Financing Agreement for Albany-Shaker Road And Watervliet-Shaker Road Projects

 

 

Background

 

CDTC's Wolf Road study and Albany County Airport study set the stage for the Town of Colonie - Albany County joint Generic Environmental Impact Study (GEIS) of the airport area. The study confirmed that expected growth in the airport area would precipitate the need for capacity additions to the highway system. It called for a careful staging of development, demand management by new development to reduce peak hour travel by 25% from typical rates, and for a public-private partnership to advance several major highway projects.

 

The follow-up Airport Area Transportation Financing Task Force created by the Town refined the financing arrangements of the GEIS. The Exit 3 improvements were put entirely in the public sector's hands for financing, and other projects were judged best implemented directly in conjunction with development (Wade Road extension, Wolf Road service roads and others). The Albany-Shaker Road (ASR) and Watervliet-Shaker Road (WSR) projects are TIP projects A275, A294 and A372. These were retained as mixed public and private financing through the use of mitigation fees due to the nature of these projects (meeting both through-traffic and local development needs but largely precipitated by identifiable local development).

 

Largely on the strength of the town's and county's initiative in the GEIS and financing plans that respected CDTC's public-private financing policy, CDTC's members added the Albany-Shaker Road and Watervliet-Shaker Road projects to the TIP in 1993 with the assumption that the standard funding splits of 80% federal, 15% state and 5% local funding shares would cover half the cost of each project. Based on development projections, it was assumed that mitigation fees and contribution of private lands for right-of-way would cover the balance of the cost. CDTC participants recognized that all the mitigation fees may not be in the bank prior to letting the project, and that it would probably be necessary for the county (as owner of the two facilities) to advance some of the project costs with county funds or bond proceeds and be reimbursed by mitigation fees as development occurs.

 

In recent years, mitigation fees have been collected and used for preliminary planning and design work. The intersection at Watervliet-Shaker and New Karner Road was broken out from the corridor project and advanced with federal, state and local funds. (The expectation of CDTC participants is that the intended public/private financing balance will result once all phases of the projects are complete.)

 

Recent concerns over the pace of mitigation fee receipts and Albany County's responsibilities for advancing funds to cover project costs while awaiting fee collections has led to exploration of alternative funding methods. (While the development plans in the area and the mitigation responsibilities assigned to specific projects seeking town approval are keeping pace with expectations at the time of the GEIS adoption, the amount of fees collected, unspent and in escrow is currently modest. This is partly because funds are not completely realized until the completion of individual projects and partly because a good portion of the mitigation responsibilities -- such as British American's -- are being kept in a tally sheet rather than in escrow until the ASR alignment is selected and right-of-way credit is determined.)

 

For the projects in the corridor (A275, A294 and A372) the project costs total $24.0M. Of this, the TIP requires that the public share of 50%, or $12.0M ($9.0M federal; $1.8M state; $0.6M county). The 1997-02 TIP lists a private share of 50%, or $12.0M (apply available mitigation fees, supplement with public funds and reimburse with mitigation fees as collected).

 

Note that the 100% public financing of the project A294 (Watervliet-Shaker Road / New Karner Road intersection) and the application of mitigation fees against preliminary planning and design costs for A275 and A372 would adjust the public/private split of financial responsibilities of remaining phases of these projects.

 

 

The CDTC-NYSDOT-County-Town TIP Agreement

 

Under federal law, CDTC may finance projects at any federal participation level up to 80%. Thus, no outside approval would be needed for CDTC to use federal funds to cover up to 80% of the private share of the projects at the time the funds must be obligated, and replenish these funds to the TIP as mitigation fees are collected. With this in mind, CDTC adopted the following provisions to govern the financing of these projects:

 

  1. Albany County commits to full 20% non-federal share for remaining public share of the two projects, receives Marchiselli funds to offset 3/4 of this share.
  2.  

  3. CDTC commits to cover up to 80% of the private half of projects and establishes procedures for mitigation fees to replenish these funds to the TIP.
  4.  

  5. Mitigation fees in hand at the time of the loan would be applied against the requirement for a 20% match on the federal share for the private half. Any additional mitigation fees in hand at the time of the loan would reduce the size of the federal commitment on the private half of the projects.
  6.  

  7. As further mitigation fees assigned to the corridor are received by the town, these funds are held in escrow by the town. They would then be applied to other TIP projects in the GEIS area to reduce the public share of these projects. (For example, they could be applied through a "betterment" agreement between the town and state to reduce the federal cost of sidewalks on Wolf Road, intersection improvements related to the Exit 3 project, or similar planned actions that are slated for federal funding.)
  8.  

  9. CDTC retains the liability to adjust future TIP commitments should mitigation fees prove insufficient over time. Should mitigation fees prove insufficient, CDTC will end up having committed a greater amount of federal funds on these projects than initially intended, but will also end up having a facility with greater reserve capacity for through traffic than initially intended. The final federal share would end up being a share that matches the CDTC public-private financing policy.
  10.  

  11. When mitigation fees reach a total to cover the repayment installments, additional fees are kept in escrow to undertake future improvements in the corridor.

 

In addition to CDTC approval, NYSDOT, CDTC, Albany County and the Town of Colonie need to jointly concur on financial responsibilities, mitigation fee transactions and future betterments. This practice does not require formal NYSDOT main office or federal concurrence.

 

In the 1999-04 TIP, the five-year outlay of federal aid reflects an estimate of mitigation fees in hand at the time of obligation. Actual outlay will be determined by actual mitigation proceeds per the process described above.