The gross cost of the Durham-Orange Light Rail Transit Project was revealed to the Orange County Board of Commissioners by financial advisors during a meeting held earlier in the week.

According to Ted Cole, a senior vice president at Davenport & Company, the actual price of the proposed commuter rail system exceeds the sum of capital costs estimated by project managers at GoTriangle.

“It’s a capital cost up front of $2.38 billion, but under the current scenario, with the debt that’s assumed and the way that debt has been structured over time with interest expense, you’re looking at about $3.3 billion,” he reported.

That revelation led Commissioner Earl McKee to consider how an additional $920 million in expenses would impact financial models that split the cost of the project between Durham and Orange counties.

“That jacks the percentage that the counties of Orange and Durham pay from 40 percent to at least 52 percent, and if you use 52 percent, the cost borne by the counties, rough calculation, is about $1.7 billion — Orange County: about $394 million,” he figured.

McKee went onto express distaste at the thought of project costs that are no longer reflective of expense estimates released by representatives of GoTriangle over the past year.

“In December, we were sold a bill of goods,” he attested. “$4 million a year for 10 years was going to satisfy the need; I’ve not heard a word about $4 million dollars a year for 10 years since that point.”

Those estimates are now contingent upon the approval of state and federal funding requests made by GoTriangle, which Cole cited as having no further means to pay for the planned rail corridor.

“All financings at this point as we understand it, the approach is that they’ll be secured by light rail assets subject to annual appropriation by GoTriangle,” he explained. “Beyond the revenues identified throughout this presentation, there are no additional GoTriangle revenues available to fund this project.”

Concerns over the financial burden that the project may impart to residents were voiced during a public comment period by Paul Rockwell, who waxed poetic on the prospect of a 40-year debt repayment plan.

“To me, it’s a sweet dream that very quickly turns into a nightmare when I start thinking about the huge, mind-boggling financial responsibility,” he mused.

Those concerns were rebuffed by Maria Palmer, a member of the Chapel Hill Town Council who espoused the benefits of public transportation during her electoral campaign.

“We’re building this for the future — not for us grey-haired folks, but for the future of our county,” she emphasized.

Benefits notwithstanding, local resident Ken Larson claimed that other public transportation initiatives would receive less funding from the county if board members were to approve the project.

“What’s the probability that we’re going to have improved bus service across all of Orange County, because that’s one of our goals,” he asked. “That probability is low, and that’s because this project is going to cost so damn much that it’s going to drain money away from those services.”

Financial advisors from Davenport & Company have briefed county officials in the past on financial matters, but Cole noted that this situation may be particularly tenuous due to exceptionally tight margins.

“When you look at this long-term model and you look at the magnitude of the project, the magnitude of the budget, and you look at the cash balances attributable to Orange County, it’s a very, very thin margin,” he admitted.

Board members are expected to consider the incorporation of the Durham-Orange Light Rail Transit Project into the county transit plan and hold an additional public hearing on April 18.

Render by GoTriangle.

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