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29 <br /> Debt Policy and Guidelines <br /> Purpose: As administrator of the Triangle Tax District, GoTriangle may issue debt to support approved <br /> capital projects in the Orange County Transit Multi-Year Vision Plan. It is the goal of the SWG that debt <br /> issuances will strive to obtain favorable ratings available for transit financing.The debt policy outlines <br /> the requirements and criteria set forth to achieve this goal and to advance the Orange County Transit <br /> Multi-Year Vision Plan. <br /> Debt Policy: <br /> It is expected that debt will periodically be issued by GoTriangle in support of the Orange County Transit <br /> Multi-Year Vision Plan under the following requirements: <br /> Any debt to be issued will be reviewed and recommended by the SWG, approved by the Orange County <br /> Board of Commissioners, and approved and authorized by the GoTriangle Special Tax Board (pursuant to <br /> N.C.G.S. 160A-167). <br /> Per North Carolina Law, debt issuances will be approved by the Local Government Commission. <br /> Debt service payments will be made in accordance with the North Carolina Local Government Budget <br /> and Fiscal Control Act. <br /> Any proposed debt issuance will be evaluated using prospective revenue expenditure amounts, as <br /> modeled in the Orange County Transit Financial Model, which is mutually agreed to by the SWG.The <br /> Orange Transit Financial Model assumptions will be agreed to annually by the SWG through <br /> coordination efforts defined in the Governance ILA. <br /> Debt Guidelines: <br /> Debt issuances that are incorporated as part of the financial model will be modeled using the following <br /> guidelines: <br /> It is the goal that all rated debt issued on behalf of approved capital projects in the Orange County <br /> Transit Multi-Year Vision Plan will obtain a rating no lower than Al (Moody's) or A+ (S&P/Fitch) and <br /> preferable in a double-A category. <br /> Actions recommended by the SWG, or adopted by the Orange County Board of Commissioners and <br /> GoTriangle Board of Trustees shall not diminish the financial health of Orange Operating and/or Orange <br /> Capital Funds. <br /> Debt will be issued to ensure sufficient flexibility to meet future obligations outlined in the Orange <br /> County Transit Multi-Year Vision Plan and to take advantage of opportunities based on market <br /> conditions. <br /> The gross debt service coverage ratio will not go below 2 times (2X)gross revenue to annual debt <br /> service, excluding short-term principal payments. <br /> Gross revenue is defined as Orange County Locally Dedicated Transit Funding Sources as stated <br /> in Section 2 of the Orange County Transit Governance ILA, plus additional farebox revenue <br /> attributed to services funded by Orange County Locally Dedicated Transit Funding Sources plus <br /> any federal funds received. <br /> 6 <br />