WEST JEFFERSON — Contract bidding for Section E of U.S. 221, located north of the four-way stoplight in West Jefferson to U.S. 221 Business and N.C. 88 in Jefferson, is scheduled to begin in March 2020, according to NCDOT Division Engineer Mike Pettyjohn.
Just three months ago, bidding on the project was delayed for an undetermined amount of time due to a number of factors, Ashe Post & Times previously reported. As of Oct. 23, Pettyjohn said the estimated $32.2 million project, which was expected to be delayed for around two years, is back on schedule with a letting date of March 17, 2020.
Factors influencing the initial delay included the NCDOT’s assistance in repairing roadwork in the wake of natural disasters across the state, such as Hurricanes Florence and Michael, as well as increases in project scopes, which required NCDOT to spread out project delivery, Ashe Post & Times previously reported.
In addition, a decrease in the NCDOT’s cash balance for the 2019 fiscal year resulted in a number of layoffs and project delays across the state, according to a report on the agency’s budgeting processes conducted by McKinsey and Co., a Washington, D.C.-based consulting firm, as well as an Oct. 23 release from N.C. Rep. Ray Russell.
According to the eight-page report, NCDOT disaster spending saw a significant increase in FY 2019, totaling $296 million — almost $250 million more than the $50 million set aside each year for disaster-related spending.
The NCDOT also said in a financial review on its website that a few other factors have lead to an uncertainty in revenue streams, including gas prices and a greater complexity in construction projects.
The NCDOT is required by state law to maintain a minimum balance of no less than 7.5 percent of its budget. According to the report, the balance sat around $150 million above that required cash floor.
In response to the NCDOT’s cash-flow issue, the N.C. House Transportation Appropriations Committee approved a bill that would provide $661 million in additional funding for the NCDOT on Wednesday, Oct. 23, as well as $301 million in the form of a loan for road improvements and other projects, according to Rep. Russell’s release.
“This bill would give (NCDOT) permission to basically get a cash advance of up to $300 million, and then pay it back as FEMA pays the state back,” Russell said in a phone call on Oct. 24.
The state is still awaiting reimbursement from the Federal Emergency Management Agency for NCDOT’s assistance in repairing roads after significant flooding took place in the eastern part of the state, Russell added, among other disaster-related spending.
According to the bill, the loan would be due to the state’s general fund by 2025. Russell said FEMA will eventually reimburse the state for disaster spending, but it’s taking longer than expected.
“The other piece of that puzzle was the legislature, in the last four or five years, has really pushed DOT to be more aggressive in their road building,” Russell said. “DOT responded, got more aggressive with their schedule, bumped a bunch of stuff up, and what that did was it drove the cash balance down for DOT.”
Russell added that he hopes the bill will go through the legislature and provide much-needed funding for NCDOT, and he doesn’t see a good reason why it would not be passed.