Austin American Statesman
Published: 9:43 p.m. Saturday, July 28, 2012

In the three years since the Texas Legislature passed a bill giving the state's toll road agencies the authority to grant free rides to disabled veterans, the two agencies that manage pay-to-ride roads in Central Texas have yet to implement the toll discount and don't have any immediate plans to do so. Statewide, only toll authorities in the Houston area have adopted the 2009 law.

The inaction has angered veterans groups and legislators. "I was hoping that it would be a simple decision," said former state Rep. Abel Herrero of Corpus Christi, who co-wrote the 2009 bill. "I would have thought that this many years later that all those authorities would see it as an opportunity, a way to say thank you. I'm shocked it hasn't happened."

Some toll officials in the state worry the veteran toll discount would open a Pandora's box of toll discounts for other groups. Others say it could be too expensive, despite the experience of Harris County toll officials.

The area's largest toll road authority — the Texas Department of Transportation, which operates Texas 45 North and Southeast, Loop 1 and Texas 130 — says that granting free tolls for disabled veterans could negatively affect annual revenues by up to 10 percent, based on a 2009 analysis of disabled veteran and Purple Heart plates in Travis and Williamson counties.

That worst case finding was based on each driver with a disabled veteran, Purple Heart or Medal of Honor plate making a round trip five days a week. Department officials said they also took into account Austin's geographic location between military installations in San Antonio and Fort Hood.

That conclusion stands in sharp contrast to the experience of the Harris County Toll Road Authority, which reports that disabled veterans account for just 0.8 percent of toll transactions.

In Travis County, 3,637 drivers have disabled veteran or Purple Heart license plates, or 0.4 percent of the county's 973,609 registered vehicles. In Williamson County, 0.7 percent of drivers have the plates. In heavily veteran Bell County to the north, home to a large Department of Veterans Affairs hospital in Temple, disabled veterans account for about 4 percent of drivers.

The timing of the 2009 law seemed propitious: With wars raging in Iraq and Afghanistan, record numbers of veterans were returning home with combat stress and other war injuries and seeking medical care. The bill's supporters argued that the discounts would have minimal effect on toll revenues while helping veterans defray the cost of driving to medical clinics and hospitals. And the law seemed in sync with the boasts of state leaders that Texas takes better care of its veterans than other states. During the same legislative session, Gov. Rick Perry signed a law exempting disabled veterans from property taxes.

But the measure appears to have crashed against the dollars-and-cents realities of toll road administration.

"The people who operate toll authorities are constantly getting requests to exempt this group and that, and they hate it," said Peter Samuel, a Maryland-based toll expert who publishes an industry newsletter, Toll Road News. "They see it as one more complication to their accounting and enforcement. They are worried if they give it to veterans that it will be used for other groups and soon you have a huge hodgepodge of different prices for different people."

Local toll officials also worry about the precedent of free tolls for certain groups.

"On the surface it seems fairly innocuous," said Mike Heiligstein, executive director of the Central Texas Regional Mobility Authority, which operates 183-A. It is building a U.S. 290 tollway in Northeast Austin and next year will probably break ground on MoPac Boulevard (Loop 1) toll lanes. "But I would be concerned about, Where do you draw the line? What we don't want is to start the process of exemptions and not know where it stops."

State Sen. Leticia Van de Putte, who sponsored the original bill, said she does not believe the law would lead toll authorities down that slippery slope. Van de Putte, a San Antonio Democrat who leads the Senate's Veteran Affairs and Military Installations Committee, said the state has traditionally singled out disabled veterans for special privileges and accommodations such as free or reduced-fee hunting licenses and specialty license plates. "As nice as it would be to help teachers, there are not statues of slain teachers at the capital," she said.

Toll authorities also argue their legal agreements with bondholders to borrow money prohibit them from granting discounts. TxDOT told legislators that its covenant does "not provide the flexibility for a toll reduction or exemption program for disabled veterans."

The transportation agency's bondholder agreement prohibits reduced or free tolls except under certain narrow circumstances. Last year TxDOT significantly reduced truck fares in an attempt to lure more trucks away from Interstate 35. Its bondholder agreement allows discounts if they are expected to eventually result in an increase in revenues.

