Agenda #7a(8)
memorandum
to: Mayor and Town Council
from: W. Calvin Horton, Town Manager
subject: Project Ordinance Amendment to Accept a Transportation Grant
date: June 26, 2006
The attached resolution and ordinance would amend the budget prepared on October 24, 2005 which included estimates for grants that have now been awarded to the Town of Chapel Hill for the new Town Operations Center. The ordinance would also revise the project budget to reflect a technical change in the handling of sales tax on construction projects.
Project ordinances for the Transit portion of the Town Operations Center were prepared on October 27, 2003, and amended on November 24, 2003, June 14, 2004, June 30, 2004, November 22, 2004, June 20, 2005 and October 24, 2005. At the time the project ordinances were prepared, the exact amount of some grants was unknown. The attached resolution would authorize acceptance of one new grant for the Transit portion of the Town Operations Center. The new grant replaces a previous grant estimate.
The Town of Chapel Hill has been awarded a grant for the new facility by the Federal Transit Administration in the amount of $4,900,000 for construction of the transit portion of the Town Operations Center. The federal portion of the grant is $3,920,000 (80%); State funds totaling $490,000 (10%) have been requested; and local matching funds of $490,000 (10%) are available in the Transportation Department’s capital reserve fund.
Sales tax paid to contractors is reported annually and reimbursed to the Town by the State. At the time the Town Operations Center project budget was initially adopted, sales tax paid to contractors was included in the budget as an expense for building costs and as revenue for sales tax refunds. Because we are recording future sales tax reimbursements as a reduction to the cost of building at the time that we make vendor payments, we need to reduce equally the budget for building costs and revenues from sales tax reimbursements. The change in the way we report sales tax has no overall effect on the amounts available for the project.