HomeMy WebLinkAboutAgenda 6-d - Authorization to Contract with the County’s Financial Advisor to Conduct a Third Party Financial Analysis of the New Financial Plan for the Light Rail Transit Project 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: February 19, 2019
Action Agenda
Item No. 6-d
SUBJECT: Authorization to Contract with the County's Financial Advisor to Conduct a Third
Party Financial Analysis of the New Financial Plan for the Durham-Orange Light
Rail Transit Project
DEPARTMENT: County Manager's Office
ATTACHMENT(S): INFORMATION CONTACT:
Travis Myren, 919-245-2300
2017 Davenport Financial Analysis
PURPOSE: To:
1. Consider authorizing the County Manager to sign an agreement with Davenport &
Company, LLC to provide a third party analysis of a new, proposed financial plan for the
Durham-Orange Light Rail Project at a cost not to exceed $30,000; and
2. Consider authorizing staff to prepare a budget amendment that transfers funds from the
Board Contingency line item (approximately $20,700) and the Manager's Miscellaneous
line item to fund this analysis.
BACKGROUND: On April 27, 2017, the Board of Orange County Commissioners adopted the
Interlocal Cost Sharing Agreement for the Durham-Orange Light Rail Transit Project as well as
the Orange County Transit Plan. As part of the Board's consideration of these items, the
County engaged its financial advisor, Davenport & Company, LLC, to conduct a third party
analysis of the proposed financial plan and report their findings to the Board of Orange County
Commissioners.
The Article 43 Transit Sales Tax, a portion of Vehicle Registration Fees, and a portion of rental
car fees are used to fund transit projects approved in the Transit Plan, including the light rail
project. The 2017 Davenport analysis (attached) focused on long term borrowing costs and
annual cash flow needs. The analysis demonstrated that all of the projects contained in the
Transit Plan could be funded using transit revenues alone.
GoTriangle is expected to propose an amended financial model due to new costs associated
with the Durham-Orange Light Rail Project. When the final proposed financial model is
completed, Board action at this time would allow the County Manager to immediately engage
the County's financial advisor to update the analysis completed in 2017 and offer any new
2
observations associated with the new financial plan. The cost of the analysis would be capped
at $30,000.
In order for the light rail project to proceed, a new Interlocal Cost Sharing Agreement and an
Amended Orange County Transit Plan will need to be approved by the Board of Orange County
Commissioners. GoTriangle is requesting these approvals during the month of March to meet a
State imposed April 30 deadline.
FINANCIAL IMPACT: Up to $30,000 would be transferred from a combination of the Board
Contingency line item (up to $20,700) and the Manager's Miscellaneous line item to fund the
financial analysis. The Department of Finance and Administrative Services has an existing
contractual relationship with Davenport & Company, so these funds would be transferred to that
department.
SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goals are applicable
to this item:
• GOAL: FOSTER A COMMUNITY CULTURE THAT REJECTS OPPRESSION AND
INEQUITY
The fair treatment and meaningful involvement of all people regardless of race or color;
religious or philosophical beliefs; sex, gender or sexual orientation; national origin or
ethnic background; age; military service; disability; and familial, residential or economic
status.
• GOAL: ENSURE ECONOMIC SELF-SUFFICIENCY
The creation and preservation of infrastructure, policies, programs and funding necessary
for residents to provide shelter, food, clothing and medical care for themselves and their
dependents.
Public Transportation provides opportunity for access to jobs and services to many individuals.
RECOMMENDATION(S): The Manager recommends the Board:
1. Consider authorizing the County Manager to sign an agreement with Davenport &
Company, LLC to provide a third party analysis of a new, proposed financial plan for the
Durham-Orange Light Rail Project at a cost not to exceed $30,000; and
2. Consider authorizing staff to prepare a budget amendment that transfers funds from the
Board Contingency line item (approximately $20,700) and the Manager's Miscellaneous
line item to the Finance Department fund this analysis.
3
D-0 Light Rail Discussion Materials —
Scenario 4o, EE V10-2
0
Orange County, North Carolina
ORANGE COUNTY
NORTH CAROLINA
April 27, 2017
The information shown is current as of the time of distribution.
