Slush Fund Slights Safety Projects

N.C. Department of Transportation Secretary Lyndo Tippett has diverted millions of dollars that could have been used for documented highway safety needs to projects selected by legislative leaders. [Scroll down for a list of projects approved and projects neglected]

According to state law, the DOT secretary is to approve all projects financed from a $15 million annual “contingency fund,” but DOT records and interviews show that for the past few years Tippett gave $5 million a year each to the speaker of the House and president pro tem of the Senate to spend on projects they chose. Rep. Jim Black, D-Mecklenburg, and Sen. Marc Basnight, D-Dare, hold those offices.

A Carolina Journal review of DOT spending raises two important questions. Why would Tippett fund non-safety projects before documented safety related projects? And perhaps more important, why would Gov. Mike Easley allow Tippett to maintain $5 million “checking accounts” for Black and Basnight?

Despite repeated requests by CJ, Tippett and Easley refused to answer questions or provide documents authorizing the discretionary funds controlled by Black and Basnight.

DOT has 173 Spot Safety Program projects, estimated to cost a total of $20 million, waiting for funding. The current budget for Spot Safety is $9.1 million. Expenditures from this fund are for traffic signals, turn lanes, guardrails, regrading, and other activities to enhance safety. Requests for projects come from DOT engineers, highway patrolmen, private citizens, and local-government officials. Accident and injury data are gathered to prioritize projects.

For the current year the General Assembly appropriated a separate $15 million for contingency funds to be used statewide for “rural or small urban highway improvements and related transportation enhancements to public roads and public facilities, industrial access roads, and spot safety projects, including pedestrian walkways that enhance highway safety.” The legislation also states that the secretary of transportation shall approve the projects. While Tippett and the DOT Board formally approve the legislator’s projects, the approval process appears to be automatic. Contingency fund expenditures do not receive the thorough analysis by DOT engineers that Spot Safety projects receive. Contingency funds are sometimes used to pay for projects on the Spot Safety list, but many contingency fund expenditures appear to have little or nothing to do with safety.

In July 2004, Tippett approved $200,000 from the speaker’s $5 million account to restore a terminal building at Wilmington Airport for a welcome center. In March 2005 he approved another $50,000 from the speaker’s account for the same project. In July 2004, he approved $150,000 from the Senate president pro tem’s account to purchase and renovate a Tabor City service station for a welcome center.

In January 2004, Tippett approved $130,000 each from the speaker’s account and the Senate leader’s account each for upgrades at the Anson County Airport. In May 2004 he spent $267,000 from his own $5 million account to resurface the pavement at the Elizabethtown Airport. A file notation indicates that Sen. Tony Rand, D-Cumberland, requested the project.

These and other projects are summarized on a DOT report “Contingency Funds Report By Source and Request 04/05.” As of March 1, 2005 116 projects had been approved and charged to the contingency fund. The report lists the location of the project, a brief description, and the date of DOT Board approval. Column headings include the secretary, the speaker, or the president pro tem, with the project cost entered in the appropriate column. A “Grand Total” line showed that Tippett had spent $3,054,935; the speaker $4,088,985; and Basnight had spent $1,740,219 this fiscal year.

“Speaker Black has approved Bill Owens request of $250,000 for the Main Street (project) in Elizabeth City. Please find the enclosed letter for details. This is half of the $500,000 needed for this project and Speaker Black would like to share the cost with Senator Basnight,” read a memo from Black’s office to Tippett. The DOT Board approved each request and several others at the board meeting Feb. 3, 2005.

A story in The Daily Advance of Elizabeth City gave more details on the project. DOT Division 1 Engineer Anthony Roper told city officials that the city is eligible to receive $250,000 now and will be eligible to receive the remaining $250,000 in July. Roper’s comments imply that someone has the influence and ability to deliver discretionary money, even from a new budget that has yet to be debated. That someone is Basnight, who according to the paper, “has vowed to support the city’s latest request” for $500,000.

“Streetscape and beautification project along Main Street (a non-system street) in the Town of Elizabeth City…” reads the project description on a DOT form “Request for Statewide Contingency Funds.” The form even has a preprinted space to check if the request is from the Senate president pro tem or the speaker of the House. Another line on the form reads “Investigated by Chief Engineer’s Office Yes/No.” On that request, “No” was underlined.

The form has “Recommended by” lines for signatures by the chief engineer. In this case Chief Engineer W. S. Varnedoe crossed out “Recommended by” and wrote, “Reviewed by.” Other signed approvals included DOT Deputy Secretary Daniel Devane and Secretary Lyndo Tippett.

The process has been going on for several years. In April 2000, while Garland Garrett was DOT secretary, Sen. Fountain Odom sent a letter to Basnight about a Charlotte project. “I request $100,000 in discretionary funds to help fund the paving of ramps to the Johnston Road Interchange in Charlotte to connect Johnston Road to the Outer Loop. It is my understanding that House Speaker Jim Black has committed $100,000,” Odum wrote.

