Financing Agreement for Albany-Shaker Road And Watervliet-Shaker Road Projects
In response to growing
development pressures in the early 1990s that included plans to reconstruct and
expand the Albany International
Airport, the Town of Colonie and Albany County initiated a planning effort called the Albany County Airport Area Generic Environmental Impact Study (GEIS) to develop a comprehensive plan for
addressing the impacts of future growth in the area. The GEIS recommended eleven transportation
actions and a plan for financing the implementation of those improvements. The plan called for careful strategy of
managing development, demand management to reduce peak hour travel, and for a
public/private partnership to advance several major roadway and transit
projects. The plan called for 1) placing
Northway access improvements (Exit 3 or 4) entirely in the hands of the public
sector for financing, 2) developer contributions, or mitigation fees, to fully
cover the cost of several other projects largely precipitated by local
development, and 3) a mix of public and private funds to share in the cost of
improvements to Albany Shaker Road and Watervliet Shaker
Road.
The plan calls for
roughly $90 million in improvements to the Airport Area's transportation
system. Mitigation fees collected
under the plan are expected to cover roughly 35% to 40% of the cost the
recommended improvements.
TIP Programming of Albany Shaker Road and Watervliet
Shaker Road
Projects
Largely on the strength of the GEIS initiative, the Town and
County's commitment to integrated transportation and community planning, and a
financing plan that respected CDTC's adopted
public/private financing policy, the CDTC Policy Board added the Albany
Shaker Road and Watervliet Shaker Road
projects to CDTC's Transportation Improvement Program in 1993. The projects were added with the
understanding that the standard funding splits (80% federal, 15% state, and 5%
local) would cover half the cost of each project. Based on GEIS development forecasts, it was
assumed that a combination of mitigation fees and right-of-way donations would
cover the balance of the total costs of the two projects. At the time these projects were programmed,
CDTC participants recognized the possibility that all the mitigation fees
needed to cover 50% of project costs might not be "in the bank" prior
to letting the project, and that it would be necessary for the County, as owner
of the two roadways, to advance some of the project costs with County funds or
bond proceeds. If this were to happen,
the County would be reimbursed by mitigation fees as development occurred.
For the projects in the corridor (A275, A294, and A372) the
project costs totaled $24 million in the 1997-02 Transportation Improvement
Program. The TIP
required that the public share would total no more than 50% of the project
costs, or $12 million ($9 million federal; $1.8 million state; and $0.6 million
county). The TIP
listed a private share of 50%, or $12 million.
The TIP noted that the private share
would be covered by available mitigation fees and supplemented with public
funds which would be reimbursed with mitigation funds as they are collected.
Concerns over the pace of mitigation fee receipts and Albany
County's responsibilities for
advancing funds to cover project costs while awaiting the collections led to
exploration of alternative funding methods during the development of the
1999-04 TIP.
While the development plans in the airport area and the mitigation
responsibilities assigned to specific projects seeking town approval were
keeping pace with expectations at the time of GEIS adoption, the amount of
mitigation fees collected, unspent and in escrow was modest. This is partly because funds are not fully
collected until the completion of individual development projects and partly
because a good portion of the mitigation responsibilities are kept "on
paper" until roadway designs are complete and right-of-way credit is
determined.
Under federal law, CDTC may finance projects at any federal
participation level up to 80%. Thus, no
outside approval is needed for CDTC to use federal funds to cover up to 80% of
the private share of the Albany Shaker and Watervliet Shaker Road
projects at the time the funds are obligated, and replenish these funds
to the TIP as mitigation fees are
collected. With this in mind, CDTC
adopted the following provisions in 1999 to govern the financing of these two
projects:
1. Albany County committed to full 20% non-federal share for remaining public share of
the two projects, and would receive Marchiselli funds
to offset 75% of this share.
2. CDTC committed to cover up to 80% of the private
half of projects and established procedures for mitigation fees to replenish
these funds to the TIP.
3. Mitigation fees “in hand” at the time of the loan
would be applied against the requirement for a 20% match on the federal share
for the private half. Any additional
mitigation fees in hand at the time of the loan would reduce the size of the
federal commitment on the private half of the projects.
4. As further mitigation fees assigned to the
corridor are received by the Town, these funds are to be held in escrow by the
Town. They would then be applied to
other TIP projects in the GEIS area to reduce the public
share of these other projects. (For
example, they could be applied through a "betterment" agreement
between the Town and State to reduce the Federal cost of intersection
improvements related to project A240 (Exit 3 or 4) or similar planned actions
that are slated for Federal funding.)
5. CDTC retains the liability to adjust future TIP commitments should mitigation fees prove
insufficient over time. Should
mitigation fees prove insufficient, CDTC will end up having committed a greater
amount of federal funds on these projects than initially intended, but will
also end up having a facility with greater reserve capacity for through traffic
than initially intended. The final
federal share would end up being a share that matches the CDTC public-private
financing policy.
6. When mitigation fees reach a total that
covers the repayment installments, additional fees are to be kept in escrow to undertake future improvements in the
corridor.
In addition to CDTC approval, NYSDOT, CDTC, Albany
County, and the Town of Colonie agreed to jointly concur
on financial responsibilities, mitigation fee transactions, and future
betterments. This practice does not
require formal NYSDOT or Federal concurrence.
In the 2005-10 TIP, the
five-year outlay of federal aid reflects an estimate of mitigation fees in hand
at the time of obligation. Actual outlay
will be determined by actual mitigation proceeds and the availability of
federal funding in accordance with the process described above.
Since the adoption of the 1997-02 TIP,
costs for airport area projects have increased.
The projects in the Albany Shaker Road
and Watervliet Shaker Road
corridors (A275, A294 and A372) total about $43 million at the time of the
adoption of the
2005-10 TIP.
As of January 1, 2005
roughly $7.8 million in development mitigation funds have been collected for
all Airport Final GEIS projects, of which $3.9 million has been allocated to
the Albany Shaker Road
project. This value does not include
about $3 million in credits awarded for right-of-way donations. Another $7 million has been assessed but not
collected for development projects that have been deferred or have not yet been
completed. CDTC has covered those local
shares with federal-aid. As mitigation
fees are collected for those projects, they will be applied to other FGEIS
recommended federal-aid projects, such as project A240 (I-87 Exit 3 or 4).