The Transportation Infrastructure Finance and Innovation Act

(TIFIA) program is off and running in FY 2004 with two new

applications and two Letters of Interest from sponsors

contemplating the use of TIFIA in their finance plans.

Operating under the current Continuing Resolution that runs

through January 2004, the TIFIA program has approximately

$1.1 billion in credit assistance available.

The first application received in FY 2004 by the TIFIA Joint

Program Office (JPO) was from IdleAire Technologies

Corporation seeking an estimated $300 million loan to

support an Advanced Truck Stop Electrification project with

estimated total costs of $1.1 billion. IdleAire’s proposal

involves a project that would enable truck drivers to turn off

their engines during rest periods while still having access to cab

heating, air-conditioning, electrification, and other amenities.

The proposed TIFIA credit assistance in conjunction with

$682 million in senior bonds would help advance this project

which is intended to reduce idling emissions, improve sleep for

long-haul truck drivers, and improve highway safety.

The TIFIA JPO has also received an application from the

Louisiana Transportation Authority (LTA) seeking a $52

million loan to support a $158 million project in Lafourche

Parish, Louisiana. The TIFIA credit assistance would help

construct a 16.3-mile arterial four-lane, fully controlled access,

elevated highway. Phase I of this project, to which the TIFIA

loan would be applied, includes the construction of a two-lane

Hampered by inadequate revenues for

roads and highways, the state of Oregon

is turning to creative thinking to meet

system needs. Amidst development of

new concepts such as statewide mileage

fees and bundling of bridge repairs in

design-build format, Oregon is also

entering the entrepreneurial world of

public-private partnerships.

Legislation for Oregon PublicPrivate Ventures

Through passage of Senate Bill 772, the

2003 Oregon Legislature gave the

Oregon Department of Transportation

(ODOT), private entities, and units of

government expansive opportunities for

partnership in Oregon transportation

projects. These opportunities are

embedded in a new legislatively

mandated program called the Oregon

Innovative Partnerships Program.

Separated yet coordinated with

traditional ODOT processes, the

Innovative Partnerships Program will

allow achievement of SB 772’s defined

goals for development of an expedited

project delivery process and maximization of innovation.

The innovative partnership arrangements that can be formed under this

new program are constrained by few

statutory restrictions and have

potentially broad applications. Eligible

projects include “any undertaking that

facilitates any mode of transportation”

in Oregon. 

SB 772 removes a number of state

impediments to forming innovative

partnerships:

❖ Allows private sector partners to

enter transportation projects as

early as the conceptual stage of

project development. 

❖ Allows ODOT to solicit proposals,

or accept unsolicited proposals, for

transportation projects from private

firms or units of government. 

❖ Maintains confidentiality of proprietary information submitted with a

transportation project proposal and

protects negotiations while

maintaining public transparency for

project development. 

❖ Exempts transportation projects

undertaken by ODOT under the

authority of the Innovative

Partnerships Program from most

requirements of the state

procurement law. Thus, ODOT

may streamline processes for the

selection of partners, including prequalification of potential partners.

TECHNICAL CORNER

VOLUME 9, NUMBER 4 FALL 2003/WINTER 2004

On the Road to Creation: Oregon’s Innovative Partnerships Program

Also in this issue...

Texas and Oklahoma

GARVEE Legislation . . . . . . . . . .3

Mississippi Bond Bank . . . . . . . .4

Tapered Match in New York . . . .5

Rhode Island GARVEE . . . . . . . .6

Kansas Transportation

Revolving Fund . . . . . . . . . . . . .7

Caltrans Transportation

Finance Bank . . . . . . . . . . . . . .7

FEDERAL CREDIT PROGRAM

FY 2004 TIFIA Applications, Letters of Interest Received

continued on page 2

continued on page 8
bridge over Bayou Lafourche at Leeville and a two-lane

elevated span from Leeville south to Highway 3090. The

project received a Record of Decision in January 2003 and is

exploring tolling options as part of its funding package.

Two California transit projects have also submitted Letters of

Interest to the TIFIA program. The North San Diego County

Transit Development Board (NCTD) has submitted a Letter of

Interest for TIFIA credit assistance seeking an $80 million loan

for the Oceanside-Escondido Sprinter rail project in Northern

San Diego County. This $351.5 million project will convert

22 miles of existing freight rail alignment into a diesel multiple

unit passenger rail system running from Oceanside to

Escondido. The project will also include 1.7 miles of new rail

right-of-way to serve California State University-San Marcos.

