Agenda - 04-01-2014 - 6a - Laserfiche WebLink

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10 1 forecast of higher than expected growth of the sales tax throughout the period of this plan. He 2 read through these changes on the chart. 3 He said the federal participation expectation has been dropped from 80 percent to 30 4 percent, and the state assumption has been dropped to 5 percent for vehicles and 8 percent for 5 other projects. He said this provides more local tax dollars from the sales tax and the vehicle 6 registration fees to move forward with projects on the schedule and pace laid out in the plan. 7 He said the other assumptions did not include any changes to the light rail project, the MLK Bus 8 way, or the Hillsborough Train Station. 9 John Tallmadge referred to attachment c - Western Triangle District Annual Cash 10 Balance, and said the balance is still above the floor that was set for annual closing cash 11 balances. He said the other test is the minimum 1.25 debt coverage ratio with reserves. He 12 said this is at 1.52, which means there is a lot of room to examine how much borrowing needs 13 to happen to get this number closer to 1.25. 14 Commissioner Gordon asked about the calibration of the model and the exponential 15 growth in the cash balance. She asked if this is necessary for debt capacity. 16 John Tallmadge said the growth rate of the sales tax dollars is a fixed percentage of the 17 3.6 percent, but this is also combined with Durham, which has a higher growth rate. He said 18 this shows that the costs go down while revenues are still growing, so this builds capacity to do 19 other projects. He said this is out in 2028, after the construction period. 20 John Tallmadge said there is a more detailed table in attachment 1-d — Updated 5-Year 21 Bus Revenue Forecast Compared to Adopted Plan. He said this shows that TT can still deliver 22 the service at the same pace as promised in the plan, and there is more local revenue for bus 23 capital than in the past. He read through the numbers in that chart. 24 Chair Jacobs noted that one chart listed fiscal year and one listed calendar year. 25 John Tallmadge said this was a transition that had to be made from the adopted plan. 26 He said a comparison can be made by looking at the average of those two values. He said 27 everything will go to fiscal year in the future. 28 John Tallmadge referred to Attachments 1-e and 1-f, which list all of Orange County 29 plan's revenues. He said this comparison shows the tradeoff between lower grant dollars and 30 higher sales tax values. He said this is offset with more borrowing. 31 Commissioner Gordon said the revenues include the half cent sales tax and the new 32 projected revenue of$223 million. She asked if it is possible to provide more bus hours, 33 instead of just offsetting the lost bus capital revenue. She said the County was concerned with 34 getting more bus service hours. 35 John Tallmadge said at one level there is a link between the capital and the operating, in 36 that the capital is buying the buses. He said there would be some flexibility if Orange County, 37 Chapel Hill or TT saw an opportunity to move money from the capital side to the operating side. 38 He said this will be discussed and considered within the working group. 39 Commissioner Gordon asked if it is possible for him to tell the Board what the additional 40 sales tax dollars will be used for. 41 John Tallmadge said this is being used to replace the lost grant funds (both state and 42 federal). He said the first priority is to make the plan whole so that promises can be delivered. 43 44 John Tallmadge said the process involves a discussion at the staff level, and last week 45 a decision was made to move this to the manager for consideration. He said it is also 46 necessary to review and revise the text of the plan to incorporate the changed assumptions. 47 He said this would then come to all of the involved boards in the April/May timeframe. He said, 48 in the meantime, these revised assumptions are being used for fiscal year 2015 to tell all of the 49 partners how much money will be available in the upcoming year.