Tracking Light Rail: Some Perspective on the Decision Ahead

low_income_minority_pop_dolrtI’ve had some interesting conversations (and some alarming ones) about the planned Durham-Orange light rail project. As you may know, GoTriangle recently announced a funding setback caused by the NC General Assembly’s ill-reasoned, regressive 10% cap on funding such projects. Current estimates suggest the shortfall will require Orange County to contribute an additional $40 million over 10 years for  construction.

Opponents say the project cost is too high. Advocates point to the opportunity cost. Pay now or pay later, they say.

Unfortunately there has been incomplete and misleading information circulating as the Orange County Board of Commissioners considers the funding challenge.  I tackle three topics in particular here, recognizing that not everyone will agree with my take:

  • Orange County is not being asked to commit to more local funding…yet.

As noted in this editorial signed by me and several colleagues, Durham and Orange counties are being asked to provide non-binding letters of intent to work with our partners to identify funding for the shortfall.

This letter would allow GoTriangle to submit an application to move into the next phase of the lengthy federal New Starts program process. The letter would not require the county to guarantee new funding for the project.

Instead, in April, 2017, the Board of Commissioners will receive and analyze updated cost and revenue assumptions from GoTriangle. They will have until June, 2018, to make a formal decision about committing new local funds or withdrawing from the federal process altogether.  (Subbing in a “Plan B” is not possible in this process.)

Long range planning requires sustained commitment, and backing out too early in a process can cost more in the long run than the cost of patient due diligence.

Like many of my elected peers and fellow Orange County taxpayers, I worry about how the County can shoulder an increasing proportion of the project, especially in a time of political and economic uncertainty. But I’m not willing to cede the project without seeing that critical financial data in April, and without considering every realistic option. We are not at a point of no return, so let’s get the best information we can and make an informed decision, not a panicked one.

  • Improved bus service and Bus Rapid Transit (BRT) alone will not solve our problems faster, more cheaply, or more efficiently than light rail. But they are necessary components of a robust, comprehensive transit system.  

As one official has put it, “We’re trying to build a better transit system, not just light rail.”  That’s the right way to look at it.

Without improved bus service across the two counties, light rail won’t be effective. That’s why the current plan calls for more and more rapid bus service, and why proceeds from the half-cent transit tax already are fueling needed changes.  In Chapel Hill and Carrboro, improvements will include BRT from Eubanks Road to UNC Hospitals and on to Southern Village, as well as more accommodating service on many other routes that feed into the light rail system.

Opponents of light rail have thrown around a lot of cost information that lacks a comprehensive, long range perspective.  For example, in a vacuum, comparing building costs “per mile” might lead one to believe that Bus Rapid Transit is “cheaper and more flexible.” But it’s not.

In the Triangle, growth rates in traffic volume has far outpaced highway project estimates. Think I-540, “Fortify 40,” and all those traffic jams from Southpoint to Mebane. If you’ve ever been sandwiched between two GoTriangle buses on Highway 54 at rush hour, you know what irony feels like.

I like buses, but they only go so far in reducing highway congestion, particularly in a corridor that does not have the capacity (or political will) for dedicated lanes that ensure they don’t get stuck in traffic. That’s the case with this project.

Here’s the most interesting statistic to me.  At full capacity, a three-car light rail train can carry 540 people using just one operator.  Five standard busses and five operators would be needed to carry similar volume. People using the train would get to their destination faster, a huge incentive for potential riders.  Meanwhile, ongoing maintenance, fuel, management and replacement costs are higher for BRT:  more moving parts require more people to keep them going.

Ultimately, light rail achieves greater economies of scale, transit volume, efficiency, and timing in a way that better supports our County’s long-range goals.  (See the 2012 rigorous, required Alternatives Analysis for additional information.)

  • Wealthy developers are not the only people that will benefit from the light rail project.

