A bill was heard this week in the Senate Transportation Committee to dedicate approximately $4 million annually in the trunk highway fund to repay the interest on a federal loan that MnDOT is expected to apply for. The loan MnDOT will be applying for is a $36 million Transportation Infrastructure Finance and Innovation Act (TIFIA) loan through the Rural Project Initiative to fund construction of the last stretch of Highway 14. The project will complete the final 12 miles of Highway 14 that are not yet expanded to four lanes between New Ulm and Mankato.
The agency believes statutory language is necessary to divert trunk highway funds to pay the interest on the loan. Interest rates on TIFIA loans are low—typically 1.2-1.3%.
Local governments have committed another $36 million to the project and MNDOT believes the agency has the capacity to find revenue to pay the remaining $20 million gap (potentially through another federal grant).
The Rural Project Initiative is a special federal program passed as part of TIFIA that provides low cost loans for transportation projects to small and rural communities across the country. Fixed interest rate loans are available for up to 49% of a project’s eligible costs.
The cities and towns of southern Minnesota are in strong support of this DFL-authored legislation, which will improve public safety and commerce along Highway 14. Numerous accidents and fatalities on Highway 14 have demonstrated the need to expand the highway to four lanes and fund other safety improvements to the corridor. (SF 3878)