The project currently has a Full Funding Grant Agreement

with the Federal Transit Administration (FTA) and is seeking

to use TIFIA and state and local sources to complete its

funding plan.

Further north, the Transbay Joint Powers Authority (TPJA) has

submitted a Letter of Interest seeking a $690 million TIFIA

loan in support of a $2.1 billion project to build a new

multimodal Transbay Terminal and downtown extension of

Caltrain in San Francisco. Construction of the project is

scheduled for completion in 2011.

Contact:

Duane Callender,

TIFIA JPO,

202/366-9644,

duane.callender@fhwa.dot.gov

The Finer Points of TIFIA

The “Finer Points of TIFIA” box provides responses to questions posed by our readers and other observers. We hope

you find this section useful and that you will submit questions to Mark Sullivan, Chief, TIFIA JPO, 202/366-5785 or

mark.sullivan@fhwa.dot.gov.

Question

What oversight does U.S. DOT conduct on projects receiving TIFIA credit assistance? How are these activities

integrated with monitoring procedures already in place?

Answer

 The goal for TIFIA project oversight and credit monitoring is to protect the Federal interest by managing risks to

project delivery and loan repayment. The U.S. DOT has a long-standing responsibility to monitor projects receiving

Federal assistance, especially large projects. By law, the U.S. DOT must monitor its credit instruments and update its

capital charges annually.

 A project that receives TIFIA credit assistance must follow the Federal grant requirements of the U.S. DOT operating

administration – Federal Highway Administration (FHWA), Federal Transit Administration (FTA), or Federal

Railroad Administration (FRA) – most closely affiliated with that project. In many cases, the project is also receiving

grant assistance from that U.S. DOT administration.

 The TIFIA program monitors a project from execution of the credit agreement through final maturity, relying as

much as possible on existing U.S. DOT oversight arrangements such as the FTA’s Project Management Oversight

(PMO) program and the FHWA’s Major Project requirements. These procedures are augmented as needed to address

any unique TIFIA credit risks. The TIFIA program also takes full advantage of credit reports, independent engineer

reports, and other mechanisms required by the capital markets.

 For each TIFIA project, the U.S. DOT prepares an Oversight and Credit Monitoring Plan based on the project’s risk

profile and operating administration requirements. The TIFIA staff participate in periodic site visits and status

meetings, consistent with the program’s role as a project investor. Borrowers must provide ongoing financial and

project information until the debt is fully repaid. This includes annual updates to the project’s financial plan per

requirements specified in the credit agreement. The borrower must also provide, at its own expense, ongoing credit

surveillance reports from a nationally recognized credit rating agency throughout the life of the TIFIA debt. 

 Each TIFIA credit agreement specifies the documentation required to assist the U.S. DOT in its monitoring of

projects receiving TIFIA assistance.

FY2004 TIFIA, continued from page 1

2
3

GARVEE ROUNDUP

* Colorado DOT issued $400.2 million in June 2002 to refund prior bonds.

Date Face Amount of Rating Projects

State of Issue Issue (in Millions) Moody’s/S&P/Fitch Financed Backstop

New Mexico Sep. 1998 $100.2 A3/A-/na New Mexico SR 44 No backstop; bond

Feb. 2001 $18.5 A2/A/na insurance obtained

Ohio May 1998 $70.0 Aa3/AA-/AA- Various projects including: Moral obligation pledge to use

Aug. 1999 $20.0 Aa3/AA-/AA- Spring-Sandusky and state gas funds and seek

Sep. 2001 $100.0 Aa3/AA/AA- Maumee River general fund appropriations

Sep. 2002 $135.0 Aa3/AA/AA- improvements in the event of Federal shortfall

Arkansas Mar. 2000 $175.0 Aa2/AA/na Interstate Highways Full faith and credit of state,

July 2001 $185.0 Aa2/AA/na plus state motor fuel taxes

July 2002 $215.0 Aa2/AA/na

Colorado* May 2000 $537.0 Aa3/AA/AA Any project financed Federal highway funds

Apr. 2001 $506.4 Aa3/AA/AA wholly or in part by as allocated annually by

Jun. 2001 $208.3 Aa3/AA/AA Federal funds CDOT; other state funds

Aug. 2003 $100.0 Aa3/AA/AA

Arizona Jun. 2000 $39.4 Aa3/AA-/AA- Maricopa freeway projects Certain sub-account transfers

May 2001 $142.9 Aa3/AA-/AAJuly 2003** $149.0 Aa3/AA-/AAAlabama Apr. 2002 $200.0 Aa3/A/na County Bridge Program All Federal construction

reimbursements. Also insured

Virgin Islands Oct. 2002 $20.8 na/na/AAA Enighed Pond Port Project Insured

and Red Hook Passenger

Terminal Building

Alaska Apr. 2003 $102.8 Aa2/AA/AA Eight road and bridge projects Full faith and credit of state

Rhode Island Nov. 2003 $217.0 Aa3/A+/AA- Freeway, Bridge and Freight None

Rail Improvement Projects

Total $3,218.5

A new Grant Anticipation Revenue Vehicle (GARVEE) and

general highway revenue bonding program has been authorized

by the Texas State Legislature, while Oklahoma’s previously

approved GARVEE program has won a legal victory that will

allow it to proceed.

