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Transportation Bonds — Transportation Bonds outstanding as of June 30, 1998, are as follows (amounts expressed in thousands).
Consolidated Transportation Bonds are limited obligations issued by the Maryland Department of Transportation (Department) for highway, port, airport or mass transit facilities, or any combination of such facilities. The principal must be paid within 15 years from the date of issue. As provided by law, the General Assembly shall establish in the budget for any fiscal year a maximum outstanding aggregate amount of these Consolidated Transportation Bonds as of June 30 of the respective fiscal year that does not exceed $1,200,000,000. The aggregate principal amount of those bonds that was allowed to be outstanding as of June 30, 1998, was $1,074,000,000. The aggregate principal amount of Consolidated Transportation Bonds outstanding as of June 30, 1998, was $844,015,000. Consolidated Transportation Bonds are paid from the transportation debt service fund. Principal and interest on Consolidated Transportation Bonds are payable from the proceeds of certain excise taxes levied by statute and a portion of the corporate income tax credited to the Department. These amounts are available to the extent necessary for that exclusive purpose before being available for other uses by the Department. If those tax proceeds become insufficient to meet debt service requirements, other receipts of the Department are available for that purpose. The holders of such bonds are not entitled to look to other State resources for payment. Under the terms of the authorizing bond resolutions, additional Consolidated Transportation Bonds may be issued, provided, among other conditions, that (i) total receipts (excluding Federal funds for capital projects, bond and note proceeds, and other receipts not available for debt service), less administration, operation and maintenance expenses, for the preceding fiscal year, equal at least two times the maximum annual debt service on all Consolidated IYansportation Bonds outstanding and to be issued, and that (ii) total proceeds from pledged taxes equal at least two times the maximum annual debt service on all Consolidated Transportation Bonds outstanding and to be issued. County Transportation Bonds are issued by the Department, and the proceeds are used by participating counties and Baltimore City to fund local road construction, reconstruction arid other transportation projects and facilities, and to provide local participating funds for federally-aided highway projects. Debt service on these bonds is payable from the counties' and Baltimore City's shares of highway user revenues. Legislation was enacted during the 1993 session of the General Assembly that established an alternative County transportation bond program. This new legislation provides features similar to the previous program except that the County transportation debt will be the obligation of the participating counties rather than the Department. On May 6, 1998, the Department issued $93,645,000 of refunding Consolidated Transportation Bonds Series 1998, with a premium of $3,699,000, to advance refund $91,200,000 of certain Consolidated IYansportation Bonds Series 1990 (2nd issue) and 1991. The refunding Bonds are dated May 1, 1998, with maturities ranging from September 1998 to September 2006, at interest rates ranging from 4.5% to 5.5%. The net proceeds of $97,031,000 (after a payment of $313,000 in issuance costs) were used to purchase U.S. government securities and were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the refunded bonds. As a result, the applicable portion of the previously outstanding refunded bonds are considered to be defeased and the liability for those bonds has been removed from the general long-term debt account group. These advance refundings resulted in a reduction of future debt service cash flows of $4,434,000, with an economic gain of $3,455,000. |
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Report of the Comptroller, 1997-98
| Volume 197, Page 60 View pdf image (33K) |
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