August 2, 1958 bond redemption premium of
<br />5½% on call of remaining issue estimated
<br />at 18,002 bonds
<br />
<br />990,110~00
<br />
<br />$18,992~110.00
<br />
<br />In connection with the calculation set £or~h in Note below, it
<br />is estimated that there will be an excess due to clearing out
<br />of Bond Redemption Fund etc. of
<br />
<br />- lO1,500.O0
<br />
<br />TOTAL REFINANCING COST
<br />
<br />$18,890,610.00
<br />
<br /> NOTE: It is contemplated that under a new trust indenture it will be unnecessary to carry
<br />an interest reserve in excess of one year. Based on this and the further assumption of a 4% interest rate on
<br />a $45,000.00 bond issue, it will he necessary to have an interest reserve of $1,800,000. This bas been pro-
<br />vided for in these calculations by assuming that the accumulations and excesses in the Bond Redemption Fund,
<br />Bond Service Fund and Reserve Fund, plus any additio~nal or underestimates of revenues, will be sufficient to
<br />produce this amount, and hence in calculating the needed funds out of the net realized from a future bond issue
<br />it will not be necessary~to also borrow interest monies, as they would be on hand from the sources indicated.
<br />
<br />CONSTRUCTIONCOST
<br />
<br /> There would seem little ne3d in a paper such as this no analyze our E~gi~eers' cost estimates.
<br />Suffice it to say that Mr. John O, Bickel of Messrs. Parsons, Brinckerhoff, Hall & Macdonald, in a letter to
<br />commission's General Counsel hasstated that the Minimum Tunnel Project, including acquisition of right of way,
<br />engineerin~d actual construction costs from High Street in Portsmouth To the interchange with the proposed
<br />Waterfront Drive in Norfolk, are detailed as follows:
<br />
<br />Contract No. 1
<br />Fabrication, concreting and sinking of ll precast tubes, including
<br />dredging and backfill of the tunnel trench .....................
<br />
<br /> Contract No. 2
<br /> Construction of the cut"s~ud cover sectio ns, open approache~,
<br /> ventilation building, electrical and mechanical work, and
<br /> interior finish of the~tunnel
<br />
<br /> Contract No: 3
<br /> ConstrucTion of the Norfolk interchange, consisting or-approach
<br />' highway, ramps und structure (practically the entire Norfolk
<br /> approach consists of the interchange since it will be directly
<br /> adjacent To the~upgrade end of the open approach) ~ .............
<br />
<br /> Contract No. 4
<br /> Construction of thePortsmouth approach highway, from the inter~
<br /> change at the A.C.L. Railroad to its junctio~ with Contract No.
<br /> Included'in this contract will be ramps .to local~ streets, the
<br /> bridg~ structure, and t~e toll plaza and buildings ............
<br />
<br />$11,517,250.
<br />
<br />7,296,750.
<br />
<br />782,000.
<br />
<br />1,733,000.
<br />
<br />Contract No. 5.
<br />Construction of an approach highway of two lanes 24 ft. wide ~on
<br />a four 'lane right of way, so ~s to permit a fu~ui~e.enlargemenT to a
<br />four lane divided highway from High Street in Portsmouth to its
<br />connection with Contract No. 4 .................................
<br />
<br />784,000.
<br />
<br />Contractors' bond premium and administration costs ............
<br />
<br />500,000.
<br />
<br />Contingencies
<br />tt should be noted that our Consulting Engineers, Parsons, Brinckerhoff, Hall
<br />& ~acdonald, in makiug the above computation allowed for factors commonly
<br />usedin arriving aT construction estimates~ and an such are~merely normal
<br />leaway on the best calculations that can be made ~of probable cost of a
<br />project of this size. However, our financial advisors, F.~. Craigie & ~Co.
<br />recognize that suchdoes not include contingencies ~n a broader sense, namely
<br />for needed changes in design, omissions or general 'elbow room' common in
<br />all major constn{ction projects. They state tbat in order to market the/re-
<br />quired bond issue, it is necessary to include a further contingency item
<br />of ............................................................. 1,000.000.
<br />
<br />Total estimated cost of minimu~ tunnel project
<br />
<br />$23,613,000.
<br />
<br />PROBLEM
<br />
<br /> Based upon the estimates of our Traffic Engineers, DeLeuw, Cather & Company, and their calcu-
<br />lations of toll revenue thereon, and the money market; our financial advisors have given us a top fig-are of
<br />$45,000,000 as the most optimistic revenue bend issue we could hope to float at any time in the foreseeable
<br />future. Our problem is therefore, immediately apparent:
<br />
<br />Assume par is received frog
<br />We-would have
<br />Inescapable charges against this fund
<br />Needed to retire balance of present bond issue
<br />C~st of project
<br />Balance available for payment of junior obligations,
<br /> totaling $5,140,894.
<br />
<br />the s~de of the maximu~ bond issue -
<br />
<br /> 18,890,610
<br /> g3,613~000.
<br />
<br />$45,000,000
<br />
<br /> 42,503,610.
<br />
<br />2,496,390.
<br />
<br />
<br />
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