Texas’ bonding program began with an omnibus transportation

bill passed by the Legislature in June 2003. Since it required a

constitutional amendment, the program could not begin until

the amendment was approved by the voters in September

2003. Texas’ program will permit the DOT to issue up to $1

billion per year of highway revenue bonds, not to exceed a

cumulative total of $3 billion. At least $600 million of the

amount issued must be used for highway safety improvement

programs. The bill does not name specific projects. Instead,

the Texas Transportation Commission will be able to weigh the

costs and benefits of borrowing for selected projects. The

Commission is also directed to establish criteria for selecting

the safety projects that will be assisted under this program.

The bill establishes a maximum maturity of 20 years, and

limits the annual expenditures on debt service to 10 percent of 

the funds (Federal, state, and other) credited to the state’s

Highway Revenue Account in the previous year.

Oklahoma’s program, authorized to issue $1 billion in total

debt, was halted in 2002 by a state Supreme Court ruling that

upheld challenges to the bond approval process. The state

addressed these challenges by creating a Council of Bond

Oversight that included appointments from both the executive

and legislative branches. The bond opponents also challenged

the creation of the Council, claiming it violated the required

separation between the executive and legislative branch, but

this claim was dismissed by the state Supreme Court.

Oklahoma’s initial GARVEE authorization, passed in 2000,

limits the term of the notes to 20 years, and requires an average

interest rate of seven percent or less. While original plans were

to issue $200 million, due to uncertainty over future Federalaid highway funding

levels, the state plans

to start with an initial

issue of $50 million.

GARVEE Transactions As of November 2003

Texas Undertakes New GARVEE Program, Oklahoma Program Clears Legal Hurdles

** $23.8 million refunded outstanding June 2000 bonds.

Contact:

Jennifer Mayer,

FHWA National Resource Center,

415/744-2634,

jennifer.mayer@fhwa.dot.gov

Table includes only bond transactions where the entire bond issue funds Federal-aid highway projects and is backed by Federal-aid reimbursements under

Section 122, Title 23.
The Finer Points of GARVEEs

Each issue of IFQ features questions and answers on the GARVEE program. This issue focuses on the mixing and

matching of Federal innovative finance tools. Under Section 122 of Title 23, Federal-aid funds can be used to repay

the debt service on any “eligible debt financing instrument.” Federal innovative finance tools include many different

debt financing instruments, but only some of these would be considered eligible debt financing instruments under

Section 122.

Note that answers to these questions are not regulatory or legislative, but represent FHWA’s current administrative

interpretations. If you have questions or want to confirm any of this information, please contact your local FHWA

Division office. GARVEE guidance is also available at: http://www.fhwa.dot.gov/innovativefinance/garguid1.htm

Would a State Infrastructure Bank (SIB) loan be considered an eligible debt financing instrument? Could a state be

reimbursed for interest on a SIB loan? 

Yes, a SIB would be an eligible debt-financing instrument, and interest costs of such a loan would be eligible. If the

SIB in question were operating under the National Highway System Pilot rules, since the source of repayments would

be Federal, the SIB loan repayments would have to be used for projects following Federal requirements.

Would a TIFIA loan be an eligible debt financing instrument? Could a state be reimbursed for interest on a TIFIA

loan?

Future Federal-aid funding would not be considered an eligible source of repayment for a TIFIA loan: thus, a TIFIA

loan could not be repaid through a GARVEE structure. However, GARVEEs could be used in conjunction with

TIFIA credit assistance as part of a comprehensive financing package. 

For more information about GARVEEs, contact Jennifer Mayer, Innovative Finance Specialist, FHWA National

Resource Center at San Francisco, 415/744-2634, jennifer.mayer@fhwa.dot.gov.

The Federal innovative finance tools

offer states significant flexibility in how

they are used, enabling a state to tailor

the techniques to meet state specific

needs. Mississippi’s recent bond

financing demonstrates how the

provisions of Section 122 of Title 23, the

GARVEE financing mechanism, can be

applied to advance critical projects, using

a conduit issuer to loan bond proceeds to

finance local Federal-aid projects.

