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State Infrastructure Bank (SIB)
State Infrastructure Bank (SIB)

Dayton, Ohio

The Ohio Department of Transportation maintains a direct loan and bond financing program, authorized under the Ohio Revised Code, Chapter 5531, for the purpose of developing transportation facilities throughout Ohio. The State Infrastructure Bank (SIB) is used as a method of funding highway, rail, transit, intermodal, and other transportation facilities and projects which produce revenue to amortize debt while contributing to the connectivity of Ohio's transportation system and further the goals such as corridor completion, economic development, competitiveness in a global economy, and quality of life.

The Ohio SIB was capitalized with a $40 million authorization of state general revenue funds (GRF) from the Ohio State Legislature, $10 million in state motor fuel tax funds, and  $87 million in Federal Title XXIII Highway Funds.  Any highway or transit project eligible under Title XXIII, as well as aviation, rail and other intermodal transportation facilities, is eligible for direct loan funding under the SIB.

ODOT's objective is to maximize the use of federal and state funds in order to make direct loans to eligible projects. Repayments will be made to ODOT and then re-loaned to subsequent projects, hence creating a SIB revolving loan program. The SIB revolving loan program will increase the number of delivered transportation projects that otherwise would not have been considered due to lack of funding.  


FUNDS AVAILABLE AS OF 6/30/2019

Funds available for Federal-eligible projects: $14,020,950
Funds available for State-eligible projects: $4,596,720


Loan Program

Purpose

The revolving loan program makes direct loans to any public entity. Qualified applicants include any public entity, such as counties, cities, villages, townships, boards or commissions, regional transit and port authorities. The program assists with all levels and modes of transportation projects within the state.

Funding

The SIB was capitalized with $87 million in federal funds, $40 million in General Revenue Funds, and $10 million of motor fuel tax funds. The availability of dollars is dependent upon SIB activity and loan repayments. SIB funds can be used for a portion or up to 100% of the project costs.

Eligibility

Any transportation related project eligible under Federal Title 23, including highway and transit, as well as aviation, rail, and intermodal facilities.   Loan collateral is any secure revenue stream such as: gasoline tax revenues, non-tax revenues, Tax Increment Financing district revenues, and license plate and registration fees.

Criteria

  1. Preference will be given for a borrower that has never utilized the SIB.
  2. Evaluation of applicant’s concentration of credit risk.
  3. The SIB loan program will maintain the following account balances:
    1. $2m in GRF
    2. $3m in Federal/Title 23

These balances will be held by ODOT for unpredictable circumstances and the decision to make a loan will be 100% at the loan committee’s discretion.

  1. No more than 50% of the 12-month forecasted balances above the reserved amounts will be available for any individual loan application.
  2. An applicant can submit more than one application per State Fiscal Year (SFY) for potential funding but ODOT is only required to consider one of the applications submitted.
  3. If a loan is denied, a new loan application for the same project cannot be submitted during the same State Fiscal Year.

Environmental Requirements

To qualify for SIB funding the following environmental criteria must be met:

  • An ODOT pre-qualified consultant should be hired
  • The project cannot result in the destruction of a history property (listed on or
  • eligible for listing on the National Register of Historic Places)
  • The project cannot result in the taking of any Threatened and Endangered Species
  • No Category 3 wetland impacts 

Terms/Interest Rate

  • Up to 30-year loan term 3%  
  • Interest deferral for first 12 month
  • Closing cost can be financed in to the loan
  • Varies based on amount borrowed

Application Process

Applications are available on-line and may be submitted anytime throughout the year. The application and loan process takes 30-60 days.

Evaluation

The following areas are evaluated to determine a project’s eligibility: ability to repay the loan, management of the project, need/public benefit, collateral and status of the project in relation to the construction startup.

Disbursement

  1. Borrower incurs eligible expenses. Borrower receives invoice from Vendor/ Contractor.
  2. Borrower submits SIB Disbursement Forms A and B that includes the eligible expenses and supporting documents to the ODOT District Office (if applicable), or directly to the Division of Finance.
    1. If submitted to District Office, the invoice is reviewed by District Office, and either approved and forwarded to Division of Finance, or returned to Borrower for amendment. A site visit may be arranged by District Office personnel.
  3. Division of Finance receives the invoice from either Borrower or District Office.
  4. Division of Finance reviews the invoice and associated documents for eligible expenses, appropriate charges, etc.
  5. SIB Administrator approves or disapproves the invoice for reimbursement.
    1. If the invoice is disapproved, SIB Administrator notifies the Borrower of issues in question.
  6. When approved, SIB Administrator submits the invoice to Office of Accounting for processing.
  7. Office of Accounting issues a warrant in the name of the Borrower, and forwards to SIB Administrator.
  8. SIB Administrator forwards actual warrant to Borrower.
  9. Division of Finance records are updated to show disbursement made to Borrower.

