CTAG_3.20.07

PRESENT:
Gerald Fox, Co-Chair, Mecklenburg County
  Amy Aussieker, Co-Chair, City of Charlotte
Mary Barker, Cornelius
Bob Bischoff, Mecklenburg County
Fred Bryant, Davidson
  Mike Bryant, Huntersville
  Christopher Edwards, City of Charlotte
  Aaron Houck, CMS
Larry Bumgarner, Mint Hill
Michelle Mallard, City of Charlotte

STAFF: Ron Tober, Dee Pereira, John Trunk, John Muth, David McDonald, Pamela Lunsford

ABSENT: Robert Zuckerman and Larry Lester
MEETING TIME: 7:30 - 8:45 AM

I. Call to Order
Gerald Fox, CTAG co-Chair, called the meeting to order at 7:30 a.m. and introduced the newest member, Michelle Mallard.

II. Approval of the February 20, 2007 Meeting Summary
The Meeting Summary was approved as written.

III. Action Items

A. Revision of Procurement Policies*
John Trunk, CATS' Chief Procurement Officer, presented CTAG with a review of CATS' Procurement Policies, previously adopted by the MTC in June 2002, to get feedback on proposed changes. He said there were very minor changes to the polices, with the exception of FTA Circular 4220.1D, which has been updated by the FTA since the MTC's last review of the Policies and is now titled Circular 4220.1E. Under the Circular 4220.1E, as a FTA Grantee CATS procurement polices most conform to the FTA's Third Party Contracting Requirements, which include free and open competition and showing no local preference, in the solicitation, award and administration of any federally funded contracts.

Mr. Trunk said revising the Procurement Polices will continue to provide the specific guidelines that CATS' staff will use in the procurement of specialized transit equipment and services with federal, state and local funds.

Mr. Fox asked if there were any major changes in the FTA Circular 4220.1D. Mr. Trunk said there aren't any major changes to the circular. He said the changes that were made make it necessary for grantees to do more self-policing and self-auditing to make sure they are in compliance with fulfilling their obligations to the FTA. He noted that this change to the circular reflects a general trend that has been going on for the last few years.

For informational purposes, Mr. Trunk gave CTAG additional information on CATS Procurement Policies. He said a component that is unique to CATS is the competitive negotiated process for purchases like buses, which is more like a request for proposal than a traditional invitation to bid. Mr. Tober said CATS usually uses this to purchase equipment and he noted that it was used for the purchase of light rail vehicles. He said it allows staff to consider life-cycle costs associated with the vehicle and the bidder's track record of providing quality and reliable equipment. He added that it is now a common practice in the transit industry to use competitive negotiated procurements to qualify bidders.

Mr. Fox asked if there was much competition for bus manufacturers at this time. Mr. Trunk said yes, noting that there are at least half a dozen manufacturers.

Mr. Trunk noted that none of the manufacturers are pre-qualified, saying that they are each evaluated on a variety of criterion including quality, costs, background and the company's ability to sustain itself in a five-year contract. He said it is a fairly exhausting evaluation process, but it insures that CATS is getting the best value.

A motion was made by Amy Aussieker to recommend the Revised Procurement Policy changes to the MTC. It was seconded by Mary Barker and recorded as unanimous.

IV. Discussion Items
A. FY08/09 Transit-Capital Program *
Dee Pereira presented the FY2008-12 Transit Capital Investment Plan, which reflects revisions to the Debt Services Expense. She said the five-year plan focuses on completion of the LYNX Blue Line, advancement of the 2030 Transit Corridor Plan, and replacement and expansion of revenue vehicles. She said it also focuses on implementation of the 2007 County-wide Transit Services Plan, design and/or construction of transit facilities, technology, safety/security, and asset procurement and maintenance.

Mr. Fox asked if staff included state grants in the funding projections for the North Corridor. Ms. Pereira said no, adding that staff hasn't projected any funding for the North Corridor. She said staff will be waiting for the financing plan to be approved by the MTC before any outside funding is factored in.

Mr. Fox asked if the operating balance is from the sales tax. Ms. Pereira said a large portion of the operating balance is derived from the sales tax.

Mr. Tober noted that if the North Corridor gets approved by the MTC, the numbers presented will change. He then said the current debt service payment for FY08-FY12 starts at $17,591,526 in FY08 and ends at $12,918,207 in FY12. He said if CATS didn't issue any new debt for the other corridors, those numbers are the debt that the City is obligated to pay. He noted that if the Northeast Corridor proceeds and the North Corridor gets approved additional debt will be issued.

Mr. Tober said when staff was putting together the operating budget for the next two years, debt was a major factor. He said staff had to make sure that the operating balance was big enough to meet the net debt service coverage ratio. He said it also serves as a check to make sure we have enough money going into the capital budget to cover debt service payments with a little cushion on top.

John Muth continued the presentation on the Capital Program.

Bob Bischoff wanted to know where Car #85 would be stored. Mr. Tober said staff will talk to CTI about that. He said CTI's museum facility is between Bland Street and Park Avenue and that could be where Car #85 will be kept when it's not in operation.

Christopher Edwards asked if they will have crossing gates uptown. Mr. Tober said there will be crossing gates and signal lights at grade crossings.

Mr. Fox noted that there is about $150 million in capital projects over this four to five year period. Mr. Tober said that number consists of non-rapid transit projects. He said once the rail system is in place, there will be capital expenditures associated with it. Mr. Fox said he pointed that out because at some point CATS will have to produce enough revenue over the next five years to maintain the current bus system, as well as the LYNX system. He suggested that staff points that out to the MTC and the public so they can know if the sales tax is repealed, money will have to be produced some other way to maintain the system or service will have to be reduced.

