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RALEIGH State Treasurer Janet Cowell knew about a controversial financing plan to finish building Charlotte's Interstate 485 and did not object until a few hours after it was announced by Gov. Bev Perdue, a state transportation official said Wednesday.
Perdue told Charlotte leaders Nov.9 that North Carolina would put up $290 million for a pair of I-485 projects expected to cost $340 million. The project contractors would be asked to finance the remaining $50 million, she said, to be repaid by the state over the next 10 years.
Jim Trogdon, chief operating officer for the state Department of Transportation, said he met with Cowell on Oct. 12 to outline the unusual financing plan. She expressed enthusiasm and asked DOT officials to work with members of her staff, he said. "She said they were excited about the opportunity to work with us on the project," Trogdon said Wednesday.
A spokeswoman for Cowell said her concerns were not new.
"Since October, the Department of State Treasurer has been clear and consistent in expressing our reservations about the Department of Transportation's ... proposal as the optimal method for completing the I-485 project," spokeswoman Melissa Waller said in a statement. "We have outlined alternative options for the completion of this important project within the timeframe proposed."
Cowell's staff asked about DOT's legal authority to finance part of the project, and DOT cited a statute that Trogdon had helped draft when he was a legislative staff member in 2006. The law, which has been revised since, empowers DOT to contract with private firms to finance road and other projects.
Lawyers for the state Attorney General's Office affirmed that DOT had the authority to make the deal, and they shared their conclusion with the Treasurer's Office, Trogdon said.
Perdue was under pressure to make good on a promise that the state would build the final five-mile section of Charlotte's I-485 loop and an interchange with I-85.
"Around Oct. 30, we met with (Cowell's staff) and told them of the urgency and how we were addressing their concerns and said we were moving forward rapidly," Trogdon said.
"The first time we heard they had a difference of opinion on the legal authority was the afternoon after we announced it, on Nov. 9," he said. "They had obtained an outside opinion that was different."
Cowell went public with her qualms late Tuesday, issuing a brief statement expressing uncertainty about DOT's financing scheme. She has not yet released documents requested by the (Raleigh) News & Observer, including legal opinions provided by private attorneys at Cowell's request.
Cowell may not have authority to stop the plan, but her approval matters because she issues the state's debt and determines how much it can afford to borrow.
On Wednesday, Perdue's office reaffirmed the governor's intent to proceed with the I-485 plan.
"The Governor's Office remains confident that this is an innovative, creative way to meet the Charlotte area's transportation needs," said Perdue spokeswoman Chrissy Pearson. "We have been assured by DOT officials and by the state's lawyers that this plan is legal and will work in North Carolina. We have no reason to believe otherwise.
"There were a lot of t's crossed and i's dotted prior to the governor announcing this plan," Pearson said.
Critics in Wake County, who reluctantly accepted tolls as a way to finance completion of Raleigh's 540 Outer Loop, said the I-485 deal was unfair because it meant Charlotte's loop would be finished toll-free. At a Nov. 28 meeting with DOT officials, Apex Mayor Keith Weatherly questioned Perdue's authority to commit the state to a $50 million debt for I-485.
"We ran that through the Treasurer's Office before moving forward," replied Ted Vaden, a DOT deputy secretary.
Sen. Richard Stevens of Cary called for more scrutiny of the I-485 plan. "It appears the state would be incurring debt," Stevens said. "We have a process for that, and we've set limits on how much debt the state would incur. Obviously the treasurer has questions about this.
"I'm not trying to do anything to stop Charlotte from getting this road. The question is whether or not the plan is legal."