Bond Program

Purpose

The investment grade bond fund programs were created to generate additional SIB loan proceeds and to fund the larger projects. 

Qualified applicants include any public entity, such as counties, cities, villages, townships, boards or commissions, regional transit and port authorities. These programs assist with all levels and modes of transportation projects within the state. 

Funding

The SIB works with the Ohio Treasurer’s Office to issue the bonds on behalf of the borrower. There is no reserve requirement, equity requirement and no set limit. Up to 100% financing is available toward a project. The General Reserve Fund Infrastructure Bond Program has an AA+ rating from Standard & Poors. The Federal Title 23 Transportation Infrastructure Bond Fund is rated AA- from Fitch Ratings.

Eligibility

Any transportation related project eligible under Federal Title 23, including highway and transit, as well as aviation, rail, and intermodal facilities. 

Collateral is any secure revenue stream such as: gasoline tax revenues, non-tax revenues, Tax Increment Financing district revenues, and license plate and registration fees. 

Depending upon the credit quality of the borrower, these financing programs can frequently take a specific revenue pledge toward a project rather than requiring a full general obligation pledge which preserves debt capacity of the borrower.

Environmental Requirements

To qualify for SIB funding the following environmental criteria must be met:

  • An ODOT pre-qualified consultant should be hired
  • The project cannot result in the destruction of a history property (listed on or
  • eligible for listing on the National Register of Historic Places)
  • The project cannot result in the taking of any Threatened and Endangered Species
  • No Category 3 wetland impacts 

Terms/Interest Rate

  • Up to 25-year term 
  • Market Rate
  • There is not a free interest period, but it could be potentially capitalized for up to 3 years
  • Transaction Costs range from 1% to 3% 
  • Dependent upon the size of issuance

Application Process

Applications are available on-line and may be submitted anytime throughout the year. The application and loan process takes 60-90 days.

Evaluation

The following areas are evaluated to determine a project’s eligibility: ability to repay the loan, management of the project, need/public benefit, collateral and status of the project in relation to the construction startup.

Approval Process

  1. Qualified participant submits completed Initial Project Application.
  2. The Division of Finance & Forecasting within ODOT will receive and review the application. The ODOT financial advisor will review the application to determine the borrower’s ability to repay the loan and submit recommendations. Additional information from the applicant may be necessary and should be made available upon request.
  3. If a project is funded with Federal funds, all Federal regulations must be followed.
  4. The applications will be presented to the SIB Loan Committee and either approved, disapproved, or approved with modifications.
  5. If the application is approved by the SIB Loan Committee, a term sheet outlining the transaction will be prepared and submitted to the applicant for approval.
  6. The SIB Loan Committee may negotiate requested adjustments to the term sheet with the borrower.
  7. Term sheet is signed by the Borrower.
  8. Term sheet is signed and the borrower is notified of approval.
  9. Legal counsel is appointed to draft loan documents.
  10. The loan documents are then prepared by legal counsel and submitted to all parties for approval.
  11. The loan agreement is signed by the borrower and the ODOT Director.

Program Comparison

Comparison of SIB Loan and Bond Fund Programs

 

LOANS

BONDS

AMOUNTS

$15,000 - $35,000,000

$2,000,000 - $20,000,000

MAXIMUM TERM

30 years

25 years

INTEREST RATE

3%

Market

REPAYMENT

First year free, second year accrued interest

No free interest period, up to three years of capitalized interest

TRANSACTION FEES

$1,000 - $10,000 (Financial advisor fee)

1% - 3% of bond issuance amount

ELIGIBLE BORROWERS

Same

Same

ELIGIBLE PROJECTS

Same

Same

REPAYMENT PENALTY

Yes, first 36 months

N/A

PROCESS TIME
Application submittal to loan closing

30 - 60 days

60 - 90 days

APPLICATIONS

Accepted year round

Accepted year round

Administration

ODOT will be the primary decision maker for SIB projects. Within ODOT, the SIB Loan Committee will manage the approval process.

ODOT's Division of Finance & Forecasting will promulgate the application process and will be the contact source for information on the program. The Division of Finance & Forecasting will receive applications, review, and make recommendations to the SIB Loan Committee.

ODOT will administer the loans and bonds using prudent financial guidelines and policies.

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