Unless its budget changes, the maximum contribution the N.C. Department of Transportation can legally make to the Durham-Orange Light Rail Transit project is $183 million, which is less than the $247.6 million GoTriangle had requested, the INDY has learned.
The good news for light rail proponents is that they’re likely to get all of that money. The better news is that this $63 million shortfall is significantly less than GoTriangle has accounted for in its contingency plans. According to the most recent quarterly update it gave to Durham and Orange County officials in February, “We are seeking $247 million from North Carolina and roughly $102.5 million from other sources. At entry to [the engineering phase of the project], contingency was $531 million, which includes $168 million unallocated.”
“They have contingency plans in their back pocket,” says Orange County commissioner and GoTriangle board of trustees member Marc Marcopolous. In the worst-case scenario, GoTriangle could scale back some of its plans or try to raise more money from the private sector through things like naming rights for light rail stations.
The NCDOT’s final score won’t come until the end of August, says NCDOT communications officer Bruce Siceloff, with the actual dollar award coming next year. But provided the DOLRT aces the second part of the state’s test in the same manner it did the first, he says, the money looks to be nearly a done deal.
The state’s funding amount derives from a complex formula enshrined in state law, explains Siceloff, a former News & Observer reporter. Before the law was changed early in the McCrory administration, he says, projects were often funded—and defunded—on political whims. The new state law sought to set out more objective criteria.
In September 2015, however, as the light rail project was ramping up, politics injected itself back into the process. Republican lawmakers inserted an eleventh-hour provision into the budget that cut the state’s contribution to just $500,000, a paltry sum that would essentially kill the proposed rail line. GoTriangle’s original financing plan, after all, called for the state to pick up 25 percent of the tab—the percentage the state had given Charlotte for its light rail—with the federal government paying for half and local governments making up the rest.
State law was later revised to something that was still less generous to the DOLRT than the state was to Charlotte, but that was at least viable: the state could give the DOLRT—the law was narrowly constructed so as to only apply to this project, Siceloff notes—up to 10 percent of the total project cost, which is how GoTriangle arrived at its $247 million request. But a second part of the law is where things get wonky: “Programmed funds pursuant to this sub-subdivision shall not exceed ten percent (10%) of any distribution region allocation.”
To back up: the state allocates money for transportation projects on three levels—statewide, regional (there are seven regions), and divisional (there are fourteen divisions). The DOLRT falls into the regional category, which means that this project can only qualify for 10 percent of the total funds allocated to its region. Here’s where it gets more confusing: Durham and Orange counties are in two separate regions.
As Siceloff explains, 84 percent of the total project funding comes from Durham County, and the remaining 16 percent comes from Orange. So the NCDOT used that as the basis for its funding split. Bottom line: a lot of complicated math that comes out to $183 million in eligible funds, under the department’s current funding projections.
Or as Siceloff puts it in an email: “Based on the total $1.54 billion available for regional impact projects in Region C (includes Durham County, which has 84 percent of the light rail project) and $1.17 billion available for Region D (includes Orange County, which has 16 percent of the project), the maximum available under the law for this project is $183 million ($154m from Region C, $29m from Region D).” [Underlining in the original.]
Earlier this week, the NCDOT released its evaluation of transit projects across the state. The DOLRT did the best of all of the regional projects in what’s referred to as the Regional Impact Quantitative Score, earning a 53.33 out of a possible 70. That score accounts for 70 percent of the state’s funding formula. The remainder comes from the more subjective local input score, in part from a series of public meetings the NCDOT will hold in May, as well as from public comments received online, Siceloff says. (If lots of people show up in support—or against—the light rail, that bodes well—or ill—for its local score.)
Siceloff says the project looks likely to perform well in this second phase. But even if that’s not completely the case, “its objective score is so high that it will have to get a terrible local rating [to not] get any funding.”
If the state funding comes through, that would leave the biggest chunk—the 50 percent share the DOLRT is seeking from the federal government—as the last remaining piece. Here, too, there is good news for light rail supporters. While the Trump administration proposed in its budget gutting funding for transit projects across the country—and only funding transit projects that are already underway—the omnibus spending bill Congress passed last month provides nearly $400 million for new projects under the Capital Improvement Grants program during the next fiscal year, an increase of $232 million.
GoTriangle is seeking about $1.24 billion in federal grants. If all goes to plan, the DOLRT will begin service in 2028.
Update, Friday, 9:30 a.m.:
Matthew Clark, the government affairs manager for GoTriangle, which couldn’t be bothered to comment yesterday before we published the story, shot off an email to the Durham City Council last night claiming that this story is “entirely false and premature,” even though the NCDOT’s information came in writing and on the record. Clark says, contra Siceloff, that the state won’t make a determination on the pool of money it has until next year. The INDY reached out to the NCDOT for clarification, and Siceloff says he’s going to look into GoTriangle’s claims and get back to us later today. When that happens, we’ll update this post.
Here’s is Clark’s email:
A recent article in the Indyweek makes the claim that “the maximum contribution the state can legally make to the Durham-Orange Light Rail Transit project is $183 million.” …
I just wanted to point out that this claim is entirely false and premature.
We don’t yet know what the state contribution will be. What we do know is that the light rail project received a quantitative score of 53.33 out of 70 in the prioritization process for state funding. That score was higher than any other transit project in North Carolina. This is great news for the project and a signal that we will do well in the prioritization process. However, that process is not complete, as local jurisdictions have the opportunity to assign points to projects (up to 30). The prioritization process will culminate in a draft of the State Transportation Improvement Program (STIP), which programs funding for various transportation projects throughout the state. That draft will not be published until January of 2019, and it’s still just a draft. Funding in the STIP has changed in the past even after publication of the draft, and we are still roughly nine months away from the draft. The State Transportation Improvement Program is typically finalized in the summer (in this case around June 2019). It is also possible that the upcoming STIP is not the only potential source of state funding for the project.
Update 2, Friday, 10:45 a.m.:
According to Nicole Meister, the NCDOT’s communications manager, Clark is at least somewhat correct. The $183 million number is based on current funding projections. If more money (or less) money becomes available for regional projects in the next year, then the overall figure from which that 10 percent amount is derived would change. He’s also correct—theoretically—that the State Transportation Improvement Program “is not the only potential source of state funding.” It is, however, the only source of NCDOT funding, Meister says. In theory, the legislature could decide to appropriate more money to light rail, though given the General Assembly’s previous antagonism toward light rail, that seems unlikely. Finally, while the project’s final score will be released in August—and the percentage of total possible funds it will receive—Clark is correct that the actual dollar amount will not be unveiled until next year.
This story has been updated to reflect this new information.