House considers safeguards on publc-private transportation deals

2/3/2015 –

A bill to take the public risk out of public-private transportation deals is due before the House of Delegates for a final vote, while a companion bill to overhaul Virginia’s transportation funding formulas is scheduled for debate.

The pair of bills, sponsored by House Appropriations Chairman S. Chris Jones, R-Suffolk, at the request of Gov. Terry McAuliffe, represent a major push by the administration and legislature to avoid additional risky public-private agreements, such as the one signed in late 2012 to build a high-speed toll expressway along U.S. 460, and to require greater accountability and transparency in how the state allocates transportation funds.

The House gave preliminary approval Monday to the so-called “P3” legislation to give the assembly money committees greater oversight over proposed public-private partnership agreements for major transportation projects.

Jones called the legislation a response to concerns over the U.S. 460 project, on which the state already has spent almost $300 million without a federal environmental permit or turning a shovelful of dirt, as well as a deal to renovate and expand the Downtown and Midtown tunnels in Hampton Roads and an unsuccessful attempt by a private company to take over the Port of Virginia in a long-term concession.

The first piece of legislation, House Bill 1886, would require state transportation officials to issue a finding of public interest before entering into a P3 deal, as well as a finding of public interest by a new advisory committee that would include the staff directors of the House Appropriations and Senate Finance committees.

Once that finding has been made, state transportation officials could not enter into a final agreement on a public-private transportation project without certifying that the risks, liabilities and other aspects of the initial deal have not changed. The U.S. 460 project morphed from a public-private partnership to a more traditional design-build project without publicly rebidding the work or reassessing the risks.

The second bill, House Bill 1887, is an omnibus measure that would make a series of changes to transportation governance and funding in the state in the aftermath of sweeping legislation in 2013 to raise what was then estimated as $6 billion in transportation revenues statewide and in Northern Virginia and Hampton Roads.

The governance changes would allow the governor to remove members of the Commonwealth Transportation Board only with cause rather than at will, replace the state transportation commissioner as vice chairman with the most senior board member and eliminate the director of the Virginia Port Authority from the panel. The changes would take effect July 1, 2017.

The biggest changes under the legislation would be to the formula for distributing transportation funds. Currently, the administration takes $500 million for high-priority state projects and allocates the rest using a formula giving 40 percent to primary roads, 30 percent to secondary roads and 30 percent to urban systems.

Under the bill, half of the $500 million used for priority state projects would be distributed to highway construction districts through a new grant program. In 2021, the last year of the six-year plan to be adopted this summer, a new formula would:

  • dedicate 40 percent of funds for structurally deficient state and locally owned bridges and reconstruction of deteriorated pavement on interstates and primary roads;
  • reserve 30 percent for high-priority projects; and
  • give 30 percent to the construction district grant program for local and regional projects in the nine transportation construction districts.

By MICHAEL MARTZ Richmond Times-Dispatch