Social equity is a big concern whenever large amounts of public investment are in play (and private investment, too, no thanks to you, Mr. Trump.)  Go Triangle has estimated that 53,000 residents, 25,800 households, and an employment base of 119,100 workers will be served by the light rail project by 2040.  An estimated 13,000 people who are transit dependent (ie: no access to cars) already live within a half mile of the proposed stations, as well as more than 2,600 people who speak English as a second language.

Those statistics speak to the broad appeal and access of the planned light rail route, as does the picture above, which illustrates proximity to low-income census tracts and communities of color. If connecting bus routes were added, we’d see even more. Turns out that while roughly 25% of households in Durham and Orange counties are low-income, 43% of the population that lives along the light rail route is low-income. (And they don’t “all live in Durham,” y’all.) That’s pretty compelling.

Here are some other ways that the project will contribute to social equity (this list is hardly exhaustive):

  • With the addition of a station at NC Central University—which is the result of public input–the project affirms the importance of this HBCU to aspiring and current college students; offers parity of access with UNC and Duke; and opens up opportunities for academic, research, entrepreneurial, and community partnerships like never before.
  • As noted above, the plan improves bus service in both counties, even for those who never plan to use light rail. This tends to benefit people who have the least resources. In Chapel Hill and Carrboro bus service is free, but in all cases, bus transit is cheaper on average than owning a car. In fact, car dependence can eat up to 25% of a family’s income, including car payments, insurance, gas, and maintenance.
  • It opens up access to living wage jobs in both counties that some people can’t reasonably access by transit now. Faster trips mean the potential pie gets bigger for workers, which is really important for those competing for higher wages or better quality jobs.
  • Dedicated affordable housing along the corridor is in the planning stages—both rental and homeownership (although Durham is ahead of the game here.)

If local government gets criticized more for any one thing it is the lack of long-range planning, yet when long range planning actually happens, some people find it hard to stomach. So it goes with light rail. I’m looking forward to hearing the discussion, debate and decision of the Orange County commissioners, whom I respect for their diverse opinions and frames of reference. I hope they’ll agree to see the process through to the next benchmark. It’s a low-risk proposition to do so.

5 Things I Like about the FY 2016 Budget (and a Few Caveats)

I’m really impressed by Carrboro’s staffing team. Not only do they do their jobs with a passion for our town, but they do what they can to keep our annual budgets as conservative as possible. They chase down grant funds, manage their costs, and find ways to hedge against uncertainty, such as executing fuel contracts or bidding out services. So much of our staff’s work transcends a budget year, from development review to public works projects to planning recreation and parks activities, so it’s fair to say that no department sits on its laurels until the last minute when it comes to budget planning.

Stop reading now if you hate budget talk, and simply take away that I’m proud of the way Town staff conducts day-to-day business with an eye always on the future.

If you actually like budget talk, here are just a few highlights of the proposed FY 2016, $21.5 million budget…and also a few scary things to think about.

A Few of My Favorite Things

Here are five things about the budget that I think are particularly good:

  1. No Tax Increase. In contrast, the Town of Cary is proposing a property tax hike of $.03 per $100 of valuation, in part due to debt service from past bond issues and the loss of the privilege license fee (see #1 under “Scary Things”).
  1. Progress on Housing Wage. In 2013 the Board of Aldermen committed to bring salary levels for all full-time equivalent staff to a “housing wage,” a figure that changes every few years but that represents a wage adequate to afford rents in our area. (Currently the figure is $31,158.) It’s a delicate matter to raise salary ranges, and phasing was the right way to go. Although the Town anticipated achieving the goal in 2020, due to cost of living increases and good budget management, we are able to do more this year than anticipated and will meet our goal three years ahead of schedule.
  1. Police Body Cameras. I know there’s lots of concern about this expenditure. Not only is it a big cost—about $91,000—but many people are concerned about the general efficacy of body cameras, particularly the potential for misuse. It’s a pretty robust debate that will continue, but there is consensus among the Board of Aldermen that the Town must take on the tough challenges necessary to reduce implicit and explicit racial bias in policing (and frankly, in other aspects of our governmental and civic life.) With strong policies in place that have been collaboratively developed with the ACLU, I am comfortable with the risk we are taking by authorizing body cameras. I am also comfortable with de-authorizing them if they prove unhelpful or flat-out harmful. (More on this and related racial bias remedies in a future post.)
  1. Substantial Increase in Affordable Housing Fund. Earlier this year, Carrboro’s Affordable Housing Fund was capitalized at roughly $35,000, barely enough to cover the cost of one mobile home. The Town’s Affordable Housing Strategy is raising the bar, and the Board is up to the challenge. This year the Board will proactively ensure the Fund is worth at least 1 penny on the tax rate, similar to Chapel Hill’s commitment to A Penny for Housing. But we’re doing even more than that. Our plans are to devote the proceeds from the sale of an office condominium to the fund as well (the condo had been purchased to facilitate an economic development deal that has now met its goals.) Once the sale is complete, the Fund will be worth closer to $760,000—a real boost to non-profit developers, providers, and individuals who need help staying in their homes.
  1. Planning Software. OK, I could talk about a whole lot of other things, but this is just a guilty pleasure of mine. At $230,000, development services and permitting software is almost three times the price of police body cameras, but it promises to help the Town streamline these critical processes for developers large and small. As with all things, there will be fits and starts, but this is a no-brainer to facilitate a better process and more reliable communication and accountability.

Some Scary Things

Remember what I said about no tax increase? I’ll be honest, it may not last. Here’s why:

  1. The General Assembly. In all sorts of ways, this elected body is demonstrating that big government is no longer a dirty word for the conservative set. I cannot count on my fingers and toes the roll-backs to local authority that have been sent down from the highest horses, including those that affect our ability to diversify revenues and reduce burdens on property owners. The most recent and scariest proposition is the reallocation of sales taxes. Under this plan, Orange County and Carrboro would lose significant revenues, a loss our town could not absorb (upwards of $1 million by one estimate.)
  1. Chapel Hill Transit is in desperate need of capital investment, as I noted in an earlier post. A projected 4.6% increase in operating costs this year do not take into account the purchases and improvements that will need to be made over the next ten years. Costs of maintaining a highly-functional, safe, goal-oriented transit system will continue rise, and at a much steeper pace, if no new federal, state or private funding can be found to assist. Watch this space for more on that in the coming months.
  1. Stormwater Mitigation. Practically every neighborhood in Carrboro has been affected by flooding over the past few years, particularly older neighborhoods with stormwater infrastructure that pre-dates 1995 Town standards. A recent examination of particular problem areas has flagged what a complicated and expensive issue we are facing as a Town. The flooding problems in question could cost more than $1.6 million to mitigate, on top of numerous other capital improvements already in line for funding…when it’s available. Some people expect there to be cost-sharing by affected homeowners, while others feel a more aggressive effort to address stormwater infrastructure should be developed and floated with a bond issue. Either way, we’ll all feel the financial pressure in future budgets.

Next Steps in Budget Planning

The staff presentation to the Board of Aldermen can be viewed here. A public hearing on the budget is Tuesday, May 26th, with an anticipated final vote scheduled for the June 16th Board meeting. Please weigh in!

Yes, Fare Free. (But It Isn’t Free.)

BOA Parade

Back in December, the Carrboro Board of Aldermen took part in the annual holiday parade through downtown Chapel Hill and Carrboro, sporting a banner with our new logo and leading a Chapel Hill Transit (CHT) bus laden with bicycles and, of course, one hula hoop. (For the record, one of the bikes was mine.) We may be a motley bunch in those Santa hats, but when it comes to boosting Carrboro—and public transit—we’re uniformly enthusiastic.

