Second loan approved under the Transportation Infrastructure Finance and Innovation Act Rural Project Initiative
WASHINGTON – U.S. Transportation Secretary Elaine L. Chao today announced that the U.S. Department of Transportation’s Build America Bureau (the Bureau) has provided a $8.45 million loan to the Monterey-Salinas Transit District (MST) in Monterey County, California. This is the second loan under the Transportation Infrastructure Finance and Innovation Act (TIFIA) Rural Project Initiative (RPI) initiated and launched by Secretary Chao.
“This $8.45 million federal loan reflects this Administration’s attention to long-neglected and overlooked rural infrastructure; the monies will improve the transportation system in Monterey County and provide residents with better access to jobs, healthcare, and other services,” said U.S. Transportation Secretary Elaine L. Chao.
The TIFIA loan proceeds will finance the construction of a brand new, 14,000 square-foot South County Operations and Maintenance Facility on a 4.8-acre lot in King City, California. Once complete, the facility will provide MST with a base in the south of Monterey County from which to operate its south county services, reducing deadhead mileage, fuel usage, maintenance and labor costs, and the risk of breakdown. Currently, no storage, parking, or operation and maintenance facilities exist in this part of the county and all of MST’s services depend on facilities in northern Monterey County.
The Department launched the RPI program to assist rural communities in overcoming financial barriers that slow infrastructure investment in rural America. Under the RPI, an eligible borrower can receive a loan of up to 49% of eligible project costs at half of the prevailing U.S. Treasury rate, and while funding is available, for loans under $75 million, the Department will cover the cost of its advisor for the loan, which is typically a fee charged to applicants.
This is the second loan under TIFIA’s RPI, designed specifically to help infrastructure development in rural regions, following the first RPI loan to the San Luis Obispo Regional Transit Authority, which closed in early September 2020. This is also the fastest loan the Bureau has ever closed. The Bureau received the Letter of Interest from MST in May 2020 and was able to close the loan just five months later.
In July, Secretary Chao announced the Applicant Toolkit (Toolkit) for the Rural Opportunities to Use Transportation for Economic Success (ROUTES) Initiative, one of the latest efforts by the Department and the Trump Administration to improve rural access to federal grant funds. The Toolkit provides user-friendly information and resources to enhance rural applicants’ familiarity with the Department’s discretionary grant programs and the funding process.
Secretary Chao announced the ROUTES Initiative at the annual meeting of the American Association of State Highway Transportation Officials (AASHTO) in St. Louis, Missouri in October 2019. The initiative is led by the ROUTES Council, an internal deliberative body at the Department which identifies critical rural transportation concerns and coordinate efforts among the Department’s operating administrations.
The Bureau, which administers the TIFIA credit program, was established as a “one-stop shop” to streamline credit opportunities while also providing technical assistance and encouraging innovative best practices in project planning, financing, delivery, and operation. The Bureau has the resources and full commitment to provide additional flexibility and financial assistance to transportation projects in regions impacted by the coronavirus disease 2019 (COVID-19) public health emergency to minimize the negative effects and help them with quicker recovery from this crisis. During Secretary Chao’s tenure at DOT, the Bureau has closed $7.9 billion in TIFIA financings, supporting more than $27.6 billion in infrastructure investment across the country.
