HIGHWAY EXPANSION & EXTENSION LOAN PROGRAM ANNUAL REPORT FOR FY-2001 TRANSMITTAL LETTER December 1, 2001 The Honorable Jane Dee Hull Governor, State of Arizona The Honorable Randall Gnant President, Arizona State Senate The Honorable Jim Weiers Speaker, Arizona House of Representatives Members of the Legislature, and Citizens of the State of Arizona Pursuant to the requirements of Title 28, Chapter 21 Arizona Revised Statutes, I am pleased to transmit the 2001 Annual Report of the Highway Expansion and Extension Loan Program (HELP). Fifteen new loans were approved this year totaling more than $203 million, bringing total loan approvals through September 30, 2001 to over $373 million. Substantial progress was made on the Maricopa County Regional Freeway System using HELP funds this year. The Price Freeway project in Chandler was completed in December (12 months earlier than originally planned), and over $88 million in right of way purchases were accelerated during the year using the HELP program. HELP projects addressed a number of transportation issues this year including emergency repairs due to the October 2000 floods, vehicular and pedestrian safety needs, and growth issues balancing the need for new roads with the needed repairs on our existing roads. HELP continues to be a useful tool for communities throughout Arizona to accelerate needed projects. The HELP Advisory Committee and staff will continue to improve the program and seek innovative uses for this vital transportation program - HELP. Sincerely, Chair, HELP Advisory Committee INTRODUCTION HELP (Highway Expansion and Extension Loan Program) provides the state and its communities with an innovative financing mechanism to accelerate the funding of road construction. The mechanism is referred to as a State Infrastructure Bank (SIB) and was initially authorized by Congress in 1995. A SIB operates like a bank by providing loans or credit enhancement for projects. HELP, Arizona’s SIB, was established in 1998, and is operated under the authority of the State Transportation Board. A seven member HELP Advisory Committee accepts loan applications, reviews and evaluates requests for financial assistance, and makes recommendations to the Transportation Board on loan and financial assistance requests. The members of the State Transportation Board as of December 1, 2001 are: F. Rockne Arnett, Chair Katie Dusenberry, Vice Chair Ingo Radicke Bill Jeffers Richard “Dick” Hileman Dallas “Rusty” Gant James Martin Phoenix Tucson Globe Holbrook Lake Havasu City Wickenburg Willcox The members of the HELP Advisory Committee as of December 1, 2001 are: Victor Mendez, Chair Bill Beyer Gary Magrino Jeff Martin Cliff Potts Tami Ryall Paul Schwartz ADOT Glendale Yuma Mesa Payson Gilbert Sun City 2001 HIGHLIGHTS The State Transportation Board approved 15 new HELP loans totaling over $203 million from July 1, 2000 to September 30, 2001. The breakdown of these loans was a significant departure from previous years. Eleven of the 15 loans were made to statewide projects, two to the Maricopa County region and two to the Pima County region. Seven of the 15 loans were made to local governments with the remaining eight loans made to accelerate ADOT projects. As the program has matured, more local communities are choosing to use this finance tool to accelerate needed transportation projects. The low interest rates on a HELP loan offer local communities an opportunity to accelerate projects and reduce construction costs by avoiding future inflation. During the year, HELP repaid the first $100 million Board Funding Obligation. The ongoing capitalization of HELP continued with a second Board Funding Obligation of $100 million executed this year. The Legislature instituted a distribution ratio in 1999 as part of the capitalization of the HELP program. For all loans made between August 6, 1999 and December 31, 2004, fifty percent of the fund must be loaned for projects in Maricopa County, 25% for projects in Pima County and 25% for projects in the other 13 counties. The percentage breakdown of HELP loans approved as of September 30, 2001 was: September 30, 2001 Maricopa County (MAG) 53.4% Pima County (PAG) 23.0% 13 other counties 23.6% HIGH MARKS HELP continues to be among the most active state