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ajc.com > Metro
State DOT may face $1 billion shortfall for projects
By ARIEL HART
The Atlanta Journal-Constitution
Published on: 04/09/08
The state Department of Transportation may be $1 billion short in paying for
projects it has promised in the near future, DOT officials said Wednesday.
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Gov. Sonny Perdue has authorized calling in an outside company for a forensic
audit of DOT finances.
The implications of the shortfall are bad enough for projects already earmarked
for funding, but the picture is even grimmer for the thousands of projects on
department books for future funding.
DOT Commissioner Gena Abraham stressed that the findings are from a preliminary
audit. She said auditors do not yet have a solid handle on the spending.
Perdue announced the forensic audit, to begin in May, in a press conference
with Lieutenant Governor Casey Cagle and Speaker Glenn Richardson marking the
end of the legislative session. He used the news to defend his opposition to a
transportation funding bill that failed by three votes.
"The more information that I frankly hear from Commissioner Abraham, the more
convinced I am right now that money may have exacerbated the problem right
now," Perdue said. "I think frankly we've saved ourselves."
DOT's budget is about $2 billion a year. The department has had long term
funding problems. In 2006, DOT board Chairman Mike Evans and DOT leaders said
the department had postponed 510 projects because it faced a $7.7 billion
shortfall over six years.
Abraham, DOT's new commissioner whom Perdue recommended for the position, held
a press conference with Evans shortly afterward Perdue's announcement.
The two officials said the department committed $4.2 billion to projects using
a federal funding mechanism that the board had no idea had been used so
extensively. The problems have existed for years.
Evans said he knew and approved that DOT was using the mechanism, which allows
projects that need federal funding to begin with state funds; the federal
funding is applied later when it becomes available. The mechanism allows
agencies to get ahead of inflation by starting projects without waiting for the
federal funds to arrive.
But Evans said he didn't know it had been used so much, nor could he say how
much it should have been used.
The board's previous chairman, David Doss, who also presided over the board
while it used the mechanism, said the $4.2 billion was probably "a little more
aggressive than we should have been," but he didn't believe the figure should
be a shock to the board.
"We had numerous meetings where we talked about advance construction, inflation
was going out the roof, asphalt concrete and metal prices were going out the
roof," and the board had made its first priority to push projects out the door
faster.
"It's going to take some time to catch back up," Doss said.
But considering DOT's long term shortages, he added, "I don't think [the new
information is] nearly the financial crisis they've made it out to be."
Although Perdue called the audit "forensic," Evans refused to speculate on
whether anything unlawful was involved.
DOT has greatly increased its project spending under Perdue, aided partly by
federal borrowing, but its efforts to do more projects faster to address
Atlanta's congestion have been undermined by skyrocketing construction costs.
Abraham has spent her first four months in office cleaning up DOT's books, and
in bringing smaller funding pots into line she has already confronted unhappy
local officials and legislators who see their projects put on hold.
That effort is peanuts compared to the larger program, which could well present
Abraham with a project massacre.
The issues stem from DOT's history of budgeting projects like an airline that
overbooks plane seats. DOT overbooked its project budgets, assuming delays by
local jurisdictions would give them time to catch up.
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