Approval to Submit TIFIA Loan Application

Transcription

1 Finance & Administration Committee Action Item III-G September 16, 2010 Approval to Submit TIFIA Loan Application

2 Washington Metropolitan Area Transit Authority Board Action/Information Summary Action Information MEAD Number: Resolution: Yes No TITLE: Approval to Submit TIFIA Loan Application PURPOSE: To obtain Board approval to apply for the TIFIA line of credit and loan facility contingent on receiving an invitation from the U.S. Department of Transportation to apply. DESCRIPTION: Earlier this year, the U.S. Department of Transportation invited applicants to submit a Letter of Interest (LOI) for projects to be evaluated against TIFIA program objectives for credit assistance. To support the goal of utilizing every resource wisely, Metro submitted a preliminary LOI in March 2010 and a revised LOI in August 2010, with rail system safety as the focus and selection criteria for the projects included in the LOI. The LOI included $2.9 billion of projects from the approved FY Capital Funding Agreement with a rail system safety focus. Also included were the National Transportation Safety Board recommended projects. The maximum TIFIA credit amount will be approximately $940 million or 33% of the estimated rail safety project cost of $2.9 billion. In the LOI Metro requested a combination of $500 million in a line of credit facility and a direct loan in an amount of approximately $440 million (equal to the amount of borrowing anticipated in the FY CIP). FUNDING IMPACT: Replacing existing commercial bank lines of credit agreements with a TIFIA line of credit would save Metro approximately $2 million per year. There is no adverse impact on Metro`s operating and capital budgets. RECOMMENDATION: Authorization to submit a formal application seeking TIFIA credit assistance for approximately $940 million, in a combination of $500 million in a line of credit facility and a direct loan in the amount of approximately $440 million, contingent on receiving an invitation from the U.S. Department of Transportation to apply.

3 Washington Metropolitan Area Transit Authority Transportation Infrastructure Finance and Innovation Act (TIFIA) Credit Program Finance and Administration Committee September 16, 2010

4 Purpose To obtain Board support for efforts to participate p in the TIFIA credit program to address the NTSB recommendations in a timely manner, and To seek Board approval to apply for a TIFIA line of credit and loan facility contingent on receiving an invitation from DOT to apply

5 TIFIA Credit Program - Benefits Metro has various lines of credit agreements for procuring capital assets, including the 300 new railcars Metro would save approximately $2 million per year by using a TIFIA line of credit FY Capital Funding Agreement contemplates issuing debt of $440 million Borrowing under TIFIA costs less than using the capital market Metro can leverage TIFIA credit assistance to simultaneously address both the NTSB recommendations and state of good repair work already planned

6 Background USDOT invited applicants to submit a Letter of Interest (LOI) for TIFIA program Projects evaluated against TIFIA program objectives for credit assistance Only competitive and highest-rated projects will be considered and invited to submit a formal application Metro submitted a preliminary LOI in March 2010 Revised LOI submitted in August 2010 to reflect estimated impact of NTSB recommendations issued on July 27

7 Background LOI projects total $2.9 billion and include: Rail system safety projects from approved Capital Funding Agreement New NTSB recommended projects Maximum TIFIA credit amount: approximately 33% or $940 million Metro requested a combination of $500 million in a line of credit (LOC) facility and a direct loan in an amount of approximately $440 million

8 Recommendation Contingent on receiving an invitation from DOT to apply, ppy, approval to submit a formal application seeking TIFIA credit assistance for approximately $940 million, in a combination of $500 million in a line of credit (LOC) facility and a direct loan in an amount of approximately $440 million.

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