Agenda - 04-18-2017 - 8-a - Minutes

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28 1 depth understanding of the contingency, as 30% of the project is a lot of money, and a 2 contingency fund is not a contingency fund if every penny is spent. 3 Danny Rogers, GoTriangle Project Director, said the allocated contingency is identified 4 with each of the pieces of the project; track, system, facilities, etc. He said the contingencies 5 are adjusted as the design process continues. He said the level of contingencies are fairly 6 common, as well as being consistent with expectations from FTA. He said there is an initially 7 high level of contingency, because at a certain level of design there are some unknowns, as the 8 design is not final. He said as the design is finalized, the contingency level will reduce. He said 9 the unallocated contingency is an amount for the unknown unknowns. 10 Commissioner Marcoplos asked if there is any chance that the contingency fund will not 11 be spent, given that it is 5% over the required FTA amount. 12 Danny Rogers said he does not expect to spend the entire amount, and the New Starts 13 program has a track record of coming in under budget since the FTA has established some 14 new guidelines. 15 Commissioner Marcoplos asked if the BOCC could receive information about these 16 other projects that have come in under budget. 17 Danny Rogers said the information is on the FTA website. 18 Commissioner Marcoplos referred to the development funds line item, and asked if the 19 value of these funds could be clarified, and what would be the ramifications if these funds were 20 not allocated. 21 Danny Rogers said about $130 million is associated with the joint development 22 opportunity, which is an opportunity that the FTA has put into the process as something with 23 which it will participate in funding. He said this could result in affordable housing, joint 24 development near stations, etc. He said if this investment is not obtained and spent, then the 25 cost of the project would go down. 26 Commissioner Marcoplos asked if there is any debt cost associated with this line item. 27 Mindy Taylor said the financing for the project is based on the total cash flow need, 28 which includes the joint development costs. She said if those costs were not in the project cost, 29 then the finance needs would reduce. 30 Commissioner Marcoplos asked if it is in the project, and there are financing costs 31 associated with it, would those financial costs need to be calculated against whatever gain is 32 received from the government with that money. He said a closer look at that may reveal how 33 valuable it is to keep it in to begin with. 34 Mindy Taylor said this could be looked into, and a 50% federal match and 10% state 35 match is anticipated. 36 Commissioner Marcoplos said some examples of how others have utilized it would be 37 helpful. 38 Commissioner Jacobs asked if Davenport could do more analysis in the next few weeks, 39 or is their involvement complete. 40 Ted Cole said Davenport can continue to work with the County. 41 Commissioner Jacobs said an analysis that he would like to see is what happens if the 42 project is delayed. He said he would like to understand this better: the pros and cons, the 43 fiscal impact, etc. 44 Commissioner Jacobs referred to the sales tax, and said both counties use the article 39 45 history, Moody's base line sales tax. He said Orange County bleeds sales tax to its neighbors, 46 and Durham has a much larger commercial, retail, industrial tax base, as compared to Orange 47 County's primarily residential one. He asked if there is a reason not to run the pessimistic view 48 for Orange County, and let Durham run the view it so chooses. 49 Commissioner Jacobs said it looks like when the LRT is funded that there is no room for 50 buses. He asked if this is correct.