The Mississippi Development Bank

(MDB), established in 1986, issues

bonds on behalf of local governmental

units (such as cities, counties, and state

agencies) to finance infrastructure

improvements. MDB, the conduit

issuer, loans the proceeds to the

governmental unit which is then

responsible for retirement of the debt

through an annual payment to the

MDB. This approach has a number of

benefits, including more flexibility in

bond covenants and debt service

coverage requirements and attractive

interest rates.

Recognizing these benefits and the need

to accelerate the funding of county

bridges, the Office of State Aid (State

Aid) within the Mississippi Department

of Transportation (MDOT), partnered

with MDB to leverage Federal funds.

State Aid receives an annual portion of

Federal-aid specifically to assist local

governmental units with transportation

projects. State Aid determined that there

was a backlog of critical bridge projects

that needed to be expedited, but

sufficient funds were not available to

advance the projects. To fill this funding

gap, it was decided that MDB would

loan bond proceeds for the projects,

which would then be repaid with a

portion of Federal-aid bridge funds.

In June 2003, the MDB sold $215

million in Variable Rate Demand Bonds,

of which $35 million is loaned through

the Mississippi Transportation Commission (MTC) to the Office of State Aid to

fund a backlog of 60 critical county

bridge projects. By leveraging its Federal

dollars, Mississippi is able to get projects

off the shelf, accelerating needed repairs

to county bridges.

continued on page 5

4

State Bond Bank Used to Advance Mississippi Federal-aid Projects
This structure allows State Aid to draw on all or a portion of

the funds when needed with a 10-year term on the loan

established from the date of the draw. When the funds are

drawn down to fund a project, they are viewed as grants to the

recipient county. State Aid does not incur any fees or interest

charges, including the additional 120 basis points above the

bond interest rate charged by MDB until the actual funds are

drawn. Since the MDB bond interest is reset on a weekly

basis, the interest rate is much lower than a fixed rate, saving

dollars for the state construction program. State Aid is

repaying the MDB loan from MDOT’s annual allocation of

Federal-aid bridge funds received over a 10-year period.

FHWA will reimburse principal and interest along with other

eligible debt-related costs in accordance with FHWA and

GARVEE guidelines.

The use of state bond banks can provide many financial

benefits in the areas of economies of scale, flexibility, and

leveraging thereby advancing transportation goals through

increased safety, congestion reduction, and economic

development. Given that many states have bond banks to

advance capital improvement projects, the approach used by

Mississippi may be an alternative to the direct sale of GARVEE

bonds by a state DOT and has the potential to be a model for

financing smaller, local Federal-aid projects.

Mississippi State Bond Bank Advances Projects, continued from page 4

$215,000,000

$35,000,000

MDB Bond Sale

MDB

MTC

Office of State Aid

Counties For 

Off-system

Bridge Program

$215,000,000

$35,000,000

$35,000,000

$35,000,000

Memorandum of 

Understanding Between 

MTC, State Aid, FHWA

Participating Projects

Awarded Grants

MDB Bonds Issued Variable 

Rate Tied to Bond Market 

Association Index

Loan Agreement Variable 

Rate Tied to MDB Bonds 

Plus 120 Basis Points

MTC Transfers Principal 

Advances In Exchange for 

State Aid Promise To Pay 

Debt Service with Annual 

Allocation Of Federal 

Bridge Funds.

5

Or:

Brenda Znacho,

MDOT,

601/359-7761,

bznacho@mdot.state.ms.us

Tapered Match Provisions Employed in New York

Recognizing New York’s need to bridge the investment gap between available resources and transportation infrastructure

needs, the FHWA New York Division Office has been providing ongoing technical assistance to the New York State

Department of Transportation (NYSDOT) Executive Committee on the use of innovative financing techniques. Two years

ago, NYSDOT decided to move forward with tapered match, a cash management tool enabled by the Transportation

Equity Act for the 21st Century (TEA-21). NYSDOT applied the tapered match provision on 12 projects throughout the

state totaling $330.9 million with a Federal share of $271.6 million. The use of tapered match allowed New York to vary

its matching share of costs over the life of the 12 projects, to better manage the near-term gap in state matching funds.

Now two years later, economic conditions in the state continue to be troubled, and the availability of state matching funds

continues to be very limited. To help meet current funding needs, on March 14, 2003 the Division Office approved

NYSDOT’s second request to use the tapered match provision on 24 Federal-aid projects. The total estimated cost of these

projects is $696.9 million with Federal funding totaling $525 million. To date, New York has authorized six of these

projects using tapered match, totaling $230 million with a Federal share of $188 million.

