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ODOT says $246M bond is a refinancing; warns years of debt will shrink bridge program capacity
Summary
ODOT officials told the Joint Interim Committee on Transportation Oversight that a $246 million highway user tax revenue bond sale is refinancing short‑term debt and estimated the agency could face roughly $65 million in additional annual debt service when several large projects are fully financed — likely reducing bridge replacements from about three per year to roughly one.
Travis Brower, deputy director for revenue and finance at the Oregon Department of Transportation, told a legislative oversight committee that a recently completed highway user tax revenue bond sale of about $246 million is not new spending but a refinancing of short‑term borrowing used on the I‑205 Abernathy Bridge.
"This is really just a refinancing of short term debt into long term debt," Brower said, adding the annual debt service on the $246 million sale will be about $17,600,000. He told lawmakers that highway user tax revenue bonds typically carry a rule‑of‑thumb debt service of roughly one‑fourteenth of proceeds.
The immediate sale is one of several financing steps ODOT expects over the next decade for large projects, including the Abernathy Bridge, Center Street Bridge and components of the interstate bridge replacement and Rose Quarter work. Brower gave a very rough range that total bond proceeds for the two Center Street phases and related items could be $700 million to $900 million; combined debt service for those projects, if issued on typical 25‑year maturities, could approach $65 million annually when fully ramped up by the mid‑2030s.
Tova Peltz, ODOT’s interim chief engineer, said that using bond proceeds to repay debt will shift long‑term resources inside Oregon’s bridge program. "By spending a portion of our annual bridge funds on debt service, we're going to be spending less on other bridge projects," she said, forecasting that when annual debt service reaches approximately $66 million it will represent up to half of some bridge funding lines and likely reduce annual bridge replacements from about three to roughly one.
The agency emphasized the timing and size of bond sales are largely driven by project cash‑flow needs and statutory authorization. Brower said the legislature sets a biennial bond ceiling and the Oregon Transportation Commission approves individual sales; in the current instance, the agency was converting short‑term commercial paper into long‑term HUTR debt because it is statutorily limited in how long it can carry short‑term borrowing.
Lawmakers pressed ODOT on trade‑offs. Several members warned that dedicating a larger share of highway fund dollars to debt service could constrain maintenance, operations and smaller capital needs. Brower and Peltz repeatedly highlighted that early legislative cost figures — often based on pre‑design estimates — have low confidence and that better staging of project decisions and clearer contingency practices could reduce the risk of overcommitment.
Next steps: ODOT said it will provide recalculations of debt’s share of the highway fund inclusive of the new sale and will post its annual debt report to the Oregon Transportation Commission website this week.
