RICHMOND 鈥 The cost of reconstructing highways hammered by Hurricane and big bills from the winter鈥檚 snow, ice and floods has overwhelmed the聽聽budget for dealing with unexpected expenses.
But rather than the usual move of tapping the state's highway construction funds to cover the gap, VDOT will try a financial move nobody can remember it trying before.
The combined total is $506 million through early April with an additional $124 million coming before the June 30 end of the fiscal year, along with $9.7 million for employee bonuses that the General Assembly approved.
Altogether, that $640 million is $420 million more than the emergency response pool, Laura Farmer, chief financial officer of the Virginia Department of Transportation, told the Tuesday. The board oversees transportation funding, planning and selection of projects.
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The work of clearing and repairing roads Helene damaged, estimated at $132 million after the storm, now looks like it will total $208 million, Farmer said. VDOT has already spent about half that, almost all the rest will be due before the end of the year.
A lot of the increase was the cost of clearing debris over the winter, when 鈥渨e also encountered extensive snow, ice and flooding response, and our current estimated cost between now and the end of the year is almost $445 million,鈥 Farmer said.
But the emergency response budget is just $220 million.
鈥淓mergencies include snow and include this kind of horrific damage with Helene,鈥 Secretary of Transportation Shep Miller told the board.
鈥淎nd all told, we're saying it's about three times that. So we've got a $400 some million-dollar gap. And what do we do with that? How do we pay that bill? Well, typically, you pay that bill 鈥y cutting construction,鈥 he said. 鈥淭hat would have driven our construction budget through the floor."
Worse, it would have delayed projects as construction costs are soaring 鈥 VDOT has seen a 24% increase in construction costs over the past three years, he said.
鈥淲e only have the money that we have. That's what we have, right? And we are required to fund maintenance first, and that's what we do now 鈥 what we did is we dug every couch cushion we could,鈥 he said.
Finding savings
Specifically, Farmer told the board, that included VDOT district offices鈥 moves to delay or defer some scheduled work until after the June 30 end of the fiscal year and tapping funds left over when closing completed paving contracts. VDOT also used Federal Emergency Management Agency reimbursements for state spending on earlier natural disasters, federal funds for repairing hurricane damage to U.S. Route 58, as well as a pause in hiring and cutting back on travel and training.
In all, VDOT staff found some $230 million they could shift to cover cleanup and repairs from Helene and the winter storms and floods.
That still left about $190 million. VDOT believed that cutting construction spending by that much would mean higher costs down the road for projects.
Eventually, there鈥檚 an additional $212 million to $261 million of federal reimbursements coming for state spending to recover from Helene and from earlier disasters 鈥 but it鈥檚 not here yet.
On the other hand, there is cash available for construction that hasn鈥檛 started 鈥 advance payments for work that will be years in the future.
That money is聽 basically sitting in VDOT bank accounts earning 3% to 4% a year.
Borrowing advances
VDOT, in a move nobody can recall it making in recent times, will borrow from some of those future construction advances to help pay for Helene and winter storm expenses and repay its construction fund when the federal disaster relief money comes in.
Board member Laura Sellers, who represents VDOT鈥檚 Fredericksburg district, where construction to ease chronic traffic jams is a top priority, said she is worried the move would end up slowing or killing projects.
Miller said the idea is just the opposite.
鈥淲e're taking the cash from a savings account that's not going to be needed for five or six years," he said. "That's what we're doing. We have cash in a savings account,鈥 he said.
Board member Becky Norton Dunlop 鈥 secretary of natural resources in Gov. George Allen's administration 鈥 agreed.
鈥淚 think it demonstrates what every family of the commonwealth needs to do when there's been an emergency,鈥 she said.
