Agenda - 04-27-2017 - 1 - Consideration of the Final Draft Durham – Orange Light Rail Cost Sharing Agreement and Final Draft Orange County Transit Plan

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99 now and FY 2020 when GoTriangle plans to submit the request for a FFGA for the D-O LRT Project. If a federal funding risk is realized and the parties decide to suspend pursuit of the D-O LRT Project,the losses would be limited to the amount of money that will have been spent on the project development and engineering work to that point in time when the decision is made to suspend work.To date, approximately$40 million has been spent on project development and engineering activities for the D-O LRT Project. As the federal budget is typically adopted in October of each year—GoTriangle expects to spend approximately$10 million more between entry to Engineering and October 2017 if the D-O LRT Project advances into Engineering. 2) State Funding—The Plans assume 10%state funding for the D-O LRT Project. In 2016,the North Carolina General Assembly passed a law capping the state contribution toward rail projects at 10%of project costs. It also required that the D-O LRT Project wait until late 2018 to be scored and prioritized for inclusion in the 2020-2029 State Transportation Improvement Program (STIP). Depending on the amount of statewide money available, the level of state funding available for the D-O LRT Project could fall below 10%of project costs. The preliminary availability of state funding for the D-O LRT Project will be announced in late 2018. If it is lower than 10%of project costs, in accordance with the Cost Sharing Agreement, the parties would convene within fifteen business days after the release of the Draft STIP and decide upon a course of action for the D-O LRT Project. To mitigate for the risk of lower than expected state funding, GoTriangle is pursuing new sources of revenue, including in-kind contributions of right-of-way from property owners along the D-O LRT Project alignment, grants from foundations and endowments, a private philanthropic campaign, and other sources of federal funds. (These activities are described in more detail in the Mitigation Strategies section below.) In addition, GoTriangle is preparing a set of cost mitigation strategies that could be used to reduce the cost of the D-O LRT Project, thereby reducing the amount of additional funds required. (These efforts are also described in more detail in the Mitigation Strategies section below.) 3) Local Sales Tax Forecast—The half-cent sales tax dedicated for transit is the largest local revenue source for the Plans. Over the past decade, which included declines in net collections in FY 2008 and 2010 due to the economic recession, sales tax collections for a similar one-cent sales and use tax in the two counties grew at an average annual rate of 5.5 percent (5.7 percent in Durham County and 4.8 percent in Orange County). In November 2016, GoTriangle contracted with Moody's Analytics, a well-regarded economic analytics firm,to provide a forecast of the half-cent sales tax dedicated for transit. Moody's developed two forecasts: a Baseline forecast and a Downside forecast. In accordance with industry standards, the Plans use the Baseline forecast as the planning assumption for the sales tax growth rate.The sales tax growth projected in the Moody's 2