NDOT / State Treasurer Announce Nearly $1 Billion in Projected Transportation Bonding Savings
CARSON CITY, NEV. – The Nevada Department of Transportation, in conjunction with the State Treasurer’s Office, announced that bonding for the financing of Project Neon road construction is projected to save taxpayers approximately $1 billion.
Essentially, borrowing funds from the municipal bond market by issuing tax-exempt bonds for a specified period of time at a fixed interest rate, bonding provided the State with the lowest financing costs. NDOT competitively sold three sets of Highway Improvement Revenue (Motor Vehicle Fuel Tax) Bonds to finance construction of Project Neon, the state’s largest transportation public works project. With an AAA rating from Standard and Poor’s for highway revenue bonds, the highest possible credit rating, NDOT received competitively-low interest rates on the bond sales to construct Project Neon, while continuing funding for other much-needed highway improvements across the state.
“As a result of bonding, the financing of Project Neon will be completed 18 years sooner with gross savings over the life of the project of approximately $986 million when compared to the proposed public-private partnership,” Nevada State Treasurer’s Office Deputy Treasurer Lori Chatwood explained.
The state sold the first Project Neon transportation bond in 2014, following State Transportation Board evaluation and approval of the benefits of bond financing over funding the project as part of a public-private partnership.
“Our focus at NDOT is to provide mobility and traffic safety and provide it by the most efficient and responsible use of taxpayer funds,” NDOT Director Rudy Malfabon explained. “We closely evaluated both public-private funding and bonding for Project Neon. Public-private partnerships can bring great opportunity to responsibly generate funding for the transportation projects Nevada needs now. But in this instance, due to historically low interest rates, bonding provided the best project fit and time savings, and ultimately great value and cost savings for state taxpayers.”
State Treasurer Dan Schwartz added his congratulations: “Nevadans should be very proud of the team from NDOT and the State Treasurer’s Office. Completing this infrastructure project 18 years earlier than projected and saving taxpayers close to $1 billion in interest costs is spectacular. It doesn’t get any better than that—anywhere.”
Project Neon is the largest transportation public works project in Nevada history. Begun in 2016, the project will widen nearly four miles of Interstate 15 between Sahara Avenue and the “Spaghetti Bowl” interchange in downtown Las Vegas and enhance traffic safety and mobility for the approximately 300,000 drivers traveling the stretch of interstate daily, currently the busiest section of highway in Nevada. Traffic in the corridor is expected to double by 2035. Project Neon will reduce travel delays by nearly 30 percent for a $110 million annual savings through increased productivity. It also will improve air quality due to less idle time and vehicle exhaust while enhancing motorist safety from reduced merge and weave traffic.