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24 <br /> 1 • The decision to move forward with the General Engineering Consultant and Program <br /> 2 Management Consultant contracts represents a significant capital commitment for <br /> 3 Orange County residents. <br /> 4 o $37,445,121 has been spent on the DO LRT through the third quarter of FY <br /> 5 2017, $8,780,755 of which was funded through Orange County Revenues. <br /> 6 o Through FY 2020, it is estimated that $206,227,131 will be spent on the DO LRT <br /> 7 project, $37,120,884 of which is funded through Orange County revenues. <br /> 8 <br /> 9 • Key items for consideration in approving this continued investment: <br /> 10 o Adequacy of the updated Transit Plan. <br /> 11 o Adequacy of the updated Cost Share Agreement. <br /> 12 <br /> 13 • Based upon our review of GoTriangle's financial models and related documents, we <br /> 14 offer the following initial observations: <br /> 15 o Based on preliminary modeling and current assumptions, we believe the Project <br /> 16 is financeable in terms of TIFIA requirements. <br /> 17 o The viability of the market-based financings will require additional due diligence, <br /> 18 further refinement of the primary Project assumptions and formalizing the "credit" <br /> 19 as it will be presented to the rating agencies and/or potential investors. <br /> 20 o Project feasibility is, in some respects, a subjective concept. While the current <br /> 21 GoTriangle model projects that the Project will cash-flow, the margin for error is <br /> 22 very small and a number of assumptions will need to materialize as modeled to <br /> 23 avoid needing additional financial support in the future. <br /> 24 o Given current projections for Project performance, Orange County cumulative <br /> 25 cash balances are insufficient in certain years to properly insulate the County <br /> 26 from potential future financial support requirements/requests. Of note on this <br /> 27 observation, Durham County cumulative cash balances may be available to <br /> 28 provide additional financial resources for Project underperformance. Clarity on <br /> 29 this point is recommended. <br /> 30 ➢ GoTriangle has identified the following mitigation strategies in an effort to <br /> 31 insulate the counties from additional financial support in the event that the <br /> 32 forecast assumptions do not materialize as projected: <br /> 33 • Contingency in the project budget; Design changes to reduce <br /> 34 project cost; Savings from property donations; Cost transfer to <br /> 35 project partners; and new revenue. <br /> 36 o Given the scope of the Project and current financial projections, Davenport is of <br /> 37 the opinion that this Project will be a discussion item and consideration as part of <br /> 38 the County's ongoing rating agency interactions. <br /> 39 • As Local Government Commission ("LGC") approvals will be required for the planned <br /> 40 non-TIFIA financings, a preliminary dialogue with LGC staff in the near future is <br /> 41 recommended. <br /> 42 • If interest and support for the Project are confirmed, the Orange County Board of <br /> 43 County Commissioners should request a clear and concise explanation of its current <br /> 44 commitments, future Project approvals and any opportunities/mechanisms for <br /> 45 multilateral and unilateral Project modification/suspension/termination. <br /> 46 <br /> 47 PUBLIC COMMENT: <br /> 48 Robert David said he has moved from being a supporter to this plan to becoming an <br /> 49 opponent of it. He said there is a lot of money at stake, and more may be coming with <br /> 50 unknown costs. He asked if there is any benefit to the County from the transit plan, as there <br />