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Project Profile: Northampton County Bridge Renewal Program

Northampton County Bridge Renewal Program

photo credit: The Morning Call

Location

Northampton County, Pennsylvania

Project Sponsor / Borrower

Northampton County, Pennsylvania, General Purpose Authority / Kriger Construction Inc.

Program Areas

Alternative Project Delivery

Mode

Bridge

Description

Northampton County in northeastern Pennsylvania has the distinction of being one of the first local government entities in the United State to enter into a public-private partnership (P3) to undertake transportation improvements. Located 60 miles west of New York City and 70 miles north of Philadelphia, the county has a population of 300,000 and owns a total of 119 bridges, 70 percent of which are structurally deficient or functionally obsolete. Four of its bridges are closed and an additional three are on a watch list.

The Northampton County Bridge Division is responsible for maintaining the bridges and has a fulltime staff of three people and an annual budget of $780,000. Typically, the Country replaces one small bridge per year and makes miscellaneous repairs on others.

To begin addressing the backlog of deficient bridges more expeditiously, the County is replacing or rehabilitating 33 structurally deficient bridges through a 14-year, $37.5 million design-build-finance-maintain (DBFM) P3 arrangement. The low-volume bridges have an average length of 40 feet and an average age of 70 years. They include concrete, stone and steel structures. Twenty-eight bridges will be replaced, and an additional five will be rehabilitated, including four stone arch bridges, some of which are over 100 years old.

The Northampton County Bridge Renewal Program is modeled after the Pennsylvania Rapid Bridge Replacement Project, a $1.118 billion, 25-year P3 project that is replacing 558 bridges throughout the state. While Northampton County has benefitted from technical assistance from the Pennsylvania Department of Transportation in developing the P3 procurement, the project uses no state or federal funds.

Both programs are procured pursuant to Act 88 of 2012, which authorizes P3 projects involving new or existing transportation facilities in Pennsylvania. Act 88 allows P3 agreements to extend for up to 99 years and requires that all P3 projects be approved by a newly created State P3 Board. However, Act 88 prevents counties from entering into P3 agreements, so Northampton County deeded ownership of the bridges to its General Purpose Authority (GPA) and used the GPA as the contracting entity. The mission of the GPA is to promote economic development through partnerships between businesses and local government.

The GPA issued a request for proposals for the Bridge Renewal Program in April 2016. Four bidders responded and the County ultimately selected Kiger to negotiate an agreement to develop the bridge program. Following a legal challenge by a losing proposer, Kriger's concession agreement with the GPA was executed on January 17, 2017. Kriger is financing the project with a combination of its own equity, payments from the County, and credit from local community banks. While the amount of available local funding was stated in the procurement documents, Kriger negotiated the terms of the County's payment structure after being selected. Annual payments begin at approximately $4 million and are reduced after the first five years of the P3 concession. The payments are not part of the Bridge Division's annual budget. Northampton County officials estimate that the P3 approach will save between 20 and 30 percent compared to individual design-build-build bridge replacement contracts, which could cost up to $1.5 million per structure.

Cost

$37.5 million

Funding Sources

County Tax Proceeds to support payments to the private partner

Private partner's financing (backed by payments from the County)

  • Commercial bank credit
  • Equity
Project Delivery / Contract Method Design-Build-Finance-Maintain (DBFM)
Private Partner

Kriger Construction Inc.

Project Advisors / Consultants

Alfred Benesch - Technical advisor

Lenders

Commercial Banks

Duration / Status

The 14-year concession includes a four-year construction period, followed by a 10-year maintenance period. Work began in March 2017 and construction of the first bridge was completed in fall 2017. An additional 10 bridges will be completed in 2018.

Financial Status

Commercial close occurred on January 17, 2017

Innovations
  • One of the first P3 concessions to be initiated by a local government entity in the United States in the transportation sector
  • Achieves cost and schedule savings by bundling the replacement or rehabilitation of 33 bridges into a single contract
  • The concession incentivizes quality construction and transfers maintenance risk to the private partner by including a 10-year maintenance period
  • The procurement allowed the private partner to negotiate the County's payment structure after being selected
  • The contract provides the private partner with flexibility to fund the project with a combination of self-financing, County payments and bank credit
Related Links / Articles

PA County to Fix 33 Bridges in First-of-its-kind Project

County Gives Its Bridges Away to Save Them

33 Northampton County Bridges to be Replaced or Fixed under "P3" Project

Contacts

Michael Emili
Director
Northampton County Public Works Department
Tel: (610) 829-6398
memili@northamptoncounty.org

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