Bonus Allocation Bungle?

Toll advocates have used the “bonus allocation” millions as a justification for the I-77 toll project…but it turns out there’s a catch. Actually, two catches.

In 2013 the NC legislature passed the Strategic Transportation Initiative (STI) which revamped how transportation dollars are allocated. One provision is a “bonus allocation” clause that provides additional funds if a region builds toll lanes.

For the I-77 project the bonus allocation amount was over $140 million. This money can be spent in any county (or counties) containing the toll project. Think of it as a $140 million shopping spree.

Reading the Fine Print

However, the bonus allocation has to be spent in a certain way. STI divvies up funding into three buckets: Statewide, Regional and Divisional. CRTPO can apportion the bonus allocation among these three buckets however they would like.

But for projects in the Regional bucket, the bonus allocation is capped at 10% of the “regional allocation… made over the five year period in the State Transportation Improvement Plan (STIP).”

It’s unclear what the statute is referring to by “regional allocation” as that term is not defined in the statute. For discussion purposes we’ll take the most expansive (i.e. pro-toll) interpretation.

A bit of background: STI divides North Carolina into seven funding “regions,” A- G. Mecklenburg is part of Region E (along with 12 other counties). But the toll project is in Iredell, too. Iredell is in Region F, along with 13 other counties, so when calculating the cap we must include the funding allocation for that region as well.

For these two areas, total funding for projects in the “Regional” bucket is about $440 million. Our bonus allocation “cap” is 10% of that, or $44 million.

Here’s where we run into problems: right now CRTPO lists $56 million bonus dollars for projects in the “Regional” category, or $12 million over the cap.

There’s a way around this, however: re-allocate money from the Regional bucket to the Divisional bucket. The Divisional bucket is subject to the same type of cap, which comes out to around $34 million. Right now CRTPO has $26 million programmed, leaving $8 million in cap space.

Combing the two buckets still leaves us “over-programmed” by $4 million, which means something would have to be cut. A good candidate would be $9 million dollars’ worth of bike lanes in Charlotte.

Problem solved, right? Actually there’s another, more insidious problem.

Allocation scheme favors toll lanes

As has been widely reported, about half othe bonus money ($77 million) goes toward building direct-access ramps to the toll lanes. One of these is at Hambright Rd in Huntersville.

Instead of private toll ramps, Huntersville would like to use that money to replace the existing two-lane Hambright bridge with a new five-lane bridge. Development is booming along Huntersville’s southern border, with over a dozen commercial projects on the books. (Apparently developers and businesses have figured out that building along the new I-485 stretch eliminates having to travel I-77 through LKN.) Improving Hambright provides a natural east-west traverse.

The thing is, if we’re reading the statute correctly, they can’t. The toll ramps are in the “Statewide” bucket, and projects cannot be moved from “Regional” to “Statewide.”

Unfortunately, CRTPO can’t move “Statewide” money to the “Regional” or “Divisional” buckets because of the cap. (Funny thing- there’s no cap on the “Statewide” bucket.)

So, if we are to spend all of the bonus allocation we must find a way to spend the $77 million in the Statewide bucket. “Statewide” projects are limited to interstates, toll roads and other miscellany (like Appalachian development). Perhaps we could use some of that money to improve I-77, right? Like another general purpose lane. That would definitely meet the “interstate” criteria.

But if we make an improvement to I-77 that reduces toll revenues we’d have to compensate Cintra… for 50 years of projected lost revenues.

So the only realistic expenditure of “Statewide” bonus money is … you guessed it… improving private toll lanes.

Bottom line: we’re basically locked into spending half of our supposed “bonus allocation”- taxpayer dollars- on improving the private toll lane project. Hence the private toll lane ramps.

Another catch

But hold on, there’s more.

We must spend the money… soon. The statue requires the funds to be spent in the “five-year period… following the contractual obligation.” NCDOT does five year workplans. Right now we’re in the 2016-2020 workplan. But the “contractual obligation” happened in the last five year workplan, which means we have to have everything spend by 2020.

Transportation wonks tell us it 2-5 years to get environmental approval. If we wanted to change a bonus project- or add a new one- it’s doubtful it could get done in time.

Of course, this begs the question: if the contract was signed two years ago, and the transportation folks knew time was of the essence, why didn’t they act like it?

But more than that, we question the law in the first place. Why the caps on the different buckets? Why the short timeline?

We’ve often said the whole “bonus allocation” scheme was thirty pieces of silver- that no local project, be it roundabouts in Davidson or a road widening in Cornelius or a greenway tunnel under I-77 in Huntersville- could betray us into 50 years of toll-induced gridlock.

Now it appears even those pieces of silver have strings attached.

 

Sources:
Iredell_Hwy_Projects_List

Meck_Hwy_Projects_List-1

https://connect.ncdot.gov/projects/planning/Pages/State-Transportation-Improvement-Program.aspx

 

2 Responses to Bonus Allocation Bungle?

  1. Rick Short says:

    And remember…

    When Cintra was getting its bonds approved the ratings agencies BOTH rated them one level above jumk bond status. That’s important because they would not be “investment grade” if they were “junk”. Selling those bonds would have been harder.

    What do you think adding $77m to the cost of the toll project would have done to that rating?

    See here for more.

    http://ashortchronicle.blogspot.com/2015/05/i77-hot-lanes-debt-should-be-junk.html

  2. 77X Rider says:

    Worse still, CRTPO failed to even endorse “direct connector” ramps from the bonus allocation funding for any location that could actually benefit transit buses traveling the future toll lanes for free.

    Hambright is quite a bit south of Exit 23 (Gilead Rd), where a park-and-ride (“Huntersville Gateway”) is located.

    Hambright is well south of Exit 25 (Sam Furr Rd), where another park-and-ride (“Northcross”) is located.

    Hambright is way south of Exit 28 (Catawba Ave), where a new park-and-ride is being built.

    So while CRTPO claims the toll lanes will benefit transit, they didn’t even successfully place their bonus shell-game money anywhere close to where transit would benefit. In other words, buses will have to enter/exit the new toll lanes right in the same vicinity of today’s congestion between I-485 and Huntersville.

    Now, that’s planning!

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