1. Durham and Orange Transit Plan Funding Needs
Orange County Board Of Commissioners
December 5, 2016

2. Clarifications
Durham and Orange counties are being asked to provide non-binding letters of intent to work with GoTriangle and other community partners to identify funds to complete the Durham-Orange Light Rail Transit Project. The counties are not being asked to invest any additional funds for the project at this time The funding gap is approximately $250 Million in Year-of-Expenditure (YOE) Dollars In 2016, the North Carolina General Assembly capped available state funding for light rail at 10% of the project’s cost, as opposed to the 25% that was previously awarded to two similar projects in Charlotte The Federal Transit Administration is still expected to invest 50% in federal funds for Durham and Orange Counties’ light rail project (D-O LRT Project), contingent on the remaining 50% coming from the existing dedicated transit revenues, state, local or other funding sources Before Durham and Orange counties are formally asked to commit additional funds to complete their light rail project, GoTriangle will continue to work with the counties, the Funding and Community Collaborative, and community partners to find ways to reduce the funding gap

3. Durham-Orange LRT Funding Gap Cost of D-O LRT Project
Request for Memorandum of Understanding (MOU) to explore additional funding sources
Schedule of next steps
BRT and LRT now include extensions beyond what was in the original plan.

4. Gap = ~ $250 Million in Year-of-Expenditure (YOE) Dollars
What is the Funding Gap?
Gap = ~ $250 Million in Year-of-Expenditure (YOE) Dollars
Gap is for entire combined Durham and Orange Transit Plan
Includes future funds to operate and maintain full bus and rail system, including vehicle replacements and state of good repair for D-O LRT Project
Bus Operations funded first for Orange Public Transportation, Chapel Hill Transit, GoDurham, Durham County, and GoTriangle services in Durham and Orange Counties
Financial plan includes buildout of revised Chapel Hill Bus Rapid Transit (BRT) Project, Hillsborough Train Station, and amended D-O LRT Project including Joint Development and NCCU Station
10% = ~$230M YOE
New growth rates anticipated in about 1 week

5. Why Is There A Gap? Bus Service State: 7.5% Local: 92.5%
Vehicles, Bus Stops, Park and Rides
Federal: 80%  38%
State: 10%  8%
Local/Other: 10%  54%
Light Rail, Commuter Rail
Federal: 50%  50%
State: 25%  10%
Local/Other: 25%  40%
Bus Rapid Transit
Federal: 50%  70%
State: 25%  0%
Local/Other: 25%  30%
Hillsborough Train Station
State: 90%  91%
Local: 10%  9%
Impacts:
Service still fully funded
LRT, BRT, and Hillsborough projects still in financial plan, CRT is out
BRT memo included
Hillsborough Station original cost: $8.9M with 10% local share ($890K)
Updated cost: $8.1M with 8.4% local share ($686K)

6. How Does the Current Project Estimate Compare to the Original Estimate?
Formula
y = x(1+r)n
Variables
y = 2016 dollars
x = original year dollars
r = escalation rate
n = number of years
Estimate Source
Base Year Millions
2016 Millions***
2011 Plan*
$1,378
$1,605
2015 Plan**
$1,598
$1,648
* Per D-O LRT Cost Share Agreement
** Per Feb 2016 FTA Financial Plan
*** r = 3.1% per Cost Construction Index 20-year average
Two ways of expressing the exact same amount of funds, making the exact same investment.

7. LRT Construction Cost Updates
Cost Estimates Include 30% Contingency
in 2016 Millions:
2011 Plan
Feb 2016 Plan
Dec 2016 Plan
Original Project (UNC-Alston Ave)
$1,605
$1,648
$1,668

8. LRT Construction Cost Updates
Cost Estimates Include 30% Contingency
in 2016 Millions:
2011 Plan
Feb 2016 Plan
Dec 2016 Plan
Original Project (UNC-Alston Ave)
$1,605
$1,648
$1,668
Including Joint Development (JD)
n/a
$1,769

9. LRT Construction Cost Updates
Cost Estimates Include 30% Contingency
in 2016 Millions:
2011 Plan
Feb 2016 Plan
Dec 2016 Plan
Original Project (UNC-Alston Ave)
$1,605
$1,648
$1,668
Including Joint Development (JD)
n/a
$1,769
Including JD & NCCU
$1,877

10. LRT Construction Cost Updates
Cost Estimates Include 30% Contingency
in 2016 Millions:
2011 Plan
Feb 2016 Plan
Dec 2016 Plan
Original Project (UNC-Alston Ave)
$1,605
$1,648
$1,668
Including Joint Development (JD)
n/a
$1,769
Including JD & NCCU
$1,877
in Year-of-Expenditure Millions:
2011 Plan
Feb 2016 Plan
Dec 2016 Plan
Construction Completion Date
2025
2026
2028

11. LRT Construction Cost Updates
Cost Estimates Include 30% Contingency
in 2016 Millions:
2011 Plan
Feb 2016 Plan
Dec 2016 Plan
Original Project (UNC-Alston Ave)
$1,605
$1,648
$1,668
Including Joint Development (JD)
n/a
$1,769
Including JD & NCCU
$1,877
in Year-of-Expenditure Millions:
2011 Plan
Feb 2016 Plan
Dec 2016 Plan
Construction Completion Date
2025
2026
2028
Original Project (UNC-Alston Ave)
$1,823
$2,013
$2,126

