State Figures Bond Interest for U.S. 401 Work Is Cheaper Than Delay
Posted May 7, 2007 7:32 p.m. EDT
Rolesville, N.C. — North Carolina is taking advantage of a new program that lets it borrow now against future federal highway aid, and six road projects that were on hold are now being talked about, including the widening of U.S. Highway 401 in northern Wake County.
The project is not far ahead of the people who will use it. Rolesville can see it coming.
The Rolesville Flea Market is an example of how things have been for years. It looks like it's miles away from the Triangle's explosive growth.
Look just outside of town, however, and there it is — a new shopping center and subdivisions that will double Rolesville's population.
Herbert Eddins, who owns the market, can see the growth happening.
“Ohhhh, it's growing fast. We even got a new Sonic in town, too. It's getting very busy down there — a lot of traffic, lotta traffic,” Eddins said.
The road work wasn't even on the state construction schedule, however, until the state decided to use Garvee Bonds to speed up construction.
“What we're doing it trying to get ahead of inflation, so the cost of borrowing, at least in today's terms, is a whole lot less than delaying those projects at double-digit inflation,” Mark Foster, NCDOT’s chief financial officer, explained.
With Garvee bonds, the state borrows against future federal funding and pays today's interest rates. That should work out better because some road projects can double in cost while they await funding. Garvee bonds will let NCDOT put the 401 widening and Rolesville bypass out for bids by 2009.
The federal government commitment against which the state is borrowing for 401 construction in the Rolesville area is $48 million.