Interoffice Memorandum
DATE: October 30, 2024
TO: Mayor Jerry L. Demings and County Commissioners
THROUGH: N/A
FROM: Joseph C. Kunkel, P.E., Director, Public Works Department
CONTACT: Brett W. Blackadar, P.E., Deputy Director
PHONE: (407) 836-7805
DIVISION: N/A
ACTION REQUESTED:
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Consent and approval of Locally Funded Agreement between the State of Florida Department of Transportation and the Central Florida Commuter Rail Commission and Three Party Escrow Agreement as approved and executed by the Central Florida Commuter Rail Commission at its November 14, 2024 meeting; and ratifying the Mayor’s prior action regarding the Locally Funded Agreement at the CFCRC’s November 14, 2024 meeting, in his capacity as a board member of the Central Florida Commuter Rail Commission. All Districts.
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PROJECT: N/A
PURPOSE: SunRail revenue operations began on May 1, 2014, and in accordance with the conditions in the original agreement, the Florida Department of Transportation (FDOT) was responsible for operating and funding SunRail for seven years. Responsibility for SunRail operations was scheduled to shift to the Local Government Funding Partners (LGFP) that comprise the Central Florida Commuter Rail Commission (Orange, Osceola, Seminole, and Volusia Counties, as well as the City of Orlando) seven years after commencement of revenue operations, essentially in 2021. However, since the full 61- mile SunRail system was not yet complete in 2021, FDOT and the LGFP negotiated an extension of the funding period with FDOT ultimately agreeing to continuing funding operations through 2024. We have reached that point where FDOT has fulfilled its initial commitment and the transfer to the LGFP must occur pursuant to the original agreements and obligations.
During this pivotal year in the overall SunRail transition process, Orange County staff has been working with FDOT staff and other LGFP regarding the details of the transition of SunRail operations--now set to occur on January 1, 2025. At the March 26, 2024 Board of County Commissioners (Board) Meeting, the Board approved a new Operations Phasing Agreement, as well as a Third Amendment to the Interlocal Governance Agreement; both agreements are necessary to effectuate the SunRail transition from FDOT to the Central Florida Commuter Rail Commission (CFCRC).
The Operations Phasing Agreement, which was approved at the March 26, 2024 Board meeting, is between all five LGFP, FDOT, and the CFCRC. This agreement provides for a phased transfer of the SunRail funding and operating obligations from FDOT to the CFCRC/LGFP and includes a summary of the needed action steps with target completion dates. FDOT also agreed to continue to operate the system for a three-year period after the financial transition occurs on January 1, 2025. The management of SunRail will also be turned over to a contract operator by no later than December 31, 2027. The agreement also includes a summary of FDOT's continued commitments including corridor permitting and financial contributions towards positive train control and vehicle overhauls.
The Third Amendment to the Interlocal Governance Agreement, which was also approved at the March 26, 2024 Board meeting, is between all five LGFP. The amendment updates the maximum Annual System Deficit amounts, which are the maximum annual funding amounts required by Orange County for the operations of the system, and includes an annual index for cost escalation. The amendment also requires a unanimous vote of the CFCRC Governing Board in order for the annual budget to exceed the Annual System Deficit. The amendment also includes language regarding the process to approve expanded and extended service and allows this to occur for only a portion of the LGFP if desired.
The newest SunRail transition agreement is the Locally Funded Agreement (LFA). The LFA is to be entered into between FDOT and the CFCRC, and Orange County is not a direct party to this agreement. The LFA is required by FDOT, as primarily a FDOT Comptroller and State of Florida Department of Financial Services form, to accept funds from the CFCRC under the obligations set forth in the Operation Phasing Agreement and related Interlocal Agreements (Governance, Funding, and Operating). The LFA does not change the maximum funding amounts, and related stipulations specified in the Interlocal Governance Agreement approved at the March 26, 2024 Board meeting. (start new paragraph)The LFA includes an attachment that is the required companion FDOT Three Escrow Agreement. According to these SunRail agreements, the CFCRC’s current fiscal year funding obligation of $65.3 million will begin January 1, 2025. The LFA is also amending the Interlocal Operating Agreement (between FDOT and CFCRC) as it relates to updated LFA nomenclature, and to update the Interlocal Agreements and Operations Phasing Agreement insofar as scheduling the required CFCRC quarterly payments. The Interlocal Governance Agreement (which created the CFCRC) requires consent of the LGFPs when it comes to any amendment of the Interlocal Operating Agreement. Therefore, the LGFPs will each need to consent to and approve the LFA as approved and executed during the CFCRC’s November 14, 2024 meeting.
If you have any questions, please feel free to contact me at 407-836-7805.
BUDGET: No additional budgetary impact, i.e., does not change the terms or funding amounts previously approved by the Board of County Commissioners on March 26, 2024.