BATA Buys State Bonds to Keep Bay Area Highway Projects Moving

BATA Buys State Bonds to Keep Bay Area Highway Projects Moving
February 27, 2009

The Bay Area Toll Authority (BATA) has completed an innovative $194 million purchase of general obligation bonds issued by the State of California through the Proposition 1B infrastructure bond measure approved by voters in 2006. The state will use the proceeds from its private placement of the bonds to continue funding for 10 Bay Area highway projects which are already underway, and to ensure funding for a $43 million carpool lane project along U.S. 101 in Rohnert Park for which the construction contract has not yet been awarded. The state will pay BATA an interest rate of 3.34 percent for 18 months, after which the state plans to buy back the bonds and resell them into the market at long-term maturities.

Bond-financed projects on which construction already has started include carpool lane additions to Interstate 80 in Solano County, eastbound Interstate 580 in Alameda County's Tri-Valley area, southbound Interstate 680 over the Sunol Grade in Alameda County, and U.S. 101 between Santa Rosa and Windsor. The state will also use the funding to continue the installation of cameras and other detection equipment to monitor traffic conditions along Interstate 80 in Solano County; Interstate 580 in Alameda County; U.S. 101 in Marin, San Mateo and Santa Clara Counties; Interstate 880 in Santa Clara County; and State Route 24 in Oakland.

"This deal reflects BATA's commitment to innovation," said Alameda County Supervisor Scott Haggerty, who serves as the Chair of BATA and the Metropolitan Transportation Commission (MTC), noting that this is the first time the state has used a private bond placement to finance transportation projects. "And it reflects MTC's commitment to delivering congestion relief in important freeway corridors throughout the Bay Area."

Funding for the Bay Area highway projects had been imperiled after the state's Pooled Money Investment Board (PMIB) last Dec. 17 imposed a freeze on infrastructure financing to help conserve cash during the state Legislature's protracted budget crisis,. The action halted or delayed more than 5,000 highway, bridge, school and other infrastructure projects around the state with a combined value of $18.1 billion. Following the Feb. 20 enactment of a new budget, the PMIB will meet next month to determine when, and to what extent, it will be able to thaw the infrastructure financing freeze.

BATA, which is directed by the same policy board as MTC, administers toll revenues from the Bay Area's seven state-owned toll bridges. MTC is the transportation planning, financing and coordinating agency for the nine-county San Francisco Bay Area.