The New Jersey Environmental Infrastructure Trust may finance nearly $900 million of clean water and wastewater projects in fiscal 2010, almost double its typical annual program, with the aid of federal and state stimulus funds.

To accommodate the influx of additional funds, the trust will issue two bond transactions this year instead of the one pooled bond deal it historically sells in the fall.

Dennis Hart, executive director of the NJEIT, said he anticipates the trust issuing roughly $67 million of bonds in October to compliment $200 million of federal stimulus funds the state will receive from the American Recovery and Reinvestment Act. After addressing the federal stimulus funds, the trust will then sell about $150 million in its yearly pooled bond deal in January, pending legislative approval.

Hart said the legislature has always approved financing measures for the trust. The Senate Environment Committee is scheduled to take up the bills tomorrow.

The NJEIT tends to sell 20-year, fixed-rate bonds on a competitive basis. Public Financial Management Inc. is the trust's financial adviser and McCarter & English LLP is bond counsel.

Typically the trust finances $500 million of drinking water and sewer infrastructure projects per year through bond proceeds and state Department of Environmental Protection funds that offer zero-interest borrowing on 50% to 75% of qualified loans. In fiscal 2010, which begins July 1, the NJEIT expects to manage an $800 million to $900 million program due to the $200 million of federal dollars and about $450 million of state funds on top of the anticipated bond proceeds.

"The amount we're going to do is going to be substantially higher than we've done," Hart said. "Last year we were a little bit down - we did about $360 million - but prior to that we were doing about $500 million a year. And this year, we have the potential to come close to doubling from $500 million."

Hart said the DEP extended its application deadline for local governments seeking to tap into the federal funds, with the program receiving a record $2.5 billion of applications to finance infrastructure projects for drinking water and sewer upgrades, up from the usual $900 million.

"There's going to be thousands of jobs created from this infrastructure, number one," Hart said. "Number two, I've seen studies that show that for every dollar you spend on sewer and water infrastructure, you add $6.45 to the gross domestic product, so these projects have an additive affect."

In addition to the increase of funds, construction costs have decreased and Hart said the NJEIT is eager to see what offers it receives. Construction bids for other state agencies such as the New Jersey Transportation Trust Fund Authority and the New Jersey Schools Development Authority have come in roughly 30% below expectations, offering cost savings for those agencies.

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