In July 2004 the DOT Board approved two contingency fund projects in Columbus County. State Sen. R. C. Soles, D-Columbus, had requested $150,000 to purchase and renovate a service station to provide a welcome center in Tabor City. Basnight approved the request and the money was essentially charged to Basnight’s account. At the same board meeting $210,000 was approved to grade and pave a rural dead-end road in Columbus County. The request came from Rep. Dewy Hill, D-Columbus, was approved by Black, and deducted from Black’s $5 million account.

When asked how the speaker obtained a discretionary fund, Hill told CJ, “I wish I could tell you, I don’t know. I have no idea how the system works.” He said he recently became aware that the contingency funds could also be used for Spot Safety projects.

One such Spot Safety project in Columbus County that remains unfunded is the resurfacing and regrading of Slippery Log Road. That project is estimated to cost $250,000. DOT information on the proposed project states that in the past three years there were 18 total accidents, 11 of which were considered correctable by the proposed improvements. The accidents produced three fatalities and 13 injuries. When asked why contingency funds were not applied to that project first Hill said, “That’s a good question. That’s a terrible highway.” He said he recently requested $7,000 from Black for the paving of a Columbus County fire department parking lot.

DOT traffic safety systems engineer Kevin Lacy oversees the $9.1 million per-year Spot Safety Program, but not the contingency fund. “If we had more funds we would program more projects,” he said when asked about the backlog. He said the contingency fund has often helped pay for projects waiting for Spot Safety Funds. As for the use of contingency funds for nonsafety projects, he said that “there are many needs for transportation improvements.”

The N.C. Constitution states that the executive power of the state shall be vested in the governor and the governor shall administer the budget enacted by the General Assembly. The Constitution contains no provisions for legislators to direct the spending of funds that have been appropriated.

CJ contacted Black’s and Basnight’s office asking for the documents authorizing the discretionary accounts. Both offices acknowledged receiving the requests, but neither has responded.

Former N.C. Supreme Court Justice Robert Orr now heads the N.C. Institute of Constitutional Law. Orr told CJ that legislative control of discretionary funds “clearly raised a serious constitutional question about the separation of powers.”

Sen. Phil Berger, R-Rockingham County, is the Republican Senate leader and a member of the Transportation Appropriations Committee. He recently became aware of the distribution process for the contingency fund.

”The information I have recently received raises concerns as to whether the practice of discretionary funds is consistent with our Constitution. I am requesting an opinion on the issue from Attorney General Roy Cooper,” he said.

Yesterday, The News & Observer of Raleigh revealed that legislative leaders also secretly set aside $20 million from the General Fund for distribution at their discretion this fiscal year. The funds were listed as reserves for grants and allocated to various state departments.

The money, like $10 million of the DOT contingency fund, could not be spent by the department head. It could only be spent after receiving instructions from Basnight, Black, or former Cospeaker Richard Morgan, R-Moore County.

In early 1997 CJ and other news organizations exposed a $21 million discretionary fund that legislators had set up in the Office of State Budget and Management. Basnight and then House Speaker Harold Brubaker each controlled 45 percent of the money, Gov. Jim Hunt was allowed the remaining 10 percent for handling the distribution of the checks.

When questioned about the practice in February 1997, Basnight told The N&O, “You’ve got me thinking. Somehow or other, you’ve got to help these areas in the state that need the money. But it shouldn’t be left in my hands to decide or Brubaker’s hands to decide.”

Basnight kept it up, though. “This is to authorize $75,000 from my discretionary funds to Senator Roy Cooper,” read a July 1997 letter from Basnight to then DOT Secretary Garland Garrett.

In late 1997, an investigation by The N&O shed light on DOT’s discretionary safety spending managed by Highway Administrator Larry R. Goode. Like the current DOT contingency fund detailed above, legislators’ pet projects were often funded before projects with documented safety concerns. The investigation led in part to Hunt’s removal of Goode.

Don Carrington is executive editor of Carolina Journal.

WINNERS
Recent expenditures from the $15 million Contingency Fund

House Speaker Jim Black’s discretionary awards include:
   • July 2003 :$60,000 to construct sidewalks in Kill Devil Hills
   • Sept. 2003: $30,000 to reimburse Town of Fair Bluff for construction of a riverwalk
   • Jan. 2004: $25,000 to resurface bus parking area at Bath Elementary School
   • July 2004: $200,000 to restore terminal building at Wilmington Airport for welcome center
   • July 2004: $50,000 additional to restore terminal building at Wilmington Airport
   • Sept. 2004: $30,000 to pave bus parking area at Mattamuskeet Elementary School
   • Nov. 2004: $25,000 to repair driveway to the Conetoe Volunteer Fire Department