February 2017 New Starts Financial Plan GoTriangle Board of Trustees January 4, 2017 1

Overview New Starts Financial Plan (“Plan”) Plan Development What is Included in / Excluded from the Plan Key Updates to the Plan Financial Health of the Plan Durham-Orange Light Rail Transit (D-O LRT) Project Capital Funding Proposed Financing Accounting for Uncertainties Main Takeaways Next Steps 2

New Starts Financial Plan A key piece of GoTriangle’s request for the D-O LRT Project to enter the Engineering phase of the federal funding process Submitted to Federal Transit Administration (FTA) on Dec. 30, 2016 FTA review to be completed in Feb. 2017 Demonstrates GoTriangle’s financial ability to construct, operate, and maintain an integrated bus and rail transit system 3

Plan Development Incorporated actual revenues and expenditures from D-O Transit Plans Incorporated studies from consultants (e.g. cost modeling) Incorporated changes to state and federal funding policies/laws Updated financial assumptions New financial advisor, Public Financial Management, began work with GoTriangle in November 2016 4

Included in the Plan GoTriangle’s existing and expansion bus services and capital investments Local share of transit providers’ expansion bus services and capital investments per the D-O Transit Plans, funded at a higher level than in the original D-O Transit Plans: GoTriangle GoDurham Durham County Chapel Hill Transit Orange Public Transportation 5

Included in the Plan (cont.) North-South Corridor Bus Rapid Transit (N-S BRT) Project, managed by Chapel Hill Transit D-O LRT Project, managed by GoTriangle Hillsborough Train Station 6

Excluded from the Plan Revenues and expenditures that do not flow through GoTriangle Other transit providers’ existing services Revenues received by other transit providers Wake County Transit Plan revenues and expenditures Durham-Wake Commuter Rail Transit (D-W CRT) Project 7

Key Updates to the Plan Local share for expansion bus services and capital investments D-O LRT Project assumptions N-S BRT Project assumptions Half-Cent Sales Tax Forecast Reserves 8

Key Updates to the Plan (cont.) Increased local share for expansion bus services and capital investments Now includes long-term maintenance of capital projects Local Funding Shares* Funding Category 2011 Plan Feb 2017 Plan Bus operations and maintenance (O&M) 77.6% 81.8% Bus purchases 10.0% 65.0% Bus capital facilities 54.0% *Percentages and cost estimates based on assumptions from Staff Working Group, to be updated Spring 2017 9

Key Updates to the Plan (cont.) D-O LRT Project assumptions Construction schedule extended to 2028 Modified scope to include JD and NCCU Construction Cost of D-O LRT Project (Incl. Contingency) (YOE Millions) 2011 Plan Feb 2016 Plan Feb 2017 Plan Construction completion date 2025 2026 2028 Original scope (UNC-Alston Ave) $1,823 $2,013 $2,126 Including Joint Development (JD) n/a $2,256 Including JD & North Carolina Central University (NCCU) $2,389 With financing costs $2,476 10

Key Updates to the Plan (cont.) D-O LRT Project (cont.) State/Local funding shares Federal: 50%  50% State: 25%  10% Local/Other: 25%  40% State of Good Repair reserve Not included in previous financial plans Totaling $172 million YOE through 2036 11

Construction Cost of N-S BRT Project (YOE Millions) Key Updates to the Plan (cont.) N-S BRT Project Modified scope State/Local/Federal funding shares Federal: 50%  70% State: 25%  0% Local/Other: 25%  30% Construction Cost of N-S BRT Project (YOE Millions) Funding Share 2011 Plan Feb 2017 Plan Federal $12.3 $87.9 State $6.1 $0 Local $37.7 Total $24.5 $125.6 12

Total through FY 2036 (YOE Millions) Key Updates to the Plan (cont.) Half-Cent Sales Tax Forecast Previous source: Dr. Michael Walden, NCSU Updated source: Moody’s Analytics Comparison of Half-Cent Sales Tax Revenue Forecasts, Total through FY 2036 (YOE Millions) County Walden (2014) Moody’s Analytics (2016) Durham $838.7 $851.9 Orange $213.7 $196.5 Total $1,052.4 $1,048.4 13

