PFM Financial Advisors LLC 300 S. Orange Ave Suite 1170 Orlando… · 2017-11-07 · PFM Financial...
Transcript of PFM Financial Advisors LLC 300 S. Orange Ave Suite 1170 Orlando… · 2017-11-07 · PFM Financial...
PFM Financial Advisors LLC 300 S. Orange Ave Suite 1170 Orlando, FL 32801
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ADDENDUM #1 DATED: JUNE 27, 2017
This addendum is being issued to address various questions received regarding North Carolina Turnpike
Authority’s Request for Proposals for Tax-Exempt Forward Refunding Bank Term Loan dated June 20,
2017 and provide a revised due date. The provided answers are intended to assist in review of the
Authority and the preparation of a response to the RFP. The due date for the RFP has been revised
to 12:00 P.M. (EST) on July 11, 2017.
1. Can the Authority do an actual loan through a loan agreement secured by a note, or will it have to flow through a bond indenture in order to get the revenue pledge? The Authority has the flexibility to do it either way. Their preference, for simplicity, would be to use a Bond that looks just like a Note. Closing documents would include (1) a short supplemental trust agreement, (2) a loan agreement in the form the bank proposes (including a global change from Note to Bond) and (3) the Bond. In any case, the documents have to include a supplemental indenture since the Loan will constitute an additional refunding bond under the existing indenture.
2. What is the appropriation mechanism and what are the risks associated to non-appropriation?
Please refer to the SECURITY AND SOURCES OF PAYMENT FOR THE 2009B BONDS section of the 2009B Official Statement. Since the General Assembly of North Carolina enacted the legislation in July of 2008, all appropriations have been made in full and on time.
3. Please discuss any pending legislative, executive or regulatory matters that could affect the receipt of
full BABs funding from the federal government. Do you expect any future decrease in federal subsidies? If so, please describe. Due to sequestration, NCTA has not received the full subsidy amount originally contemplated since FY 2013. Sequestration rates have ranged from 6.8% to 8.7% and is currently 6.9%. NCTA does not forecast changes in sequestration.
4. Have there ever been any issues in appropriating the State Funds to pay the debt service on the Bonds? No.
5. Please provide projections of debt service coverage after the proposed refunding. Please refer to Appendix A attached. Note this is a hypothetical refunding assuming a 15 year term.
6. Has the Authority ever defaulted in the payment of principal of or interest on any bonds? If so, please describe. No.
7. Will the Debt Service Reserve Fund remain in place for the unrefunded portion of the outstanding bonds? Has the debt service reserve ever been used in the past?
The Debt Service Reserve Fund covers only BABs and therefore will remain in place for the
unrefunded bonds though there may be a small release of funds reflecting a lowered Reserve
Fund Requirement. IF there is a partial release it will go to the Debt Service Fund (which
includes the Redemption Account) and reduce the size of the refunding. The Debt Service
Reserve Fund has not been drawn on in the past.
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8. In the event of a partial or complete elimination of the subsidy for the remaining BABs, how would a
potential cash flow deficit likely be addressed? If necessary, the Authority could use General Reserve Fund money under the Revenue Trust Agreement. For additional information on the Triangle Expressway System Revenue Bonds and associated flow of funds, please refer to the Official Statement for the Triangle Expressway System Senior Lien Turnpike Revenue Refunding Bonds, Series 2017 which is available on emma.msrb.org (https://emma.msrb.org/ER1037930-ER813506-ER1214537.pdf). Projected Cash Flow and Debt Service Coverage (including payment of appropriation bond debt service in excess of annual appropriations) is provided on pages 29-31.
9. Has the NC General Assembly ever increased (or decreased) planned appropriations for infrastructure projects similar to those addressed by G.S. 136-176? If so, what were the projects involved and what was the outcome of the increase (or decrease)? The Mid-Currituck Bridge project and Garden Parkway project were granted appropriations of $25 million annually which were later reduced/eliminated. Neither project was underway nor had debt secured by the appropriations at the time of reduction. Furthermore, the General Assembly has never increased or decreased appropriations for infrastructure projects where debt secured by the appropriations has been issued.
