New Jersey Transportation Trust Fund Authority
Fiscal Year 2011 Financial Plan





Plan for Financing Anticipated NJDOT/NJT
Capital Program Outlays for Fiscal Year 2011














Prepared by
Transportation Trust Fund Authority


May 2010



Chris Christie, Governor
James S. Sampson, Acting Commissioner
Kim Guadagno, Lt. Governor
N E W J E R S E Y
N E W J E R S E Y
T R A N S P O R T A T I O N
T R A N S P O R T A T I O N
T R U S T F U N D
T R U S T F U N D

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I. Introduction


The New Jersey Transportation Trust Fund Authority (“NJTTFA”) is responsible for funding the
State portion of the capital programs of the New Jersey Department of Transportation (“NJDOT”)
and New Jersey Transit Corporation (“NJ Transit”) as well as local-aid programs. Each year the
NJTTFA must adopt a Financial Plan designed to implement the financing of the proposed projects.
By statute, the Financial Plan must meet the following requirements:

“The financial plan shall contain an enumeration of the bonds, notes or other obligations of
the authority which the authority intends to issue, including the amounts thereof and the
conditions therefore. The financial plan shall set forth a complete operating and financial
statement covering the authority's proposed operations during the ensuing fiscal year,
including amounts of income from all sources, including but not limited to the proceeds of
bonds, notes or other obligations to be issued, as well as interest earned. In addition, the
plan shall contain proposed amounts to be appropriated and expended, as well as amounts
for which the department anticipates to obligate during the ensuing fiscal year for any future
expenditures.

The NJTTFA is able to meet its obligation to fund its share of the programs through annual State
appropriations secured by revenues from the Motor Fuels Tax, Petroleum Gross Receipts Tax,
Sales Tax (new vehicle sales), toll road contributions, heavy truck registrations, good driver
surcharges, investment earnings, and the incurrence of debt.


II.
Prior Years' Results

The following table summarizes the results of the NJTTFA’s operations for Fiscal Years 1985
through Fiscal Year 2008 and the expected results for Fiscal Year 2010


Summary of Operations (FY 1985-2010)
(Dollar Amount in Thousands)

Ac tua l
Es tim a te d
A ct ual & E st
D es c ript io n
1 98 5 -2 00 9
2 0 10
Thru 2 01 0
A utho rit y O bliga tions (Us e s)
P ro g ra m Ap p ro pr iatio n s
$ 2 0,3 35 ,45 0
$ 1 ,6 0 0,0 00
$2 1 ,9 3 5,45 0
D eb t S e rvice
6,5 86 ,12 0
7 5 2,8 73
7 ,3 3 8,99 3
A u th o rity E xpe nse s
13 ,97 5
2,1 99
1 6,17 4
T ota l Au tho rity O bl iga tio ns
$ 2 6,9 35 ,54 5
$ 2 ,3 5 5,0 72
$2 9 ,2 9 0,61 7
A utho rit y Funding S ourc es
R eve n ue A p pr op ri atio ns
$ 1 1,4 02 ,90 0
$8 9 5,0 00
$1 2 ,2 9 7,90 0
In ter est Ea rn in gs
5 08 ,93 4
7,9 38
5 1 6,87 2
B o nd Pr em iu ms
1 69 ,59 1
0
1 6 9,59 1
N et B on d P ro cee d s
1 3,1 48 ,12 0
1 ,1 5 4,0 16
1 4 ,3 0 2,13 6
T ota l Au tho rity Fu nd in g
$ 2 5,2 29 ,54 5
$ 2 ,0 5 6,9 54
$2 7 ,2 8 6,49 9
B ala nce Unf unde d
$ 1,7 06 ,00 0
$2 9 8,1 18
$ 2 ,0 0 4,11 8

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The $2.004 billion “balance unfunded” calculation for 1985 through 2010 reflects the fact that the
NJTTFA only issues bonds to meet cash flow obligations, not the full value of capital program
appropriations. The “program appropriations” calculation shows the contract or obligation authority
the Legislature has provided to NJDOT/NJ Transit for Transportation Trust Fund projects since
Fiscal Year 1985. However, the costs of most transportation capital projects are paid out in cash to
vendors over a number of years—particularly large road and bridge construction projects. The
NJTTFA only issues bonds for anticipated cash outlays in the current year. Accordingly, the
$2.004 billion calculation reflects the project appropriations since 1985 that have not been fully
disbursed to vendors less any estimated remaining TTFA funds available as of June 30 to fund
those obligations.


III. Debt
Issuances

A.
Debt Issuances - Fiscal Year 2011's $1.6 Billion Capital Program

The proposed NJDOT/NJ TRANSIT’s Fiscal Year 2011 capital program is $1.6 billion. In addition to
cash outlays from that proposed program that will occur in Fiscal Year 2011, the NJTTFA must fund
cash outlays for previously authorized projects. As in past years, the NJTTFA plans to incur debt
only at levels necessary to maintain a minimum level of cash and investments equal to the
anticipated cash needs for the ensuing twelve-month period. Based upon anticipated cash flows of
previously authorized projects and $1.6 billion in new spending authority, the NJTTFA expects to
issue $1.8 billion (PAR value) in new money bonds to generate approximately $1.67 billion in
project proceeds. The bonds will have maturities up to 31 years as authorized by the March 2006
amendments to the New Jersey Transportation Trust Fund Act, enacted on March 23, 2006 as P.L.
2006, c.3 (the “2006 Amendments”).

