GRIP2 projects come under fire

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In a big strategy switch, the Department of Transportation is doing something about not having enough money for tending to responsibilities, including the state’s 26,688 lane miles of roads, airports, and the cash-eating commuter railroad.

 

 

DOT’s woes get modest attention because the department operations are not paid for with money from the state’s general fund.

I previously heard DOT Secretary Gary Giron at an Aug. 3 meeting of the New Mexico Mortgage Finance Authority Oversight Committee, held in Gallup. The thrust of Giron’s August comments seemed to be that DOT had no money and was thinking about what to do.

Giron and senior managers, attended by a retinue of about 20 staffers, spoke to the Legislative Finance Committee on Dec. 5. To start, Giron said, “DOT is facing tough times. The quality of the transportation system has begun to decline and will continue to decline” until new financial solutions appear.

What was missing in Gallup in the summer and remained missing in Santa Fe was any indication of fundamental rethinking of how the department approaches life.

The smallest scale revelation suggested some curious things about DOT business as usual.

Here is the situation: Under the administration’s much hyped GRIP2 program to build roads and do other things, project proposals came from communities that were supposed to put up some money to go with the state money. “Match” is the term of art, here. But 5 percent, the proportion required for projects costing less than $500,000, is much more token than match. The percentage increases with project cost.

Unsurprisingly, very small communities — Mountainair was mentioned — couldn’t find even the $25,000 required to put against a $500,000 project. So DOT, in its generosity, raided the interest money from unspent bond money.

A vote on the usefulness of the GRIP2 projects came recently from the federal government. Facing a shortage of new severance tax money to pay for loans to build the projects, DOT sought to shift them to stimulus money. Only four made the federal grade.

In response, Rep. Rhonda King, D-Stanley, had a bright idea. Maybe there should be legislation dumping the remaining GRIP2 projects, she suggested. King added that perhaps the legislature should “look at the structure of the highway department.” The current structure was fine when the department was self-supporting. That time has passed.

Sen. John Arthur Smith, D-Deming, and LFC vice chair, then stepped in, saying, “The GRIP2 projects were totally and completely irresponsible.” There is “a cloud of responsibility over the Highway Commission” and the administration for selling the legislature a bill of GRIP2 goods. The Legislature shares the cloud of responsibility for buying the hype.

Clever financing brought “instant gratification” to road projects, but, starting with Gary Johnson’s administration, long term impacts were forgotten. “We know we’re still in deep trouble on GRIP1,” the Richardson administration’s first construction program, Smith said.

DOT’s FY 11 Budget Request said, “Total road fund revenues… are estimated (as of July) to bottom out in FY 2010 at $392 million, a decline of $44.1 million, or 10.1 percent, over three years.” These projections have been reviewed by the state’s consensus forecasting group, which boasts a poor recent record, and, being vintage July, the estimates fail to reflect the revenue deterioration in summer. Look for the revenue estimates to fall.

DOT plans include cutting maintenance by $14 million, field supplies by $6.4 million, closing rest areas, and trimming heavy equipment purchases by $5 million and traffic safety grants by $2.3 million. Personnel provide savings of $10 million. The preferred vacancy rate is 9 percent for authorized positions; the current vacancy rate is 15.3 percent. DOT may increase the rate to 20 percent.

Cross training of remaining staff may be one result. Oh, horrors.

©2009 New Mexico News Services

 


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