Minnesota’s SIB, referred to as the Transportation Revolving Loan Fund (TRLF), was established in 1997 to provide loans and other financial assistance to cities, counties, the state, and other governmental entities for all phases of Federal-aid eligible transportation projects. Borrowers can pledge any type of repayment source. However, the TRLF is restricted from providing financing for toll or congestion pricing projects.

The Minnesota Department of Transportation (Mn/DOT) and the Minnesota Public Facilities Authority (MPFA, the agency that administers Minnesota’s Waste Water and Clean Water revolving loan funds) jointly administer the TRLF. Mn/DOT evaluates the technical merit of project applications, while the MPFA evaluates the financial merit. This interagency partnership enabled Mn/DOT to develop and operate the TRLF without the addition of any staff.

To date, the TRLF has been capitalized with approximately $58.5 million (a $3.5 million Federal grant, $31.5 million in Federal ISTEA advance capitalization funds, $16.5 million in state general funds, and $7 million in state trunk highway funds). These funds have been leveraged through the sale of revenue bonds to enable the approval of over $110 million in loans to 21 projects.

Seven of these 21 projects are currently under agreement, with an additional 10 expected to close by the end of the calendar year. These projects range from a $535,000 loan to a city with a population under 5,000 for approach work on a Federal-aid bridge project to a $15 million loan to Mn/DOT for advance acquisition of right-of-way to preserve a new principal arterial corridor.

Also of note is a $21 million leveraged loan from the TRLF’s Transit Account to the Metropolitan Council (the Twin Cities’ metropolitan planning organization) for the completion of 53 transit capital projects ranging from vehicle rehabilitation to bus lane and shelter construction. The interest rate for the loan is 2.71 percent. The repayment source is regional property taxes, and the repayment term is variable depending on the useful life of the projects. It is estimated that the Metropolitan Council will save approximately $4 million over other financing options.

Overall, the TRLF has been a very successful tool for enabling the timely completion of transportation projects that lack current funding.

The FHWA Innovative Finance Quarterly (IFQ) is published four times per year. FHWA does not maintain a mailing list for the IFQ nor does it distribute the publication direcly. The IFQ is available as an insert to the AASHTO Journal and is also available electronically through FHWA's Home Page: http://www.fhwa.dot.gov/innovativefinance/