10. Under G.S. 136-176, what was repealed in (a1), (a2), (a3), (b1), and (c)? Please see North Carolina General Assembly Session Law 2013-183, s. 4.8, which can be found on the General Assembly website at this link: http://www.ncleg.net/EnactedLegislation/SessionLaws/PDF/2013-2014/SL2013-183.pdf
11. If possible, can you please provide any FY17 interim financials on the Highway Trust Fund? Interim financials as of May 2017 are available in Appendix B.
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APPENDIX A – PROJECTED DEBT SERVICE COVERAGE
Period
Ending
State
Appropriated
Revenues
Interest
Subsidy
Payments (1)
Other
Revenues(2)
Debt Service on
Series 2009B
Bonds
Debt Service on
2017 Refunding
Bank Term Loan
Transfer to
Revenue Fund/
(Draw upon)
General Reserve
Fund (3)
Debt
Service
Coverage
7/1/2017 25,000,000 7,341,384 130,925 25,899,949 6,572,360 1.25x
7/1/2018 25,000,000 7,258,228 130,925 29,389,751 2,999,402 1.10x
7/1/2019 25,000,000 5,417,395 130,925 26,240,426 2,330,131 1,977,763 1.07x
7/1/2020 25,000,000 3,550,408 130,925 20,830,834 4,660,263 3,190,236 1.13x
7/1/2021 25,000,000 3,380,400 130,925 20,649,100 4,660,263 3,201,963 1.13x
7/1/2022 25,000,000 3,293,350 130,925 10,106,950 16,916,773 1,400,552 1.05x
7/1/2023 25,000,000 3,293,350 130,925 10,106,950 16,899,556 1,417,769 1.05x
7/1/2024 25,000,000 3,293,350 130,925 10,106,950 16,876,794 1,440,531 1.05x
7/1/2025 25,000,000 3,293,350 130,925 10,106,950 16,858,190 1,459,135 1.05x
7/1/2026 25,000,000 3,293,350 130,925 10,106,950 16,838,376 1,478,949 1.05x
7/1/2027 25,000,000 3,293,350 130,925 10,106,950 16,817,058 1,500,267 1.06x
7/1/2028 25,000,000 3,293,350 130,925 10,106,950 16,789,013 1,528,312 1.06x
7/1/2029 25,000,000 3,293,350 130,925 10,106,950 16,768,873 1,548,452 1.06x
7/1/2030 25,000,000 3,293,350 130,925 10,106,950 16,741,269 1,576,056 1.06x
7/1/2031 25,000,000 3,293,350 130,925 10,106,950 16,710,980 1,606,345 1.06x
7/1/2032 25,000,000 3,293,350 130,925 10,106,950 16,687,564 1,629,761 1.06x
7/1/2033 25,000,000 3,087,693 130,925 28,315,810 (97,192) 1.00x
7/1/2034 25,000,000 2,667,264 130,925 27,860,558 (62,368) 1.00x
7/1/2035 25,000,000 2,228,114 130,925 27,392,853 (33,813) 1.00x
7/1/2036 25,000,000 1,769,370 130,925 26,900,015 281 1.00x
7/1/2037 25,000,000 1,290,214 130,925 26,384,533 36,606 1.00x
7/1/2038 25,000,000 789,771 130,925 25,843,725 76,971 1.00x
7/1/2039 25,000,000 267,059 130,925 25,284,578 113,407 1.00x
(1) Assumes 6.9% sequestration remains through term of unrefunded bonds
(2) Includes projected investment earnings
(3) Positive numbers represent a transfer to the Revenue Fund established under the General Revenue Bond Trust Agreement and
negative numbers represent a draw upon the General Reserve Fund established under the General Revenue Bond Trust
Agreement. In years that the Appropriation in less than outstanding debt service due to federal sequestration, the remaining
debt service may be paid from the General Reserve established under the General Revenue Bond Trust Agreement.
