156 Toll Road Study and Appendices - Transportation Agency for ...

e sought to support the construction of Highway 156. A TIFIA loan provides flexible repaymentterms, and lower interest rates compared to toll revenue bonds. For example, while interestcosts accrue immediately on a TIFIA loan, their payment can be deferred thereby eliminatingthe cost of capitalized interest. The rate on a TIFIA loan is tied to the 30-year U.S. Treasury ratewhich has ranged between 2.45% and 4.85% since 2008; substantially lower than a publiclysold, tax-exempt toll revenue bond. Under current legislation, a project may receive a TIFIA loanfor up to 49% of eligible project costs. The plan currently assumes a loan for Highway 156 forapproximately 33% of total eligible costs. Eligible costs are defined to include developmentphase activities, construction and right-of-way acquisition, capitalized interest, reserve funds andcost of issuance expenses.What portion of the project is financially feasible?This study demonstrates that Route 156 West Corridor Phase 1, including construction of a newalignment, four-lane, Highway 156, and a new interchange at Highway 156 and Castroville Boulevard,is financially feasible. That is, in addition to the expected federal, state and local funds,the net toll revenues would be sufficient to support and repay toll revenue bonds and a TIFIAloan to finance a total of approximately $70 million in un-funded project costs for Phase 1 andassociated operations and maintenance costs.Improving operations and safety at the Highway 101 and Highway 156 interchange is important;however Phase 2 capital costs more than double the project costs, from $109 million to$268 million, as demonstrated in Table 1. With the additional travel benefits associated withPhase 2, it is anticipated that Phase 2 (together with excess revenue from Phase 1) would generateapproximately $85 million of additional funding, through toll revenue bonds, in the year2025 after paying for Phase 1 construction; however this additional funding falls short of thePhase 2 funding requirements which are, approximately $160 million.How long will the tolls be in effect?Similar to a home owner paying a 30 year mortgage, a new alignment Highway 156 will be paidfor over the duration of the bond or loan. Once the loan is repaid the tolls can be removed. Abond repayment date will vary based on loan type, loan duration and the opening date of thetoll facility.The traditional bond financing structure assumes a 30 to 32 year final maturity. Bonds issuedfor Phase 1 would mature in 2048. Bonds subsequently issued for Phase 2 are estimated tohave a final maturity date of 2054. A federal TIFIA loan must be repaid within 35 years of theproject substantial completion date, in this case opening day. A TIFIA Loan for Phase 1, with anexpected opening date of 2021, would have a final repayment date of 2056.STATE ROUTE 156 Tolling Traffic and Revenue Study [ 7 ]