There are several potential sources of federal and State funding for the transit transfer center

ATTACHMENT 2

STAFF REPORT

TRANSIT CENTER – POTENTIAL FUNDING SOURCES

There are several potential sources of federal and State funding for the transit transfer center. We have summarized the programs and provided an assessment of the status of funding below. We have attempted to address those sources of funding identified by the consultant.

Surface Transportation Program

The bulk of federal transportation funding is provided to the State through the Surface Transportation Program. These funds are allocated by the North Carolina Department of Transportation through the Transportation Improvement Program. Although these funds may be used for roadway, public transit, bicycle or pedestrian projects, they have traditionally been allocated to roadway projects.

Recently, the Town has reallocated Surface Transportation Program funds previously allocated to the Homestead Road project as part of the funding for the Chapel Hill Transit Maintenance and Operations Center. In a similar manner, the Town could pursue funding a transit transfer center by identifying a project already funded in the Transportation Improvement Program and proposing those funds be reallocated. The Town has included a request for the funding of a transit transfer center in its list of public transit improvements, which have been included in the Transportation Improvement Program.

At this time, the Town has the following projects funded in the 2004-2010 Transportation Improvement Program:

South Columbia $850,000 (FY2005)

$2,000,000 (FY2007)

Weaver Dairy Road $2,700,000 (FY2005)

$8,300,000 (FY2007)

The Town could also pursue funding for the transit transfer center as part of the negotiations between the Durham-Chapel Hill-Carrboro Metropolitan Planning Organization and the North Carolina Department of Transportation for the development of the 2006-2012 Transportation Improvement Program. The State is anticipated to release their draft 2006-2012 Program in December 2004. In early 2005, the Metropolitan Planning Organization and the Department of Transportation will begin discussions to develop a final Transportation Improvement Program. During these discussions, the Town and the Metropolitan Planning Organization could identify funding of the transit transfer facility as a high priority.

Surface Transportation Program Direct Allocation

The Durham-Chapel Hill-Carrboro Metropolitan Planning Organization is annually allocated approximately $3 million dollars of federal surface transportation program funds. These funds are allocated by the Transportation Advisory Committee. The Town of Chapel Hill has received funding for public transit, bicycle and pedestrian projects. The transit center would be eligible for funding from this program. At this time, the Direct Allocation funds have been fully allocated through fiscal year 2009. Funding might be available beginning in FY2010 for the transfer center from unallocated monies. An alternative option would be for the Town to reallocate Direct Allocation funds from currently funded projects. These projects include:

Morgan Creek Greenway $80,000 (FY2005)

$640,000 (FY2007)

Dry Creek Greenway $64,000 (FY2006)

$560,000 (FY2008)

Upper Booker Creek Greenway $64,000 (FY2006)

$756,000 (FY2008)

These projects represent $2,164,000 in federal funding. With the required 20% local match the total funding available from these projects totals $2,705,000. The Town could propose that the funding for these greenway projects be reallocated to the transfer center and that the greenway projects be funded in fiscal years 2010 through 2012 from unallocated funds.

Urbanized Area Formula Grant

The Durham-Chapel Hill-Carrboro Urban Area receives an annual formula allocation from the Federal Transit Administration. These funds are split between Chapel Hill Transit, Durham Area Transit and Triangle Transit Authority based on population and service levels. Chapel Hill receives approximately $1.6 million dollars annually from this program. These funds are traditionally used for ongoing transit operations and small capital projects.

Transit Discretionary Program

The Federal Transit Administration allocates funding for transit capital projects through an annual discretionary program. The North Carolina Department of Transportation has traditionally developed a single application for discretionary funding which includes requests for funding from transit systems throughout the State. The Federal Transit Administration will provide the State with a single discretionary allocation which the State then will use to fund specific projects. In the past large capital projects have only received partial funding through this process. In FY04 the Town received approximately $1.3 million in federal funding from this program.

Congressional Earmark

A portion of federal transit administration funding is allocated on a project by project basis though the congressional earmark process. Securing funding from this source will require the support of congressional representatives. Although funding through the earmark process has recently been limited to approximately $1 million per project per year, multiple years funding could pursued to secure the necessary funding.

Congestion Mitigation Air Quality

Earlier this year Orange County was included in the designation of the Durham-Chapel Hill Carrboro Urban Area as a air quality non attainment areas. This designation will allow Chapel Hill to apply for Congestion Management Air Quality funding. Transit improvements are an allowable use of these funds, although projects must show a direct impact on improving air quality. The North Carolina Department of Transportation has managed the Congestion Management Air Quality program and it is our understanding that the State will shortly release new guidelines for project applications, project evaluation and funding. It is unclear how much funding might be available through this program.

Transportation Infrastructure Finance and Innovation Act

The Transportation Infrastructure Finance and Innovation Act is designed to provide credit assistance on flexible terms directly to public-private sponsors of major surface transportation projects to assist them in gaining access to the capital markets. Federal Transit Administration staff indicates this program has not been funded. No credit assistance has been provided to any transit projects in North Carolina.

Conclusion

In order to secure funding in the timeframe necessary to construct the Transfer Facility by 2009 the Town may need to pursue several different approaches. The Town could request funding through the Congressional earmarking process and the North Carolina Statewide Transit Discretionary Grant program. Although funding in any given year would not provide the entire estimated cost of the transit transfer center, allocations over several years could provide the necessary funding.

We will have to exercise care not to compete against ourselves for funding needed to pay for the new Transit Operations Center.