The state Budget Committee gave its assent Wednesday to the financing plan for the $764 million West Lake Corridor project, opening the way for the Northern Indiana Commuter Transportation District to submit the project to the Federal Transit Administration with a fully funded local financial plan.
"We are in position to submit our application to the federal government to enter into engineering," NICTD President Michael Noland told the committee, referring to the next stage in the planning process for projects in the FTA's Capital Improvement Grants program. "We'll also ask the federal government to give us a rating."
A rating of "medium" or better on a five-level scale would allow the railroad to enter negotiations with the FTA for a full-funding grant agreement, which would lock in a 50 percent federal match.
The Budget Committee met at the University of Southern Indiana in Evansville; the meeting was streamed live online.
The Budget Committee's acceptance of the financial plan ratified an agreement among the Northwest Indiana Regional Development Authority and the Indiana Finance Authority.
"One of the strengths of the project is that this will give us 100 percent of our local funding," Noland said.
Bill Hanna, president and CEO of the RDA, said the 100 percent figure will help "remove any risk in the evaluation process." He said recent signals from the FTA and administration are that they want to see full local funding in place before moving projects forward.
"I think that's going to be a theme moving forward," Hanna said.
The IFA and RDA approved the financing agreement in July. The IFA's Dan Huge, the state's public finance director, reviewed the financing mechanisms for the Budget Committee. Borrowing will take three forms, he said.
According to current plans, the IFA will issue bonds in late 2019 or early 2020, Huge said, with the RDA as fiscal officer, making payments using its own revenue and local income tax contributions from most Lake County municipalities and the county.
The state's pledge of $6 million annually will back a second set of bonds. And, short-term grant anticipation notes will be used to "anticipate" the FTA's distribution of grant money, which can be spread out over three to eight years, Huge said.
Noland said once the West Lake plan is submitted to the FTA, it takes about five months to get a rating. If successful, that would be followed by negotiations for a full-funding grant agreement, which could come in late 2019 or early 2020. Construction would then begin in 2020, with completion scheduled for January 2024, Noland said.
Project officials will bring the double-tracking finance plan to the Budget Committee early next year, Hanna estimated. NICTD is completing environmental work on the project, expecting to be done by the end of the year.
The South Shore is also working with the FTA to transfer the double-tracking project from the Capital Investment Grants' Core Capacity program to its New Starts program. Noland said the FTA considers that a better fit for the project.
State Sen. Karen Tallian, D-Portage, is a member of the Budget Committee, and spoke in support of the projects.
"I think most people in Northwest Indiana believe these are going to change the landscape up there in a lot of significant ways," she said.