How to protect and strengthen our fare-free transit system is becoming an increasing concern, however. Federal and state revenues are flat or declining, and the fleet is aging badly. Some buses are so old their parts are no longer manufactured. Just to get to industry averages, CHT must replace a total of 42 buses and 13 EZ Rider vans yesterday.

Unfortunately, Santa won’t be delivering any of those vehicles next year.

Current estimates show that necessary capital expenditures and increases in operating expenses will cost CHT upwards of $80 million over ten years.  This doesn’t include service expansion, facilities upgrades, or the addition of Bus Rapid Transit (BRT) on major travel corridors.  Carrboro’s share of this cost isn’t yet clear, but it will be far more than, well, the cost of building the proposed Carrboro Arts and Innovation Center.

You might be interested in learning more by viewing these quick CHT system facts, or if you’re a glutton for punishment, the detailed financial sustainability presentation delivered to the Board of Aldermen in January.

I’m a member of the Chapel Hill Transit Partners Committee, which comprises delegates from the Town of Chapel Hill, Town of Carrboro, and UNC-CH. Most everyone on the board is convinced fare-free is the way to go to reduce the number of under-occupied cars heading to our downtowns, and to reduce the parking needs in town and at the university and hospital. Greenhouse gas reduction is a major appeal, as is knowing that free transit is a significant help to seniors, people with disabilities, and people of modest means.

More than one news outlet has reported that CHT is considering dropping its fare free policy in order to purchase buses. This is not quite true. As part of its sustainability planning, the system is refreshing past analysis to make sure that its board, elected officials, and the public are very clear about the trade-offs between charging fares and meeting ridership and other community goals. We want to see the numbers, of course, but we have a strong hunch they won’t be compelling enough to restore any sort of fare system.

Of course we all know transit isn’t really free anyway — even systems that charge fares require substantial subsidy. Ours is paid for with property and sales taxes, student fees, and by tax dollars passed through via grants from the state and federal government, among other resources. It is a “pre-paid” service: whether you choose to use it, you pay for the opportunity to do so. For those living in neighborhoods with little or inconvenient bus service, this doesn’t land well, but when carless people pay for local roads and childless people pay for our A-rated schools, we can’t say there isn’t precedent for sharing the load in our communities.

Chapel Hill Transit takes 7 million car trips off the road, carrying people more than 2.5 million miles in Chapel Hill and Carrboro every year. Imagine the impact of parking and traffic if there were no buses, or even just half of what we have now. To me, transit is fundamental public infrastructure — as fundamental as roads and schools.

So how do we pay for the new reality of stewarding a fare free transit system? Where will that $80 million come from? Here are some possibilities:

  • Municipal budgets, with or without new tax increases.
  • Municipal and/or County bonds.  Orange County already plans a bond issue in 2016—perhaps transit will be included?
  • Dedicated funding, such as parking fees.
  • Economic development taxes (which means increasing economic development!)
  • Advertising sales and sponsorships, such as bus wraps, on-bus adds, corporate adopt-a-bus programs and other creative ideas.
  • New public and private grant resources.
  • Allocations from Orange County and Chatham County, which benefit (or could) from connectivity to CHT routes and a regional approach to local transit.
  • Fee for service, for example, offering to operate Orange Public Transportation (OPT) for a fee.
  • Cost savings, for example, leasing rather than owning buses, or combining purchasing power or maintenance operations with neighboring transit systems for efficiencies.

It’s too soon to comment on the most likely sources, much less a timeline for raising the necessary funding. What I can say is that Carrboro and all of our transit peers will have to commit to significant increases in their transit investments within two years, a factor that already is informing my decisions about other financial investments the Town of Carrboro is considering.  There will be some compromises, but I’m confident one of them won’t be our fare-free system.

Carrboro Arts and Innovation Center: Smart Public-Private Partnership?

