Title
Consider a resolution authorizing the filing of a loan application for financial assistance from the State Infrastructure Bank for the Gattis School Road Segment 3 project.
Body
This item will allow the City to submit a loan application to the Texas Transportation Commission totaling $27,000,000 to fund construction, right of way and related cost for the widening of Gattis School Road from Windy Creek to Double Creek Drive. This project is a key part of the City's 5 year Transportation Master Plan and has been approved as a project by Round Transportation and Economic Development Corporation (Type B).
The source of repayment for this loan will be sales tax revenues of the Type B.
The overall goal of the State Infrastructure Bank (SIB) program is to provide innovative financing methods to communities to assist them in meeting their infrastructure needs. The SIB program allows borrowers to access capital funds at or below market interest rates. To assist communities as they recover from the economic effects of COVID-19, the Texas SIB is providing local governments the opportunity to access funds for eligible transportation projects at reduced interest rates
The value added by issuing a SIB loan as opposed to other types of debt are lower issuance costs, no underwriting is required, no additional deliverable needs to be assembled for submission, no rating needs to occur, there will be zero interest until January 2023 and reduced followed by interest rates. The loan is also callable at any time.
Staff recommends approval.