Without the use of tapered match, these projects would have been delayed until at least the second half of the state fiscal

year. This would have meant that the actual construction would have been delayed until the 2004 construction season,

resulting in a later completion date and potentially increased project costs. By demonstrating that tapered match would

expedite completion and reduce costs of the 24 projects, New York is able to

deliver needed transportation projects in the state. While a long-standing

feature of the innovative finance “toolbox,” tapered match continues to be a

valuable cash management strategy for states facing the pressures of near-term

investment needs and funding gaps.

Contact:

Mike Fazioli,

FHWA New York Division Office,

518/431-4125, ext. 216,

mike.fazioli@fhwa.dot.gov

Contact:

Jim Hatter,

FHWA National Resource Center,

404/562-3929,

jim.hatter@fhwa.dot.gov

INNOVAT IVE TOOLS IN PRACT ICE

The following diagram shows the basic structure of the transaction:
6

Rhode Island Deploys GARVEE and State Bonding Program

Like many states, Rhode Island is facing the significant costs of

reconstructing 45-year-old Interstate System segments,

replacing critical bridges, and developing new transportation

projects to accommodate economic growth. At the same time,

the Rhode Island Department of Transportation (RIDOT) has

largely “reserved,” or programmed, its future annual

construction program in order to complete the vital

construction projects contained on its State Transportation

Improvement Program.

In order to address these seemingly competing needs, Rhode

Island has developed a multi-year bonding strategy that couples

GARVEE bonds to fund the Federal-aid eligible portion of

certain project costs with Motor Fuel Tax Revenue bonds to

finance the state share of such project costs. Rhode Island

plans to issue a maximum of $710 million in GARVEE bonds

and a maximum of $125 million in Motor Fuel bonds.

This bond package will be used to partially finance five

transportation projects, critical to the continued economic

vitality of Rhode Island. According to Brian P. Peterson,

RIDOT’s Chief Financial Officer, the bonds allow the state “to

continue the rest of the (construction) program while

completing the five critical transportation projects on an

accelerated basis.” These five projects are described below.

❖ Interstate 195 Relocation Project

This $418 million project involves the relocation of a 45-

year-old 1.6-mile stretch of Interstate 195 (I-195) and an

adjacent 0.8-mile portion of Interstate 95 (I-95) through

Providence. The freeway will be relocated 2,000 feet to

the south of its current alignment and outside the barrier

which protects the 350-year-old city from hurricane

flooding. The project includes 14 new bridges with a

1,200-foot mainline bridge over the Providence River, 25

lane-miles of new interstate, a new interchange with I-95,

five miles of new city streets, and 4,100 feet of new

pedestrian river walks. In addition, removal of the existing

interstate will free up 20 acres of prime downtown real

estate. The project will complement the recently

completed river relocation, Waterplace Park, and

Memorial Boulevard Extension projects that have

revitalized downtown Providence.

❖ Route 403 Project

The $129 million Route 403 project involves construction

of a new freeway that will connect the existing Route 4

freeway in East Greenwich with the Quonset Davisville

Port and Commerce Park in North Kingstown (the

Quonset Industrial Park), improving access to the park.

This 4.5-mile, four-lane, controlled-access facility will

contain three interchanges, a total of 14.8 miles of roadways (including the main freeway and the ramps), 14 new

bridges, two bridge rehabilitations, an extensive storm

drainage and water quality treatment system, and

environmental mitigation improvements. With funding

provided by the bonding package, the freeway will be

constructed in six contracts and opened to traffic at the

end of 2007, five years ahead of the initial construction schedule.

❖ Freight Rail Improvement Project

The $196 million Freight Rail Improvement Project

(FRIP) is a 22-mile project located within Amtrak’s

Northeast Corridor. This project entails constructing a

freight dedicated track along Amtrak’s mainline tracks,

linking Quonset/Davisville to the Boston Switch at

Central Falls and out to western markets. The FRIP is to

be administered by Amtrak Force Account – work

performed by Amtrak forces – as well as RIDOT

construction contracts. RIDOT construction contracts

consist of nine individual sitework and structure projects

containing elements of work necessary for preparing the

alignment and trackbed for the construction of the third

track. Funding for the project is a mix of state and Federal

funds, including a combined $51 million in planned

GARVEE and Motor Fuel bonds. 