But experts also say toll agencies may renegotiate their agreements with bondholders, especially if they can demonstrate that the reductions won't affect loan payments. Samuel said the authorities typically oppose such discount programs. "Unless the members of the board of a toll authority are very convinced that this is an important thing to do, unless they are very keen to do it, they are likely to resist it," he said.

Veteran toll discounts are rare across the country. The New York State Thruway Authority grants veterans free tolls if they qualify for an adaptive vehicle through the Department of Veterans Affairs, usually given to veterans who have suffered amputations or hand and foot injuries.

In Florida, disabled veterans can receive exemptions if they have permanent upper body impairments that prevent them from reaching out of their car to drop cash into a toll basket. And in Orange County, Calif., drivers with disabled veteran license plates receive free passage except during rush hour, when their tolls are discounted.

Veteran advocates say the law that emerged out of the 2009 legislative session had two major limitations. It does not require toll agencies to adopt a disabled veteran program, it merely permits it.

The 2009 Legislature, operating at the height of the recession, also did not appropriate any funding to toll authorities to replace any revenue lost as a result of adopting the program.

Despite those limitations, Houston area officials embraced the law in 2009, after what one veteran advocate said was a single meeting with toll officials over brisket.

"We felt it was important to give this advantage to our veterans," said Eric Hanson, spokesman for the Harris County Toll Road Authority, which has operated toll roads for more than two decades and is overseen by county commissioners. The Central Texas authorities are led by boards of political appointees.

Over the past three years, the program has cost the authority about $6 million — less than 1 percent of the more than $1 billion in toll revenues it has collected over that period. Officials also say the disabled veteran number may be inflated because some vets who otherwise wouldn't use the road now do because of the free pass.

The Central Texas Regional Mobility Authority in 2010 said it would implement the program only when the Legislature appropriated money to make up for lost revenue. "It's not a veteran-specific issue," said agency spokesman Steve Pustelnyk, who added that such a program would come with significant administrative costs. "We felt if the Legislature wanted the program they should fund it."

Ray Wilkerson, who was appointed to lead the mobile authority's board by Gov. Rick Perry, said it wasn't an easy decision. "Our board struggled with this when it was first brought up," said Wilkerson, whose father served in World War II. "I've got the greatest respect in the world for veterans. ... We're between a rock and a hard place."

The Travis County Commissioners Court endorsed allowing local disabled veterans to drive toll-free in 2010, but with no direct toll road authority the resolution amounted only to a recommendation.

Disabled Austin veterans such as Sid Hull, 75, who served in Vietnam as part of a 20-year Army career, say they are left frustrated by a law they perceive as toothless and toll road agencies they see as resistant. Hull said he would take the toll road to his appointments at the VA hospital in Temple if local toll agencies would adopt the discounts.

"There are so many things here in Texas that they do for their vets," Hull said. "Yet this one little thing seems to be a thorn in the side of all of us."

SAN ANTONIO DRAMA:

-- FHWA come to San Antonio MPO meeting in June and flip on their recommendations

Property rights activists seek clarity on eminent domain use by private entities

By Terri Hall
July 24, 2012
Examiner.com

"Why is it my responsibility as a Texas landowner to make a foreign corporation prove it has legally obtained the power of eminent domain in Texas?" asked Julia Trigg Crawford, a farmer in East Texas locked in a legal fight with Canadian company TransCanada over the use of eminent domain to acquire land for its Keystone XL Pipeline. Crawford and other property rights advocates addressed the House Land and Resource Management Committee hearing yesterday at the Texas Capitol in Austin, asking lawmakers to exercise greater oversight over private companies’ use of eminent domain authority.

“Rather than mending fences and tending to crops, I’m here in Austin today fighting to protect my land,” Crawford pointed out.

This should not be.

RMA vows to press on with 1604 toll project

By Vianna Davila

Updated 10:52 p.m., Thursday, July 19, 2012

The Alamo Regional Mobility Authority leadership stressed again and again Thursday its pledge to move forward with construction of a long-planned toll project on Loop 1604, despite a recent political shakeup that put Bexar County in charge of the agency's operations.

