by James A. Bacon
Virginia taxpayers will have to suck up a $400 million to $500 million loss if the U.S. 460 upgrade between Petersburg and Suffolk never gets built, Transportation Secretary Aubrey Layne told the House Appropriations Committee yesterday. “If everything totally went south, we … may end up with $500 [million] left of the $1.4 billion set aside,” he said, as quoted by the Times-Dispatch.
The fate of the mega-project is up in the air because the McDonnell administration signed a design-build contract with U.S. 460 Mobility Partners before obtaining all necessary environmental permits. At issue is the fate of an estimated 480 acres of wetlands along the proposed route of the interstate-quality highway. VDOT proposed to purchase wetlands credits from private mitigation banks to offset the wetlands destroyed by the project but the Corps has not yet determined whether that would be deemed an acceptable offset.
The hearings yesterday surfaced a lot of valuable information but missed perhaps the most critical issue of all: Members of the Commonwealth Transportation Board (CTB) approved crucial financing for the project in October 2012 without ever being informed that wetlands mitigation was an issue.
I attended that meeting of the CTB and wrote a lengthy story about it. Board members expressed reservations about borrowing so much money to fund the project and sought assurances that the state’s exposure was limited. As I summed up the discussion at the time: “Administration officials insisted that the deal posed little risk of exposure to the state over its already-significant contribution.”
The issue of obtaining wetlands permits, and the possibility that they might derail the project, never came up. View the PowerPoint presentation made by Charlie Kilpatrick, the No. 2 man at the Virginia Department of Transportation at the time, who was since promoted to Virginia Highway Commissioner. Kilpatrick’s presentation summarized the justification for the project and provided a detailed explanation of the business terms. The document never referred to the fact that VDOT had not yet obtained necessary permits from the Corps of Engineers.
When explaining rights and obligations of the various parties under the U.S. 460 Mobility Partners contract, the PowerPoint does allude obliquely to environmental issues:
But Kilpatrick did not brief the CTB on the unresolved issues with the Corps of Engineers. In a slide entitled “Next Steps,” he noted the need to obtain Federal Highway Administration approval for the project but made no mention of the Army Corps of Engineers.
Based on Kilpatrick’s presentation and the discussion that followed, the CTB voted October 17, 2012, to issue up to $425 million in tax-free bonds to help underwrite the cost of constructing the 55-mile highway. Without that approval, the project could not have proceeded.
Two weeks later, on Nov. 1, 2012, Dave Forster with the Virginian-Pilot wrote an article describing how the Army Corps of Engineers was unconvinced that the route selected by VDOT was the best option to minimize wetlands destruction. Forster cited correspondence that made it clear the discussions had been underway “for months” and that VDOT knew that failure to resolve the issues could result in the “project not moving forward”:
Tom Walker, regulatory branch chief for the Corps of Engineers’ Norfolk district, said VDOT has not submitted its permit application and that the agencies have been working for months to reach an agreement. He was scheduled to meet with VDOT staff today in Richmond to continue discussions.
“We haven’t been getting the information that we’ve been asking for,” Walker said Wednesday. “But they’ve been communicating with us somewhat regularly now.”
VDOT released a one-sentence statement through a spokeswoman: “We continue to have an open dialogue with the Corps to discuss these issues.” …
VDOT tried, unsuccessfully, to convince the Corps this summer that its chosen route was the best option and that no further study was needed. In a letter dated July 20, Richard Walton, chief of policy and environment for VDOT, wrote to the Corps’ Norfolk District commander that he was concerned the Corps’ position “overlooks critical information” that “will result in this important project not moving forward.”
Despite Forster’s public revelations of these issues, VDOT charged ahead, signing the contract with U.S. 460 Mobility Partners in late December.
The confluence of events raises the possibility that the McDonnell administration — then-Secretary of Transportation Sean Connaughton, then-Virginia Highway Commissioner Gregory Whirley and then-Deputy Commissioner Kilpatrick — deliberately withheld vital information about the wetlands permits from the CTB. If the action were deliberate, it would not have been the first time. The McDonnell administration also omitted critical information in its presentation to the CTB before a vote to approve funding for the controversial Charlottesville Bypass. In that episode, senior VDOT officials neglected to inform the CTB that VDOT staff had serious reservations about the official cost estimate for that project — concerns that proved to be amply justified. (I documented that deception in a December 2011 article, “In the Dark.”)
Connaughton is no longer Secretary of Transportation. He is slated to assume the presidency of the Virginia Hospital and Healthcare Association. Whirley has retired. But Kilpatrick has assumed the top spot at VDOT. And Layne, one of the most vocal advocates of the U.S. 460 project, now serves as transportation secretary. While he was not in a position of executive authority at the time, Layne was extremely active behind the scenes as chair of the bond-issuing authority and worked closely with the administration to get the project approved.
Governor Terry McAuliffe needs to grill Layne and Kilpatrick: “Were you aware of the Army Corp’s wetlands concerns in October 2012? Did you consider those concerns germane to the CTB decision to authorize the sale of $450 million in state bonds? If so, why did you not note those concerns during the CTB deliberations that month? Do you consider the withholding of vital information from the CTB to be acceptable behavior for officials in the McAuliffe administration?”
The four years of the McDonnell administration were a dark ages for openness and transparency in government — at least in the secretariat of transportation. McAuliffe needs to make it clear to his appointees and to the public at large that he will not tolerate the practices that led to the Charlottesville Bypass and Rt. 460 fiascos.