos, Orange County Commissioner, and Ellen Reckhow, Durham County Commissioner, to satisfy this obligation, and we have had several additional meetings to discuss how we will address the $57.6 million shortfall. According to the Cost - Sharing Agreement, Durham County has committed $738.4 million YOE to the Project from Dedicated Local Transit Revenues. Based on updated modeling with still conservative Durham County Administrative Complex 1 200 East Main Street, Durham, NC 277011 (919) 560 -0025 Fax (919) 560 -0013 Equal Employment /AffirmativeActiveEmployer I Website: hnp: / /www.dconc.gov/ Heidi Carter Wendy Jacobs, Chair • 31 Falling Water Drive 4308 Rivermont Road Durham, NC 27713 Durham, NC 27712 . Email: Email: hcarter(a dconc.Qov Email: wjacobs @dconc.gov Brenda A. Howerton 3325 Tarleton West James Hill, Vice -Chair Durham, NC 27713 5505 Lake Elton Road Email: bowerton @dconc.gov Durham, NC 27713 Email: jahill @dconc.gov COUNTY OF DURHAM Ellen w 11 Pine e Top Top Place BOARD OF COMMISSIONERS Durham, NC 27705 Email: ereckhow @dconc.gov w t Jennifer Robinson Chair, GoTriangle Board of Trustees GoTriangle PO Box 13787 Research Triangle Park, NC 27709 Dear Jennifer Robinson: I am writing to reiterate Durham County's support for the Durham - Orange Light Rail Transit Project and our ongoing commitment to satisfy obligations as outlined in the Interlocal Agreement for Cost - Sharing for the Project. As you know, recent legislative action by the North Carolina General Assembly placed several limits on the Light Rail Project. The Project remains eligible for a maximum of $190 million provided that all other non - federal funds for the project are committed by April 30, 2019, and that federal funds are committed no later than November 30, 2019. Given that the original financial plan for the Project contained a $247.6 million contribution from the State of North Carolina, there is now a shortfall in the financial plan of $57.6 million. The Cost - Sharing Agreement states that if state funds to be used for the D -O LRT Project are cancelled, terminated, withdrawn, do not materialize, or otherwise become unavailable for the D -O LRT Project, the Parties shall meet within fifteen business days to determine how to address the situation. On June 21st, I met with Mark Dorosin, Chair of the Orange County Commissioners, Mark Marcoplos, Orange County Commissioner, and Ellen Reckhow, Durham County Commissioner, to satisfy this obligation, and we have had several additional meetings to discuss how we will address the $57.6 million shortfall. According to the Cost - Sharing Agreement, Durham County has committed $738.4 million YOE to the Project from Dedicated Local Transit Revenues. Based on updated modeling with still conservative Durham County Administrative Complex 1 200 East Main Street, Durham, NC 277011 (919) 560 -0025 Fax (919) 560 -0013 Equal Employment /AffirmativeActiveEmployer I Website: hnp: / /www.dconc.gov/ 5 estimates, Durham County's dedicated transit revenues are robust and sufficient to cover the revenue shortfall. Durham County is committed to using these additional funds for this purpose. We make these additional commitments with an understanding of the Project's schedule and specifically the anticipated execution of a New Starts Full- Funding Grant Agreement in September 2019. In addition to our funding commitment, we commit to updating any related documents in support of GoTriangle's application for the Full- Funding Grant Agreement. We also understand the significance of FTA's planned risk assessment for the Light Rail Project, and we recognize the importance of the capital campaign led by GoTransit Partners. We will continue to work together with our partners to ensure that both endeavors are successful. The Durham - Orange Light Rail Transit Project connects 3 major universities, 3 major hospitals, and 3 of the top ten employers in North Carolina, but it does more than that. It will lay the foundation for the next century of progress in our region and it will play an essential role in North Carolina's continued success. For these reasons, Durham County maintains its unwavering support, as evidenced by our Board's unanimous vote in support of this letter at our August 27th, 2018 public meeting. Sincerely, Wendy Jacobs, Chair Durham Board of County Commissioners Durham County Administrative Complex 1 200 East Main Street, Durham, NC 27701 I (919) 560 -0025 Fax (919) 560 -0013 Equal Employment /Affirmative Active Employer I Website: http://www.dconc.gov/