The General Assembly Put Light Rail on Life Support, Then Revived It—But With Conditions That Could Ultimately Kill It | North Carolina | Indy Week
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The General Assembly Put Light Rail on Life Support, Then Revived It—But With Conditions That Could Ultimately Kill It 

Less than a month ago, the Durham-Orange Light Rail Transit project had been all but pronounced dead, thanks to thirty-four words in a state budget crafted behind closed doors and rushed through without debate: "A light rail project is ineligible for scoring, prioritization, and State funding until a written agreement is provided to the Department establishing that all non-State funding necessary to construct the project has been secured."

The problem, of course, is that in order to get "non-State funding"—$1.2 billion from the federal government—the $2.47 billion project first needs commitments from state and local funding sources. If the state's commitment were made contingent on an existing federal commitment, that would create a Catch-22 that could imperil the whole enterprise.

Officials with local governments and GoTriangle, the transit agency spearheading the light-rail effort, scrambled to convince legislative leaders that they'd made a mistake. It seemed like a long shot, given how brazenly GOP lawmakers and their veto-proof majority steamrolled the budget process.

"They view mass-transit projects as social engineering, as telling people what to do in terms of the way they get around," says Senator Floyd McKissick, a Durham Democrat. McKissick, like Senate Minority Leader Dan Blue, is skeptical of the idea that legislators were unaware of the problem the language created.

Nevertheless, McKissick successfully negotiated with Republicans on a technical corrections bill—ratified June 15—addressing the offending language. But the light rail's new life comes with tight deadlines and a new cap for state funding—creating at least a $57 million shortfall for the project.

Language in the bill basically sets up a game of Operation around the project's future. Bump into its parameters and zap!—the DOLRT could die on the table. Those working on the project say there isn't much wiggle room in the timeline it lays out, but it can be done.

This is only the latest hurdle the DOLRT has faced in trying to line up state funding.

Previously, light-rail projects were eligible for state funding up to 25 percent of the total project cost; the DOLRT's original funding plan banked on this more than $600 million. In 2015, however, that cap was reduced to just $500,000—again, as part of a backroom budget deal. A bipartisan effort succeeded in getting that repealed, but it was replaced with a 10 percent cap, which, for DOLRT, meant a maximum state contribution of $247 million. (As the INDY reported earlier this year, however, because of how the state's contribution is calculated, the project was only likely to get $183 million in the best-case scenario.)

The corrections bill set a new cap specifically for the DOLRT (other projects are still eligible to receive up to 10 percent of their cost from the state): $190 million. Given all that's happened, another funding hit couldn't have been much of a surprise for transit officials.

But the bill also added conditions: If the project doesn't hit certain deadlines, it will be removed "from the current and any future State Transportation Improvement Program," which allocates funding for transit projects across the state.

The DOLRT's final score from the N.C. Department of Transportation is expected in August, and approval of the upcoming STIP will come in about a year. If all goes according to plan, construction will begin in 2020, and the line will open in 2028.

"If the deadlines are not met," says GoTriangle general manager Jeff Mann, "state funding would be forfeited and reprogrammed to other projects, which of course would be very detrimental to the project given the necessity of the state funding."

The first deadline is April 30, 2019. By that date, $1 billion in local money needs to be committed to the project. This could come from local governments or a private fundraising effort being headed by GoTransit Partners, a nonprofit the transit agency set up last summer.

"That's an aggressive timeline, but it has been our plan," Mann says. "It is now, however, a requirement as opposed to a target."

It's too soon to know whether project partners will close the funding gap by cutting costs or finding new money, Mann says. GoTriangle is meeting with Durham and Orange Counties to see if a previously adopted cost-sharing agreement needs to be revisited, with the counties forking over more money. (Earlier this month, the Orange County Board of Commissioners unanimously adopted a statement that it would not spend more than the $149.5 million it had already committed to the cost-share agreement.)

The counties are funding their share through sales taxes, vehicle registration fees, and vehicle rental fees. About $88 million from these voter-approved funds has been spent already.

Wendy Jacobs, chairwoman of the Durham County Board of Commissioners and a member of the GoTriangle Board of Trustees, points out that new development along the route—and the approximately $1.4 billion in new tax revenue it's expected to generate through 2057—benefits more than just the county governments splitting the local share. (She adds that there's been no talk of raising taxes to close the gap.)

"We've got to look at the big picture and what the value is to our community in terms of filling the fifty-seven-million-dollar hole that we have," she says.

GoTransit Partners, whose board of directors is chaired by Capitol Broadcasting Company vice president Michael Goodmon and also includes former Durham Mayor Bill Bell, had been tasked with raising $102 million through in-kind, right-of-way, and cash donations. GoTriangle is also evaluating the option of selling naming rights to the eighteen stations along the seventeen-mile route.

Goodmon says he's confident the nonprofit can hit its fundraising goal—which may change in light of the limit on state funding—but it will be "all hands on deck."

"I think projects like this need a timeline, and I think aggressive timelines are good," he says. "It forces answers. It forces asks. It forces tough conversations."

According to a consulting firm's March 28 presentation to the GoTriangle board, the nonprofit was looking at "a potential land donation from two large entities" that would put the fundraising effort more than halfway to its goal. Goodmon told the INDY he believed those talks were progressing, but he declined to identify donors.

"We're in a wide variety of discussions in terms of land contributions, and we're starting now to tee up our conversation around financial contributions," he says.

That leaves the second deadline: Under the corrections bill, GoTriangle has to secure federal funding by November 30, 2019. Mann says it was already the agency's plan to submit its final application for federal funds by the end of this year, with the aim of securing an agreement by September 2019.

Still, that's cutting it close—and there will be no room for error.

"I do get concerned about the tightness of the timeline, but it is a timeline that GoTriangle felt comfortable with," McKissick says. "It's realistic but, yes, it's ambitious in that it assumes that everything proceeds relatively smoothly and that commitments that need to be made on the local level and federal level occur within the timelines that are reasonably anticipated today."

McKissick met with Mann, as well as the general counsel for GoTriangle, Senate leader Phil Berger, Senator Bill Rabon (a Republican who McKissick says has been an ally for transit projects), and legislative staff to talk about the project timeline and answer questions. The Federal Transit Administration also joined by conference call, McKissick says.

McKissick argues that the State Transportation Improvement Plan was created to keep politics out of the funding process—and he believes that logic resonated with lawmakers who didn't want to see the DOLRT move forward. McKissick says the new conditions were the price of doing business with the Republican majority.

"You're talking about a project that had to be brought back to life," he says. "It was already dead. You had to come up with a reasonable, doable timeline. Best-case analysis, you wouldn't have had any language there dealing with it except removing what was put into the budget. That's best case. But we're dealing in a world where best case is not always obtainable."

This story has been updated to include a statement from the Orange County Board of Commissioners.

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