West Virginia lawmakers receive update on Roads to Prosperity bids, paving lawsuit
CHARLESTON — Legislators received several reports on major transportation issues facing the state during the start of legislative interim meetings Sunday.
The Joint Legislative Oversight Commission on Department of Transportation Accountability met Sunday evening with DOT Secretary Tom Smith and other department officials.
Smith updated the committee on highway projects funded by Roads to Prosperity bonds, Parkways Authority bonds, and Grant Anticipation Revenue Vehicle (GARVEE) Bonds. Smith said that DOT currently has $500 million of road construction work in progress or finished, with plans to have another half a billion dollars of project in progress or completed in the next six months.
Over $200 million is wrapped up in pay-as-you-go projects, being smaller paving projects. Smith said 250 projects were completed under pay-as-you-go.
“Our West Virginia contractors have really stepped up, and there’s now 250 projects that are finished — projects that would not have been constructed had it not been for the governor’s Roads to Prosperity program,” he said.
Smith said the state had $500 million in Turnpike bonding, $500 million in GARVEE bonding, and $1.6 billion in general obligation bonding.
Next, Smith explained why the state is rebidding a massive project in Ohio County.
At the end of August, the governor’s office announced that DOT rejected the bids for bridge repair and paving work on parts of Interstate 70 in the Wheeling area — considered one of the first projects in the Roads to Prosperity bond program.
Smith said as the scope continued to increase, so did the cost for completing the project. Construction cost inflation also doubled from 2017, plus import tariffs by the Trump administration has raised the price of steel, Smith said.
“It’s kind of hard to peer into a crystal ball and see that, but it is what it is,” he said. “All of these things make these design-build projects hard to estimate. At the end of the day, the difficulty in estimating isn’t the issue, it’s the cost of the work. You have to get that work done.”
The governor’s office and DOT are reviewing the project and could change the scope of what is done in I-70 in order to get lower bids.
“At the end of the day, we think by rejecting those bids and going back and re-bidding it that we’ll be able to manage that scope and get a lower number and that will make the dollars go further for other projects around the state,” he said.
West Virginia’s registered voters approved the Roads to Prosperity Amendment in 2017. The amendment provides for the improvement and construction of roads in the state by the issuance of bonds not to exceed $1.6 billion.
West Virginia has $1.3 billion for road construction and rehabilitation projects thanks to GARVEE bonds issued in 2017 and 2018, and general obligations bonds issued in 2018.
The I-70 final proposal included rehabilitation of 26 bridges on I-70 and was estimated to cost $201 million. The low bid for the project came in higher than that at $275 million.
The committee also heard from Jonathan Storage, general counsel for the state Division of Highways, regarding the anti-trust lawsuit filed by the state against West Virginia Paving.
The state is suing West Virginia Paving for hiking the price of asphalt by 40 percent and buying up smaller paving companies and asphalt manufacturers. The West Virginia Attorney General’s Office says the case is moving forward and discovery is ongoing.
The state filed its case in January 2017, and is being represented by Bailey and Glasser, Robinson and McElwee, and the Webb Law Center, as well as the state Attorney General’s anti-trust division and attorney for DOT.
“I can assure the state is very well represented in this case,” Storage said.
The state’s lawsuit against West Virginia Paving and its subsidiaries is separate from a similar suit, filed by Parkersburg, Charleston, the Kanawha County Commission, Beckley, Huntington, and Bluefield. An effort to consolidate the two cases was rejected.
The case was before Kanawha County Circuit Judge Todd Kaufman but has since been transferred to the West Virginia Supreme Court’s business court division and Judge James Young. The case will be tried Sept. 16, 2019.
“We’re moving very fast and furious when it comes to this case, and we have been all along,” Storage said. “In fact, the State of West Virginia has been one of the most aggressive parties.”
The parent company of West Virginia Paving is CRH LLC, in Dublin, Ireland.