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RALEIGH N.C. State Treasurer Janet Cowell raised a possible hindrance Tuesday to plans for speeding completion of I-485 in northern Mecklenburg County.
Cowell's office issued a statement late Tuesday expressing uncertainty about the funding mechanism to finish the unlinked loop - a plan that was announced with great ceremony by Gov. Bev Perdue two weeks ago.
"In the absence of contracts specifying terms and conditions of the 485 project, we are unable to determine if there are issues or concerns," said Melissa Waller, Cowell's spokeswoman, in a prepared statement. "We continue to advise the Governor's office and the Department of Transportation on the various options available for this important project."
Perdue responded two hours later with a statement saying the financing plan had been vetted.
"Prior to announcing the plan, we worked with (Attorney General Roy Cooper's) office as we developed the design-build-finance program for completing I-485," Perdue said in the statement. "During this process, the Attorney General's office indicated that our plan was legal."
Cooper's spokeswoman, Noelle Talley, said their office does not discuss its legal advice. Cowell, Perdue and Cooper are all Democrats.
Perdue's statement suggested she wasn't about to put on the brakes.
"We are excited to see contractors express interest for this project that will save taxpayer dollars and complete the loop as quickly as possible," she said.
Cowell may not have authority to stop the plan, but her approval matters because she issues the state's debt and oversees the state's debt load, determining how much it can afford to borrow.
The unfinished highway has long generated tension between Raleigh and Charlotte. Construction was supposed to finish by 2003 but was delayed as Charlotte's population and traffic mushroomed, infuriating drivers and feeding a lingering sense that the city gets shortchanged by state leaders in Raleigh.
Any glitch in the I-485 plan would create difficulty for Perdue, who has already had to back away once this year from a promise to accelerate work on closing the loop.
Contractor financing
Perdue's plan for finishing the last five miles of the highway, estimated to cost $340 million, calls for the private contractors to finance $50 million of the construction on their own, but with the state backing the debt and paying the companies back over 10 years.
Cowell is the only one who can issue debt, in the form of bonds, for the state. What's unclear is whether Cowell would have authority over the state vouching for the debt of a private contractor when they borrow money to finance the highway.
An additional question: whether the state guaranteeing a contractor's loan would be counted against the state's debt capacity. That's something that could affect how much it costs the state to borrow money, because national rating agencies look at the debt load when they decide how to rate the state's bonds. Those ratings help determine the interest rate on the bonds.
Rep. Becky Carney, a Charlotte Democrat and chair of the House Transportation Committee, said she heard rumblings over the weekend about concerns for financing the road.
"Obviously we're hoping this will work, not just from the standpoint that I'm from Charlotte," Carney said. "But we have to be creative in how we finance our infrastructure. The needs are great across the state."
Predictable squabble
Charlotte Mayor Pat McCrory, Perdue's Republican opponent in last year's campaign, said the squabble over the highway was predictable.
"This should come as no surprise," said McCrory, who leaves office in two weeks. "No one knew the details when it was announced and no one knew who had the authority when it was announced. It's something I've been trying to determine since then to make sure it's not another false call."
Perdue, a Democrat from the coastal city of New Bern, pledged during her campaign last year to develop a closer relationship with Charlotte. She visited in February, promising to start construction on the last leg of the loop by year's end.
Then the economy tanked, state revenue plummeted and the promise withered. Furthering the bitter sentiment in Charlotte, state officials in May proposed paying for I-485 by sacrificing money for Independence Boulevard. Local officials sharply rejected that plan.
Perdue repeatedly emphasized that she was pushing her transportation department to craft an agreeable plan to finish the loop.
