The Idaho Transportation Department said it will
save about $13.1 million in interest costs after it refinanced $101 million in debt held in "GARVEE" highway bonds and slashed the interest rate to 2.3 percent from 4.5 percent.
States including Idaho issue those grant-anticipation revenue vehicle bonds for infrastructure projects by borrowing against their future revenue stream in annual allocations from the federal Highway Trust Fund.
The ITD said the GARVEE bonds allow it to finance much-needed road and bridgework, with the promise to pay back the borrowed capital over the next 18 years.
The ITD worked with the Idaho Housing and Finance Association to refinance the debt in its second refinancing of GARVEE bonds. The first, in 2015, resulted in $12.7 million in reduced costs, the department said.
"Through GARVEE, we are investing wisely by spending the money now to solve the transportation problems of tomorrow. We are paying less than the anticipated cost of inflation for the same construction work in years to come," said ITD Director Brian Ness.
He added: "The GARVEE program on the whole is another example of ITD being as efficient as possible by saving money, stretching resources and reinvesting savings back into the maintenance of our roads and bridges."
The department's chief administrative officer, Charlene McArthur, said that the ITD tries "to take advantage of favorable market conditions and ensure that we are managing our finances wisely for the taxpayers of Idaho. We apply those savings back to maintenance and improvement of our roads and bridges."
She also credited ITD Controller Dave Tolman for managing the financing transaction and working with external partners. "The ITD team will continue to monitor the market and work with our partners to identify future opportunities," she said.
Over the last 10 years, the department said, its GARVEE bonds have paid for about $857 million in road and bridge work that includes 119 miles of new roadway, 41 new or rebuilt bridges and 14 new or rebuilt interchanges.
The Idaho Legislature approved an additional $300 million in GARVEE bonding authority during its last session, the ITD said, and the Idaho Transportation Board has started to direct some of that funding toward projects in the Treasure Valley and in northern Idaho.
Separately, the department also announced that the Transportation Board voted to allocate more than $100 million toward
expansion of the Interstate 84 Caldwell-to-Nampa Corridor, drawing on a mix of state funding sources.
It said that would also help strengthen the ITD's application for a federal infrastructure grant.
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