DAVENPORT & COMPANY
Member NYSE I FINRA I SIPC
General Assumptions & Major Capital ORANGE COUNTY
NORTH CAROLINA
Scenario 4o EE V10-2
General Assumptions Major Capital
Scenario 40 EE v10-2 1 LRT Initial Capital Cost
2 FTA New Starts Grant-Capital Costs $ 1,194,284,214 50.00%
3 State Funding-Capital Costs 238,856,843 10.00%
1 Scenario Description Scenario Under 4 In Kind Contributions
Consideration for 5 Orange County 3,584,640 0.15%
Adoption _ 6 Durham County 15,791,793 0.66%
2 7 Joint Development Grants
8 Orange County 12,042,212 0.50%
3 LRT Cost Share Assumptions (Durham / Orange / Private] 9 Durham County 53,050,825 2.22%
4 Capital Cost 81.5/ 16.5/ 2.0 10 Local Share-Private Capital Campaign' 18,120,000 0.76%
5 Shared Borrowings 81.5/ 18.5 11 Local Share-Orange County 143,007,212 5.99%
12 Local Share-Durham County 709,830,690 29.72%
6 Operations and Maintenance 13 Total LRT Initial Capital Cost $ 2,388,568,428 100.00%
7 Through 2036 80/ 20 14
8 After 2036 81/ 19 15 Orange County LRT State of Good Repair through 2062 $ 89,948,3
9 State of Good Repair 16
17 Other Orange County Tax District Funding through 2045
10 Through 2036 80/ 20 18 Bus O&M $ 139,669,259
11 After 2036 81/ 19 19 DO LRT O&M $ 85,651,778
12 20 Bus Facilities and Capital Projects(Including Replacements) $ 8,059,476
13 Durham / Wake CRT 21 Vehicles(including Replacements) $ 14,247,696
22 NS BRT Project(Construction Costs) $ 6,125,000
14 23 Hillsborough Train Station Project(Construction Costs) $ 686,000
15 Orang*ounty Sales Tax Assumptions 24 County Admin&Facility O&M $ 1,241,202
16 FY 2017 - 2046 Moody's Baseline 'First$18.12 million Applied to Orange County
17 FY 2047 - 2062 3.71%
18
19 Reservi Assumptions
20 Cash Balance Maintain Positive
Balance
21 Operating Reserve 3 Months/ 25 % of
CH/OPT Bus 0&M
22 Debt Service Reserve 10% of Debt Issued
DAVENPORT&COMPANY Source: GoTriangle Scenario 40 EE v10-2
April 27,2017 Orange County, NC 1
Financings & Total Cost ORANGE COUNTY
NORTH CAROLINA
Scenario 4o EE V10-2
1 LRT Initial Capital and Borrowing Cos
2 FTA New Starts Grant - Capital and Borrowing Costs $ 1,235,577,789 37.54%
3 State Funding- Capital and Borrowing Costs 245,030,076 7.44%
4 In Kind Contributions
5 Orange County 3,584,640 0.11%
6 Durham County 15,791,793 0.48%
7 Joint Development Grants
8 Orange County 12,042,212 0.37%
9 Durham County 53,050,825 1.61%
10 Local Share - Private Capital Campaign' 18,120,000 0.55%
11 Local Share - Orange County 301,323,299 9.15%
12 Local Share - Durham County 1,407,277,235 42.75%
13 Total LRT Initial Capital and Borrowing Cost $ 3,291,797,868 100.00%
14
15 Orange County LRT State of Good Repair through 2062
16 Cash Funding $ 17,948,360
17 Debt Funding 72,000,000
18 Interest and Borrowing Costs 10,773,118
19 Total State of Good Repair $ 100,721,478
20
21 Orange County Financing Assumptions
22 Locally Funded LOBs - Initial LRT $ 72,500,000
23 Grant Funded LOBs- Initial LRT 57,350,000
24 TIFIA Loan - Initial LRT 79,550,000
25 Locally Funded LOBs - State of Good Repair 72,000,000
26 Total Orange County Financings $ 281,400,000
' First $18.12 million Applied to Orange County
DAVENPORT&COMPANY Source: GoTriangle Scenario 40 EE v10-2
April 27,2017 Orange County, NC 2
��
Key Financial Statistics ORANGE COUNTY
NORTH CAROLINA
Cash Reserves (with Scale Adjustments) - Scenario 4o EE vio-2