infrastructure banks in the nation. According to the Federal Highway Administration (FHWA), HELP ranks second in the nation among infrastructure banks with $156,849,985 in loan disbursements and third in the nation with $373,192,000 in loan agreements. The 23 loans made by HELP ranks fourth among the 32 state infrastructure banks. State Infrastructure Bank Loan Agreements by State As of September 2001 State Number of Agreement Loan Agreement Disbursements to Date Alaska 1 $2,737,000 $2,737,000 Arizona 23 $373,192,000 $156,849,985 Arkansas 1 $31,000 $31,000 Colorado 2 $400,000 $400,000 Delaware 1 $6,000,000 $6,000,000 Florida 32 $465,000,000 $94,000,000 Indiana 1 $3,000,000 Iowa 1 $739,000 $739,000 Maine 23 $1,780,000 $759,000 Michigan 23 $17,034,000 $13,033,000 Minnesota 7 $66,124,000 $29,581,000 Missouri 10 $69,251,000 $66,754,000 Nebraska 1 $1,500,000 New Mexico 1 $541,000 $541,000 New York 2 $12,000,000 $12,000,000 North Carolina 1 $1,575,000 $1,575,000 North Dakota 2 $3,565,000 $1,565,000 Ohio 35 $146,624,000 $102,550,000 Oregon 9 $11,483,000 $11,181,000 Pennsylvania 15 $14,600,000 $14,600,000 Puerto Rico 1 $15,000,000 $15,000,000 Rhode Island 1 $1,311,000 $1,311,000 South Carolina 5 $1,502,289,000 $510,428,000 South Dakota 1 $11,740,000 $11,740,000 - - State Infrastructure Bank Loan Agreements by State As of September 2001, cont'd Tennessee 1 $1,875,000 $1,875,000 Texas 32 $80,001,000 $69,617,000 Utah 1 $2,888,000 $2,888,000 Vermont 3 $1,030,000 - Virginia 1 $18,000,000 Washington 1 $700,000 Wisconsin 2 $1,188,000 $1,188,000 Wyoming 5 $49,090,000 $32,614,000 $2,882,288,000 $1,179,556,985 245 Note: Includes both Federal and State SIB programs Source: Federal Highway Administration; ADOT $18,000,000 - LOANS The HELP loans approved this fiscal year were used for a variety of purposes including emergency repairs, acceleration of the Maricopa County Regional Freeway System, and advancement of both rural projects and metro projects. For the first time, more loans were made to local communities than to ADOT to accelerate projects. The 15 loans accelerated highway projects in nine different counties throughout Arizona. Since its inception, HELP has made loans for transportation projects in 13 of Arizona’s 15 counties. Emergency Repairs October of 2000 brought heavy rains throughout Arizona. The damage to portions of the state's road system was extensive. Two of the harder hit areas were La Paz County in western Arizona and Santa Cruz County to the south. While these types of repairs normally are eligible for FHWA funding, all federal emergency relief funding had been exhausted for the year. After several meetings with FHWA, the counties, the Governor’s office and ADOT engineers it was determined that HELP offered the best option for funding the repairs. As federal emergency relief funds become available, these funds will be used to repay the principal and interest on the HELP loan. In a matter of three weeks these loans were applied for, approved and awarded demonstrating the ability of the program to respond to unusual circumstances. Salome Road-Centennial Wash Crossing, La Paz County Date Approved: December 18, 2000 Project: Repair the section of road washed out by the flooding in La Paz County. Loan Amount: $2,000,000 Interest Rate: 2.93% Project Acceleration: 15 months (best estimate of when FHWA would have had funding available to pay for repairs). The repairs enabled residents of the county to have access to the county seat (Parker) and provided truck traffic a safe, quick route into the county from I-10. South River Road, Santa Cruz County Date Approved: January 19, 2001 Project: Repair a 500 foot section of the road washed out by flooding in October. As part of this loan, Santa Cruz County borrowed an additional $650,000 to resurface the entire length of South River Road. Loan Amount: $1,150,000 Interest Rate: Will be determined at time of first draw. Project Acceleration: 15 months (best estimate of when FHWA would have had funding available to pay for repairs). South River Road is an important truck and school bus route north of Nogales. These repairs enabled the heavy traffic to bypass major streets in Nogales easing congestion and improving safety. LOANS TO SMALL COMMUNITIES An important feature of the HELP program