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

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11 1 Commissioner McKee said he is assuming the reduction at the state and federal levels 2 was not expected. 3 John Tallmadge said that is correct. 4 Commissioner McKee said what makes him uneasy is that the projected growth rate in 5 sales tax revenue has increased by almost 25 percent. He asked how he can feel confident 6 that this is concrete when past projections on federal and state percentage have been thrown 7 out the window with massive reductions. 8 John Tallmadge said there are different forces acting on these current assumptions. He 9 said one is political policy and the other is economic. He said when the assumptions were 10 being worked on in 2011, it was during a deep recession, and there had been negative returns 11 in sales tax. He said this meant it was a very conservative budgeting time. He said the values 12 then still recognized that the longer term growth rate would be different than the first couple of 13 years. He said this new growth rate is consistent with long term growth rates in Orange County 14 in the last decades. He said more time can be spent on the analysis when this is brought to the 15 Board for a decision. 16 Michael Talbert said he would second what John Tallmadge said. He said these original 17 estimates were done coming out of the great recession. He said Clarence Grier has reviewed 18 these, and he feels these numbers are very realistic. He referred to the yellow sheet, and said 19 the revenue estimates are increasing by more than 5 percent, which should provide an 20 opportunity for the Board to approve a change in the plan. 21 Michael Talbert referred to attachment 1-e and 1-f and noted that the grand totals after 22 2035 increase by $100 million. He said a large percentage of that increase is the removal of 23 federal and state money and the issuing of bonds. He said there is an issuance of$126 million 24 in bonds and debt in 2012 that was not part of the original plan. He said much of the gap is 25 being filled with bonds. 26 Commissioner Price asked how the projected growth rate of the sales tax translates with 27 regard to the buses and hours for the Hillsborough and northern Orange bus routes and park 28 and ride. She asked for clarification on whether the earlier discussion was about buses on 1-85 29 or Highway 70. 30 David King said he specifically said the 1-85 corridor, but Highway 70 is also included. 31 Commissioner Price asked how this change in the funding formula affects the timeline 32 for getting buses in the northern part of the County. 33 John Tallmadge said the goal was for the financial plan not to be the driver. He said the 34 dollars will be there. He said this will depend on when the planning is done, when the park and 35 ride lots are leased or built, and when the vehicles are available for the service. He is hopeful 36 that this can start at the end of this calendar year. 37 Commissioner Price noted a reference to DR Commuter Rail, and she asked for an 38 explanation of this. 39 John Tallmadge said this is the Durham Raleigh Commuter Rail, and this is part of the 40 Durham plan. 41 42 Commissioner McKee referred to the operating costs per revenue hour listed on page 6. 43 He asked if Triangle Transit's cost increase of 11 percent is projected to be a continuous 44 increase at this rate, or if it is an anomaly. 45 John Tallmadge said an adjustment was made to the fiscal year 2013 actual values and 46 everyone is then inflated on a 3.1 percent rate. He said this is a recalibration and then in the 47 model, each future year grows 3.1 percent. He said these values are used to generate how 48 much service will cost, and then this backfills once a determination is made of how much local 49 money is needed to provide service. He said the set split agreement between Chapel Hill, TT, 50 OPT and Orange County means there is no advantage to an agency inflating its cost per hour.