Durham County Will Cover Light Rail's $57 Million Shortfall | News
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Monday, August 27, 2018

Durham County Will Cover Light Rail's $57 Million Shortfall

Posted by on Mon, Aug 27, 2018 at 8:05 PM

click to enlarge GOTRIANGLE
  • GoTriangle
Durham County says it will cover the $57.6 million shortfall in light rail funding created when legislators capped the state's share of the $2.47 billion project in their latest state budget.

The county plans to cover the gap with additional revenue from a vehicle registration fee, a car rental fee, and a half-cent transit tax dedicated for the proposed Durham-Orange Light Rail as well as other transit projects. Durham County commissioners on Monday night unanimously approved a letter to the GoTriangle Board of Trustees outlining the funding change.

"Durham’s Article 43 sales tax devoted to transit continues to perform very well and can support the additional debt necessary to make up for the reduction in state funding without Durham having to
implement any additional strategies for raising revenue," the agenda item read.

Orange County commissioners will consider a companion letter at their September 4 meeting.

John Tallmadge, the project's interim director, said the change won't take away from other transit projects in the pipeline that are supposed to be supported by the same revenue streams, including commuter rail to Wake County.

"Everything in the transit plan can move forward," said board chair Wendy Jacobs.

Project planners had expected the state to cover $247 million of the project (although because of how the state's contribution is calculated, the project was likely to get $183 million at most). But, GOP legislators — in a hastily crafted budget —  capped the state's share at no more than $190 million. 

According to Tallmadge the Federal Transit Administration had asked GoTriangle to report by September 7 how it would cover the $57 million shortfall. The agency is hoping to receive a grant from the FTA for half of the project cost.

Most of the seventeen-mile line, which will run from the University of North Carolina through downtown Durham to North Carolina Central University, will be in Durham County.

Jacobs said the entire sum is coming from Durham because it has the tax base to cover it.

Under an existing cost-share agreement, Durham County had committed $738 million to the project. Orange County had agreed to spend $149 million (after the state budget came out, Orange County said it would contribute no more than that).

"The Durham-Orange Light Rail Transit Project connects three major universities, three major hospitals, and three of the top ten employers in North Carolina, but it does more than that," the letter, signed by Jacobs, reads. "It will lay the foundation for the next century of progress in our region and it will play an essential role in North Carolina’s continued success. For these reasons, Durham County maintains its unwavering support."

Representatives from the Greater Durham Chamber of Commerce, the People's Alliance and the Durham Housing Authority spoke in support of the project at Monday's meeting. Meredith Daye, director of development for the Housing Authority, said about 75 percent of the agency's units are located within a half-mile of proposed light rail stop and the line will be a key service to residents at DHA properties, which will be redeveloped in coming years.

The project was nearly derailed earlier this summer when Republicans in the General Assembly rushed through a state budget containing a provision that all non-state funding for light rail had to be committed before the state would chip in. The problem with this is that the Federal Transit Administration requires all non-federal funding to be committed before it will award a New Starts grant of about $1.2 billion.

After some scrambling by local elected officials, the provision was rewritten to allow up to $190 million in state money to go toward the project, provided it hit some deadlines.

First, about $1 billion in local funding must be committed by April 30, 2019.  The existing amounts agreed to by the counties, the additional $57 million in tax and fee revenue and money raised through an ongoing, private fundraising effort to collect commitments for about $102 million in cash and right-of-way donations count toward that total.

Second, GoTriangle has to secure federal funding by November 30, 2019.  GoTriangle general manager Jeff Mann told the INDY in June 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.

If all goes according to plan, construction will begin in 2020, and the line will open in 2028.

Read the joint statement from Durham and Orange county commissioners:

Light Rail Funding Gap - Joint Statement by Sarah on Scribd

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