State sells $1.9 billion in bonds for projects
Oregonians are about to see a new boost in statewide construction while also saving millions in financing costs, due to the successful sales of roughly $1.9 billion in state bonds thus far in 2017, Treasurer Tobias Read announced Friday.
This completes public bonding approved by the 2015 Legislature. Large-scale projects to be financed include:
· the second phase of the Knight Cancer Institute at Oregon Health Sciences University;
· seismic rehabilitation grants for Oregon public schools;
· courthouse projects in Multnomah, Lane and Jefferson counties;
· higher education projects such as the new Center for Excellence in Engineering & Technology at Oregon Institute of Technology;
· multiple highway improvements; and
· affordable housing and mental health housing projects.
“These new bonds will finance much-needed affordable housing, make schools safer, improve university research capacity, expand our highways and – at the same time – Treasury is saving taxpayers millions,” said Read, who oversees the state’s debt financing activities. “We are mobilizing Oregon’s construction trades to build vital infrastructure and improve our quality of life for generations.”
The treasurer said Oregon’s recent history of budget discipline, tactical use of public debt, and the Legislature’s adherence to a debt limit has helped the state to obtain general obligation credit ratings of AA+/Aa1/AA+ ratings by Standard & Poor’s, Moody’s Investors Service, and Fitch Investors Service respectively.
The Treasury Debt Management Division facilitates the sale of state bonds, interfaces with bond rating agencies on behalf of the state, connects nonprofits with lower-cost financing and maintains a bond calendar of all public debt issuances by Oregon governments. Read applauded the work of the division, led by Laura Lockwood-McCall.
The new bonds were issued via eight separate revenue bond and general obligation sales, all of which were overseen by the Debt Management Division of the Oregon State Treasury. Due to Oregon’s strong credit ratings, Treasury was able to sell the bonds at highly competitive interest rates.
The new bonds will be a catalyst for even more Oregon construction activity: They account for just part of the total cost of the projects that will be built. Universities, school districts and local governments must also supply matching funds.
In addition to sparking new construction, the bond sales also will save millions for taxpayers and stretch dollars further for highway projects. Of the bonds, $1.2 billion will finance new construction, while about $700 million will refinance previous debt issuances — and will save an estimated $40.7 million in interest costs over time.
Bonds need to be repaid, with interest, so the Oregon State Debt Policy Advisory Commission makes recommendations about how much public money should be devoted to repay General Obligation and Lottery-backed debt, in order to keep annual payments at a manageable level. The Legislature decides whether and how to allot the available public debt within the debt capacity.
The Oregon State Treasury protects public assets, saves money, and helps Oregonians to invest in themselves and their families through empowerment programs like the Oregon 529 Savings Network and OregonSaves. Treasury oversees public investment, banking, and debt management services. State investment policies are set by the Oregon Investment Council. Treasury also promotes public outreach and education to help Oregonians learn strategies to save money and make smart financial choices.
Examples of major projects by region:
· Portland: Knight Cancer Center at OHSU phase 2 ($84.9 million), Multnomah County Courthouse ($17.4 million), Portland State University Neuberger Hall ($50 million); Portland Community College Manufacturing Innovation District Building ($5 million);
· Mid-Willamette Valley: State Capitol repairs and improvements ($27.3 million); (State Fair facility improvements ($2.5 million); MacLaren Youth Corrections facility improvements ($5.3 million), Western Oregon University Natural Sciences Building renovation ($5.9 million);
· Corvallis/Albany: Linn Benton Community College Alternative Fuels grant ($1.5 million); Oregon State University Forest Sciences Complex ($29.7 million);
· Eugene: Lane County Courthouse ($1.4 million), University of Oregon Chapman Hall renovation ($5.5 million), University of Oregon Klamath Hall renovation ($6 million);
· Southern Oregon: Center for Excellence in Engineering & Technology at Oregon Institute of Technology phase 1 ($10.2 million), Southern Oregon University Britt Hall renovation ($4.7 million), Oregon Youth Authority Rogue Valley facility improvements ($$5.9 million), Oregon Shakespeare Festival ($2 million);
· Eastern Oregon: Eastern Oregon University Hunt Hall site restoration ($3 million), Elgin Health Clinic ($1.3 million), Port of Morrow Early Childhood Center ($1.6 million), Eastern Oregon Trade and Event Center ($1.5 million), Wheeler County / OHSU fiber line ($3 million), Juntura Road improvements ($2 million), Blue Mountain Community College Animal Science Education Center ($3.3 million);
· Central Oregon: Jefferson County Courthouse ($2.5 million), Oregon National Guard Youth ChalleNGe improvements ($5 million), Central Oregon Community College projects;
· Coast: Coos Bay rail line ($10 million), Oregon State University Marine Sciences Campus phase 1 ($24.7 million), Brookings Harbor dock repairs ($1.6 million),Warrenton dock replacement ($3 million);
· Statewide: School facilities matching grants, transportation construction, water resources grants, child support enforcement technology.
The completed bond sales are:
· General Obligation bonds, $476.4 million (Feb. 8)
o Seismic grants for schools and public safely facilities
o Courthouse, university and state agency projects
o Debt refinancing
· General Obligation bonds, $62.1 million ( March 1 )
o School project matching funds
· General Obligation bonds, $84.9 million ( March 16 )
o OHSU Knight Cancer Center – phase 2
· Lottery revenue, $230.5 million ( March 22 )
o New projects
o Debt refinancing
· General Obligation bonds, $329.5 million ( April 4 )
o University and community college new projects and refinancing
· General Obligation bonds, $30 million ( April 18 )
o Highway fund
· Highway User Revenue Bonds, $365 million ( May 1 )
o New projects and refinancing
· Highway User Revenue Bonds, $335.7 million ( May 18 )
o New projects and refinancing
