CT Construction Digest Thursday May 21, 2020
TREASURER WOODEN ANNOUNCES SUCCESSFUL
$850 MILLION SPECIAL TAX OBLIGATION BOND SALE, SETTING NEW RECORD
Very Positive Investor Demand as Pandemic Response Continues
Hartford, CT -- State Treasurer Shawn T. Wooden today announced the successful pricing of $850 million Special Tax Obligation (STO), Transportation Infrastructure bonds, demonstrating strong investor confidence amid the ongoing COVID-19 response and a confirmation of a stable fiscal outlook for the State. Consistent with past practice, Treasurer Wooden gave retail investors priority during a dedicated retail order period on Monday, May 18th. Retail orders received during this one-day priority period totaled $480 million, setting a new record for the STO Bond program. “The success of our STO bond sale is important for Connecticut. The funding will be used for transportation projects across the State and the low cost of funds achieved will save taxpayers money,” said State Treasurer Shawn T. Wooden. “Continuing to manage our limited resources prudently during a crisis is another way of demonstrating that our state continues to head in the right direction.”
Transportation infrastructure projects funded by these bonds include the following:
• I-95 Gold Star Memorial Bridge in New London;
• I-84 Improvement Program in Waterbury;
• I-91/CT 15 Interchange Improvements in Wethersfield and East Hartford;
• New Haven Rail Yard Master Complex;
• The replacement of the Walk Bridge in Norwalk; and
• Enhancements to the rail fleet.
Orders from both retail and institutional investors reached $7.2 billion, far exceeding the bonds offered and allowing the State to lower its borrowing costs in the final pricing. The overall interest cost on the twenty-year bond sale is 2.97%. "The ability to finance strategic improvements in our transportation infrastructure at such a low cost is a benefit for all of our residents and the future of our state,” said Treasurer Wooden. Prior to the sale, three rating agencies reviewed and affirmed their credit ratings and stable outlooks for the State’s STO bonds: S&P Global Ratings at “A+”, Fitch Ratings at “A+”, and Kroll Bond Ratings at “AA+”. RBC Capital Markets led the bond underwriting syndicate that sold the bonds. The bond sale is scheduled to close on May 29, 2020.More information on the State's bonding programs is available at www.buyctbonds.com.
Torrington school board to pitch high school renovation project
LANCE REYNOLDS
TORRINGTON — The Board of Education will make another pitch to the city Thursday on why a major overhaul of Torrington High School is necessary in advancing the education of the city’s children.
The City Council will be voting on two major items that will determine whether the school board can go forward with its proposed high school renovation project. The option being put forward by the school board is for a $156.6 million project with 62.5% state reimbursement. The state’s estimated share would be $85 million and the city’s estimated share would be $71.6 million.
The board considered three options, including maintaining the building as it stands with no additions. That carried the lowest price at $112.2 million but would cost Torrington taxpayers more at $78.3 million because the state would pay a smaller share.
The first vote will be on the school board’s request to establish a building committee to develop schematic drawings and specifications for school building grants. That will help determine the second vote, which will decide if the board can submit a grant application to the state Department of Education by June 30 for the project. The board is looking at going to referendum in September.
Along with a presentation by the district’s central offices, bond counsel member Sandra Dawson and financial adviser Bill Lindsay will offer the City Council and Board of Finance legal and finance advice on the proposed renovation.
If the project is approved at referendum, the first payment of the 20-year bond would be due in 2022-2023 at $643,000 and peak in the sixth year at $6.8 million. After that, the payments trend down. The bonding on the high school would add to bonding already approved for a renovation of the city’s wastewater treatment facility and road reconstruction.
The planned renovation would move seventh- and eighth-grade students from Torrington Middle School to the high school with different entrances, wings and cafeterias separating the middle schoolers and high schoolers. The school’s auditorium and gymnasium would be shared, and middle school students who excel academically would have the opportunity to take part in some high school programs.
“We provide just as good of an education as any other town that I ever lived in,” Eucalitto said. “We just don’t have a population that requires every student to go to college and focus on test scores. We don’t provide a second-rate education.”
