OPEN SESSION OCTOBER 30, 2025 PAGE 4 OF 8
that the Conservation Area shall remain substantially in its natural condition forever; and the Conservation Area may contain land, functions, values, and services that serve as mitigation for impacts within the Otter Point Creek 1 Tier II catchment that were permitted by MDE; and MDE is a third-party beneficiary under the Declaration. Upon motion by Member William H. Cox, Jr. and seconded by Member Samuel D. Snead, the Members unanimously approved to place restrictive covenants on the subject property containing 15.208 acres, plus or minus, in order to meet environmental obligations.
APPROVAL – DEBT POLICY
Mr. Allen Garman requested MDTA Board approval to continue with the current MDTA Debt Policy.
Mr. Garman explained that following the annual review by internal staff and an external municipal advisory firm, no changes to the Debt Policy are currently recommended.
He further explained that the Debt Policy includes legal requirements within Maryland State Law and the Trust Agreement, as well as Board directives to ensure financial strength. These guidelines and mandates support credit quality and access to the capital markets at the lowest possible financing rates.
Upon motion by Member Samuel D. Snead and seconded by Member Dontae Carroll, continuing with the current MDTA Debt Policy was unanimously approved.
APPROVAL – TRUST AGREEMENT CHANGES
Mr. Garman advised that currently, the Trust Agreement does not provide the MDTA with the ability to self-fund a business interruption insurance reserve and treat the releases from the reserve as Net Revenues for purposes of supporting the annual Rate Covenant or Debt Service Coverage ratios. Recently, the MDTA has experienced rapidly rising insurance premiums nationally as a function of increasing natural disaster loss activity, as well as the MDTA’s recent business interruption experience. These circumstances have necessitated a close examination of the Master Trust Agreement provisions for insurance reserves and the legal treatment of reserve releases to ensure stable Debt Service Coverage. The proposed changes would authorize external Bond Counsel to draft changes to various sections and definitions within the Trust Agreement to provide the MDTA with the financial flexibility to self- insure for potential business interruption with cash reserves. Other potential benefits include lower insurance costs, the elimination of counterparty risk, and more stable Debt Service Coverage in stress scenarios. Mr. Garman also advised that per the Finance and Administration Committee’s request, MDTA Management has drafted proposed changes to the MDTA’s Board Operating Policy to reserve the authority of the MDTA Board to make future decisions regarding self-funding. The proposed changes will be presented to the Board for approval at a future date.
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