Auditor describes MnDOT's outlook as grim

"Downright grim" is how Legislative Auditor James Nobles describes the outlook for the Minnesota Department of Transportation.

In his long-awaited audit of the agency, delivered Tuesday, Nobles asserts that MnDOT's cash crunch has placed the agency and Minnesota motorists in a bad position going forward.

"There are a few bright spots but the overall picture is not good," Nobles told lawmakers at the Capitol, "And parts are downright grim."

And while drivers have welcomed the high profile projects aimed at relieving congestion and bottlenecks, Nobles found much of the progress on that front over the past six years came at the expense of routine maintenance of existing roads and bridges.

"Spending right now is not aligned with the Department's priority of preservation," Nobles said.

"The need for preservation is more pressing than ever, because of the significant deterioration in pavement. And as that occurs, restoration of those roadways gets more and more expensive."

He painted a portrait of a cash strapped agency, forced to divert money from maintenance to new construction projects. At the same time, by the Department's own measures, the driving conditions on Minnesota's roadways worsened.

MnDOT found 66 percent of expressways in good condition in 2007, compared to 72 percent in 2002. Over the same time period the number of smaller roads rated in good condition also dropped, going from 65 percent in 2002 down to 59 percent in 2007.

"It's not just an aesthetic thing that you can drink your coffee while you're driving," Nobles explained to reporters later, "It is a deterioration of the roadway that is going to cost some money to repair."

MnDOT's own executives told Nobles that the number of roads rated in poor condition will double by 2011. They also predicted that by fiscal year 2012 the agency will have to spend all $672 million of its trunk highway money just to keep up with the repair load. Currently roughly only half of that, $350 million, is budgeted.

If all the money goes to maintenance, Nobles noted, it would leave nothing for expansion or new projects. That is, unless, something changes for the agency by then in terms of incoming revenues.

"And the Minnesota Department of Transportation will not be able to fully meet its core goals without additional funding."

Nobels recommended that MnDOT examine its use of borrowing through bonds and come up with a set of rules to live by when it comes to "debt financing." He noted that in 2003 the state raised $800 million in highway bonds to finance its building plan, and took an advance on federal aid payments which also was a form of borrowing.

As the head of a neutral, nonpartisan government watchdog agency, Nobles can't take sides in the current politically charged debate on raising the fuel tax. He did urge all sides to work together for the sake of Minnesotans.

"We don't need congestion here at the legislature any longer," Nobles remarked, "We need the executive branch and the legislative branch to break through that and get something done. And I hope this report will help."

Carol Molnau's take on it

Lieutenant Governor Carol Molnau, who doubles as Transportation Commissioner, was on hand as Nobles briefed lawmakers.

In a prepared statement she essentially agreed with his assessment that the state needs to invest more money in preserving its existing highway system.

"We must do even more and a better job of aligning our investments project by project with our stated priorities, and we will."

Under questioning from legislators Lt Gov Molnau defended the way her agency has spent its money during the Pawlenty era.

"Could we use more resources? Of course," said Molnau, "Have we applied them as well as we possibly can with the resources we have? I believe we have."

She blamed the problem on rapid inflation in construction costs, which exceeded every expert's expectations. And Molnau noted gas tax revenues actually dropped last year, for the first time ever.

"Now we're below what we've received in past years, showing that the gas tax is not a very aggressive way to fund."

But one shouldn't mistake any of what Molnau said as an endorsement of increasing the fuel tax for the first time in 20 years. Instead she argued against the ongoing efficacy of the gas tax, as she has in the past.

"I truly do believe we're going to have to find another major source for funding transportation outside of the gas tax," Molnau argued, "We have a mechanism that only works if you drive more."

Audit fuels DFL push for gas tax hike But DFL leaders say the auditor's report should add momentum to their efforts to raise the fuel tax, as part of a comprehensive $8 billion transportation spending package.

"Twenty years of excuses and inaction have led to this," Senate Transportation Committee chairman Steve Murphy said as he held up a copy of the auditor's report.

"There's only one way of getting out of it and that's to stand up and do the politically correct and politically courageous thing. And that's just to step to the plate and tell the people we're not going to let this continue in our state."

House Speaker Margaret Anderson Kelliher said the report presents undeniable evidence that MnDOT needs a boost in revenue, from a higher fuel tax and a dedicated surcharge devoted to retiring highway bond debt.

"You know they've been running this thing with bailing twine and bubble gum, it's pretty clear that it can't keep up," remarked House Speaker Margaret Anderson Kelliher of Minneapolis.

Kelliher said Democrats are more than willing to explore alternatives to the fuel tax in the future, including the mileage tax idea now being tested in Oregon and studied by MnDOT.

The state's road can't wait, she said, while that technology is being perfected.

Bridges bright spot

The bright spot, for Nobles, was a finding that MnDOT inspectors kept up with the worst bridges in the state despite the agency's staffing cutbacks since 2001.

"I think they're reasonably good on bridge inspections, which is rather surprising given the collapse of the I-35 Bridge," said Nobles.

The collapse of the Interstate 35-W bridge August first claimed 13 lives, and prompted many reviews of MnDOT's operations including the audit by Nobles.

"Obviously this report was about the overall picture and on bridges it's not as bad as it is on pavement."

Deb Junot, who served as project manager for the audit, told legislators that MnDOT's staff cutbacks and budget caused the agency to fall behind on routine inspections or bridges considered lower priorities.

"That inability to get to the maintenance they would like to do is related directly to declines in bridge crew staffing at the districts," Junot said.

MnDOT's district offices haven't complained of a lack of inspectors, according to Junot, but the numbers in the Metro area are down significantly from seven years ago.

Before 2001, she explained, the Metro District had six bridge crews with a total of 32 staff plus two to three seasonal staff hired to help those crews.

"They're currently operating with 5 bridge crews, but they have 7 vacancies unfilled due to budget constraints. So they're actually operating at about a four crew status. And they no longer hire seasonals."

"That staffing change really has a material impact on the day-to-day bridge maintenance."

When asked if anything in audit surprised him, the auditor didn't mince words.

"Just how grim the situation is, and frankly how willing the Department was to acknowledge that."

By John Croman, KARE 11 News

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