Tools & Programs:
Federal Debt Financing Tools
Grant Anticipation Revenue Vehicles (GARVEEs)
The following is a brief summary of GARVEE transactions in 2012.
- NC DOT issued $179.54 million on January 26, 2012 to fund 49 projects.
- On March 1, 2012 the Commonwealth of Virginia Transportation Board issued $297.59 million in GARVEE debt in its 2012A series. All of the proceeds from this GARVEE issue will be used to pay costs included by the Commonwealth for the Downtown Tunnel/Midtown Tunnel/Martin Luther King Freeway Extension Project. Virginia state law does not allow the aggregate principal amount of outstanding GARVEE debt to exceed $1.2 billion.
- The State of New Hampshire issued its second round of GARVEE bonds in support of the I-93 Reconstruction project. The $98.25 million in bond proceeds are expected to pay for mainline and interchange reconstruction and capacity improvements along the southern extent of the project. This GARVEE sale brings the total amount issued for the I-93 project to $178.25 million out of an authorized $195 million.
- Washington State issued its first ever GARVEE bonds in support of the SR 520 Floating Bridge and Eastside Project. The $500.4 million in GARVEEs is part of $1.95 billion in debt authorized to support the SR 520 Bridge Replacement and HOV Program. This major project consists of the construction of a new pontoon facility and pontoon construction, the Eastside Project to improve SR 520 and complete the HOV system east of Lake Washington, and the replacement of the existing Evergreen Point Floating Bridge across Lake Washington, incorporating the new pontoons and including connection to a future Westside approach and connection to the Eastside project. The authorized debt may be issued as "Triple Pledge Bonds," which are general obligation bonds backed first by toll revenue from the existing floating bridge, second by motor fuel taxes, and third by general state revenues. Bonds backed solely by toll revenues are also permitted. To date in addition to these GARVEEs, the state has issued $519 million in Triple Pledge Bonds. It intends to issue an additional $300 million in GARVEEs in Fiscal Year 2013 and the remaining debt as toll revenue bonds in Fiscal Year 2014.
- The State of Montana issued $50.92 million in GARVEEs to refund a portion of the outstanding principal from its 2005 and 2008 GARVEE Bond series to a lower interest rate. The Refunded Notes cover the repayment of the Series 2005 issue from 2016 through 2020. The recent bond refunding will save over $2.7 million (net present value) over the next 8 years, an average saving of $341,000 per year. Montana’s earlier GARVEE issues supported construction of various improvements to a 44.8 mile stretch of US 93 from Missoula to Polson.
- In July the Commonwealth of Virginia issued $120.625 million in its 2012B GARVEE series to raise funding for the I-95 HOV/HOT Lanes Project and the Downtown Tunnel/Midtown Tunnel/Martin Luther King Freeway Extension Project. The bonds will paid off over a 15 year period expiring in September 2027. In the event that either of these P3 projects is delayed, altered or terminated, VDOT will substitute an eligible project or projects in accordance with a Memorandum of Agreement executed with FHWA and the Commonwealth Transportation Board in December 2011.
- In September the State of Arkansas issued $197 million in GARVEEs to support its
Interstate Rehabilitation Project that will maintain, repair, and upgrade
critical segments of the state’s interstates. The bonds are to be repaid with
federal interstate maintenance funds and a portion of the state tax on diesel
fuel. They were issued as General Obligation (GO) bonds and thus further backed
by the full faith and credit of the state. By state law, GO bonds require voter
approval, which was secured at a special election held in November 2011. This
issuance is the first of a total $575 million authorized by voters.
- Also this month, the District of Columbia issued $43 million in GARVEEs to support the second phase of its Eleventh Street Bridge project. Early in 2011, it had issued $83 million to support Phase I. Phase II is improving connections between the new bridges and the adjacent freeway and roadway.
- In October, Mississippi issued $163 million in GARVEEs for various road and bridge improvements.
- In November, Ohio issued $184 million in GARVEEs to support immediate project needs on its current State Transportation Improvement Program.
- The State of Alabama issued $328 million in GARVEEs in support of the Alabama Transportation Rehabilitation and Improvement Program, which has set up a competitive process for local governments to fund their projects with state-issued GARVEEs provided they contribute a 20 percent match. This is the first of three planned issuances in support of this $1 billion program championed by the governor.