Thursday, August 9, 2012
MDOT to sell bonds to complete I-269
By SUE WATSON
The Marshall County Industrial Development Authority board of directors approved borrowing $163 million on behalf of the Mississippi Department of Transportation last week.
The money will be raised in bonds to complete the construction of I-269 through Marshall County. MDOT has already sold $52 million in bonds and the money has been either committed or spent, according to Steve Pittman, financial consultant to MDOT. The first $52 million was for paying for the engineering, design, rights-of-way and some construction on the highway that has already begun.
The federal government and MDOT will pay the debt service on the bonds with terms of the bonds not to exceed 20 years, according to Pittman.
Mike Tagert, highway commissioner for the Northern District, said now is the time the state needs the benefits of the new highway.
“We need the benefits of I-269 sooner rather than later,” he said. “It is a critical component of the I-269 corridor. This process of utilizing our bonding authority certainly shows the significance of this project in the greater plan of our statewide transportation system, This is an important project, not only for Marshall County, but for the entire state and Mid-South region.”
Pittman and bond attorney Steve Edds of Jackson presented the project to IDA, which was given the authority to act as a borrower of the proceeds on behalf of MDOT. Neither IDA nor the county board of supervisors has any risk in using its authority and IDA will act solely as a pipeline for the bonds.
The state uses the authority of IDA to issue the bonds for MDOT as a way to fast-track the I-269 project, Pittman said. Otherwise it could take 12-15 years to build out the new I-269 if construction depended on funds, like the gas tax, coming in slowly.
Pittman said it was the foresight of IDA back in 2007 to get the I-269 project underway in a hurry.
“The important thing is this organization has stepped up and is the vehicle in which MDOT is able to finance the construction of the highway that will drastically affect the economy of Marshall County,” Edds said. “It is going to do wonders for Marshall County.”
Pittman said the importance of the new highway cannot be understated and MDOT sees the importance of it because financing of I-269 using an IDA-like conduit has been done in only three other instances in the state.
Projects in Harrison and Madison counties and another in the city of Laurel were fast-tracked for interstate construction or reconstruction using this sort of mechanism, Pittman said.
He said the $163 million should be sufficient to finish I-269 in Marshall County, subject to no unforeseen changes in the project.
“The contracts will be let over two to three years, so when the contracts are finished, I-269 will be complete (in Marshall),” Pittman said.
The IDA board of directors voted unanimously to approve a resolution of intent to handle the $163 million on behalf of MDOT.
“This board nor the county nor any authority in Marshall County has any obligation on this debt,” Pittman assured as the vote was taken. “The documents are very clear that once your part is done, MDOT and the Federal Highway Administration will be responsible for the debt service.”
IDA will amend the 2007 interlocal agreement with MDOT to include this new debt.
Edds said the resolution of intent will be published for four weeks locally and if 1,500 citizens objected there would have to be a referendum on the issuance of the bonds.
“I do not expect it,” Edds said. “MDOT will pay for the work with federal reimbursements out of the new Highway Bill which has passed, so we are not expecting any problem.
“The exciting thing for you to realize is you are one of four projects in the state that has used this process to accelerate highway building.”
IDA board attorney Kent Smith said as this money is let for construction contracts, the project will be more visible as people see the dirt work begin. The construction includes the construction of two cloverleafs or half cloverleafs, one near Ingram’s Mill and the other at Highway 72, he said.
“Now things are moving quickly because they are going to build the road. In the next couple of years you will be able to see where this money is spent,” Smith said.
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