The Georgia Department of Transportation said Tuesday it has spent nearly $1 billion last budget year on road projects and related costs, rejecting a contention that the agency has been stifling job creation in Georgia's beleaguered construction industry.
Some of Georgia's most powerful contractors have claimed hundreds, if not thousands, of on-the-ground jobs have been lost because the department has not spent money more urgently during the recession on paving and road projects. The allegation surfaced last week when the DOT's governing board booted former Commissioner Vance Smith from the top job.
DOT had $1 billion to use toward projects for the fiscal year that ended June 30, according to DOT. Both board members and Bill Hammack, president of the state's largest road contractor, C.W. Matthews Contracting Co., complained that the department awarded contracts worth little more than $660 million. Whether because of projects coming in under budget, or not being let out fast enough, critics said the money needed to be reinvested into additional projects to create more jobs.
But numbers provided by the department Tuesday paint a much different picture. According to DOT, Hammack and others are ignoring additional costs and mandates, including incentives to complete projects early; projects bid through local governments; and change orders, supplemental agreements and allotment orders.
All told, $955 million -- of a little more than $1 billion available for road work -- went to contracts and contractors last year, department spokeswoman Karlene Barron said.
Acting Commissioner Keith Golden, a 25-year DOT veteran appointed by the board last week, said there's no excess DOT funding.
"There are limited resources federally and statewide," Golden said in an email Tuesday. "We are looking for creative ways to get things done. We have less people in the department and so we must find ways to ensure that we provide a safe and sustainable level of service for our citizens."
Still, Hammack said his firm currently employs 1,143 people, down from approximately 2,000. "I would anticipate returning to that level with a robust highway program," Hammack said.
DOT first started in 2008 slowing down what it spent on projects to work out financial issues and deal with funding shortfalls. After record spending in 2007, state auditors said DOT had been illegally spending money that was off limits, enriching contractors but violating the state constitution. The resulting financial turmoil turned state transportation work upside down for more than a year, with projects grinding to a halt.
Since then, according to David Moellering, executive director of the Georgia Highway Contractors Association, some contractors have lost 30 percent of their employees due to lack of work.
Moellering said it would be “pure speculation” for him to say whether DOT was doing all it could to spend available money. However, he said, “Our industry is on life support. Anything DOT can do to get projects out to [bid] is critical.”
That job is now Golden's, who will meet Wednesday with the board for the first time as acting commissioner. Promoted by Smith to become DOT's deputy commissioner, Golden at the behest of the board almost simultaneously stepped in to take Smith's place, gaining at least temporary control of the department's 4,540 employees and its $2 billion budget.
A licensed engineer, Golden holds a master’s degree in civil engineering from Georgia Tech. He began his DOT career in planning and most recently held a management post in the department's traffic operations.
Golden now runs a DOT that has furloughed employees in countless functions, and lost hundreds more through attrition and a hiring freeze. It used to employ 6,000 people, a number that has been falling since about 2005. Its leadership has also been playing musical chairs, or have left altogether.
Smith was DOT's third commissioner in four years. Two of the department's top three jobs -- chief engineer and director of the state's toll roads program -- are currently filled by the same person. The department has a new treasurer. It lost in May its mass transit director and human resources administrator.
Golden said Tuesday that those positions would be filled "as the budgetary resources allow." The department is also under a state mandate to cap its number of employees at 4,975, which Golden said sometimes means relying on contractors to get work done.
At the same time, transportation spending has been squeezed nationwide, as gas tax revenues have not kept pace with a booming population’s needs. Much of the gas tax – the main funding source for transportation projects -- does not rise with inflation. The federal gas tax and part of the Georgia gas tax is charged as cents per gallon, not cents per dollar, so for those parts of the gas tax, no matter how much the price of gas and roadwork goes up, the tax revenues on a tank of gas remain the same.
In Georgia, state gas tax revenues have fallen from $1 billion in the fiscal year 2008 to $828 million in fiscal 2010, and recovered to $921 million in the fiscal year that just ended June 30, according to state Department of Revenue figures.
Golden said the department must be strategic with its money, balancing transportation needs with those of business and development. It must look for ways to address congestion that cost less but have great impact. And it must do all this with an eye toward the future, when billions of dollars worth of regional transportation projects may land under its purview. Voters decide next year whether to approve a 1-cent sales tax to pay for the projects. In metro Atlanta alone, the tax is projected to raise an estimated $7.2 billion over 10 years.
"We will continue to focus on program delivery, working to ensure that we are delivering projects on time and on budget," Golden said. The department, he added, is "making every effort to keep projects moving into the community."
Staff writer Ariel Hart contributed to this article.
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