The declaration came at the mobility authority's first public board meeting since Commissioners Court voted to take over the RMA's staff operations last month, in what was called a cost-saving move. The move came weeks before the agency planned to start the search for a contractor to tackle the 1604 toll project, which could be under construction by December 2013 if things go according to plan.

Interim RMA Board Chairman Robert Thompson remains determined that they will.

MPO plan brings roads faster

Kevin Wolff, For the Express-News

Thursday, July 19, 2012

The Transportation Policy Board of the San Antonio Metropolitan Planning Organization, or MPO, had to make some important decisions about area road planning last month.

We decided our community can no longer wait for the Legislature to halt the diversion of transportation dollars for other uses and to index the gasoline tax. For this reason, among others, the decisions we made were to push forward with plans for the long-awaited expansions of U.S. 281 and Loop 1604.

The current plans were born in March, when the Texas Department of Transportation announced that it had $2 billion in additional federal and state funding to parcel out among the state's transportation districts. I scrambled to put together a nontolled financing plan that would dedicate our area's portion to U.S. 281 and Loop 1604 and match it with other local, state and federal dollars that we have secured or will secure in the near future.

Italy eyeing public asset sale to slash debt

Vittorio Grilli, who was appointed just last week, also lashed out at rating agencies, in comments to the Corriere della Sera published Sunday in the wake of the decision by Moody's to downgrade Italian debt.

"The government wants to secure, through a multi-year programme, the sale of public assets for between 15 and 20 billion euros ($18 billion to $25 billion) a year, or one percent of gross domestic product," he said.

He said such a programme could reduce Italy's debt, which is currently approaching two trillion euros or 123 percent of GDP, by 20 percent in five years.

"I would be happy to reduce it to 100%, it would be wonderful. Unfortunately... there are no longer as many saleable assets belonging to the state and public enterprises as there were 20 years ago."

Grilli also said that relations with credit rating agencies had "become difficult", in the wake of the decision by Moody's last week to downgrade Italian debt from A3 to Baa2 -- just two notches above junk-bond status.

"Before the subprime crisis, they gave the top triple A rating to entities (that posed) that real public danger, such as special purpose vehicles," he said, referring to complex financial instruments that packaged toxic debt.

"Since the bubble burst, the rating agencies -- private companies that have a potential conflict of interest with their clients with an exposure to an exclusively American culture -- are always late.

"They amplify the effects of events rather than anticipate them," he said.

Turning to financial markets he said they "do do not yet recognise the quality of our country's efforts to put the accounts in order. A balanced budget is at hand, structural reforms are being undertaken."

"No other country has done so much in so little time," he said.

He also said the government was reaping the rewards of its fight against tax evasion, that would bring an extra two billion euros into the treasury coffers.

Enlarge Photo

Enlarge Photo

The Texas Department of Transportation is considering development of an unusually wide median area on the Texas 130 toll road near Texas 71 east of Austin, potentially leasing the land to investors to build and operate a gas station, store or restaurant that drivers could use without leaving the tollway.

Although such highway plazas are common in other states and overseas, it would be a first for Texas.

Though the idea is still far from reality, it has drawn critics. Anti-toll-road activist Terri Hall said such an initiative undermines free enterprise and would use once-private land, possibly obtained through eminent domain laws, to enrich the state.

TxDOT in June published a "request for information," asking interested companies to respond by July 25 with the outlines of what they might install and how such a lease with the state could be structured. An agency spokesman on Friday emphasized the preliminary nature of the initiative. A second, formal bidding process would have to occur before TxDOT reaches a deal.

"This is exploratory," TxDOT spokesman Mark Cross told the American-Statesman. "What they're looking to do is to find a way to increase the revenue and enhance the customer service along the tollway."

Cross said the agency is not considering a similar arrangement at any other place along Texas 130 or the other three Central Texas tollways owned by the agency. TxDOT, in its agreement with a private consortium to extend Texas 130 another 41 miles to Seguin, retained exclusive rights for this sort of development. That section of road should open this fall, officials said Friday.

State law allows TxDOT to lease land on its tollways for only a handful of uses: gas stations, garages, stores, hotels, restaurants, railroad tracks, utilities and telecommunications facilities and equipment.

