HOW TO APPLY

INTRODUCTION

The New Jersey Transportation Bank was established pursuant to N.J.S.A. 58:11B-1 et seq, to provide low interest loans to local government units for transportation infrastructure projects. The Transportation Bank is a partnership between the NJ Department of Transportation (DOT) and the New Jersey Infrastructure Bank (I-Bank). The Administrative guidance document regarding securing financing through the Transportation Bank, including but not limited to the project ranking methodology, the initial short-term construction loan project priority list, the submission and review of applications, funding eligibility, and financing program terms and conditions was recently published and submitted to the New Jersey legislature and is available here.


ADVANTAGES OF TRANSPORTATION BANK FINANCING

Transportation Bank loans are between 0% and 50% of the market rate or an effective rate of between 1.25% and 1.5% in today's market conditions (5/14/2018). Engineering design, construction and other project related costs are eligible for financing. Funds are available for engineering design when the costs are incurred within as little as 30 days from submission of Step 2 of the Loan Application (see below). Short-term loans are utilized for design and construction for periods of up to three years during which no payments of principal or interest (if applicable) are due. Upon short-term loan maturity, long-term loans will be issued for the lesser of the project's useful life or 31 years. Long-term loans will be issued to a pool of borrowers and partially financed using proceeds from the sale of I-Bank bonds. Aggregating many projects financings into one bond issue reduces financing and underwriting costs for program participants, and borrowers are relieved of many obligations arising when self-financing such as arbitrage and refundings.


APPLICANT/PROJECT ELIGIBILITY

Transportation bank loans are available to local government units (defined as a county, municipality, municipal, county or regional transportation authority, or any other political subdivision of the State authorized to construct, operate, and maintain public highways or Transportation Projects or consortia thereof), who satisfy both the loan repayment obligations and the Transportation Bank's credit worthiness standards (investment grade credit rating or a suitable credit enhancement). Each Borrower will provide a municipal or county general obligation pledge to secure its repayment obligations.

Transportation Bank Loans are available for capital projects for public highways, approach roadways and other necessary land-side improvements, ramps, signal systems, roadbeds, transit lanes or rights of way, pedestrian walkways and bridges connecting to passenger stations and servicing facilities, bridges, and grade crossings (“Transportation Project” or “Project”). Transportation Bank financing is limited to Transportation Project costs incurred: construction costs, engineering, legal counsel, financial advisor, permitting, project management and other costs as recognized in N.J.A.C. 16:20B-4, and excluding any costs for which DOT or other grants have been received.

Projects for which construction has been advertised or awarded prior to securing Transportation Bank approvals are ineligible for Transportation Bank financing.


APPLICATION PROCESS

The Transportation Bank application and financing process is similar to the New Jersey Water Bank (formerly, the "New Jersey Environmental Infrastructure Financing Program"), which has funded more than $6.4 billion in environmental infrastructure project loans over the past 30 years. Notwithstanding, the application process has been streamlined to reduce the period of review and applicant transaction cost.

Only Applications submitted by a local government unit's Authorized Representative (i.e., an employee of the local government legally authorized to submit a Transportation Bank Loan Application on behalf of the local government unit) will be accepted.

The following are the milestones to securing Transportation Bank financing for your project:

TRANSPORTATION MILESTONES

Transportation Milestones

Application Submissions (Applicant/Borrower) Steps Program Action (I-Bank/NJDOT)
1. Initial Submission
Sponsor/Representative
Project description
Step 1 Project Eligibility / Ranking
Environmental Determination
Application Meeting (Mandatory)
Project Identification Number – PIN*
2. Financial / Technical / Engineering
PIN #
Financial Information
Engineering Contract
Step 2 Credit Eligibility Determination
Engineering Funding Commitment
Loan Closing
Disburse engineering $ upon receipt of requisitions/invoices
3. Construction - Advertisement
Sealed Plans
Contract Specifications
Engineering Design Certification
Step 3 Authorize Advertisement
4. Construction - Award
Construction Bids
Award Resolution (subject to concurrence)
Step 4 Award Concurrence
Construction Contract Commitment
(contingent on award, low bid adjustment)
Disburse construction $ upon receipt of requisitions/invoices

To begin the application process (Initial Submission), proceed to Step 1 above.


*Upon an Allocation of Funding

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NEW JERSEY TRANSPORTATION INFRASTRUCTURE BANK