lies in its ability to enable small communities the option of undertaking a major project and spreading the repayment over several years. The repayment, in most cases, comes from future HURF (Highway User Revenue Fund) collections. This, along with subsidized interest rates, makes the HELP an attractive financing tool. Paper Mill Road, Town of Taylor Date Approved: May 18, 2001 Project: Widening the major road in the town, adding a center turn lane, sidewalks and lighting ensuring the safety of the residents going to the city park, elementary school and city offices. The project will also provide better access to a new fire training facility being developed in the community. Loan Amount: $1,000,000 Interest Rate: 3.42% Project Acceleration: 4 years A true community-wide project, the Paper Mill Road widening addresses the concerns of the residents: safety, mobility and economic benefit. This is an example of a project that would not have taken place without the HELP program. This loan enabled the city to spread payments over a four-year period without depleting the funding for other necessary transportation projects. McLane Road, Town of Payson Date Approved: June 15, 2001 Project: Widen and improve surface while maintaining local nature of the road. Loan Amount: $1,100,000 Interest Rate: Will be determined at time of first draw. Project Acceleration: 3 years McLane Road is the original major North/South route in Payson. The road winds through the older section of town with no shoulder, and a reduced speed limit. Knowing repairs were needed for the road, the city council voted to repair and improve the road without losing its historic identity. This project adds needed turning lanes and a wider road surface while keeping the winding nature of the road intact. LOANS TO LARGER RURAL COMMUNITIES Yuma and Sierra Vista are two of the larger communities in rural Arizona. Projects in these communities can be much larger and tend to require funding to accelerate the project rather than funding to insure the project happens. Following are three projects that are important from a mobility and economic basis that utilized HELP loans. Buffalo Soldier Trail, Sierra Vista Date Approved: July 21, 2000 Project: Widen road from two to four lanes from Seventh Street to State Route 90 Bypass Loan Amount: $1,970,000 Interest Rate: 4.00% Project Acceleration: 18 months The widening will better handle the increased volume of traffic in Sierra Vista, increasing both mobility and safety. Included in this project will be lane barriers that will reduce the potential for head-on collisions. The project will assist with access to the commercial area of the city including the new major mall. Redondo/I-8 TI, City of Yuma Date Approved: June 15, 2001 Project: Design and reconstruction of the interchange at Redondo Road/I-8. In addition, Redondo will be resurfaced for access to a new commercial center. Loan Amount: $2,000,000 Interest Rate: Will be determined at time of first draw. Project Acceleration: 3 years With a new commercial center anchored by Home Depot opening and no access from westbound I-8, a new interchange is needed. Traffic currently has to exit the highway past the commercial center and backtrack to access the area. With improved mobility and economic benefit, this project will have a lasting effect on traffic patterns in Yuma. Avenue A, City of Yuma Date Approved: April 20, 2001 Project: Widen road from two to four lanes. Loan Amount: $1,000,000 Interest Rate: Will be determined at time of first draw. Project Acceleration: 2 years The relocation of the Border Patrol along Avenue A necessitated the widening of this road to provide better access for employees and better mobility to the adjacent neighborhood. The city borrowed the necessary money from HELP and will repay the loan through the transportation sales tax enacted for Yuma. Leveraging these dollars will enable Yuma to complete more projects in a shorter period of time easing congestion in this fast growing Arizona city. URBAN LOANS Fewer loans went to the urban areas in 2001, but the loans that were made in Maricopa and Pima Counties represent important projects to the mobility of each city. SR 51 (Squaw Peak Parkway) Union Hills to L101, City of Phoenix Date Approved: November 17, 2000 Project: Construction of the last section of SR51, connecting it with Loop 101. This loan will allow the last two sections to be bid as one project and will accelerate the project by 2 years. Loan Amount: $22,500,000 Interest Rate: 2.475% Project Acceleration: 2 years This project will complete the Squaw Peak Parkway by allowing the Bell Road to 101 section to be built as one project. This major highway project will ease traffic congestion, improve air quality and enhance the economic development of the area. JCT I-10/I-19 TI, ADOT Date Approved: September 21, 2001 Project: This project will reconstruct the entire interchange including eight ramps, two city streets, ten bridges, major drainage improvements, high mast lighting, traffic signals and landscaping. Loan Amount: $62,500,000 Interest Rate: Will be determined at time of the first draw. Project Acceleration: Phase I-12 months; Phase II-24 months Safety concerns and congestion are the driving influences for this project. The original configuration of the interchange did not take into account the size and volume of trucks using the interchange. 6th Avenue Improvements, City of Tucson Date Approved: June 15, 2001 Project: Continue widening and reconstruction of the road from Ajo Way to Rodeo Wash. This will include new sidewalk, curb, gutters and lighting. Loan Amount: $4,500,000 Interest Rate: Will be determined at time of first draw. Project Acceleration: 18-24 months The economic revitalization of this area is a primary concern for the city. Prior phases of this project made a dramatic difference in the economic performance of the district. The commercial area has made an obvious turnaround in its ability to compete with other commercial areas. MAG REGIONAL FREEWAY SYSTEM Date Approved: September 21, 2001 Project: Majority of loan will be used for right-of-way purchases and construction of the Santan Freeway (Loop 202) and the Red Mountain Freeway (Loop 202). This loan will continue the overall acceleration of the freeway system with its goal of completion by 2007. Loan Amount: $50,000,000 Interest Rate: Will be determined at time of first draw. Project Acceleration: 7 years The benefits of this loan will be numerous. First, with the completion of the Regional Freeway System, traffic congestion will be reduced and air quality will be improved with less idle time on the freeways. The freeways will be safer due to more options in commutes and larger freeways to handle the growing volume of vehicles. The acceleration will save dollars on construction costs and right-of-way purchases by avoiding inflation costs. ADOT RURAL PROJECTS In prior years, the majority of HELP loans were made in this category. This year, however, only four loans were made internally. Three of the projects are located in the northeastern area of the state and each project will have a profound effect on the community it serves. SR 260, Pinetop to Hon-Dah Date Approved: January 19, 2001 Project: This project is the second phase of the widening and reconstruction of SR 260 extending from the community of Pinetop to the Hon-Dah Convention Center in Navajo County. Loan Amount: $8,400,000 Interest Rate: 2.93% Project Acceleration: 12 months Traffic congestion and safety issues are being addressed in the White Mountains with this loan to resurface and widen SR 260 from two to four lanes. In addition, economic development will be enhanced with better access into businesses along the route. Naha ‘Ta’ Dziil Road TI, Sanders Date Approved: March 16, 2001 Project: The project includes the design of an alternative alignment of the US 191 Traffic Interchange at I40 to the west of the existing interchange. The project will add sidewalks and lighting from Naha ‘Ta’ Dziil Road to the Sanders Elementary School. Loan Amount: $1,000,000 Interest Rate: Will be determined at time of first draw. Project Acceleration: 17 months The safety of the children attending the Sanders Elementary School is the number one issue addressed by this loan. Not only is the TI reconfigured, but the detached sidewalks and roadway lighting will make this area much safer for pedestrians and vehicles alike. SR 260, Christopher Creek Segment Date Approved: May 18, 2001 Project: Project consists of 5.5 miles of roadway