The wide median was a staging area and concrete plant for the tollway's construction before that section's 2007 opening. Cross said it was envisioned as a spot for a possible toll plaza since construction of the road. The area is 2,875 feet long and 450 feet wide, or about 30 acres, the TxDOT document indicates.

The TxDOT solicitation includes a schematic, labeled "for illustrative purposes only," of what might end up in the median, including car and truck parking areas and a 19,000-square-foot convenience store and restaurant.

The document also touts the growing traffic potential of Texas 130, which six years after opening still has light traffic on its four lanes. The document includes maps showing 2010 daily average traffic along various points of the road, including about 20,200 cars and trucks a day at the potential development site. By 2035, TxDOT expects that traffic there will have more than tripled to about 77,500 vehicles a day, according to the solicitation.

About 215,000 vehicles a day pass through Austin on Interstate 35, according to a 2010 count.

The document points out that there are no similar facilities within four miles.

The Texas 130 corridor, with some exceptions near Pflugerville and the coming Circuit of the Americas racetrack, has been slow to develop. But David Roche, the managing principal and a retail specialist with Endeavor Real Estate Group, said he could see small-scale commercial development being successful at the location.

"Yeah, I think it would, providing you have some signage saying it's coming," Roche said. "I don't see a hotel there though. And if they ground-lease, they could stagger the payments so they're much smaller now and increase as the volume of traffic increases."

Hall, the activist who is from Comal County, characterized the possible facility as an improper intrusion of government into private enterprise. Any developers who might open shop in the median, she said, would have a competitive advantage over restaurateurs or service station operators who might hope to operate similar facilities on private land alongside Texas 130.

"Who's going to have that be financially viable when TxDOT has a captive audience, a monopoly inside the tollway?" Hall said. "TxDOT condemned that land. It was supposed to be in the public use for a road. But now TxDOT is getting in the development business, and is picking winners and losers.

"It may be the norm other places, but we see it for what it is. It's a threat to property rights on its face."

Chris Newton, president of the Texas Petroleum Marketers and Convenience Store Association, said his organization has generally opposed commercializing rest areas along highways. "We're obviously concerned whenever state government begins taking property used for a public purpose and considers how it could be used for a private purpose."

Cross, asked for a reaction to Hall's criticism, sent an email quoting a passage from the request for information that did not directly address the government-
private sector balance.

"The department is dedicated to providing a safe and efficient system of tolled highways," Cross wrote, "while ensuring the highest possible level of service and efficiency to its customers."

Railroad Commission favoring pipelines over Texas landowners

By Debra Medina - Houston Chronicle

Updated 08:39 p.m., Friday, July 13, 2012

"Only one candidate for Railroad Commissioner has the proven experience and ability to lead the agency and protect private property rights."

That is the opening line from one of Railroad Commissioner Barry Smitherman's re-election radio ads. The problem, at least from my perspective as an engaged citizen who has fought to protect private property rights in Texas for years, is that Smitherman has not lifted a finger to protect property from eminent domain.

Like his predecessors, Smitherman has presided over a Railroad Commission that has issued T-4 permits, rubber-stamping pipeline claims to common carrier status for any and all pipeline companies who check that box on the form. Those companies then turn around and use their T-4 permit as proof that they have been given the right of eminent domain by the Railroad Commission.

So exactly what has Smitherman or the Railroad Commission done to protect private property? Under Texas law, a pipeline is a common carrier only if it meets a number of strict criteria, but these T-4 permits are granted without any fact checking to determine whether or not the pipeline in question meets those criteria.

Published: 8:48 p.m. Sunday, July 15, 2012

Last year's drought caused cracks to form in the asphalt in several sections of the still-to-open southern 41 miles of the Texas 130 tollway, causing millions of dollars in damage.

The private consortium that is building the road — and will run it for the next five decades as part of an agreement with the Texas Department of Transportation — has been tearing up and repaving stretches of the road between Mustang Ridge and Seguin. The rehabilitation work, under way since the spring, will cost as much as $30 million, said Chris Lippincott, a spokesman for the State Highway 130 Concession Co., but it will cause minimal or no delay in the road's opening.

The lease contract with TxDOT requires that the road be open by November, Lippincott said.