Mr. Tober said the City Council will take action to approve or disapprove the MTC's decision on the budget. He noted that under the new governance, the County Commission is not in the approval posture as far as the transit is concerned.

Larry Bumgarner asked if the debt financing is for all of CATS' operations. Mr. Tober replied yes.

Mr. Bumgarner asked for fare revenue numbers for buses and light rail, as well as the ridership numbers. Mr. Tober said that's in the information staff gave you on the operating budget, so you should have that in your material.

Mr. Bumgarner asked if anybody knows how much their towns are paying toward the half-cent light rail tax. Mr. Tober pointed out that it's not a half-cent light rail tax, but a transit tax. He said they do not have that information from the state and added that it's allocated based on population. He noted that there is a City piece, County piece and the individual towns. He said staff can get that information. Mr. Bumgarner said that information needs to be included in the records. Michelle Mallard asked that they follow-up on that and tell her how much each town is actually contributing toward the half-cent sales tax.

Christopher Edwards said he was concerned about the possibility of losing the half-cent sales tax and asked if CATS was looking at backup plans to make sure funding is in place if the sales tax is repealed. Mr. Tober said staff hasn't started looking at plans along that line. Mr. Fox said staff should develop a plan and noted that the public should be made aware of what the ramifications would be if the tax is repealed.

Bob Bischoff noted that Pineville elected not to be a part of light rail. Mr. Bumgarner asked him why he thinks that is. Mr. Bischoff said because of density. He said you have to have density to support the light rail.

Mr. Tober said at the last MTC meeting, a public hearing on the proposed fare increase was held. He said several speakers spoke against increasing the fare. He said a couple of the speakers who ride STS spoke out against raising the fare on STS, specifically. He said the MTC requested additional information on STS' costs and want to know what would happen if STS' fare wasn't increased.

V. Chief Executive Officer's Report
Upcoming MTC Agenda Items*
Mr. Tober said the only action item for the MTC this month is the Procurement Policies. He said the Commission will hear information on the Capital Program and staff will provide them with a report on the North Corridor Financing Plan status. He said next month, the MTC will take action on the FY08-12 Transit Operating Program. He noted that after that, there aren't any action items on the MTC's agenda for the next few months. He said that may change, depending on what comes out of the budget discussions and the half-cent sales tax discussion.

Concerning the North Corridor Funding Plan, Mr. Tober said there have been a large number of meetings going on with Mayor McCrory, Commissioner Roberts, the Mayor of the three towns and the Mayor of Mooresville, and NCDOT officials. He said the last of those meetings were in February. He said this month staff has been meeting with the planning staffs of the individual towns and the City of Charlotte to discuss the potential of having development around the corridor's line paid for. He said staff will be giving the MTC a status report on that next week.

He noted that he is cautiously optimistic that a financial plan for the North Corridor that the MTC will find acceptable will be developed by June. He said the key question will be is the MTC comfortable enough with the funding plan, as well as the state's participation at that point in time to authorize staff to spend the $5.5 million budgeted in 2008 to start preliminary engineering in July or August.

He said he is going to Raleigh tomorrow morning to present to the joint sub-committee on Transportation and Appropriation the status of the South Corridor Light Rail Project and talk about the North and Northeast corridors' projects and the state's participation. He said what we will be looking for from the state over the next six to seven years is about $250 million or 25 percent matching support for the North and Northeast corridors.

Ms. Barker asked if anything exciting came out of the meeting with Lowe's. Mr. Tober said Mayor McCrory was supposed to organize that and he isn't sure what the status is.

Ms. Barker asked if there was anything new from Iredell County. Mr. Tober said no. Ms. Barker said she had some friends up there who say there is a group of citizens who are working on this with the Commissioners, but noted that she didn't have any information beyond that.

Mr. Tober said Randy Kincaid has been very active with Iredell County and there is a meeting scheduled with Marion Crowell of NCDOT and Judge Collier in early May. He added that Lowe's, as well as the hospital, were very active on this issue. He noted that while there are efforts being made with the primary businesses around Mount Mourne, NCDOT, and the County Commissioners, the state's participation in the North Corridor is critical because there is about a $65 million to $70 million funding gap and if the state does not participate that means the size of the gap is doubled.

Mr. Bischoff asked if there are any updates on the Center City Streetcar. Mr. Tober said the big issue is that the FTA's current rules are not very supportive streetcar projects. He said if the North Corridor Project funding plan gets approved, then we will be moving ahead with that and it will consume our available resources. However, he said if the North Corridor Project funding plan is not approved, it is likely that the streetcar project will be one of the next projects in line if the FTA's rules related to the Small Starts Program are loosened up a bit.

Concerning the LYNX Blue Line, Mr. Bischoff asked if the decision to open the light rail early will be made in May. Mr. Muth said yes, saying that in May staff would have more milestones achieved and be in a better position to make that decision.

Mr. Bischoff asked if any thought had been given to opening a small part of the line on a weekend, as sort of a public introduction to the light rail. Mr. Muth asked if he meant in the next few months or later on. Mr. Bischoff said later on in the fall closer to the opening date. Mr. Muth said there have been conversations about that, but no plans have been finalized yet. Mr. Bischoff said he suggested that because it would be a good public relations idea.

Ms. Mallard noted that there has been a lot of talk about the LYNX Blue Line going over budget. She asked if staff is communicating to the public how the money is being spent. Mr. Muth said staff continues to update the public and give the City Council and MTC updates on the budget.

Mr. Fox asked if there were any funds noted in the budget for possible claims. Mr. Muth said the portion of the $462.7 million does not assume any recovery of any funds.

VI. Adjourn
The meeting was adjourned at 8:45 a.m.

NEXT CTAG MEETING: TUESDAY, APRIL 17, 2007, 7:15 A.M. AT THE VEHICLE MAINTENANCE FACILITY.

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