At Mayor Lavelle’s suggestion, the Board of Aldermen will hold a public hearing on January 20th to get feedback on a proposed “Arts and Innovation Center” and something similar to a synthetic Tax Increment Financing (TIF) scheme to pay for it. (I say similar, because in this case public financing would be repaid with new tax revenues generated by a not-yet-approved hotel, as opposed to the incremental increases in property tax revenues that a TIF or synthetic TIF implies.) Read about the proposal and the public hearing here.

Because the town would substantially finance and own the building, the partners who are proposing the project have built into their narrative the words “public-private partnership.” People like me love to use those words to signify cooperation, “win-wins,” and other non-partisan kinds of things. In all cases, however, the word partnership needs to be taken quite seriously.

In this particular case, however, town government has been asked to entertain and pay for a high-risk plan that it has had no substantive role in designing, and to consider it under some ‘urgent’ conditions that could set the town up for failure right out of the gate. As some Aldermen have noted, this doesn’t feel like partnership. It feels like manipulation.

Fiduciary Duties of the Partners

It’s fair to say that the Board of Aldermen have received some mixed messages from the ArtsCenter and Kidzu, the two non-profit partners that would benefit most from the deal.  Neither seems to be driving the conversation from a position of strength or certainty. I’ve heard from one ArtsCenter board member that he personally “doesn’t care” if the building gets built–the ArtsCenter can always just function in place. (This same board member told me that the ArtsCenter, which has a reputation for regularly operating at a deficit, doesn’t have a comprehensive business plan.) I’ve also heard from one Kidzu board member that she’d have no problem with the interactive children’s museum owning a building outright, as long as the price is right. If that’s the case, why not start there, rather than with a complicated partnership with another non-profit that lacks a comprehensive business plan?

Both these comments are disconcerting to me. Non-profit board members have fiduciary responsibility for their organizations and their financial stability, but there is no evidence that these two boards have made the case internally—much less externally—that the proposal on the table makes the best business sense for them, their stakeholders and their long-term sustainability.

For our part, the Board of Aldermen has a fiduciary responsibility to the taxpayers. Part of this duty is to provide economic development financing only when there is a fully-vetted “but for” argument—meaning, but for public financing, the capital or economic development deal would not work, and the resulting opportunity cost for the town would be too substantial to ignore. In all cases, such an investment needs to be right-sized and, in my opinion, needs to ensure the economic benefits are shared by the people who need those benefits the most: people who need the good jobs, higher wages, increased property values, lower taxes, or infrastructure improvements generated by the development.

I hope the public hearing will help us all better understand the concerns and boundaries inherent in each partner’s fiduciary duties, including aversion to financial risk.

What Should Be on the Table?

I also hope the public hearing will help us better understand the true (rather than supposed) benefits of the proposal, whether further conversation should be scrapped, or whether some other iteration of public-private financial partnership could be the better way to go.

Without additional public input from people independent from the proposed financial partners, I cannot support the proposal as is written now.  I think all of the following need to be put on the table as negotiable:

  • Objectives of the project
  • Location for the project
  • Timeline for development, from raising the financing, to transition plans for partners, to breaking ground and opening the doors
  • Budget parameters
  • All available options for public and private financing—especially the latter
  • Architecture, including choosing the design firm and determining the shape, size, and appearance of the building
  • Tenants, financial partners, and standards for their sustainability, business plans, and board composition
  • Ownership structure, and thus governance structure, for the building
  • All pro forma calculations and assumptions
  • Parking and infrastructure—and who pays for it

In other words, unless the public overwhelmingly demonstrates otherwise on January 20th, I think we should start the conversation from scratch with the ArtsCenter and/or Kidzu boards, and perhaps additional, stronger or more certain partners.