Key Updates to the Plan (cont.) Reserves now included in Plan Reserves Reserve Type Criteria Operations and maintenance (O&M) 3 months of system O&M expenses State of good repair 30% of annualized capital replacement costs or 50% of available cash balance, whichever is lower Debt service Limited obligation bonds (LOBs): 10% of par Transportation Infrastructure Finance and Innovation Act (TIFIA) loan: maximum annual debt service 14

Financial Health of the Plan 15

D-O LRT Project Capital Funding Shares (YOE Millions) Amount Percent Federal $1,238.2 50.0% State $247.6 10.0% Pay-as-you-go local revenues* $207.5 8.4% Local government grants for eligible joint development activities $19.5 0.8% Joint development local match $45.6 1.8% In-kind right-of-way donations $19.4 Financing proceeds* $698.6 28.2% Total $2,476.3 100% * Of these amounts, the D-O Transit Plans currently commit $616.7 million YOE in local revenues through a combination of pay-as-you-go and financing proceeds. 16

Financing Uses (YOE Millions) Financing Instruments (YOE Millions) Proposed Financing Financing Uses (YOE Millions) Amount D-O LRT Project local share $698.6 Cash flow needs due to Federal and State funding disbursements $236.4 Total $935.0 Financing Instruments (YOE Millions) FY of Drawdown(s) Amount LOB, series 1 2024 $120.0 LOB, series 2 2025 $215.0 LOB, series 3 2026 $200.0 TIFIA loan 2024-2028 $400.0 Total* $935.0 *LOBs are repaid before TIFIA loan repayment begins 17

Proposed Financing (cont.) Repayment Terms (YOE Millions) Interest Only Payments? Interest Rates Repayment Terms LOBs Yes 4.0% 4-6 years TIFIA loan 5.0% 35 years Total Financing Costs (YOE Millions) Financing Charges Eligible for 50% Federal Share (through FY 2032) Total Finance Charges FY 2017-2036 LOBs $86.9 $89.1 TIFIA loan $0.8 $116.2 Total $87.6 (Federal Share = $43.8) $205.3 18

Proposed Financing (cont.) Full TIFIA loan debt service begins (principal and interest) Short-term LOBs repaid before TIFIA loan debt service begins (interest only) 19

Accounting for Uncertainties Contingency in D-O LRT capital cost Reserves Sensitivity Analyses with additional local revenues 10% capital cost increase for D-O LRT Project (similar to 0% state funding share) Lower-than-expected sales tax revenues 21

Additional Local Revenues Included in Sensitivity Analyses $25 M $20 M Note: Right-of-way donations and Joint Development local shares are now included in the Base Case Scenario Note: No Additional funds needed prior to 2020. 22

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Main Takeaways Plan includes higher local funding shares for bus and rail investments than the original D-O Transit Plans Plan assumptions are more conservative and now include reserves and long-term maintenance February 2017 Financial Plan eliminates need for additional local funding sources (previously estimated need of $250 million YOE) in base case Plan still requires additional local funding sources in sensitivity cases 24

Next Steps Apr. 2017 Update of D-O Transit Plans and execution of full General Engineering Consultant (GEC) and Program Management Consultant (PMC) contracts Jun. 2018 Request to be in President’s budget – requires 50% of non-New Starts funds to be committed Dec. 2018 Inclusion in Draft STIP - State share defined, but not committed Jun. 2019 Inclusion in State Transportation Improvement Program (STIP) – State participation committed Oct. 2019 Submit request for FFGA with FTA – requires 100% of funding to be committed Jan. 2020 Full Funding Grant Agreement (FFGA) with FTA 25

Next Steps (cont.) Dec. 2016 Jan.- Apr. 2017 Mar. 2017 Apr. 2017 Deadline for GoTriangle to request entry into FTA Engineering phase for D-O LRT Project Non-binding MOUs to work with GoTriangle and other community partners to identify funds to complete the D-O LRT Project The counties are not being asked to invest any additional funds for the project at this time Revise Financial Plan Monthly Transit Plan financial updates to County, DCHC-MPO, and GoTriangle Boards Present for information the full GEC and PMC contracts County, MPO, and GoTriangle Boards review updated Transit Plans with potential additional revenue assumptions Execution of GEC and PMC contracts required to maintain proposed construction schedule 26

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