Minutes 04-04-2017 - Laserfiche WebLink

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28 used for any other purpose. Ted Cole said in the model there is also an operating reserve. Mitch Brigulio said there is an operating reserve set up in the model, which is essentially three months worth of Orange County and GoTriangle operations for the system. He said it does not include the LRT. Mindy Taylor said the operating reserve is for the system operations and is modeled in three separate places; a portion is allocated to Durham, Orange, and GoTriangle's own agency operations, outside of the county plans. Commissioner Rich asked if the source of the operating reserve could be identified. Mindy Taylor said it comes from the sales tax. She said the reserve is 25% of the annual operating expenses, and if there were a shortfall for three months, there would be funds to cover it. Commissioner Marcoplos referred to the graphs on page 8 and 9, and said it appears to show the disappearing orange bars, which could not be seen because of the size of the graph. He said this is a problem because there is the 82/18 split, which is a part of this thought process. He said the cash balance for Durham is in relation to their 82%, and the cash balance for Orange is in relation to its 18%. Commissioner Marcoplos said there needs to be a way to make this clear on the website so that the public does not get the wrong impression. Commissioner Marcoplos referred to the sales tax assumptions table, column b, on page 7, and said he does not see business cycles there. Ted Cole said there may well be, and some expectation of business cycles. He said the process to derive these growth rates was very involved. Commissioner Marcoplos referred to the line item that notes 30% contingency funds, which seems to be based on an FTA requirement; but to him this contingency number should be based on actual estimates on the actual project. Commissioner Marcoplos said the answer that he originally got back from GoTriangle was that 20% of the total base cost is allocated contingency, which seems to be saying to him that excavation, stations, rail installation, etc. are going to have a certain amount of contingency. He said there is then 10% that is unallocated. He said he is a builder and builds contingency into his projects as well, and there seems to be no way of dealing with the fact that if this is a true contingency it may indicate that 5-10% is not needed. He said a 5% contingency amount would be $120 million, plus any finance costs. He said he is curious to gain a more in depth understanding of the contingency, as 30% of the project is a lot of money, and a contingency fund is not a contingency fund if every penny is spent. Danny Rogers, GoTriangle Project Director, said the allocated contingency is identified with each of the pieces of the project; track, system, facilities, etc. He said the contingencies are adjusted as the design process continues. He said the level of contingencies are fairly common, as well as being consistent with expectations from FTA. He said there is an initially high level of contingency, because at a certain level of design there are some unknowns, as the design is not final. He said as the design is finalized, the contingency level will reduce. He said the unallocated contingency is an amount for the unknown unknowns. Commissioner Marcoplos asked if there is any chance that the contingency fund will not be spent, given that it is 5% over the required FTA amount. Danny Rogers said he does not expect to spend the entire amount, and the New Starts program has a track record of coming in under budget since the FTA has established some new guidelines. Commissioner Marcoplos asked if the BOCC could receive information about these other projects that have come in under budget. Danny Rogers said the information is on the FTA website.