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State Infrastructure Bank Loan Application with FDOT for the Gainesville Transportation Center
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State Infrastructure Bank Loan Application with FDOT for the Gainesville Transportation Center
Explanation
The Florida Department of Transportation (FDOT) under the State Infrastructure Bank (SIB) Program can use federal funds for loans for transportation projects that otherwise could not be built because federal transportation grants were not available at the time of construction. The Gainesville Transportation Center has $1.2 million in available federal grants, however, it is now estimated that the project will cost $2.0 million. FDOT can make available a loan of $800,000 to allow construction to begin now, rather than waiting to secure additional federal transit grants for the project. The loan must be repaid within 10 years, however, FDOT does not charge interest, and so only the principal needs to be repaid. FDOT does require that the applicant back the loan with a pledge of repayment from future federal transit grants. FDOT regulations allow revenue generated from the project to be used to pay back the loan.
Fiscal Note
Currently the Gainesville urbanized area has been allocated some $1.3 million a year in federal formula for FY 1998 and FY 1999. In both of these years, FDOT was able to allocate some additional funds which has pushed the federal formula funds amount to $1.5 million for each year. Staff estimates that the Citywill receive a minimum of $1.3 to $1.5 million per year over the next 10 years. The City would need to set aside only $100,000 each year from that amount to repay the loan in full in 8 years. Staff also estimates that lease payments from tenants, such as Greyhound, Amtrak, and CTS, could generate some $40,000 per year that can be applied to the loan repayment. Any allocation of rent income to repay the loan will reduce the amount of federal transit grants needed to be applied for loan repayment.
Recommendation
The City Commission authorize the City Manager to: 1) file the loan application with FDOT pending review by the City Attorney as to form and legality; and 2) execute any required documents related to acquiring the loan, subject to review by the City Attorney as to form and legality.