Culvert replacements and bridge work are among the county and municipal projects now eligible for low interest loans through the New Jersey Transportation Infrastructure Bank or I-Bank.
The funding is available through a partnership between the New Jersey Department of Transportation (NJDOT) and I-Bank an independent state financing authority.
David Zimmer, Executive Director of the I-Bank, gave a presentation on the new transportation funding options during the NJTPA Board meeting July 9.
Since 1985, he said, New Jersey has had an infrastructure bank to fund drinking and wastewater projects. It has invested $7.2 billion in water projects, saving borrowers $2.4 billion in interest payments, Zimmer said.
In 2016, the same financing model was applied to transportation projects by creating the I-Bank. With approval of the State Legislature, NJDOT’s Local Aid Infrastructure Fund allocated $22.6 million each year to I-Bank. This funding has been further leveraged through bonding to provide $39 million each year in spending power for projects. The I-bank currently has on hand nearly $80 for low interest loans.
The funding takes the form of short term loans of up to three years to cover design, engineering and construction. Once the project is complete, the short term loan is converted into a long term loan over the useful life of the project (up to 31 years). The loans are generally repaid through county or municipal budgets.
In addition to offering low interest rates (about 1.5 percent), Zimmer said the I-Bank also only charges interest on the money a municipality or county has borrowed as it is drawn down, rather than charging interest on the full loan amount when it is approved.
NJTPA Chairman Angel Estrada said the I-Bank was potentially very valuable, “presenting the opportunity for counties and municipalities to do projects on their own” without the complications and delays of depending directly on federal or state resources.
Visit the New Jersey Transportation Infrastructure Bank’s website to learn more.
[July 11, 2018]