APTA Transit Board Members and Board Support Seminar Creative Financing May 2, 2016

1. APTA Transit Board Members and Board Support Seminar Creative Financing May 2, 2016

2. Financing Tools • Sales and Use Bonds • Certificate of Participation (COPs) • Build America Bonds (BABs) • Private Activity Bonds (PABs) • Transportation Infrastructure Finance and Innovation Act (TIFIA) • Railroad Rehabilitation and Improvement Financing (RRIF) • Public/ Private Partnership (P3 – Equity ) • Unsolicited Proposals • Federal Grants • Sales & Use Taxes • Fare box Revenues • Refinancing

3. Definition of Tools • Sales & Use Bonds • Bonds backed by sales and use taxes • "Loan me the money today, I'll pay it back in 30 years plus interest." • COPs • Asset backed financing • Typically used for rolling stock • "I'll come back for the ring in 30 years when I have the money or you keep the ring." • BABs • Created under the American Recovery and Reinvestment Act (ARRA); taxable municipal bonds that carries special tax credits and federal subsidies • "Okay, okay. I'll pay you back with interest and I'll get you a break on what you owe Danny the Geech." • PABs • A municipal security whose proceeds are used by one or more private entities. • "This is a special deal just for you, okay? You're the only one who can make this work." • TIFIA • Federal credit assistance in the form of direct loans, loan guarantees, and standby lines of credit • “I don’t really need your money, just tell Danny the Geech you got me covered.” • RRIF • Federal Railroad direct loans and loan guarantees • P3 • Contractual arrangement between a public agency and a private sector entity. Each sector’s skills are shared in delivering a service or facility. • “You scratch my back, I scratch yours.” • Unsolicited Proposals • Application submitted on the initiative of the offeror toobtain a contract with the government; not in response to a request for proposal (RFP) • “Pssst. Hey, bud. I got an idea.”

4. Creative Use of Tools Creativity comes in how the financing tools are used based on individual project characteristics. Eagle Project - $2.2 Billion - 40 miles - Three lines • P3 – Equity Financing • PABs • BABs • Sales and Use Tax Bonds • TIFIA • New Starts • Sales and Use Tax Funds • Local/Colorado DOT/Other Attraction: • Train to Airport • Development opportunities • Regional in scope • Panasonic located near airport

5. Creative Use of Tools Denver Union Station - 60 acres - $560 Million • City and County Tax Increment Financing District (TIF) • Property Taxes • RRIF • TIFIA Attraction: • Historic Building; existing identity • Transit Hub • Major development opportunity in downtown Denver

7. Creative Use of Tools North Metro - 18 Miles - $633 Million (plus $119M property • Unsolicited Proposal • COPs • Sales & Use Taxes Attraction: • RTD owned right of way • Fast growing area • Previous successful lines

8. Bond Refinancing Savings Factors to consider: • Call date • Net Present Value - RTD’s threshold is 3 percent

9. Intangibles Long-term contracts - cost savings from less frequent negotiations, RFPs and reviews Perception of board - certainty of sound fiscal decisions "Moody's sets high expectations for boards' role in shaping a firm's risk appetite and ensuring proper risk management framework is in place." Best Practices for a Board's Role in Risk Oversight, 2006, Moody's Agency backstop - RTD automatically appropriates 90% of previous year's budget if current year budget is not approved.

10. THANK YOU JEFF.WALKER@RTD-DENVER.COM