Some Other Questions to Consider

The notice of public hearing outlines some fundamental questions the Board of Aldermen has for the public. Here are some of my own:

  • What should be the future of the Carrboro Century Center if the town chooses to participate in this venture? (Food for thought: Carrboro’s Vision 20/20 document which is considered “policy” on most days, can be found here. I’ve compiled cites pertaining to the Century Center here.) Bear in mind the town also owns an empty condo downtown that is valued in excess of $500,000.
  • Currently recreation and parks investments constitute 7% of the town’s budget, or $2.2 million in 2014-15. This includes just over $500,000 in capital funds. Is there a trade-off that could help pay for the cost? For example, could the town make adjustments to its recreation and parks budget, such as outsourcing arts programming to the partners involved in the Arts and Innovation Center?
  • The proposal asks us to borrow against future tax revenues generated by a not-yet-approved new hotel downtown. Are there other capital improvements that the town could pay for with that tax revenue that otherwise won’t get paid for? What does this mean for the individual taxpayer?
  • The building would require a great deal of accessible parking, especially for parents with young children. Would a traffic and parking analysis demonstrate that another site would be better than the one suggested on the corner of Main and Roberson Street?
  • Racial equity questions are looming large in policing, but also as relates to economic development strategies, including affordable housing and job creation. If this building and partnership concept were designed to meet the town’s goals to advance social and economic equity, what would it look like? Who else would be involved in the visioning?

I’m looking forward to hearing from the public on January 20th on these and other important questions. Ultimately I’m confident the town will make a good decision—but only with the guidance and good input from a diverse public. Please join in!

Let’s Make Staff Pay Better than McCrory Would

First it was drought.  Then the wettest year any of us could remember.  And now two snow events in a week, one that revealed Triangle traffic to be almost as bad as Atlanta’s.  Imagine.

But when all the jokes about Yankee drivers and fair-weather competition (and even both at once) finally waned, it looked like Carrboro fared pretty well.  I heard plenty a tale of abandoned cars and long walks home, but also of shared rides and helpful elbow grease and impromptu slumber parties with old friends.  I also heard lots of praise for Carrboro’s public safety officers and public works staff, and also for Chapel Hill Transit.  Everyone worked incredibly hard to make our roads, homes, schools and businesses safe and accessible again.

We were lucky, but also prepared.  Skilled personnel, hard workers, competent management—when we think of infrastructure we don’t always consider our staff as much as we consider our stuff.  The plows, trucks, pipes, streets, gutters, sidewalks, bike paths.  None of that does anyone any good without the people to operate and/or maintain them.

I attended the February 11th meeting of the Carrboro Board of Aldermen, which included a public hearing about the budget.  Thanks to one resident’s impassioned comments, discussion turned to staff salaries and the fact that many Town workers, having spent so much of their careers here, still are not earning the midpoint of their salary range.  Revenues have remained relatively flat with the economy, and without another way to pay for adjustments beyond occasional cost of living increases, the Town has had to defer plans to correct pay equity issues.

As in so many areas of government, there are value conflicts here.  We value competent people, but don’t pay enough to retain them.  We brag on Carrboro’s high quality of life, but it’s still out of reach for many of our public workers who must find housing and schools outside the county.  We value a budget that does not increase taxes, but do so at the expense of the people that make that possible.

Governor McCrory’s recent teacher pay plan calls for raising the starting salary of first-time teachers, or 25% of NC educators, but not the salaries of experienced teachers.  I heard Rep. Graig Meyer say that one reason for doing so is to divide and conquer—to turn seasoned teachers against their younger counterparts, splitting what is currently a united front.  The Town of Carrboro had no such intention when it revised pay scales to meet the market years ago, but doing so led to the pay equity issues that some tenured staff experience now.  If the effect is the same—that we are failing to do right by our Town staff—then we need to do something about it.

I believe the Board of Aldermen wants to do the right thing, but I also know the decision will be difficult.  Raising property taxes even a penny can hurt property owners…and votes.  Nonetheless, our values are reflected in our budget.  I pledge to support thoughtful, constructive efforts to make sure the two are truly aligned.