Debt service coverage is provided by constitutionally dedicated revenues, comprised of an amount
equivalent to revenue derived from the Motor Fuels Taxes ($.105) per gallon, but not less than $483
million in each fiscal year, an amount equivalent to the revenues derived from the tax imposed on
the sale of petroleum products of not less than $200 million in each fiscal year beginning with Fiscal
Year 2002, and an amount equivalent to the revenues derived from the tax imposed under the
Sales and Use Tax Act on the sale of new motor vehicles of not less than $200 million for Fiscal
Year 2004 and each fiscal year thereafter. The Authority also anticipates receipt of no less than
$12 million of the $24.5 million collected by State from Toll Road Contributions which are currently
dedicated to the Transportation Trust Fund Authority by statute. These revenues, as well as other
statutorily dedicated revenues derived from the extra three cents ($.03) per gallon tax on diesel fuel,
heavy truck registration fees, and the “Good Driver Surcharge” are subject to annual appropriation
by the Legislature.

The NJTTFA may decide to accelerate, decelerate, or split the projected debt issuance based upon
what the Authority deems to be in the best interest of the State taking into account market
conditions or other reasons. A summary of the projected NJTTFA’s cash flows for Fiscal Year 2011
is provided below:

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Fiscal Year 2011: Statement of Anticipated Changes in Cash Position

The estimated $1.8 billion (PAR) in new money bonds will be issued as “state contract” bonds
backed by the existing contract between the State Treasurer and the Authority. This contract
pledges that any dedicated NJTTFA revenues appropriated by the Legislature will be made
available to the Authority for debt service payments.

B. Constitutional
Dedication

Pursuant to Article VIII, Section 2, Paragraph 4 of the New Jersey State Constitution, certain
revenues are dedicated to the purposes of paying or financing the cost of planning, acquisition,
engineering, construction, reconstruction, repair and rehabilitation of the transportation system in
the State. The Legislature may not borrow, appropriate or use these amounts or any portion thereof
for any other purpose. These constitutionally dedicated revenues include (a) for each State fiscal
year commencing on and after July 1, 2007, an amount equivalent to the revenue derived from
$0.105 per gallon from the tax imposed on the sale of motor fuels pursuant to Chapter 39 of Title 54
of the Revised Statutes; (b) for the State fiscal year, commencing on July 1, 2000, an amount not
less than $100,000,000 derived from the State revenues collected from the tax imposed on the sale
of petroleum products pursuant to P.L. 1990, c. 42 (C. 54:15B-1 et seq.) as amended and
supplemented or any other subsequent law of similar effect, and for each State fiscal year
thereafter not less than $200,000,000; and (c) for the State fiscal year commencing July 1, 2001, an
amount not less than $80,000,000 from the State revenue collected from the State tax imposed
under the “Sales and Use Tax Act,” pursuant to P.L. 1966, c. 30 (C. 54:32B-1 et seq.), as amended
and supplemented, or any other subsequent law of similar effect, for the State fiscal year
commencing July 1, 2002, an amount not less than $140,000,000, and in each State fiscal year
thereafter an amount not less than $200,000,000. These constitutionally dedicated revenues may,
but are not required to be used, subject to appropriation by the Legislature, to pay the NJTTFA’s
debt.

D es c rip t io n
S u b - T o ta l
T o ta l
E s tim ate d J u ly 1, 20 10 C a s h B al an c e
$ 12 1 ,7 4 2,0 94
R ec e ip t s:
S tate Ap p rop ri atio ns :
M oto r F u els T a x
4 8 3,0 00 ,0 0 0.0 0
$
P e tr ol eu m P ro du c ts T ax
20 0,0 00 ,00 0
S a le s T ax
20 0,0 00 ,00 0
T oll R oa d C on trib utio n s
1 2,0 00 ,00 0
89 5 ,0 0 0,0 00
In ter es t Inc o m e
1 0 ,4 0 0,0 00
B o nd Pr oc e e ds ($ 1 .8 bi llio n P A R v al ue )
1 ,67 3 ,1 4 6,2 63
T ota l R ec e ip ts
2 ,5 7 8,5 46 ,26 3
$
D is b u rs em e n t s:
S tate T ra ns p o rtatio n P ro je c t C os ts
1 ,65 0 ,0 0 0,0 00
T T F D e bt Se rv i c e
79 3 ,0 0 0,0 00
N J T C O Ps D eb t S e rv ic e
9 4 ,7 0 0,0 00
S J T A So u th Inle t M u lti-Y ea r F u nd in g A g re em en t
1 ,9 3 2,0 00
A u th o rity O pe ra ting Ex p e ns e s
4 ,6 0 6,8 90
T ota l D is b ur s em en ts
2 ,5 4 4,2 38 ,89 0
$
E s tim at ed J u ly 1 , 2 01 1 B ala n ce
1 5 6,0 49 ,46 7
$

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Article VIII, Section II, paragraph 4 added effective December 6, 1984; amended effective
December 7, 1995, amended effective December 7, 2000, and amended effective December 7,
2006.

