Chapel Hill News

FTA wants more proof of local money for Durham-Orange light rail

The Federal Transit Administration has asked GoTriangle for more proof that 30 percent of local and state money is committed to the $2.5 billion Durham-Orange Light-Rail Transit project.

The agency needs the information by April 30, FTA official Tyrhonda Edwards said in a Feb. 16 email. If GoTriangle misses that deadline, the project would be delayed by at least a year and any money spent during that time would not be eligible for federal reimbursement.

The proposed 17.7-mile light-rail system would connect UNC Hospitals in Chapel Hill to N.C. Central University in Durham.

GoTriangle expects its board to vote April 26 on a $70 million engineering contract, which would be executed only after the FTA lets the project advance.

But Edwards cited multiple issues with the engineering application, including the need for Orange and Durham leaders to approve the revised light-rail implementation plan. The 2012 agreement is supposed to be reviewed every four years, and each county and its partners must vote on “material changes,” including a 10 percent difference in the estimated construction cost.

The Orange County Board of Commissioners was asked on Feb. 16 to delay that vote when GoTriangle said all the information the commissioners needed on updated financial and project plans wouldn’t be ready by April, as originally planned. Both counties now are expected to vote in June.

GoTriangle spokesman Mike Charbonneau acknowledged Wednesday that transit staff received the FTA email before that Feb. 16 meeting but said they weren’t ready to present the information.

“At the time of the county commissioners meeting that same evening, staff had not yet had the opportunity to fully review and evaluate FTA’s request to identify the specific documents being requested and the process needed to submit those documents,” he said.

The email from Edwards also noted that a 2012 cost-sharing agreement among Orange County, Durham County and GoTriangle no longer backs up the submitted financial plan. The agreement does not specify how much each partner could pay, and has the state picking up 25 percent of the project cost.

The state has set a 10 percent cap on funding since the agreement was signed.

Another issue, Edwards said, is the limited information about loans that could fill part of the state funding shortfall and the local money that could repay that debt.

“Again, it is unclear to FTA whether the agreements would need to include this information for GoTriangle to have the authority to issue the proposed debt,” Edwards wrote.

She acknowledged that memorandums adopted by Orange and Durham leaders in December show local support for the project. However the memorandums, in which the counties pledged to help look for $175 million more, do “not create an enforceable fiscal obligation,” she said.

GoTriangle General Manager Jeff Mann alerted Orange and Durham officials to the need for more documents in an email Tuesday.

Charbonneau said Mann and Project Director Danny Rogers met with both counties’ managers Tuesday to discuss sending a joint letter to the FTA with the requested documentation. The counties are reviewing the draft letter, which outlines the funding originally committed to the plan, he said.

The counties need to show the FTA that they have $371.1 million – 30 percent of the local share – dedicated to the project, Mann said. He noted that the current implementation plans for both counties commit a combined $455.7 million from the half-cent transit sales tax, vehicle registration fees and a car rental tax.

GoTriangle can use the dedicated revenues to apply for financing and repay debt at its discretion, the joint letter states.

The latest financial plan still expects the federal government to pick up 50 percent of the light-rail construction cost. Durham and Orange counties, if the state picks up 10 percent, could pay about $990 million. Cost overruns or an economic change could require more local dollars, officials said.

Tammy Grubb: 919-829-8926, @TammyGrubb