❖ New Washington Bridge

The existing Washington Bridge carries multiple

eastbound lanes of I-195 and U.S. Routes 6 and 44 over

the Seekonk River between the cities of Providence and

East Providence. The bridge also passes over several local

streets as well as the Providence and Worchester Railroad.

It was built in 1928, and is immediately south of the

Washington Bridge North built in 1970. Based on the

recommendations of a value engineering study, the $85

million New Washington Bridge will be realigned within a

vacant area between the 1928 and 1970 structures, using a

portion of existing foundations to construct the new

facility. The new bridge will consist of five, 12-foot travel

lanes and two, four-foot shoulders.

❖ New Sakonnet Bridge

The $151 million New Sakonnet Bridge project will

replace the existing bridge on a new alignment

immediately south of the existing structure. Replacement of this bridge is required due to seismic

susceptibility, structural inadequacy, and substandard

safety features. The crossing carries Rhode Island State

Route 24 over the Sakonnet River, a tidal passage

separating the Town of Portsmouth on Aquidneck Island

to the west and the Town of Tiverton on the mainland to

the east. It is a key link in the transportation systems

connecting Massachusetts to Rhode Island and the

Aquidneck Island communities.

continued on page 9
As of September 2003, 32 states had entered into 351 loan

agreements with a total dollar value of $4.5 billion. This

activity is shown in the table to the right.

This issue of IFQ highlights two states that have recently

established SIB-like programs, aimed at increasing the

availability of financial assistance to local governments for

eligible transportation projects. In Kansas, a revolving

fund has been established using state funds, to support

generally small local projects. In California, the

administration of the Transportation Finance Bank has

changed, and enhancements have been made to

implement the bank’s

flexible short-term financing opportunities.

Kansas Transportation Revolving

Fund Established 

In December 2003, the Kansas Department of

Transportation (KDOT) used a portion of state revenues

from its State Highway Fund to establish a Transportation

Revolving Fund. The fund is patterned after existing state

water revolving funds and other state transportation

revolving funds. The KDOT fund is intended to assist

cities and counties improve their transportation facilities.

Eligibility extends to locally sponsored projects both on and off

the State Transportation System. The fund will be initially

capitalized with $25 million during FY 2004. Applicants are

limited to $6 million in loan requests annually. Prior to

implementation of the fund, 25 units of government had

expressed interest in the fund. The fund received four

applications totaling $13 million in the first month of

operation. Interest in project

funding ranges from $45,000 to

$6 million. Applications and

inquiries come from all regions

of the state.

Caltrans Administers Transportation 

Finance Bank 

The SIB program in California was originally authorized by

statute in 1998 for administration by the California

Infrastructure and Economic Development Bank (CIEDB)

under the California Technology, Trade and Commerce

Agency. Known as the Transportation Finance Bank (TFB), it

was established to provide credit enhancements, but was never

formally marketed and no loan guarantees were ever made. 

With no activities in the TFB program, in fiscal year

2001/2002, the California Department of Transportation

(Caltrans) initiated legislative amendments, with CIEDB’s

concurrence, to allow Caltrans to administer and operate the

TFB program. With the passage of that legislation (AB 2996,

Chapter 805, Statutes of 2002), Caltrans became the

administrator of the TFB program in the 2002/2003 fiscal

year. In that same fiscal year, Caltrans developed guidelines

and loan application documents and submitted them for

adoption through the California Transportation Commission

(CTC). CTC adopted the guidelines and the loan application

package during its January 2003 meeting. Caltrans provided

the non-Federal matching funds for the $3 million Federal

share of the program for capitalization of the bank. Loans and

other credit assistance are now available to local public entities

and public/private partnerships for projects that meet basic

eligibility criteria. Currently, Caltrans has received one loan

application package from a local agency and loan documents

are under review.

Additional information about California’s Transportation

Finance Bank program, including legislation, guidelines, the

loan application and agreement package, related interest rates

(T-Bill), and a fact sheet, is available at the Caltrans Division of

Innovative Finance web site at:

http://www.dot.ca.gov/hq/innovfinance/t_f.htm.