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APPENDIX B – FINANCIAL UPDATE AS OF MAY 2017
Financial UpdateAs of May 2017
David Tyeryar, Chief Financial Officer
June 28, 2017
Financial UpdateSFYTD 2017 as compared SFYTD 2016
Month over MonthDollars in Millions May '17 May '16 May '17 May '16 $ Change
Collections 396$ 441$ 4,989$ 4,570$ 419$ Expenditures 464 410 4,709 4,257 452 Net Change (68)$ 31$ 280$ 313$ (33)$
May '17 May '16Cash Balances: Trust Fund 1,695$ 1,433$ Highway Fund* 367 284 Totals 2,062$ 1,717$
*Excludes bond proceeds held by Trustee & GARVEE Debt Service Reserve
Year to Date
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Revenue Summary May 2017($ in Millions)
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Expenditure Summary May 2017($ in millions)
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Revenue and Expenditure Variances as of May 2017
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60 Month Revenue & Expenditure Projections as of May 2017
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Total Expenditures 1,260 1,235 935 1,177 1,611 1,318 1,234 1,486 1,673 1,388 1,309 1,549 1,719 1,499 1,395 1,692 1,846 1,567 1,384 1,600
NCDOT Revenue Sources
SFY2017 - $4.7 Billion
Motor Fuel Tax$1,782.8M 38.1%
Highway Use Tax $706.6M 15.1%
DMV Registrations $544.2M 11.6%
Licenses $162.5M 3.5%
Title Fees & Other $223.9M 4.8%
Federal $1,139.2M 24.4%
Federal Grants/ARRA $118.5M
2.5%
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27.6%
State Agency Transfers ‐ $194.8State Ports Authority 35.0Other Agencies 12.3Municipal Aid 147.5
7.3%
Other Modes ‐ $334.4Aviation 68.6Rail 87.6 Public Transit 126.9Ferries 50.6Bike .7
Admin & Other ‐ $341.3
Debt Service – $209.5GO Bonds 61.0GARVEE Bonds 99.5NCTA 49.0
Uses of 2016-17 NCDOT Appropriations
Total Funding = $4.7 Billion
Maintenance ‐ $1,293.0
*STI TIP Construction 2,259.6Other Construction 45.1
Strategic Transportation Investments(STI) $2,266.3
($ in millions)
Construction – $2,304.7
49.3%
4.2%
7.1%
4.5%
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SFY2017 NCDOT Sources and Uses
Total Funding = $4.7 Billion
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Federal $1,258 Motor Fuel Tax $1,783 DMV Fees/Other $930 Highway Use Tax $707 Other $109
Highway Fund Highway Trust Fund Other$3,307 $1,371 $109
Motor Fuels Tax Motor Fuels Tax Civil Penalties$1,266 $517 $28
DMV Registrations Highway Use Tax DMV ‐ Tag & Tax,$544 $707 & Other
Licenses Title Fees & Other $22$163 $147 NCTA Toll RevenueOther $43$76 Ferry Toll RevenueFHWA $5$1,139 BABS Interest Rebate
Grants/ARRA $11$119
State Ports Auth $35 Strategic Transportation Strategic Transportation GF Agencies $12 Investment Construction Investment Construction
$1,226 $1,034DOT Spending $2,002 STI ‐ NCTA Total Spending $109
Maintenance $6 Transfer to OSBM for DPI$1,051 STI ‐ Bike $28
Bridge Preservation $1 DMV ‐ Tag & Tax,$242 & Other
Construction $22$45 Debt Service: Rail ‐ Federal NCTA Debt Service
Powell Bill GO Bond $61 $50 & Other$148 NCTA $49 Airports ‐ Federal $54Modal Admininistration $20 Ferries$229 $35 Transit ‐ Federal Capital ImprovementsDMV $35 $5$125 GARVEE Debt Service
Admin $99 ($ in Millions)$124 GHSP ‐ FederalOther $14$38
Transfers $47 Total STI = $2,267
Other = $363
71% 29%84% 16% 100%100% 100%
NCDOT Expenditures
SFY2017 as of May 31, 2017
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