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What Happens When All of TxDOT's Dreams Come True?

By Ben Wear - Austin American-Statesman Staff

Highlights

A new Sunset Commission report says that the agency might not be fully ready for a coming boost in funding.

The report says TxDOT needs to make its road project selection process more objective and transparent.

And it gigs the agency for bidding and construction that result in projects being late and overbudget.

Admit it, you’ve had the lottery daydream.

What if, you think to yourself, I bought a ticket or two or 10, and then somehow that sixth number matched, and all of a sudden you had more money than you know what to do with. So, what would you do with it? And, more fundamentally, how would you decide what to do with it?

According to a state report released this month, the Texas Department of Transportation has become that delirious-but-disjointed lottery winner. TxDOT’s Brinks truck has finally come in, thanks to two constitutional amendments approved by voters in 2014 and 2015, some legislative largess and a change in federal law. The agency will have an additional $48.6 billion to spend over the next 10 years, the report says, or more than double what it had expected earlier for highway construction and maintenance.

And, according to the Texas Sunset Commission report released Nov. 15, the agency isn’t yet prepared to spend that bounty wisely, efficiently and transparently.

“Long-range plans remain disjointed, funding allocation decisions lack clear, objective analysis,” the report said. “TxDOT’s ad hoc approach” to moving road projects from proposal to design to letting (the agency’s term for taking bids) to construction has led to a significant number of projects coming in late and overbudget. That means drivers have to endure congestion longer and get the benefits of new road capacity later, and that less money is available to build other projects.

Deborah Cannon: Construction on Texas 71 east of Austin-Bergstrom International Airport in early October. The Texas 71 toll project is running behind schedule. ... read more

The blunt report gives the agency credit for a “good-faith effort” to respond to similarly tough Sunset reviews in 2009 and 2011, and to 2015 changes in state law meant to make it more transparent and efficient. And agency officials, I’m told, believe that the Sunset staff didn’t give TxDOT sufficient credit for the changes it has started to make. They’ll get a chance to make their case publicly at a hearing Dec. 9 before the Sunset Commission, and through the coming legislative session as a TxDOT Sunset bill makes its way through the process.

But, in any case, the report explains (if not excuses) the agency’s historically reactive, crisis-management approach by pointing to what has been a chronic lack of funds through the decades. The Legislature three times in the 1980s and early 1990s bailed out TxDOT by increasing the gas tax, but then stopped doing so in 1991, leading to a 20-year slide in inflation-adjusted money available for highway work.

That led in this century’s first decade to the reliance (overreliance, some Texans would say) on toll road financing with bonds and private investors, which by definition are last-minute, unpredictable sources of money. For a very long time, TxDOT and its many partners in getting roads done have had to scramble and joust to figure out which, among many, worthy projects in a huge state would get a slice of an insufficient, shifting and shrinking funding pie.

In other words, if you’re always checking your bank balance to see if you’re overdrawn, the report says, it’s hard to be forward thinking.

But that paycheck-to-paycheck picture has changed in the past couple of years, and the Sunset Commission report says the agency must make a “high-stakes transition” to spending well the billions that have fallen its way.

Part of the problem for TxDOT is the sheer scale of its state, and of the agency’s task. Part of it is politics.

Although roads and cars have their critics (especially in Austin), by and large Texans really want what TxDOT provides. And the reality is that most road expansions fulfill what one might reasonably expect to be TxDOT’s goals: decrease traffic congestion, improve road safety, connect farms to towns and towns to cities, spark economic development. So sifting through hundreds of such beneficial, possible projects becomes a subjective matter of ranking the relative boost for each of those goals.

But then you get the political part. Project A might have more powerful supporters than Projects B, C and D (and all the others in the queue), or at least more savvy and experienced advocates. Project A might be in an area that supported the governor (who appoints the Texas Transportation Commission members) while the next two projects are in areas with a different partisan makeup. Or one area might have gone through a dry spell, with relatively less funding, and its elected representatives have made an effective case that its time has come for a little TxDOT love.

The variations on all this are endless, and have been going on for most of TxDOT’s 99-year history.

Then there’s the matter of shovel-readiness, that trendy term you might remember from President Barack Obama’s big economic stimulus law in 2009. In TxDOT’s case, the money for construction generally won’t go to a project that isn’t ready or nearly ready for dirt to turn. And it can take many years and many regulatory steps to get from someone suggesting a road project (the local chamber of commerce, a developer, a resident, a highway engineer, a legislator or a city council member) to construction. So that figures into where the money goes as well.

Which brings me to “dirty letting,” an eyebrow-raising term in the Sunset Commission report and one that I had never before heard in 13 years of covering transportation.

Letting, as I said above, is what TxDOT calls the process of taking bids and awarding a project to the winning bidder. The agency has “lettings” every month, and in the fiscal year ending Aug. 31 it awarded 786 such contracts for a total of $4.9 billion. And, the report says, about half of those were dirty.

OK, before someone calls the district attorney (and to stop the sniggering I set off here), I should explain that a “dirty letting” is one in which the construction contract is awarded before all the needed right of way (land) has been purchased for the project, or utility lines and pipes that are in the way have not yet been moved. Awarding the construction contract in such cases, the report says, “risks a cascading series of problems including project delays and cost overruns.” And until the past few years, TxDOT generally avoided doing it.

But in fiscal 2015, the study says, about 30 percent of contracts were awarded with some right of way not yet purchased, and 20 percent of its construction contracts were signed though TxDOT owned none of the necessary land. That means that most of TxDOT’s real estate purchasing efforts go to addressing this emergency backlog, rather than working ahead of the game, the report said.

And this sort of scrambling occurred before all this new money began to roll in.

The real gold rush starts next September, when TxDOT for the first time will begin getting money from Proposition 7, a constitutional amendment directing at least $2.5 billion a year in state sales tax revenue to TxDOT. The agency has won the lottery, and the relatives (meaning 254 counties with road needs) are crowding around looking for some help.

Let’s hope TxDOT is ready.

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#state #TxDOT #budget #legislative

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