October 19, 2012


Idaho Transportation Board Chairman Jerry Whitehead called a special work session of the Idaho Transportation Board at 1:00 PM on Friday, October 19, 2012. The following principals were present at the Idaho Transportation Department in Boise, Idaho:

            Jerry Whitehead, Chairman

            Jim Coleman, Vice Chairman – District 1

            Julie DeLorenzo, Member – District 3

            Lee Gagner, Member – District 6

            Brian W. Ness, Director

            Larry Allen, Deputy Attorney General

            Sue S. Higgins, Executive Assistant and Secretary to the Board


Chairman Whitehead thanked the participants for attending the special work session. He noted the session is optional and the other Board members were excused from attending.


Transportation and Economic Development Zone (TEDZ). Consultant Jeremy Pisca explained the federal Transportation Infrastructure Finance and Innovation Act (TIFIA), whereby federal funds are available as a loan to states for transportation projects. TIFIA funds could be used for up to 49% of project costs, including environmental work and preliminary design. The minimum size of a rural project is $25 million. Interest rates would be ˝ of the standard US Treasury rate at the date of close.


TIFIA could be used with the TEDZ proposal. Mr. Pisca said TEDZ involves identifying boundaries and diverting a portion of the estimated sales taxes collected within that zone to a specific project fund. The fund is continuously appropriated for the purpose of paying the debt service of the highway project. The proposal requires ITD and the Department of Commerce to work cooperatively to select a state highway project to fund via this mechanism and also to approve the boundaries. An economist would need to determine the total revenue impact within the zone, which must be at least twice the cost of the infrastructure improvements. Additionally, a majority of local jurisdictions within the identified boundary must approve formation of the zone. ITD retains control over the highway projects. Mr. Pisca also emphasized that TEDZ would be an optional funding mechanism. The Departments of Commerce and Transportation would determine if and where it would be used. He added that revenue collected in the zone that is in excess of the required loan payment would be diverted to the General Fund. The entire state could benefit from this proposal.


Discussion followed on the proposal. Some of the concerns included the ongoing costs to maintain new routes and purchase maintenance equipment, the liability of a continuously-appropriated fund based on sales tax collections, and that small areas may be precluded from participating. Money for the non-TIFIA funded portion of the project could come from various sources. Federal formula funds could be used for 31% of the costs. Other options may be tolls or local option taxes.


In response to a question on who would pay for the economist to study a proposed zone, Mr. Pisca said that expense would be shared between the Departments of Commerce and Transportation. When it was suggested that a private entity be allowed to fund the economic study, Mr. Pisca replied that the intent is to keep the study independent. The accuracy of a private entity’s study may be questioned.


Mark Warbis, Communications Director from the Governor’s Office, asked about an escape mechanism in case the economy plummets. He asked who would be responsible to repay the loan if sales tax revenue from the zone is the only funding source and those funds are insufficient. Economist Dr. John Church replied that the economists’ initial funding review would estimate the funding potential for a long period of time. He noted that historically, the economy goes up and down. Vice Chairman Coleman suggested diverting excess revenue during good economic times to a reserve account to be used for debt payment if the revenue generated does not meet the estimated projections.


Chairman Whitehead thanked the participants for the additional information on the proposal.



            WHEREUPON the special session of the Transportation Board adjourned at 2:45 PM.




Jerry Whitehead, Chairman

Idaho Transportation Board

Read and Approved

November 14, 2012

Boise, Idaho