FOR IMMEDIATE RELEASE
Charleston, SC -- The South Carolina State Ports Authority Board today unanimously approved a resolution supporting construction of a new Cooper River bridge and suggesting three ways that the SPA could contribute.
0 One, the Authority could pay the verifiable cost differential of the additional height and width related to the new bridge, to the extent these costs are not offset by the lower height over Town Creek; OR
0 Two, the SPA could do away with its existing bond debt through a State contribution. The SPA would then pay to the State Infrastructure Bank and/or the State the amount it currently pays in debt service on $125 million in outstanding bonds. This payment is currently about $9 million annually; OR
0 Finally, the Authority could treat the bridge as a Special Project and tolls from the bridge to be collected to repay the SPA for its contribution.
Doing away with outstanding bonds and instead making these payments to the State is the most technical option. It can only be done provided that the State pays off $125 million in bonds issued independently by the Ports Authority in 1998.
While other states and cities provide funding to their ports, the Ports Authority has not received taxpayer support of its capital plan since the late 1970s and has instead used bonds backed by its revenues to fund development. The SPA has become the model of financial responsibility. In fact, the Ports Authority has received the highest bond rating of any port authority that does not enjoy a dedicated subsidy.
A master resolution governing these bonds constitutes a legal pledge between the Authority and its bondholders. The Ports Authority revenues, therefore, are legally tied to operational expenses, repaying debt and capital improvements. Because of this legal agreement between the Ports Authority and its bondholders, the Authority's existing bond debt must be defeased before the Authority can legally spend its revenues on a non-port function, such as the bridge.
The challenge has been finding a way to assist with the bridge while not violating the law and mortgaging the future of our state's port.
Earlier this year, a plan was proposed to repay a $215-million federal loan for construction to begin. It called for annual payments of $7 million from SCDOT, $3 million from the local community and $5 million from State Ports Authority, assuming the State provided funding to cover the SPA's commitment. The State funding to cover the State Ports Authority's portion has not been included in the budget and led to the options considered today.