Orange County NC Website
Browse       Search
23 <br /> 1 Projected Results (Scenario 3 v9 C) April 4, 2017 Orange County, NC 9 Overall Results — <br /> 2 Uniform Scales for All Graphs <br /> 3 <br /> 4 Financial Model Observations, Key Drivers, and Risk Factors ( page 10) <br /> 5 • In order to implement this Plan of Finance and access long term capital funding, <br /> 6 GoTriangle will need to receive two investment grade credit ratings. In order to receive <br /> 7 investment grade credit ratings, GoTriangle will need to be able to demonstrate: <br /> 8 o Ability to maintain positive cash flows. <br /> 9 o Ability to demonstrate minimum Debt Service Coverage levels. <br /> 10 o Ability to manage the project. <br /> 11 o Some minimum level of operating / capital reserves. <br /> 12 <br /> 13 • As GoTriangle, Durham County, and Orange County continue to evaluate the project <br /> 14 and Plan of Finance, the following key drivers / risk factors may be considered: <br /> 15 o Potential changes (positive or negative) in the DO LRT Capital Cost. <br /> 16 o Approval, timing, and amount of FTA New Starts Federal Funding, State <br /> 17 Funding, and TIFIA Funding. <br /> 18 o Realization of assumed Transit District Revenues and DO LRT Fare Revenues. <br /> 19 o Actual / revised estimates for DO LRT Operating Costs and ongoing DO LRT <br /> 20 capital / maintenance costs. <br /> 21 o Ability to fund existing and expansion bus service and Bus Rapid Transit. <br /> 22 <br /> 23 Potential Orange County Credit & Cash Flow/ Budget Implications <br /> 24 • Credit Implications. <br /> 25 o All financings will be secured by Light Rail assets and will be subject to annual <br /> 26 appropriations from GoTriangle. <br /> 27 o Beyond the revenues identified on the prior pages, there are no additional <br /> 28 GoTriangle revenues available to fund this project. <br /> 29 o Between the TIFIA loan and market based financing, no other credit details have <br /> 30 been developed or disseminated to the working group. <br /> 31 o In their review, the Rating Agencies may view Orange County as having a <br /> 32 contingent liability to the GoTriangle financial plan, regardless of whether or not <br /> 33 there is an explicit guarantee provided by Orange County. <br /> 34 ➢ Davenport would anticipate that the rating agencies will review <br /> 35 Orange County's credit with and without a liability for GoTriangle. <br /> 36 ➢ The soundness of the business plan at the time of the review will help <br /> 37 the Rating Agencies determine the level, if any, of the potential <br /> 38 contingent liability. <br /> 39 • Cash Flow/ Budget Implications. <br /> 40 o As discussed previously, there are a number of key assumptions included in the <br /> 41 GoTriangle financial plan. <br /> 42 o Changes, positive or negative, to these assumptions will impact Orange County's <br /> 43 cash flow requirements under this plan. <br /> 44 o If there is a significant shortfall, Orange County may be required or decide to <br /> 45 contribute additional revenue in order to maintain the viability of the project, <br /> 46 regardless of whether there is a contractual requirement to do so. <br /> 47 • As the Plan of Finance continues to develop and key decision points are reached, more <br /> 48 information about the potential credit and financial impacts will be available. <br /> 49 <br /> 50 Wrap-Up & Items for Consideration <br />