"We'll be open ahead of that," he said. The company, still working on frontage roads and toll facilities as well as the rehabilitation work, is probably a month away from announcing an opening date, Lippincott said.

The consortium and TxDOT signed the long-term lease in 2007, and construction began in 2009. The four-lane tollway is flanked by two-lane frontage roads between Mustang Ridge and Lockhart because it overlays what was U.S. 183, and then does not have continuous frontage roads as it runs around Lockhart's west edge and then onto Interstate 10 near Seguin.

The construction cost, which the company had said late last year would be $968 million, now will be about $1 billion, Lippincott said. The overall cost of the project, counting engineering, right of way costs and an initial $25 million concession payment to TxDOT, will be a little more than $1.3 billion, he said.

The consortium, led by Spanish toll road company Cintra and a subsidiary of San Antonio-based Zachry Construction Corp., is paying all of those costs, including the added $30 million. It will split toll revenue with TxDOT over the life of the lease, with TxDOT's share increasing from a few percent to as much as half as traffic grows on the road over the years.

Texas 130 lies over the Blackland Prairie section of the state, known for its clay-rich soils and their tendency to expand in wet periods and contract in drier times.

The problem, Lippincott said, "was neither faulty workmanship nor faulty design. What happened was a historic drought."

The company's inspectors first detected the cracks last fall, he said. The work involves not only replacing broken pavement, but also changing the substructure of compacted soil beneath to create moisture barriers with impermeable layers.

"We're going to keep the wet parts wet and the dry parts dry at the subsurface level," Lippincott said.

The company in some cases is reworking soil and pavement where no cracks had been found because pre-construction soil sampling had indicated those areas have heavy clay content and could be prone to similar damage in the future.

"For us, this is the stitch in time that saves nine," Lippincott said. "We're making these changes now so that in a year or three from now we don't have to put up orange barrels, slow the traffic down and go fill the cracks."

AASHTO opposes federal power grab on tolls

In testimony this week on Capitol Hill the states' highway lobby AASHTO (Association of American State Highway and Transportation Officials)  argued against Senator Frank Lautenburg's so-called Commuter Protection Act, S2006. Speaking for AASHTO North Carolina DOT head Eugene A Conti said enactment of the bill would add great uncertainty to financing of toll projects and discourage states and local authorities from advancing projects that would have to gain federal clearance for toll rates.

"(T)he loss of tolling agencies’ ability to set their own rates would have a deeply unfavorable effect on their credit ratings, increasing the cost of capital and making it harder for such agencies to borrow money through issuances of bonds for much needed capital improvements, maintenance and other essential services."

In addition S2006 would discourage use of toll-financed public-private partnerships (PPPs):

"Instead of granting maximum access and flexibility to a mix of funding and financing tools most appropriate for each state including toll-based PPPs, Congress would create new impediments to private investment through this legislation."

Conti said the states agree that "federal limitations should be removed" that hamper use of tolls for reconstruction within the tolled corridor. At present only three states of 50 are able to use tolls in this way under the very limited "pilot program" outside of bridges and tunnels.

The AASHTO submission says the traditional highway trust fund financing is "at a crossroads" with flat or declining revenues and increasing difficulties obtaining other funding. The deficit relative to existing inadequate federal grants of $90b/year is put at $13b/year by the Congressional Budget Office.  National Surface Transportation Policy and Revenue Study Commission had projected future federal investment needs at $225b/year, almost three times the yield of current gas tax revenues.

Conti: "In recent years, with the growing gap between highway investment needs and available revenues as well as the development of easy-to-use automated toll collection technology, toll roads and toll lanes have once again become an important means for financing investment in new highway capacity—in the last decade about one-third of all new limited-access lane miles built in the United States were tolled; in states such as Texas and Florida, the share is even higher."

The AASHTO submission said currently, there are more than 270 state and local toll roads, bridges, and tunnels in 32 states, totaling 5,541 miles of roadway.

Toll revenues nationally are around $11b/year.

Rough economic times for tollers worldwide

The Wall Street Journal has a p1 headline "New Signs of Global Slowdown" and a "darkening" economic outlook around the world. Today's news in the US is merely of drop in capital goods orders, the second monthly drop. But economic data from around the world while not dramatic is remarkably consistent in pointing to a new slowdown in economies virtually around the world.

