Alternative Financing
Pa Youa Xiong
MnDOT Office of Financial Management
Alternative Financing
• TRLF
• TIFIA
• Bonds
• LGA
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TRLF
Transportation Revolving Loan Fund
History
1995 NHS Designation Act - State Infrastructure Bank (SIB)
1997 MN Legislation – TRLF (MN Statute 446A.085)
• MnDOT in partnership with DEED and the PFA.
•
•
•
•
$4 million Federal Funds SEED (1998-2005)
$31 million Federal Funds (1998-2000)
$7 million State Trunk Highway Funds (1999-2000)
$16.5 million State General Fund (1998-2000)
$8.2 million of the State General Fund was rescinded in 2003 to
help balance the state budget.
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TRLF
Eligible Projects
Title 23 or Title 49
Eligible costs include but are not limited to preliminary and final
design, engineering, construction, right-of-way acquisition and
capitalized interest.
Eligible Borrowers
Governmental entities (Cities, Counties, MnDOT, etc.)
Private entities are not eligible but can coordinate with a
transportation agency
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TRLF
Forms of Repayment
Property Tax Levies
Special Assessments
Tax Increment Financing (TIF)
Local Government Option Sales Tax
Future State-Aid Funds
Future Federal-Aid Funds
Future State Trunk Highway Funds
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TRLF
Loan Repayment
Interest payments must begin within one year after the loan
agreement is executed.
Principal payments can begin up to three years after the loan
agreement is executed or one year after construction is completed,
whichever is sooner.
Payments occur semi-annually on February 20 and August 20.
Loan Term
Up to 30 years, or the “useful life” of the project, which ever is
less. Determined by MnDOT
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TRLF
Security Requirement
All borrowers (except MnDOT) will be required to provide to the
Authority either:
General Obligation Bond (a pledge of a portion of the property
taxes collected)
OR
Revenue Bond (a pledge of revenues such as sales tax revenue,
parking revenues, user fees, future federal and/or state aid etc.)
MnDOT can provide the pledge of future federal or state funds as
security for TRLF loans.
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TRLF
Reimbursable Loan
Payments for the project needs to be incurred before the PFA can
disperse the funds to the borrow.
Can bill PFA for ongoing payments
Total amount dispersed cannot exceed agreement amount.
More Questions?
Contact Steve LaFontaine (PFA)
Stephen.Lafontaine@state.mn.us
651-259-7471
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TRLF
Interest Rates
A market index to establish the base interest rates for the TRLF.
Discounts
General obligation note - could receive a 1.50% discount from the
AAA rates.
Revenue note - could receive a 1.50% discount from the BBB rates
Discount is set on an annual basis and can be adjusted by the PFA.
Population of less than 5,000 will receive an additional discount of
1.00%. Exception, adjusted interest rate cannot be below 1.00%.
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TRLF
Responsibilities - MnDOT
Coordination of respected MnDOT District Office
Completion of Application
• Municipal Resolution
• ATP Concurrence
• MPO Concurrence (if applicable)
District forwards completed application to Central Office (OFM)
TRLF Review Committee reviews and scores projects
TPIC approves recommendation for Commissioner’s Certification
Commissioner certifies project
Certified project is forwarded to the Public Facilities Authority
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TRLF
Responsibilities – Public Facilities Authority (PFA)
Send’s potential borrow Financial Application Form
Credit Check
Underwriting of the Loan
Execution of the Agreement
Disbursing funds to borrower
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TRLF
Application Record
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TIFIA
Transportation Infrastructure Finance and Innovation Act
Federal Loan Program for project of national or regional significance.
Minimum Anticipated Project Costs:
• $10 million for Transit-Oriented Development, Local, and Rural
Projects
• $15 million for Intelligent Transportation System Projects
• $50 million for all other eligible Surface Transportation Projects
Credit Limit – up to 33% of anticipated eligible project costs.
If sponsor has compelling justification, it can be up to 49%.
Eligible Applicants: State Governments, Local Governments, Private
Firms, Special Authorities, Transportation Improvement Districts and
State Infrastructure Banks.
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TIFIA
Eligible Applicants
State Governments, Local Governments, Private Firms, Special
Authorities, Transportation Improvement Districts and State
Infrastructure Banks
Eligible Projects (not limited to)
Highways and Bridges, ITS, Intermodal Connectors,
Transit Vehicles and Facilities, Pedestrian Bicycle Infrastructure
Networks, Rural Infrastructure Projects, Passenger Rail Vehicles and
Facilities
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TIFIA
Fees
Application Fee (cover cost of outside advisors) $400,000 $700,000 depending on project complexity
Annual Loan Servicing Fee of $13,000, due Nov. 15th
Montioring Fee (has not been charged to date)
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TIFIA
Project Examples
https://www.transportation.gov/tifia/projects-financed
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Bonds
TH Bonds - are required to be used on the TH system. Project
must have a useful life of 20 years.
General Obligation Bonds – used for any purpose other than
for Trunk Highways.
Bonds for State Aid Projects
Local Bridge Replacement Program
Local Road Improvement Program
Contact Patti Loken (SALT) for more information.
Patti.Loken@state.mn.us
(651) 366-3803
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TH Bonds
Chapter 152 (2008) $1.7B
• $1.08B Non-Designated
• $600M Bridges
• $40M Interchanges
Chapter 36 (2009)
• $40M Interchanges
Chapter 388 (2010)
• $100M Highway Improvements & Interchanges
Chapter 117 (2013)
• $300M for Corridors of Commerce
Chapter 5 (2015)
• $140M Non-Designated
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LGA
Local Government Advance
MN Statute 161.361
ADVANCE FUNDING FOR TRUNK HIGHWAY PROJECTS
Local agencies have the ability to advance TH projects ahead of when the
project is programmed/planned to be let by MnDOT using their own
funds.
Requirements
1.
Project has be identified in the CHIP (STIP is first 4 years)
2.
Funds for LGA projects are available for those years.
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LGA
LGA Funding Accounts
Advance Funding ($10,000,000 cap without interest)
To expedite construction of all or part of a trunk highway in the Metro
and/or the Greater Minnesota
Interregional Corridors ($10,000,000 cap with interest)
To expedite development of an interregional transportation corridor
including design consultants, right-of-way purchases, construction, or
other related expenditures in the Greater Minnesota
Bottlenecks ($10,000,000 cap with interest)
To expedite bottleneck reduction including design consultants, right-ofway purchases, construction, or other related expenditures in the Metro
areas
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LGA
• Project selected – District/ATP
• Communication with OTSM – Brian Gage
• OTSM and OFM will see if funding in specified years are
available
• Cooperative Agreement Unit - Maryanne Kelly-Sonnek
• OFM monitors payments
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Questions?
Contact:
Pa Youa Xiong
Pa.Youa.Xiong@state.mn.us
(651) 366-3781