Cumulative Cash Balance County Cash Balances
Cash Balances-Total Cash Balances-Durham
$800,000,000
$800,000,000
$700,000,000
S700,000,000 —
$600,000,000 $600,000,000
$500,000,000 $500,000,000
$400,000,000 $400,000,000
$300,000,000 $300,000,000
$200,000,000 $200,000,000 —
$100,000,000 $100,000,000
m a ,n m a ,n a � a H H N H H H H N H H H H H H H N H r N ry ry N ry H H ry N ry H H r H H N H H H H N H H H H H H H
1 Financial Health Criteria CashBalances-Orange
2 Minimum Aggregate DSCR $45,00 000
3 LOBs (Initial LRT) 1.18x $40,000,000
4 Grant Funded LOBs (Initial LRT) 1.26x $35,000,000
5 TIFIA & State of Good Repair 1.07x $30,000,000
6 Minimum Cash Balance During Construction $25,000,000
7 Orange (Fiscal Year) $4,223,172 (2019) $20,000,000
8 Durham (Fiscal Year) $8,167,908 (2024)
$15,000,000
9 Minimum Cash Balance After Construction
10 Orange (Fiscal Year) $15,837,810 (2030) $10,000,000
- - --t t-- - --- ---- ---
11 Durham (Fiscal Year) $3,657,932 (2035) $5,00 000
$0 I
m a n
Note: Does not include Operating and Debt Service Reserve balances. Note: Cash Balances shown do not include GoTriangle level Cash Balances.
DAVENPORT&COMPANY Source: GoTriangle Scenario 40 EE v10-2
April 27,2017 Orange County, NC 3
Key Financial Statistics ORANGE COUNTY
NORTH CAROLINA
Cash Reserves (without Scale Adjustments) - Scenario 4o EE V10-2
Cumulative Cash Balance County Cash Balances
Cash Balances-Total Cash Balances-Durham
$800,000,000
$800,000,000
$700,000,000
S700,000,000 -
$600,000,000 $600,000,000
$500,000,000 $500,000,000
$400,000,000 $400,000,000
$300,000,000 $300,000,000
$200,000,000 $200,000,000 -
$100,000,000 $100,000,000 I I I I I I - ■ - - 1� I I � 1 _ 1 1 � I � I I I I I I I I
$o II � II � I ■ I � � � � � II $o � �
1 Financial Health Criteria CashBalances-Orange
2 Minimum Aggregate DSCR $800,000,000 -
3 LOBs (Initial LRT) 1.18x
S700,000,000
4 Grant Funded LOBs (Initial LRT) 1.26x
5 TIFIA & State of Good Repair 1.07x $600,000,000
6 Minimum Cash Balance During Construction $500,000.000
7 Orange (Fiscal Year) $4,223,172 (2019) $400,000,000
8 Durham (Fiscal Year) $8,167,908 (2024)
$300,000,000
9 Minimum Cash Balance After Construction
10 Orange (Fiscal Year) $15,837,810 (2030) $2oo,000,000
11 Durham (Fiscal Year) $3,657,932 (2035) $10°•00 000
$o - - IIII ■ ■ ■ ■ ■ ■ ■ ■ 1 ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 1 ■ 11111 ■ 111111I
o S S S S S S S S o
Note: Does not include Operating and Debt Service Reserve balances. Note: Cash Balances shown do not include GoTriangle level Cash Balances.
DAVENPORT&COMPANY Source: GoTriangle Scenario 40 EE v10-2
April 27,2017 Orange County, NC 4
8
Charlotte Office Ted Cole
Independence Center Senior Vice President
101 N. Tryon Street
804-697-2907
Suite 1220
Charlotte, NC 28246 tcole@investdavenport.com
Richmond Office Mitch Brigulio
One James Center First Vice President
901 East Cary Street 704-644-5414
11th Floor mbrigulio@investdavenport.com
Richmond, VA 23219
Chazzo Habliston
Raleigh Office Associate Vice President
Glenwood Plaza
36905 Glenwood Ave. 704-644-5413
Suite 390 chabliston@investdavenport.com
Raleigh, NC 27612
DAVENPORT&COMPANY
April 27,2017 Orange County, NC 5
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NORTH CAROLINA
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