Economic Cycle researcher Lakshman Achuthan cites for the US:

- coincident indicators, all major broad measures (output, sales, income and jobs) are all turning down together, a sign that "a recession is at the doorstep"

- income growth lower than the level of the last ten recessions

"We have 223 years of business cycle history, we have had 47 recessions, and we have the hope that if the Fed can print enough money we can stave off the 48th recession, but the odds are not in our favor."

The elections six months off make any kind of intelligent response by the federal government more difficult.

Europe of course is in the throes of the biggest challenge to the Euro in decades with likely defaults by Greece and possible other countries.

China a former growth leader looks increasingly weak as it struggles with vast inventories of empty housing and  commercial buildings and underutilized infrastructure - with financial crises likely to follow.

Brazil the biggest economy in South America has seen a contraction every month this year.

Fuel costs down

One of the few bits of good news is the major decline in world oil prices in the past few months - 15%. Gasoline and diesel are on the way down too of course. 

But that may reflect weak demand as much as improved supply. And to the extent the big oil price rise last year was driven by hedging and speculation about war in the Persian Gulf, these prices could go up again too.

VMT weak

Of direct interest to tollers vehicle miles traveled (VMT) are bumping around month to month but the so far the basic trend seems to be flat, or even a tad down.

From mid 2010 through mid-2011 there seemed to be faint signs of recovery, but since then VMT has dropped again slightly.

Recently released INRIX data on the 150 most congested urban corridors in the country showed an approximate 1% drop in traffic 2011/2010.

The latest FHWA figures - a moving 12 months VMT total - shows US drivers still well below the 3 trillion vehicle-miles figure reached in the years 2006 and 2007.

The high in driving was 3,039b November 2007. In March this year we were 3.24% below that and since October last year we've been at least 3% below every month.

For a good period now the FHWA numbers and the INRIX data mesh, showing us now down a bit nationally on 2010, when we got within 2.5% of the Nov 2007 high.

With the economy so weak probably the best to hope for is an essentially flat trend line for the foreseeable future.

CHICAGO — As Indiana spends down $3.8 billion generated by its 2006 lease of the Indiana Toll Road, the state has a series of new public-private partnerships in the pipeline that underscore its continued reliance on the technique to provide financing for transportation infrastructure projects.

As of this year, all of the remaining cash from the toll road lease to a private consortium — $1.7 billion — is earmarked for ongoing projects, and officials plan to rely on other P3s to help finance transportation projects in the future.

The Hoosier State has three major privatization deals in the works under a P3 program launched by Indiana Department of Transportation for the state’s largest infrastructure projects.

The transactions include the state’s participation in a bi-state effort with Kentucky to build a new $2.4 billion bridge spanning the Ohio River, a planned 47-mile expressway that connects to Illinois, and a major revamp of a highway that runs north of Indianapolis.

On the local side, the city of East Chicago, Ind., recently inked a deal with a private company that will create the state’s only privately owned toll bridge to replace a failing span that was shuttered in 2009.

“Indiana has tried to position itself as being innovative with regard to leveraging private capital for infrastructure,” INDOT spokesman Will Wingfield said. “It’s very important in the current economic climate that Indiana makes it clear to the private sector that Indiana is open for business and interested in engaging in these types of innovative deals that help improve transportation for Hoosiers.”

Gov. Mitch Daniels, who will leave office in January, has been one of the biggest cheerleaders for P3s throughout his years in office.

Read more here.

Link to article here.

The $6 billion Dulles Rail project has been the subject of controversy for high toll rates, delayed construction, and union favoritism that could send jobs to out-of-state firms. Republican officials trace the source of the problems to Kaine, who ceded the Virginia toll road to the Metropolitan Washington Airports Authority (MWAA) in 2007.

“It was Tim Kaine’s decision as governor that turned management of the Dulles Rail project over to the Metropolitan Washington Airport Authority (MWAA) in the first place,” Delegate Tim Hugo said in a statement. “The rising costs, the jobs lost to other states, and the ongoing mismanagement of this project are the result of Tim Kaine’s bad decisions.”