construction that will realign and widen SR 260 from two lanes to four lanes. Included in the project are bridges over Christopher Creek, Sharp Creek, and Hunter Creek Drive, a pedestrian underpass and three wildlife underpasses. Loan Amount: $41,900,000 Interest Rate: Will be determined at time of first draw. Project Acceleration: 9 months While the acceleration is helpful, the real benefit of this loan is the ability to utilize ground water that accumulated from snow in the area. Pedestrian safety is a major concern of this project. Relocation of access to the Christopher Creek community and segments of two Gila County roads removes the dangers of speeding traffic through the community. SR89A, Glassford Hill Segment Date Approved: September 21, 2001 Project: Provides design and right-of-way dollars for a project that will realign and widen a five-mile section of SR89A from a two-lane roadway to a four-lane controlled access, divided highway. Loan Amount: $3,216,000 Interest Rate: Will be determined at time of first draw. Project Acceleration: 12 months The traffic congestion occurring in the Prescott / Prescott Valley area will be eased with the widening of this section of highway. MAP STATEWIDE Loan Amount City / Location Project Name Project Description 1 Carr Canyon Rd - Hunter Canyon Rd Design 2 Buffalo Soldier Trail Widening 3 Van's Trading Post to East of SR264 Design 4 Salome Rd Centennial Wash Crossing Emergency road repair & bridge repair $2,000,000 La Paz County 5 Lake Havasu Blvd,Old London Bridge Rd Design and right of way acquisition $1,850,000 Mohave County 6 SR260 Showlow - McNary - Eager Mill, Chip seal, overlay $5,664,000 Showlow 7 Pinetop to Hondah Widening, turn lane, drainage, traffic signal, landscape $8,400,000 Pinetop 8 US60 / SR79 TI Design $600,000 Pinal County 9 HWY 89 - Center Street traffic signal New traffic signal / widen approach $300,000 Chino Valley $457,000 $1,970,000 $500,000 $1,500,000 Cochise County Sierra Vista Coconino County 10 Glassford Hill Design 11 Ave 3E SR280 TI Design realignment 12 South River Road Emergency repair and Reconstruction $1,150,000 Santa Cruz County 13 St. Johns - Sanders Highway Design $1,000,000 Apache County 14 Ave. A Reconstruction Reconstruction $1,000,000 City of Yuma 15 Paper Mill Rd. Improvement Project Widen /resurface / sidewalks $1,000,000 Town of Taylor 16 SR260 Christopher Creek Segment Road reconstruction / new bridge / water transport $41,900,000 Gila County 17 McLane Road Reconstruction Road reconstruction / Right of way acquisition $1,100,000 Payson 18 I-18 Giss Parkway - Redondo Dr.TI TI reconstruction $2,000,000 Yuma 19 SR89A Glassford Hill Segment Design / right of way $3,216,000 Prescott Valley $800,000 Prescott Valley Yuma 476,407,000 PAG Loan Amount City / Location Project Name Project Description 1 I-10 - I-19 TI Right of way acquisition $3,285,000 Pima County 2 I-10 - I-19 TI Cultural resource recovery $1,000,000 Pima County 3 I-10 Mainline Prince Rd Design $1,000,000 Pima County 4 6th Avenue Project Street improvements $2,000,000 Tucson 5 6th Avenue Project Phase II Street Improvements $4,500,000 Tucson 6 I -10 / I -19 TI Reconstruction $62,500,000 Pima County $74,285,000 MAG Loan Amount City / Location New construction (8)lane arterial highway $26,000,000 Chandler Squaw Peak Freeway SR51 New construction (6) lane arterial highway $22,500,000 Phoenix 3 Red Mountain Country Club to Gilbert New construction (8) lane arterial highway $24,000,000 Mesa 4 MAG System Right of Way Right of way acquisition $100,000,000 Maricopa County 5 Regional Freeway System Right of way / construction $50,000,000 Maricopa County Project Name Project Description 1 Price Freeway - Warner to Frye 2 $222,500,000 GRAND TOTAL $373,192,000 Note: Information presented herein illustrates project location sites only. For information regarding total number of HELP loans, please refer to (loan status as of September 2001) listed below. FINANCIAL CONDITION OF HELP FUND Shown below is the HELP Fund cash status as of the fiscal year ended June 30, 2001, with comparables to June 30, 2000. The numbers shown are on a cash basis, and are unaudited. HELP Fund Cash Status June 30, 2001 June 30, 2000 Beginning Fund Balance $115,498,598 $37,214,565 - $6,561,311 State Match - $396,600 