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9 <br /> <br />To consider authorizing the Chair to sign a letter to the GoTriangle Board of Trustees affirming <br />Orange County’s current funding commitment to the Durham-Orange Light Rail Project ($149.5 <br />million) and communicating a tentative agreement between Orange County and Durham County <br />to use Durham County dedicated transit revenues to supplant reduced State funding. <br /> <br />BACKGROUND: <br />In April 2017, the Board of Orange County Commissioners approved an Interlocal Agreement <br />for Cost Sharing for the Durham-Orange Light Rail Transit Project. The parties to this <br />Agreement are Orange County, Durham County, and GoTriangle. <br /> <br />The Cost Sharing Agreement, along with the Orange County Transit Plan, specifies the amount <br />of dedicated local transit revenue1 that each County will contribute to the light rail project. <br />Orange County’s contribution is $149.5 million in year of expenditure dollars while Durham <br />County’s contribution is $738.4 million. <br />1 Dedicated local transit revenue includes revenue produced by the Article 43 ½ cent Transit <br />Sales Tax, Article 50 five percent (5%) vehicle rental tax, Article 51 three dollar ($3) <br />GoTriangle Regional Vehicle Registration Fee, and the Article 52 seven dollar ($7) County <br />vehicle registration fee. <br /> <br />The Cost Sharing Agreement also specifies a decision making and dispute resolution process <br />for changes that may occur in either project revenues or expenditures. In the event of a material <br />change in revenue, the parties are obligated to meet within fifteen (15) business days to discuss <br />measures to address the shortfall. During the adoption of the State Budget, the North Carolina <br />General Assembly placed several limitations on the Light Rail Project. One of these limitations <br />was to limit the maximum amount of State funding to $190 million. The light rail financial model <br />that was included in the Orange County Transit Plan and the Cost Sharing Agreement assumed <br />a total State contribution of ten percent (10%) or $247.6 million. The $190 million limitation <br />created a shortfall of $57.6 million. <br /> <br />Consistent with the terms of the Cost Sharing Agreement, the parties convened an initial <br />meeting on June 21, 2018 to begin discussing potential solutions to the funding shortfall. <br />Orange County was represented by BOCC Chair Mark Dorosin and Commissioner Mark <br />Marcoplos who met throughout the summer with two representatives from Durham County. <br />Using updated financial modeling, GoTriangle demonstrated that Durham County’s dedicated <br />transit revenues were sufficient to compensate for the $57.6 million revenue shortfall created by <br />the State. The negotiating team agreed to present this solution to their respective governing <br />boards prior to September 7, 2018 when GoTriangle is required to submit a project progress <br />document to the Federal Transit Administration. <br /> <br />The negotiated solution for Durham County to commit additional dedicated transit revenue is <br />recognized in two letters, one from the Chair of the Durham County Board of Commissioners <br />and one from the Chair of the Orange County Board of Commissioners. Both of these letters are <br />attached. The Durham County Board of Commissioners considered and approved its letter on <br />August 27, 2018. <br /> <br />Both Orange and Durham counties will be asked to formally amend the Cost Sharing <br />Agreement and each County’s Transit Plan to codify the change in funding commitments on a <br />schedule that supports GoTriangle’s application for a September 2019 Full Funding Grant <br />Agreement. <br />