Agenda - 04-18-2017 - 5-a - Presentation and Public Hearing on the Draft Orange County Transit Plan

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2 approved a memorandum of understanding in December to work with GoTriangle to identify alternative funding sources. The Board also directed the County Manager to engage a consultant to conduct an independent review of the financial model for the light rail project. Later in December, GoTriangle reported project financing would be restructured to prevent the need for any additional local funds to support the project in a base case scenario. In February 2017, GoTriangle received direction from the Federal Transit Administration that prescribed an April 30 deadline for updating the Orange County Transit Plan and the Cost Sharing Agreement between Orange and Durham counties. During this time, GoTriangle also created a new financial model that delineates revenue, expenditure, debt service coverage and cash flow by county. The model also allows the counties to evaluate different cost share scenarios between Durham and Orange County for the D-O LRT project. The new financial model revealed that the dedicated Orange County transit revenues could not support the light rail cost share percentages contained in the 2012 Bus and Rail Investment Plan. As a result of the new financial information and changes to the project scope, Durham and Orange counties are in the process of renegotiating the cost share agreement that defines the financial responsibilities of each County. On April 4, 2017 the Board of Orange County Commissioners received a report on the independent financial analysis conducted by Davenport & Company. The presentation clarified the total cost of the project, financing mechanisms, and potential financial risks including credit, cash flow, and any potential budget implications. The presentation also highlighted significant project funding milestones if the project is approved to move forward including approval of State funds in June of 2019 and a Federal full funding grant agreement in early 2020. Since these external funding commitments have not been secured, the draft Cost Share Agreement includes provisions that would trigger discussions about the future of the project if external revenues do not materialize or are reduced in an amount that would require additional local funding. If these external funding reductions were to occur, the Agreement would require the counties to meet to discuss responses which would include modifications to the schedule, reductions in the scope, or discontinuation of the project. The same response would be triggered if the project experiences cost overruns or if transit taxes and fees do not yield the amount of revenues projected in the Plan. FINANCIAL IMPACT: The Transit Plan governs the allocation of transit taxes and fees in Orange County. Through the term of the Plan (2045), Orange County is projected to generate approximately $452 million in dedicated transit revenues. The presentation is intended to inform the Board's decisions on how those funds should be allocated across transit services. SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goals are applicable to this agenda item: Public Transportation provides opportunity for 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.