Orange County NC Website
Browse       Search
22 <br /> determined by the state statutes; the kind of support agreements that Orange and Durham <br /> Counties can provide, if they so choose; and how do the rating agencies look at the project. <br /> He said two investment grade ratings must be secured in order to get the TIFIA loans. <br /> Commissioner Jacobs said it will take a while to resolve all of these borrowing issues <br /> with GoTriangle, and he is concerned about Orange County's fiscal health. He asked if the <br /> County is still on the trunk of the tree, or is it out on a limb. <br /> Ted Cole said the County is still on the trunk, but as the conversation evolves, the key <br /> questions will be what is the County committed to, if it approves that transit plan and the cost <br /> share agreement, and where are opportunities to take a step back and reassess. He said he <br /> does not know the answer to these questions. <br /> Richard Marvin, PFM-Financial Advisor to GoTriangle, said there is a requirement for <br /> investment grade ratings. He said the way to achieve this with the LOB concept is to only <br /> pledge the revenues of the system and the sales taxes. He said this is what will be used to <br /> establish the investment grade rating, and by establishing this rating will lead people to buy the <br /> bonds. He said they are restricted to the value of the system itself, and the revenues coming <br /> in. He said there is no legal backstop from the Counties. <br /> Commissioner McKee asked if this means that the County has absolute immunity from <br /> any impact on the County's credit rating or the County's obligations to make sure these get <br /> paid. <br /> Richard Marvin said as far as getting them paid, yes there is immunity. He said there <br /> would only be an adverse action to the County's rating, if the County became unable to raise <br /> ad valorem taxes, or affected the economics of the County. <br /> Commissioner McKee read a statement out of the Davenport report: "if there is a <br /> significant shortfall, Orange County may be required or decide to contribute additional revenue <br /> in order to maintain the viability of the project, regardless of whether there is a contractual <br /> requirement to do something." He said this statement seems to be at odds with what Richard <br /> Marvin is saying. <br /> Ted Cole said the statement read by Commissioner McKee is on page 11 of the <br /> PowerPoint, and "may be required" is a nod to the fact that Davenport does not know what the <br /> credit is ultimately going to be. He said there is an expectation today that there will not be any <br /> need for a formal support agreement between Orange County, Durham County, and <br /> GoTriangle; but if the credit were to evolve to where such an agreement were needed, then <br /> that is where "required" comes into play. He said it anticipates that the credit will be evolved, <br /> and if there is a support agreement required to get the credit for GoTriangle, then Orange <br /> County may be required to support it; and if not, then the County could decide to support. <br /> Commissioner McKee said he would not want them to find themselves in court in 2032 <br /> trying to define the word required. <br /> Ted Cole said he understands, and when the time comes to develop the credit of <br /> GoTriangle for the purposes of funding this project, the County will have great clarity on <br /> whether it is required to support it or not. He said at this point the expectation is that there will <br /> be no requirement, but the process has yet to be completed. <br /> Chair Dorosin said should that time come, the County would be able to decide whether <br /> or not to proceed. <br /> Commissioner McKee said yes, but the County will be hundreds of millions of dollars in, <br /> at that point. <br /> GoTriangle Financial Model <br /> Major Revenue and Expenditure Assumptions <br />