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.