How to Fund a TDOT Local Programs Project

Things have been busy in the Local Programs world for the past month. We just had another very successful workshop last week in our Jackson, TN Office. As with all of these Workshops some questions and issues  seem to come up again, and again. One of the biggest questions seems to be:


We are working with several rural Counties with Federal Off-System Bridge (BRZE) projects that are going to be $1 million plus projects. Even if these County Highway Departments could cash flow the engineering bills, what about when these things hit the Construction Phase? It would not be unexpected to get a $100,000, $200,000 or maybe even $300,000 bill for one month. Even if TDOT turns around the reimbursements in 30 days, that is still 30 days that the County has to “float the note” for that large amount.

The good news is that there is an answer already out there. It is called the Tennessee Municipal Bond fund.

You can go to their website here or call them at:

226 Capitol Blvd, Suite 502
Nashville, Tenn 37219
Phone: 615-255-1561

I have spoken with representatives of the Bond Fund about this very situation, and they can help. They can set things up so that you are writing checks for the project out of a loan, not your operating budget, that gets paid back when TDOT pays you back.

This is not a new thing. The Tennessee Municipal Bond fund has run loans for just about every City and County in Tennessee since 1985. You will have to get approval from the City council or County Commission for this. But consider this is not a long term loan. The most a Local Programs project will go on for is a year or two. Once the TDOT project is closed out, and you have gotten all of the reimbursements back from TDOT, then the loan will be paid off. The loan costs, including interest are going to be very low.

Remember that with a TDOT Local Programs project you are sending in monthly reimbursement requests. You don’t wait till the end to send in one or two big billings.

Full disclosure: Neither A2H nor I have any financial interest in you using the TN Municipal Bond fund. This is just a great tool that can help you get your project done with the minimum amount of headache.



About arran375

I work for Askew, Hargraves, Harcourt and Associates, Inc. here in Nashville, Tennessee. The short version of what I do is that we help local governments spend the Federal funds they get from TDOT on road, and bridge projects.
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