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24 Potential Orange County Credit & Cash Flow/ Budget Implications • Credit Implications. o All financings will be secured by Light Rail assets and will be subject to annual appropriations from GoTriangle. o Beyond the revenues identified on the prior pages, there are no additional GoTriangle revenues available to fund this project. o Between the TIFIA loan and market based financing, no other credit details have been developed or disseminated to the working group. o In their review, the Rating Agencies may view Orange County as having a contingent liability to the GoTriangle financial plan, regardless of whether or not there is an explicit guarantee provided by Orange County. ➢ Davenport would anticipate that the rating agencies will review Orange County's credit with and without a liability for GoTriangle. ➢ The soundness of the business plan at the time of the review will help the Rating Agencies determine the level, if any, of the potential contingent liability. • Cash Flow/ Budget Implications. o As discussed previously, there are a number of key assumptions included in the GoTriangle financial plan. o Changes, positive or negative, to these assumptions will impact Orange County's cash flow requirements under this plan. o If there is a significant shortfall, Orange County may be required or decide to contribute additional revenue in order to maintain the viability of the project, regardless of whether there is a contractual requirement to do so. • As the Plan of Finance continues to develop and key decision points are reached, more information about the potential credit and financial impacts will be available. Wrap-Up & Items for Consideration • The decision to move forward with the General Engineering Consultant and Program Management Consultant contracts represents a significant capital commitment for Orange County residents. o $37,445,121 has been spent on the DO LRT through the third quarter of FY 2017, $8,780,755 of which was funded through Orange County Revenues. o Through FY 2020, it is estimated that $206,227,131 will be spent on the DO LRT project, $37,120,884 of which is funded through Orange County revenues. • Key items for consideration in approving this continued investment: o Adequacy of the updated Transit Plan. o Adequacy of the updated Cost Share Agreement. • Based upon our review of GoTriangle's financial models and related documents, we offer the following initial observations: o Based on preliminary modeling and current assumptions, we believe the Project is financeable in terms of TIFIA requirements. o The viability of the market-based financings will require additional due diligence, further refinement of the primary Project assumptions and formalizing the "credit" as it will be presented to the rating agencies and/or potential investors.