The joint meeting involving the school board, Board of Finance and City Council will take place at 5 p.m. over Zoom. Public comments can be made to the city clerk’s office before 4 p.m. through email at city_clerk@torringtonct.org.
State highway agencies need a $50B federal cash infusion or construction could halt, group says
Larry Higgs
Highway agencies, which have seen either tolls or gas tax revenue plummet due to double digit drops in traffic volume due to coronavirus travel restrictions, are asking for federal aid to make up for lost money.
But national highway officials said what they need is more than what’s been proposed isn’t enough. Without it, state departments of transportation, DOTs, face tough choices including stopping construction, cutting back on maintenance and furloughing workers. officials said.
A $3 trillion coronavirus relief bill proposed on May 12, included $15 billion in funds for state departments of transportation, but that is lower than the almost $50 billion that the American Association of State Highway and Transportation Officials (AASHTO) officials estimates DOTs will need.
That request was based on an estimate of what states need over the next 18 months to offset revenue losses, said Susan Howard, AASHT program director for transportation finance. Nationwide, state DOTs stand to lose $110 billion, based on prior years.
“The bill has $15 billion. It’s not as much as we hoped for, but we’re happy to have that revenue,” she said. “We see it as a first step.”
The first $2 trillion CARES act had funding for transit agencies, but not for state transportation departments or toll agencies, Howard said.
For toll agencies and state DOTs, less traffic means less revenue, either in tolls or gas tax revenues. Traffic research company Inrix estimated that traffic on New Jersey highways dropped by 62% after COVID-19 stay at home orders except for essential workers were issued in March.
An association representing 128 toll agencies in the U.S. has made a separate request to Congress for $9.2 billion in federal aid last month. That figure is tied to revenue losses projected in 2020 and the first quarter of 2021.
NJ Turnpike officials reported a $23 million loss in toll revenues caused by a 29% traffic drop in March due to COVID-19. Port Authority officials reported a 61% traffic drop at its six bridges and tunnels and have asked federal officials for $3 billion in aid to cover lost revenues that also includes airports and the PATH rail system.
For drivers, the effects could be the same without federal help, whether they drive a toll road or state highway.
Some states have begun to suspend major road and bridge construction projects, others have delayed approving contracts to start work, even though this is the peak season for construction, because of the uncertainty of revenues, Howard said. Some state transportation departments have furloughed or laid off employees, she said. Maintenance projects would have to be prioritized and some put off.
“Every state will have to look at revenue forecasts, all will see a definite loss,” Howard said. “They will have to make some tough decisions on what they can afford to do.”
New Jersey highways have seen a higher traffic reduction than the 30% to 40% drop in other states, due to COVID-19. But New Jersey is in better financial condition because current funding is based on taxes collected prior to the COVID-19 outbreak, Steven Schapiro, an New Jersey Department of Transportation spokesman said.
“There are no funding issues for state fiscal year 2020 (which started on July 1, 2019).” He said. “The full impact of the pandemic on the Transportation Trust Fund are not yet known.”
New Jersey DOT officials are watching funding needs and are working with Gov. Phil Murphy’s administration on them, Schapiro said. Murphy has until May 22 to update his revenue forecast and until Aug. 25 to present a new spending plan. Employee furloughs also would be addressed with the administration, Schapiro said.
The state’s future looks grim, based on reports of falling tax revenue collections that were down $3.5 billion when compared to last April. Statistics were not available from the state treasury department for gas tax collections which are a major DOT funding source.
State Senate President Steve Sweeney, D-Glouchester, has proposed a partial furlough of state employees as a way the state can deal with revenue shortfalls and avert layoffs. Approved by both houses of the state legislature last week, it is up to Murphy to sign or reject the bill.
AASHTO’s funding request would “fund projects for the next 12 to 18 months, so this pain won’t be felt all at once,” said Tony Dorsey, an AADHTO spokesman.
Without it, money that DOTs have “in the pipeline will dry up and projects will dry up and employee furlough more rampant,” he said. “That is the crisis we see happening.”
New Jersey DOT officials supports the AASHTO funding request and has informed members of the state congressional delegation about that, Schapiro said.