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National Association of Counties
Washington, D.C.

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 Infrastructure bank pools small revenue streams

By Charlie Ban
STAFF WRITER


 

Counties in Pennsylvania and New York have debuted loan programs to help fund infrastructure improvements in areas where work is needed.

A long-lived plan to repair each of Dauphin County, Pa.’s bridges has evolved into an infrastructure bank open to municipalities and other organizations within the county’s borders. Suffolk County, N.Y.’s sewer infrastructure bank is more of a traditional loan program. 

The Dauphin County Infrastructure Bank will provide up to $30 million in low-interest loans to municipal projects by pooling small streams of tax revenue over the next three years.

SpeedRead-bankpool.pngWithin the county, 40 municipalities — townships, boroughs and the state capital city Harrisburg — draw consistent but relatively small proceeds from the state’s 12-cents-a-gallon liquid fuels tax. Added up, the revenue trickles accumulate into a significant stream, about $1 million a year that will be paired with money from the state department of transportation’s Pennsylvania Infrastructure Bank, which will contribute the rest of the money to the pot.

“When you’re getting $4,000 or so, for a smaller township, it won’t go too far,” said Commission Chairman Jeff Haste, who planned the project during years of working as a transportation engineer in the 1980s and ’90s. “With that money, the townships could chip in another quarter-mile of paving, but it wouldn’t mean anything of major impact.”

The impact comes from using the sum of those revenue streams to unlock other local, state and federal funding sources that wouldn’t have been available to municipalities going it alone.

“We’re taking advantage of economies of scale,” Haste said. “We’re able to negotiate for rates most of these municipalities couldn’t dream for on their own.”

Commissioners’ spokeswoman Amy Richards Harinath said the county has had a lot of interest in applying from municipalities.

Londonderry Township is planning to submit several applications for the infrastructure bank, which Township Manager Steve Letavic calls “visionary.”

“It gives us access to capital at a cheaper rate than a public issuance,” he said. “This is going to give us a chance to take care of several projects that, before this infrastructure bank came about, we had no idea how we were going to pay for.”

Citing $500,000 price tags for common repair projects, the infrastructure bank could help put a major dent in repair costs. On top of Letavic’s list is a bridge, built in 1940, that needs major work.

“Municipalities around here are dealing with a lot of looming infrastructure costs and this bank is giving us a way to make these repairs happen.”

Bullet Click here to read more about Dauphin County's infrastructure bank

The county itself, municipalities in the county and redevelopment authorities are eligible for infrastructure bank loans. School districts, nonprofit organizations and private companies can apply if sponsored by a municipality. The applicant must have good credit.

Projects are evaluated on their economic impact, involvement in a collaboration and impact on heavily used routes. Applications will be judged by the county’s Gaming Advisory Board, which does the same for projects funded by the Hollywood Casino.

The loans can be used to buy land; relocate utilities; or build, improve, repair or rehabilitate transportation infrastructure. The loans can be for up to 10 years and can be awarded a fixed 0.5 percent interest rate for governments or 1 percent for nonprofits or private companies.

Successful applicants will have access to the county’s engineering firm to help with their projects, an option Harinath said will appeal to smaller municipalities or projects that are just getting started.

In New York, the Suffolk County’s Asset Stabilization Reserve Fund pays for projects that the county sewer infrastructure committee and County Legislature approve. The sewer bank, which debuted in April, seeks to expand sewer service to the county, only 25 percent of which is served by sewage treatment facilities. The reserve fund holds approximately $30 million.