The West Virginia Parkways Authority cleared a technical hurdle last week toward advancing a bond deal for the U.S. 35 toll road and the issue could be priced by the end of the year.
The WVPA and the West Virginia Division of Highways agreed to a memorandum of understanding detailing the responsibilities between the two state Department of Transportation agencies.
The authority will operate toll plazas and collect tolls while the Highways Division will maintain the road, according to the MOU.
Earlier this year, West Virginia lawmakers passed legislation that allows the WVPA to issue bonds secured by tolls for new roads. Previously, the authority could only issue refunding bonds for the state’s turnpike.
With this new issuing authority, Transportation Secretary Paul Mattox asked the WVPA to issue bonds for a 14.6-mile stretch of U.S. 35 through Mason and Putnam counties. The new roadway will connect the northern and southern segments.
Work still needs to be finished before the bonds can be issued. A traffic revenue study is being completed by Jacobs Consultancy.
Bids for a design-build contract are not due until late October, said WVPA general manager Greg Barr. The toll road also needs approval from Mason and Putnam counties, he said.
Once the revenue study and design-build contract are finalized, the authority will have a clearer picture of the price. But Barr said state engineers have estimated the road could cost $180 million, down from a $240 million estimate last year.
When the bonds are ready to be issued, Citi will be the lead underwriter. Public Resources Advisory Group will be the financial adviser.
Barr said he hopes the bonds can be issued by the end of the year to take advantage of low interest rates and the 35% subsidy rate offered by the Build America Bond program.
“If we get into the bond market sooner rather than later we can take advantage of some of the lower issuance costs, which can save millions of dollars,” Barr said.
BABs could be part of the financing package if the deal is greater than $100 million, he said.