The news worsened Tuesday when the Department of Transportation’s inspector general released a scathing report on the MWAA, detailing a culture of secrecy, lavish spending, and potential corruption.

The audit found that MWAA’s 12-member Board of Directors, appointed by officials in Virginia, Maryland, and the District, operate outside of federal regulations, allowing them unlimited use of taxpayer-funded travel with limited accountability.

Federal employees are restricted by a per diem when travelling on business, while MWAA members face no such threshold. The board members took advantage of this loophole, according to the report. Taxpayers footed the bill for a number of over-the-top expenses, including a $238 reimbursement for two bottles of wine, $4,800 for three meals in Hawaii, and a $9,200 plane ticket for a trip to Prague.

The MWAA board operates in the dark, awarding a slew of no-bid contracts, some of which could violate conflict of interest statutes imposed on federal agencies.

One member awarded a $100,000 contract to his wife’s law firm without soliciting competitive and open bids to the work.

“This certainly falls short of industry standards,” Virginia Delegate Barbara Comstock said. “They continue to make exemptions for themselves and they aren’t being supervised.”

U.S. Rep. Frank Wolf (R., Va.), who called for the inspector general’s audit in March 2011, said he was not surprised by the report.

“There’s ethical lapses, contractual lapses all over the place,” Wolf said. “There is much more to be disclosed.”

The $100,000 law agreement was no ordinary conflict, according to Wolf. The board hired the law firm in an attempt to dodge a federal law passed in November that reauthorized MWAA with a provision to expand the board, allowing Gov. Bob McDonnell (R., Va.) additional appointments.

The MWAA resisted when it appeared that McDonnell’s appointments would reverse the pro-union mandate.

“We passed a bipartisan bill signed by the president on Nov. 18 and they hired a lawyer to contravene the will of Congress and the president,” Wolf said.

That is not the only conflict of interest at MWAA, according to Virginia lawmakers.

Kaine appointed Dennis Martire, a vice president of the Laborers’ International Union of North America (LiUNA), to the board. Martire has pushed openly for a Project Labor Agreement, which would mandate union rules for construction. Such an agreement could preclude Virginia companies from competing for the job, since only 4.6 percent of workers are unionized in the right-to-work state.

Workers represented by LiUNA have obtained several MWAA contracts. And though Martire recused himself from voting on the issue, he helped draft the PLA policy and remained in the room as other board members took up the vote.

The project ran $150 million over budget in the first phase of construction and Virginia is pressuring the MWAA to allow McDonnell to replace Kaine’s appointees on the board. McDonnell suffered a setback Monday when Virginia’s General Assembly rejected his bid to withhold funding from the project until the board allowed new appointments.

“[The report] seems to validate many of our grave concerns with the governance and decision making within this vital transportation entity,” McDonnell spokesman Jeff Caldwell said. “This is why Gov. McDonnell has been calling for substantial reforms and additional representation from Virginia to influence decisions by this entity.”

Martire’s fellow directors have stood their ground on the use of unionized labor.

“We aren’t changing anything,” authority member Bob Brown told the Washington Examiner in March. “We’re going to tell Virginia they should live up to the deal they made.”

Republicans are using that argument as a battering ram, saying that the “deal” belongs to Kaine rather than to the taxpayers of Virginia.

“That is Tim Kaine’s legacy … the costs are all on Virginia; we want people on there working with us rather than attacking us and working against us,” Comstock said. “These board members and union workers don’t have to live here and pay taxes and pay the tolls; they just get here, take the jobs, and leave.”

Costs could be passed onto Virginia drivers in the form of higher tolls. MWAA has weighed its maximum potential toll—the highest rate budgeters feel can be charged on a road without losing drivers—to $7 in 2013, up from $2 in 2005.

The Kaine campaign did not return calls for comment.

Wolf is calling for a permanent inspector general to oversee MWAA operations. Transportation Sec. Ray LaHood is considering the possibility of appointing a staffer to watch over daily operations at the agency, according to sources with knowledge of his intentions.

The inspector general expects to finish its audit by January 2013.

Link to article here.

Texas isn't ready for bigger ships from Panama Canal expansion

Gordon Dickson | The Fort Worth Star-Telegram

May 28, 2012