Idaho Transportation Department refinances GARVEE to save $13.1 million for taxpayers

BOISE – The Idaho Transportation Department (ITD) will save approximately $13.1 million in interest costs on GARVEE highway bonds. ITD worked with the Idaho Housing and Finance Association to refinance $101 million of debt by reducing interest rates from 4.5% to 2.3% on those bonds.

This is the second refinancing of GARVEE bonds completed by ITD and IHFA as part of the continuing management of this program. The first, in 2015, resulted in $12.7 million.

“Through GARVEE, we are investing wisely by spending the money now to solve the transportation problems of tomorrow. We are paying less than the anticipated cost of inflation for the same construction work in years to come,” said ITD Director Brian Ness. “The GARVEE program on the whole is another example of ITD being as efficient as possible by saving money, stretching resources, and reinvesting savings back into the maintenance of our roads and bridges.”

GARVEE bonds allow ITD to finance much-needed road and bridgework, with the promise to pay back the borrowed capital during the next 18 years.

“ITD continues to look for opportunities to take advantage of favorable market conditions and ensure that we are managing our finances wisely for the taxpayers of Idaho,” said department Chief Administrative Officer Charlene McArthur. “We apply those savings back to maintenance and improvement of our roads and bridges.”

GARVEE bonds have paid for approximately $857 million in road and bridge work in the last 10 years, including 119 miles of new roadway, 41 new or rebuilt bridges, and 14 new or rebuilt interchanges.

The Idaho Legislature approved an additional $300 million in GARVEE bonding authority during their last session, and the Idaho Transportation Board has already started to direct some of that funding toward needed projects in the Treasure Valley and in northern Idaho.

McArthur also credited ITD Controller Dave Tolman for his diligence in managing the financing transaction and work with external partners. “The ITD team will continue to monitor the market and work with our partners to identify future opportunities,” she said.