7

SIB HIGHLIGHTS

SIB Loans Reach $4.5 Billion

State Infrastructure Bank Loan Agreements by State

As of September 30, 2003

Contact:

Mike Yee,

Caltrans,

916/324-7624,

mike.yee@dot.ca.gov

Loan 

Number of Agreement Disbursements

State Agreements Amount ($000) to Date ($000)

Alaska 1 $2,737 $2,737

Arizona 43 435,942 375,398

Arkansas 1 31 31

Colorado 4* 4,400 1,900

Delaware 1 6,000 6,000

Florida 37 515,600 244,212

Indiana 2 5,715 5,715

Iowa 2 2,879 2,879

Maine 23 1,635 1,635

Michigan 33 22,207 22,207

Minnesota 15 95,719 77,013

Missouri 13 92,057 72,854

Nebraska 2 6,792 6,792

New Mexico 2 14,600 14,600

New York 5 15,450 12,000

North Carolina 2 1,713 1,713

North Dakota 2 3,891 3,891

Ohio 41* 185,095 138,050

Oregon 14 19,221 18,321

Pennsylvania 36 24,364 22,756

Puerto Rico 1 15,000 15,000

Rhode Island 1 1,311 1,311

South Carolina 6 2,643,000 1,545,693

South Dakota 3 28,776 28,776

Tennessee 1 1,875 1,875

Texas 42 253,421 249,480

Utah 1 2,888 2,888

Vermont 2 800 800

Virginia 1 18,000 17,985

Washington 3 2,376 487

Wisconsin 3 1,813 1,813

Wyoming 8 77,977 42,441

TOTAL 351 $4,503,285 $2,939,253

Contact:

Phyllis Jones

FHWA,

202/366-2854,

phyllis.jones@fhwa.dot.gov

Contact:

Evelyn Fitzpatrick,

KDOT,

785/296-4782,

evelynf@ksdot.org

* The previous issue of IFQ included aviation loans for Colorado and aviation

and rail loans for Ohio. These loan agreements are excluded in this table.
Program Formation

ODOT is currently in the process of

implementing the Innovative Partnerships

Program. The complexities of innovative

partnerships require employment of outside

expertise to assist ODOT in organizing the

program and subsequently soliciting, evaluating,

and negotiating proposals. The Oregon

Innovative Partnership Unit (IPU) staff have

surveyed the industry and identified a pool of

highly qualified firms to provide this assistance,

many of whom represent only public clients, thus

avoiding potential conflicts of interest.

With the assistance of selected consultants, IPU

staff will develop the following over the next 

12 months:

❖ Administrative Rulemaking

❖ Operating procedures

❖ Public involvement and outreach plans

❖ Intergovernmental coordination strategies

❖ Integration plan for Innovative Partnerships

Program projects with the ODOT project

development and delivery process

❖ Contract templates

❖ Project evaluation and negotiation strategies

❖ Risk assessment processes and risk management philosophy

❖ Project identification criteria

❖ Qualification processes for potential partners

Administrative Rulemaking

Among the first steps in program development is the

establishment of the administrative rules that will govern the

program. IPU staff are working with the Oregon Department

of Justice to develop proposed rules to be filed with the

Secretary of State in February 2004. 

The proposed rules will assign to the Oregon Transportation

Commission the approval role for project selection, proposal

solicitations, proposal selection, and approval of partnership

agreement. The proposed rules will also create: 

❖ Minimum requirements for submitted proposals,

including disclosure requirements for proposal submitters.

❖ A process for acceptance or rejection of proposals.

❖ Defined processes for management of unsolicited

proposals, including provision for a competitive proposal

process.

❖ Consultation with local governments on issues related to

project selection and proposal evaluation.

❖ Definition of the extent of confidentiality for submitted

information.

❖ A process for suspension of unsolicited proposals for

specified categories of projects.

❖ Special rules for bi-state projects.

Conclusion

Oregon intends not to be bound by the constraints of

traditional road funding. While certainly not a panacea for

road finance problems, the Innovative Partnerships Program

will allow Oregon to explore the practical limits of private

sector participation in transportation projects. Fear of

innovation will not block resolution of the state’s bottlenecks,

choke points, and impediments to commerce.

8

Contact:

James M. Whitty, Manager,

Innovative Partnerships Program,

ODOT,

503/986-4284

Jim.Whitty@odot.state.or.us

Oregon’s Innovative Partnerships Program, continued from page 1

Features of Oregon's Public-Private

Partnership Legislation

❖ Establishes a State Transportation Enterprise Fund to pledge

moneys to secure debt obligations relating to public-private

transportation projects. 

❖ Authorizes bonding of transportation project revenues under a

public-private agreement. 

❖ Allows grant anticipation revenue bonds (based on future

Federal funds) for public-private initiatives. 

❖ Allows financing arrangements available under TIFIA for

public-private initiatives. 

❖ Expands the ability of the Oregon Transportation

Infrastructure Fund to assist in financing a public-private

transportation project, including ensuring repayment of loan

guarantees on behalf of private entities. 

