Friday, August 24, 2012

Bridge Funding Gets Serious Questioning and Scrutiny For Lawmakers

Lawmaker questions need for Mid-County Bridge

By Cindy Beamon
The Daily Advance
Wednesday, August 22, 2012

New questions by lawmakers about the proposed Mid-County Bridge in Currituck signal another tough fight ahead over the $600 million project, local and state officials say.

Four powerful Republicans in the General Assembly plan to review the state’s plan for funding the bridge this fall.

In response, Currituck commissioners are set to meet with the Joint Legislative Transportation Oversight Committee on Sept. 5 to defend what they call a “serious threat” to the seven-mile span crossing the Currituck Sound.

State Sen. Bill Rabon, R-Brunswick, one of the committee’s four chairmen, said “gap funds” for the mid-county bridge — funds to pay for the difference between what the project will cost and the amount private tolls will raise — unfairly favor Currituck over other counties in the state. If Rabon had his way, funds would be more evenly distributed among all 16 of the state’s transportation districts.

“What makes Currituck so special?” Rabon asked in a telephone interview last week.

The newest threat to the project is really nothing new, said state Rep. Bill Owens, D-Pasquotank. In 2011, Owens used the bridge as a bargaining chip when he agreed to vote with the Republican majority for a veto-proof state budget.

“It’s been serious for a couple years now,” Owens said of 
possible funding cuts to the bridge.

The bridge will lose Owens as its chief defender in the General Assembly when he retires later this year. Another powerful bridge supporter, former Senate President Pro Tempore Marc Basnight left office in January 2011.

“We have fought a lot of opposition over the years, and so far, we are still on the table,” Owens said. “But there will be future fights after I am gone.”

That fight could hang on a promise.

Owens said House Speaker Thom Tillis made a promise that he would back the bridge for as long as he remains speaker. So far, Tillis has kept his word, said Owens.

When the Senate sought to cut the gap funding for the project by almost half this year, Tillis helped restore full funding in the General Assembly’s final budget, said Owens. Cutting the gap funds would have “killed the project,” he said.

Tillis could not be reached to comment. Last week, an aide said he was on vacation until Monday.

Owens acknowledged the fragility of Tillis’s promise. Tillis may not be re-elected as House Speaker or he may yield to pressure from fellow Republicans not to continue gap funding for the project, officials have speculated.

In the Senate, opposition to the Mid-County Bridge and similar toll-road projects appears to be building.

Rabon said he doesn’t know if he has support in the General Assembly to end funding for the bridge as lawmakers now know it.

In 2002, the state set up the North Carolina Turnpike Authority to plan and construct toll-road projects that would be too expensive to be funded through the traditional state transportation system.

Rabon is now suggesting the state scuttle Turnpike projects and divvy funds among the transportation districts.

He said the Turnpike projects give an unfair advantage to some counties.

“No one in the state should be special. Everyone should be treated fairly,” said Rabon.

He didn’t mention names, but Rabon said under previous leadership in the General Assembly, northeastern North Carolina has already received “more than its fair share” of state funding for various projects.

“That’s the way it used to be done, but that’s not the way it’s going to be done from now on,” said Rabon.

State Sen. Stan White, who was appointed by the Democratic Party to fill the unexpired term of Basnight, charges that questions about the bridge’s funding are a veiled attempt to shift funding to other road projects in the state.

Currituck Commissioner Owen Etheridge has also questioned the motives of legislators raising questions about the gap funding.

“I just want them to not play politics with the Mid-County Bridge, and that’s what I think is going on,” Etheridge said in an interview earlier this month.

Rabon denied that his district would receive any immediate benefit from shifting funds away from Turnpike projects. He noted that the proposed Cape Fear Skyway, a Turnpike project near Wilmington, would be one of the victims if funding is shifted elsewhere.

Rabon said he doesn’t oppose the Mid-County Bridge, just how it will be funded.

The state’s plan to provide $28 million in gap funds each year for 30 years will turn the bridge into a “billion dollar project,” he said. That’s more than the state can afford, he said.

Rabon also questioned what will happen if the state’s private partner in the project goes bankrupt.

“If they go belly up, who’s going to pay?” he asked.

Local officials say the oversight committee chairmen are overlooking the benefits of the Mid-County Bridge project.