Board Funding Obligation '99 - $100,000,000 Board Funding Obligation '00 $100,000,000 - - $20,000,000 $20,000,000 - $108,695,287 $8,739,802 Interest Repaid on Loans $3,487,890 $485,725 Interest Earnings $6,634,674 $3,531,166 Total Revenues $238,817,851 $139,714,604 $84,084,480 $61,411,070 $100,000,000 - $6,232,139 - Administration Costs $140,378 $19,501 Total Expenditures $190,456,996 $61,430,571 Ending Fund Balance $163,859,453 $115,498,598 Revenues: Federal Appropriation Highway Fund Transfer General Fund Appropriation Principal Repaid on Loans Expenditures: Loan Disbursements BFO Payment to Treasurer-Principal BFO Payment to Treasurer-Interest Prepared By Arizona Department of Transportation Financial Management Services 206 S. 17th Avenue Suite 200 B Phoenix, AZ 85007-3213 Phone (602) 712-7441 * Fax (602) 712-6672 HIGHWAY EXPANSION AND EXTENSION LOAN PROGRAM (HELP) Loan Status As Of September 2001 Statewide Loans PROJECT SPONSOR PURPOSE OF LOAN PROJECT LOCATION LOAN INTEREST APPROVAL RATE * DATE MAXIMUM FINAL DRAWS TO OUTSTANDING LOAN MATURITY DATE LOAN AMOUNT BALANCE ADOT Reconstruction SR260 Show low to Pinetop 02/18/00 2.93% $5,664,000 Oct-01 $4,666,836 $4,666,836 Town of Chino Valley Construction Widen approach to Center St., Install Traffic Signal 03/17/00 4.50% $300,00 Jan-05 $300,000 $230,000 ADOT Design Right of Way Various projects state wide 05/19/00 3.46% $5,707,000 Jun-05 $2,415,299 $2,415,299 City of Sierra Vista Construction Buffalo Soldier Trail 7th St., to SR90 Bypass 07/21/00 4.00% $1,970,000 Jun-03 $1,970,000 $1,455,000 La Paz County Reconstruction Centennial Wash Crossing 12/18/00 2.93% $2,000,000 Jan-04 $1,448,568 $283,757 ADOT Reconstruction SR260 Pinetop to Hondah 01/19/01 2.93% $8,400,00 Jan-03 $1,734,245 $1,734,245 Town of Taylor Reconstruction Paper Mill Road 05/18/01 3.42% $1,000,000 Jan-05 $1,000,000 $1,000,000 Santa Cruz County Reconstruction South River Road 01/19/01 To be Determined $1,150,000 Jan-05 Part A ER work funded by FHWA (500,000) - ADOT Design Naha 'Ta' Dziil Rd Sanders TI 03/01/01 To be Determined $1,000,000 Jun-04 - - City of Yuma Reconstruction Ave A 40th Street to Desert Ave 04/20/01 To be Determined $1,000,000 Jul-06 - - ADOT Reconstruction & Water SR260 Christopher Creek 05/18/01 To be Determined $41,900,000 Junl-05 - - Town of Payson Reconstruction McLane Road 06/15/01 To be Determined $1,100,000 Jul-06 - - City of Yuma Reconstruction 1-8 - Giss Parkway/ Redondo Dr Interchange 06/15/01 To be Determined $2,000,000 Jul-06 - - ADOT Reconstruction SR89A Glassford Hill Road Reconstruction 09/21/01 To be Determined $3,216,000 Aug-03 - - Loan Status As Of September 2001 MAG Loans Project Sponsor Purpose of Loan Project Location Loan Approval Date Interest Rate* Maximum Loan Amount Final Maturity Draws To Date Outstanding Loan Balance City of Mesa New Construction Urban Freeway System Red Mountain Freeway: Country Club to Gilbert 03/20/1998 4.41% $24,000,000 Oct-01 $24,000,000 $24,000,000 Cit of Chandler New Construction Urban Freeway System Price Freeway: Warner to Frye 03/20/1998 3.59% $26,000,000 Jul-02 $26,000,000 $1,309,254 Purchase of Right of Way for Urban Freeway System ADOT Various: As Stipulated in Senate Bill 1201 11/15/1999 3.92% $100,000,000 Jun-01 $90,324,139 Paid in full 06/28/2001 ADOT City of Phoenix Construction SR51 Completion Union Hills L101 11/17/2000 2.475% $22,5000,000 Jun-05 $990,897 $990,897 ADOT Regional Freeway System Completion Regional Freeway System 09/21/2001 To be Determined $50,000,000 Dec-06 - - Loan Status as of September 2001 PAG Loans Project Sponsor Purpose of Loan Project Location City of Tucson Street Improvements ADOT Design Right of Way City of Tucson ADOT Loan Approval Date Interest Rate* Maximum Loan Amount Final Maturity Draws to Date Outstanding Loan Balance 6th Ave: 19th Street to I-10 03/17/2000 4.50% $2,000,000 Jan-05 $2,000,000 Paid in full 05/01/01 Various projects in Pima County 05/19/2000 To be Determined $5,285,000 Jun-05 - - 6th Ave: Ajo Street Way to Rodeo Improvements Wash 06/15/2001 To be Determined $4,500,000 Jun-06 - - 09/21/2001 To be Determined $62,500,000 Jan-06 - - Construction I-10 / I-19 Interchange *Interest rate will be determined by the State Transportation Board when the first construction draw is made.