❖ Allows public-private transportation projects to be financed by

funds or property contributed by private entities or units 

of government. 

❖ Expands ODOT’s authority to use eminent domain to allow

private sector ownership of any transportation project facilities. 

❖ Allows formation of districts to require all revenues from

revenue sources collected within the district from the

transportation project to be used exclusively for the benefit of

the district.
9

A REMINDER TO READERS

FHWA DOES NOT MAINTAIN A MAILING

LIST AND DOES NOT DISTRIBUTE IFQ

DIRECTLY. IFQ IS AVAILABLE AS AN INSERT

TO THE AASHTO JOURNAL, AND IS

AVAILABLE ELECTRONICALLY THROUGH

FHWA’s WWW HOME PAGE:

http://www.fhwa.dot.gov/

innovative finance/

IFQ IS ALSO PROVIDED TO THE FOLLOWING

ORGANIZATIONS FOR REDISTRIBUTION

AND/OR AS INFORMATION FOR THEIR

MEMBERSHIP:

• American Public Works

Association (APWA)

• Surface Transportation Policy

Project (STPP)

• National Governor’s Association

(NGA)

• National Association of State

Treasurers (NAST)

• National Association of State

Auditors, Controllers, and

Treasurers (NASACT)

• National Association of Regional 

Council’s (NARC’s) Association

of MPOs (AMPO)

SUZANNE H. SALE, FHWA

CO-MANAGING EDITOR

602/379-4014

FAX: 602/379-3608

SUZANNE.SALE@FHWA.DOT.GOV

MAX INMAN, FHWA

CO-MANAGING EDITOR

202/366-2853

FAX: 202/366-7493

LAURIE L. HUSSEY, CS MANAGING EDITOR

CAMBRIDGE SYSTEMATICS, INC.

617/354-0167

FAX: 617/354-1542

LHUSSEY@CAMSYS.COM

Reproduction (in whole or in part)

and broad distribution of IFQ is

strongly encouraged. Permission

from FHWA, the editor, or any

other party is not necessary.

Contributors to Vol. 9, No. 4 of IFQ include:

Roger Berg, Cambridge Systematics, Inc.

Duane Callender, TIFIA JPO

Mike Fazioli, FHWA New York Division Office

Evelyn Fitzpatrick, Kansas Department of Transportation

Dale Gray, FHWA

Jim Hatter, FHWA National Resource Center

Phyllis Jones, FHWA

Jennifer Mayer, FHWA National Resource Center

Brian P. Peterson, Rhode Island Department of Transportation

Suzanne H. Sale, TIFIA JPO

Mark Sullivan, TIFIA JPO

Frederick Werner, FHWA National Resource Center

James M. Whitty, Oregon Department of Transportation

Mike Yee, California Department of Transportation

Brenda Znacho, Mississippi Department of Transportation

Rhode Island currently contemplates issuing bonds in three installments over a

five-year period, in November 2003, 2006, and 2008. The GARVEE bonds are

“stand-alone,” that is, neither state revenues nor the state’s full faith and credit are

offered as a secondary, or back-up, pledge for the payment of debt service. Rather,

the sole revenue source to make debt service payments is anticipated future FHWA

Federal-aid apportionments. The November 2003 bond package includes $217

million in GARVEE bonds and $53 million in Rhode Island Motor Fuel bonds.

Both the GARVEE bonds and the Motor Fuel bonds have been assigned high

ratings by the three nationally recognized bond rating agencies. The GARVEE

bonds are rated Aa3/A+/AA- by Moody’s Investors Service, Standard & Poor’s and

Fitch Ratings, respectively. The Motor Fuel bonds received ratings of A2/A+/A

from the same agencies.

The Rhode Island Economic Development Corporation, the issuer of these bonds,

successfully priced both the GARVEE and Motor Fuel bonds on November 13,

2003. The all-in true interest cost on the GARVEE bonds is 3.52 percent, while

the interest rate on the Motor Fuel bonds is 4.04 percent.

The principal portion of the annual debt service for the November 2003 GARVEE

bonds ranges from a high of $32.3 million in 2006 to a low of $13.7 million in

2007. These payments represent from 17.9 percent to 7.6 percent, respectively, of

the estimated future Federal-aid annual apportionments of $180 million.

Generally, dedicating less than 20 percent of anticipated Federal-aid

apportionments to debt service payments is considered to be a conservative

leveraging strategy.

Rhode Island Deploys GARVEEs, continued from page 6

Contact:

Brian P. Peterson, Chief Financial Officer,

RIDOT,

401/222-6940,

bpeters@dot.state.ri.us