Owens said he’s invited Rabon to Currituck to see the need for the bridge first-hand, but so far Rabon hasn’t accepted.

“I don’t think people realize the magnitude of the problem,” said Owens, noting that evacuation of the barrier island during a major hurricane would be a major problem.

Both Owens and White said the oversight committee’s move to re-examine financing for the bridge could be serious.

“(The) Turnpike (Authority) is nervous,” said White. “The tone of the (committee’s) letter is ‘kill the bridge.”’

Rabon said asking questions is just part of his job as a member of the oversight committee. He said Currituck needs to prove the importance of the project to the entire state.

“If the same project was approved in Avery County, would Currituck support it?” asked Rabon.

Owens said Currituck has already answered questions about the bridge’s importance.

“This is nothing new, and it certainly hasn’t been rushed,” said Owens.

Wednesday, August 22, 2012

More Speculation on the Mid Currituck Bridge


Killing bridge could cost $10M
By Cindy Beamon
The Daily Advance
Tuesday, August 14, 2012

CURRITUCK — The state risks losing up to $10 million if it pulls out of a partnership agreement to build the proposed Mid-County Bridge in Currituck, an official with the agency responsible for building the span says.

David Joyner, executive director for the N.C. Turnpike Authority, also has adjusted the proposed construction starting date for the $600 million bridge project to January 2014.

Under that timeline, the seven-mile span across the Currituck Sound wouldn’t open to traffic until 2018.

Joyner made both projections as part of his response to questions posed recently by four powerful state Republican lawmakers critical of the state’s funding for the Mid-Currituck Bridge project.

In a letter to Joyner, state Sens. Bill Rabon, R-Brunswick, Kathy Harrington, R-Gaston, and state Reps. Phillip Frye, R-Mitchell and Grey Mills, R- Iredell, each of them a chairman of the Joint Legislative Transportation Oversight Committee, asked several questions about the bridge. They said the state’s first public-private partnership to build a road project needs to be “highly scrutinized” to avoid a negative outcome.

Among other things, the lawmakers wanted to know the terms of the state’s agreement to build the bridge, and the state’s projected risks and financial obligations for the project.

In his Aug. 3 response, Joyner said the state’s private partner in the bridge project, Currituck Development Corp., is expected to contribute $40 million toward the bridge. CDC is a consortium of private partners including Spanish bridge-building company ACS Group.

Under the proposed public-private partnership, CDC will design, construct, operate and maintain the project over 50 years. The company is expected to recoup its costs by charging tolls, estimated earlier to cost motorists between $6 and $12 one way.

Joyner said if the state were to back out of the partnership agreement with the CDC before closing the deal, it would have to pay up to $10 million.

The private partners have also agreed to shoulder “key risks” in the project, he said. Those risks include: absorbing the risk for collecting tolls; keeping construction on time, and on budget; and operating and maintaining the bridge for 50 years.

The state’s obligation includes providing “gap funds” to subsidize construction costs.

The state Legislature has agreed to pay up to $28 million in gap funds each year for 30 years. For the past two years, however, the General Assembly has delayed its appropriation of the gap funds and diverted the funds elsewhere.

This year, the Senate even removed funding for the project altogether but later agreed in budget negotiations to a one-year delay in funding instead.

Apparently, the new round of questions from the committee chairmen is a continued challenge to the project.

“Transportation infrastructure needs in this state are great and we all must grapple with which projects to finance and how to finance them,” states their letter to Joyner.

Local officials say the questions by the Republican lawmakers signal a serious threat to the bridge project.

“I am very worried they will not come back next year and refund the bridge even though we have assurances they will,” Currituck Commissioner Owen Etheridge said.

The General Assembly is expected to hammer out next year’s budget during its winter session. Funding for the bridge is expected to be part of those budget deliberations.

In the meantime, the state will be working toward finalizing its agreement with CDC.

The Turnpike Authority has projected its commercial agreement with CDC will be ready by October. The next steps would be the project’s final design and environmental permits before the financial closing in December 2013.

Joyner said any legal challenge to the project — which the Turnpike Authority is expecting — would not increase the state’s $10 million liability.

“Historically, environmental lawsuits do not kill projects but they can delay projects,” Joyner said. “Eventually projects go forward assuming financial conditions allow. We have anticipated a reasonable delay from litigation.”

The lawmakers’ letter states their committee plans to meet this fall to review the information from Joyner.