C. Credit
Ratings

The 2009 Series C and D and the 2010 Series A & B bonds of the NJTTFA, which were uninsured,
received ratings at the time of issuance of: “A+ “by Fitch Investors Service, “A1” by Moody's
Investors Service, and “AA-“ by Standard & Poor's Corporation.

In determining the timing, structure and size of each bond issuance, the NJTTFA considers such
factors as current market conditions, cash flow needs, and the impact of the added debt on the
NJTTFA's appropriation. The NJTTFA's Bonds have been and continue to be well received by the
market.


D.
Fiscal Year 2011 Statutory Debt Limit

The 2006 Amendments to the Transportation Trust Fund Act established new restrictions on the
statutory debt limitation. NJ.S.A. 27:1B-9(i), as amended, is set forth below:

“Commencing with the fiscal year beginning July 1, 2006 and ending with the fiscal year
beginning on July 1, 2010, the authority shall not incur debt for any fiscal year in excess of
$1,600,000,000, reduced in each of those fiscal years by the amount by which the
appropriation of State funds to the Transportation Trust Fund Account for that fiscal year
shall exceed $895,000,000; provided, however, that if a portion of that permitted amount of
debt, less any reduction as provided above, is not incurred in a fiscal year, an amount not
greater than the unused portion may be incurred in a subsequent fiscal year in addition to
the amount otherwise permitted subject to the approval of the Joint Budget Oversight
Committee. Debt permitted for the fiscal year beginning July 1, 2006 may be incurred prior
to July 1, 2006. Any increase in this limitation shall only occur if so provided for by law. In
computing the foregoing limitation as to the amount of debt the authority may incur, the
authority may exclude any bonds, notes or other obligations, including subordinated
obligations of the authority, issued for refunding purposes. “

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Transportation Trust Fund Authority
Statutory Debt Limit

Description
Sub-Total
Total
Fiscal Year Bonding Credits:
FY 1996-2005
$6,950,000,000
FY 2006
650,000,000
FY 2007
1,600,000,000
FY 2008
1,600,000,000
FY 2009
1,600,000,000
FY 2010
1,600,000,000
FY 2011
1,600,000,000
Total
$15,600,000,000
Less Authority Bond Issuances
1996 Series A Thru 2005 Series C
$6,291,885,000
2005 Series D
953,020,000
2006 Series A Grant Anticipation
131,555,000
2006 Series C
1,115,496,792
2007 Series A
1,171,055,000
2008 Series A
1,122,744,638
2009 Series A
142,730,924
2009 Series B
273,500,000
2009 Series C
150,000,000
2009 Series D
147,500,000
2010 Series A
359,253,361
2010 Series B
500,000,000
2010 Series C (Estimated)
1,800,000,000
Total
$14,158,740,715
Less Appropriations Exceeding $895 Million
FY 2007
0
FY 2008
0
FY 2009
0
FY 2010
0
FY 2011
0
Total
0
FY 2011 Unused Debt Limit
$0
$1,441,259,285




F. Official Intent for Federal Income Tax Purposes

For the purpose of permitting the proceeds of bonds which may be issued by the Authority to be
used to reimburse expenditures paid after the date that this plan is adopted by the Authority (or
within 60 days prior to such date) in accordance with the applicable regulations of the U.S. Treasury
Department, this capital plan, upon its adoption by the Authority in accordance with law, shall
constitute a declaration of the intent of the Authority to issue bonds, as more fully described in III(A)
above, in the expected maximum principal amount of $1,800,000,000, to pay, or reimburse
expenditures made prior to the date of issuance of such bonds to pay, costs of the capital program
of NJDOT and NJ Transit for the fiscal year 2011 and unpaid costs of the capital programs of
NJDOT and NJ Transit for prior fiscal years.


IV.
Fiscal Year 2011 Operating Budget

The NJTTFA estimates the following operating expenses will be required to manage the

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financing operations of the NJTTFA during Fiscal Year 2011 assuming there will be one bond
sale. The operating budget is funded from the Legislative appropriations to the NJTTFA:

Anticipated Operating Expenses

Description
Estimate
Legal Notices
$1,000
Professional Accounting Services
30,000
Trustee Service Fees
60,000
Line of Credit Fees
4,465,890
Contingency
50,000
Total
4,606,890




Fiscal Year 2011
Anticipated Bond Issuance Costs

The Authority plans to issue new money bonds to support Fiscal Year 2011 project expenditures.
At the $1.800 billion bonding level, the anticipated bond issuance costs for the 2010 Series C
Money Bonds is estimated to be $9.0 million for underwriting expenses, up to $5.25 million for bond
insurance, to the extent it is available and cost effective, and $1.1 million for other costs of issuance
such as rating fees, printing fees, financial advisor fees, Trustee’s fees, Bond Counsel fees, and
Trustee Counsel fees.