Agenda - 06-21-2016-13-6 - Information Item - Memorandum Regarding Hillsborough Train Station Funding and the Proposed 2016 Appropriations Act

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2 by this budget language, though it is currently unclear if this project qualifies as a project "that spans two or more counties and that serves more than one municipality," or if the currently adopted 2016-2025 State Transportation Improvement Program (STIP) would be changed to reflect this restriction. The Town of Hillsborough was informed by their local legislative delegation that this budget language may remove funding from the Hillsborough Train Station, giving the project a large funding gap. In response, the Hillsborough Town Mayor, Mr. Tom Stevens, has written to President Pro Tempore of the North Carolina Senate Phil Berger and House of Representatives Speaker Tim Moore to express his concerns and ask that the proposed budget language be amended to preserve the funding for the Hillsborough Train Station. It is important to note that the budget has not yet been finalized and more information will be made public in the coming weeks. In order to better understand how this project is funded, a brief history of the station project and its funding is presented below. Funding History An intercity (Amtrak) train station in the Town of Hillsborough was proposed in 2009. Town of Hillsborough staff, the Rail Station Small Area Plan Task Force, and other contributors prepared the Hillsborough Rail Station Small Area Plan and considered a number of funding options, including applying for a 2010 American Reinvestment and Recovery Act (ARRA) grant. This grant was not awarded to the Station project. Consideration was also given to the Hillsborough Train Station project during the development of the Orange County Bus Rail Investment Plans (OCBRIP). This led to discussion about making an application to the Transportation Investment Generating Economic Recovery (TIGER) competitive grant program, based on the familiarity of the North Carolina Department of Transportation (NCDOT) Rail Division with these grants and the likelihood of receiving a grant in Hillsborough. The OCBRIP provided a breakdown of the cost split in the case of receiving a TIGER grant. Under this funding scenario, 80 percent of the total project cost would be covered by federal funds, 10 percent by state funds, and 10 percent by local funds. Local funds for the project were anticipated to be generated from the 1/2 cent sales tax. After the Board approved the OCBRIP and Orange County voters approved the transit funding referendum in 2012, the Legislature in 2013 enacted the Strategic Transportation Investments (STI) law (HB 817) which implemented a data-driven process for selecting transportation projects statewide. Following discussions between the NCDOT Rail Division, the North Carolina Railroad (NCRR) company, the Town of Hillsborough, and Orange County, it was determined that the Station project would be eligible for entry into the funding competition established by STI. The project was submitted, performed well under the relevant criteria, and was added to the STIP, with construction scheduled to take place in 2019 and 2020. In the current STIP, the Station project is scheduled to be funded with about 90 percent state funds and 10 percent local funds, including revenue from the 1A cent sales tax. Under the proposed budget language, funding from the State may be required to be reduced to 10 percent, leaving a substantial funding gap. Next Steps The Orange County Board of Commissioners may wish to consider voicing concerns with the Orange County legislative delegation in support of the Town of Hillsborough's concerns regarding this proposed budget language.