12. LRT Construction Cost Updates
Cost Estimates Include 30% Contingency
in 2016 Millions:
2011 Plan
Feb 2016 Plan
Dec 2016 Plan
Original Project (UNC-Alston Ave)
$1,605
$1,648
$1,668
Including Joint Development (JD)
n/a
$1,769
Including JD & NCCU
$1,877
in Year-of-Expenditure Millions:
2011 Plan
Feb 2016 Plan
Dec 2016 Plan
Construction Completion Date
2025
2026
2028
Original Project (UNC-Alston Ave)
$1,823
$2,013
$2,126
Including Joint Development (JD)
n/a
$2,256

13. LRT Construction Cost Updates
Cost Estimates Include 30% Contingency
in 2016 Millions:
2011 Plan
Feb 2016 Plan
Dec 2016 Plan
Original Project (UNC-Alston Ave)
$1,605
$1,648
$1,668
Including Joint Development (JD)
n/a
$1,769
Including JD & NCCU
$1,877
in Year-of-Expenditure Millions:
2011 Plan
Feb 2016 Plan
Dec 2016 Plan
Construction Completion Date
2025
2026
2028
Original Project (UNC-Alston Ave)
$1,823
$2,013
$2,126
Including Joint Development (JD)
n/a
$2,256
Including JD & NCCU
$2,389

14. D-O LRT Funding Updates
Anticipated State and Federal Shares of D-O LRT Construction Cost,
in Year-of-Expenditure Millions:
Estimate Source
YOE Cost
State Share
Federal Share
2011 Plan
$1,823
25% = $456
50% = $912
Feb Plan
$2,013
25% = $503
50% = $1,006
Dec Plan
$2,389
10% = $239
50% = $1,195

15. Dedicated Transit Revenue Updates
Projected Total Dedicated Transit Revenues* through 2035,
in Year-of-Expenditure Millions:
Estimate Source
Forecast
Estimated Revenue**
2011 Plan
Staff
$217 Orange
$744 Durham
Feb Plan***
Walden, 2014
$266 Orange
$946 Durham
Dec Plan****
Moody’s Analytics, 2016
$251 Orange
$960 Durham
* Includes sales tax, $3 and $7 vehicle registration fees, vehicle rental tax
** Actuals are included plan updates
*** All four revenues based on Walden, 2014
**** Sales tax based on Moody’s Analytics, 2016; remaining revenues based on Walden, 2014

16. Ways to Resolve the Funding Gap Includes 10% State Funding
Note: No Additional funds needed prior to 2020.

17. Other Steps To Fill Gap Steps already taken
Adjusted D-O LRT Project construction schedule to better match FTA reimbursement rate (delayed completion of construction from 2026 to 2028)
Hired new financial advisor, experienced in structuring financing plans for major federally funded projects, to begin refining financing assumptions
Steps that will be evaluated between December and April
Value engineering / cost cutting opportunities
Financing optimization
Joint Financial Staff Working Group
Coordinated evaluation of financial plans
Refinement of funding shortfall need
Evaluation of additional revenue sources
Reduce ticket vending machine count and replace with purchase by phone technology
Evaluate need for future three-car platforms
Evaluate potential single track locations

18. Key Dates Jan. 2020 Full Funding Grant Agreement (FFGA) with FTA
Oct Submit request for FFGA with FTA – requires 100% of funding to be committed
Jun Inclusion in State Transportation Improvement Program (STIP) – State participation committed
Dec Inclusion in Draft STIP - State share defined, but not committed
Jun Request to be in President’s budget – requires 50% of non- New Starts funds to be committed
Apr Update of Transit Plans and execution of full General Engineering Consultant (GEC) and Program Management Consultant (PMC) contracts

19. Getting to April 2017 Dec. 2016 Jan. - Apr. 2017 Mar. 2017 Apr. 2017
Deadline for GoTriangle to request entry into FTA Engineering phase for D-O LRT Project
Non-binding MOU to work with GoTriangle and other community partners to identify funds to complete the D-O LRT Project
The counties are not being asked to invest any additional funds for the project at this time
Revise and finalize financial plan
Monthly Transit Plan financial updates to County, MPO, and GoTriangle Boards
Present for information the full GEC and PMC contracts
County, MPO, and GoTriangle Boards review updated Transit Plans with potential additional revenue assumptions
Execution of GEC and PMC contracts required to maintain proposed construction schedule

20. Next Steps
Obtain approval from Orange (Dec. 5) and Durham (Dec. 12) Boards of County Commissioners to submit financial plan to FTA that includes potential additional local funding:
“Subject to and contingent upon any authorizations required by Orange County, including the Orange County Board of Commissioners, Orange County agrees to cooperate with the local municipalities and work together to identify, develop, and implement additional funding mechanisms to directly support the D-O LRT Project.”
Obtain similar approvals from MPO (Dec. 14, 2016)
Continue to work with local partners to identify potential additional local revenue sources prior to approving full GEC and PMC contracts in April 2017
Note: No additional local funds will be spent on the D-O LRT Project prior to receiving a Full Funding Grant Agreement (FFGA) from FTA in 2020
BRT and LRT now include extensions beyond what was in the original plan.

21. Questions