Tennessee eyes bonds for bridges

12/08/2008

By Candy McCampbell

Tennessee is eyeing the use of $350 million in bonds for bridge repair or replacement, a detour from its traditional “pay as you go” method of construction funding.

Gov. Phil Bredesen endorsed Department of Transportation Commissioner Gerald Nicely’s proposal to sell low-risk bonds that would be backed by guaranteed federal funds for the bridge work.

Nicely wants to use Grant Anticipation Revenue Vehicles, dubbed “Garvees,” that would be repaid in about 12 years with $40 million annually in guaranteed federal funds.

More than 300 Tennessee bridges are rated as “structurally deficient.” The bond money would fund repairs on about 200 of them over two to three years.

“I think Commissioner Nicely was creative about finding one area that makes some sense to do this with and do double duty,” Bredesen says. “Let us repair some bridges and let us create some jobs in a tough time. I’m looking for ever way I can to make it work in this environment.”

Nicely said about 65 to 70% of the bridges could be repaired within two and a half to three years.

“We’d have them either under construction or completed,” Nicely says. “And yes indeed, it would obviously provide a lot of jobs.”

Nicely made the proposal during a recent budget hearing where department heads are showing how they are dealing with an expected $800 million shortfall this year.

The bond sale, which would require legislative approval, would be a “one-time event,” he adds.

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