Wisconsin lawmakers seek changes on road project estimates

MADISON - State transportation officials could no longer ignore basic factors such as inflation in estimating the costs of road and bridge projects, under legislation being drafted by lawmakers.

The legislation follows up on a sharply critical audit released last month that showed the cost of major road projects in Wisconsin doubled between the time they were planned and built.

The legislation — discussed Tuesday at a Joint Legislative Audit Committee hearing — would require that estimates more fully account for these factors and be updated annually. The yearly updates would not only have to document the present cost estimate of the project, they also would have to say what the original estimate was and the reasons for any changes.

Audit Committee Co-Chairman Sen. Rob Cowles (R-Allouez) and auditors said they would seek an update from DOT in June to ensure that the agency is fixing the problems.

"This committee is going to have to have an ongoing dialogue with the agency to see if these things have been done," Cowles said. "It’s one thing to pass legislation and it’s another to make sure that they do it."

The audit was issued just weeks after Transportation Secretary Mark Gottlieb retired. His replacement, David Ross, Tuesday sought to respond to the audit report and rebuild his agency's image.

"I join you in your frustration," Ross told the Audit Committee. "We must work to restore the public’s trust."

Ross said he would dig into the cost increase of projects such Interstate 39/90 and Highway 18/151, adding that he didn't accept them.

It cost $1.5 billion to build 19 major projects between 2006 and 2015 — $772.5 million more than originally estimated, the Legislative Audit Bureau found. Even though the Department of Transportation was spending money on most of these projects for 18 years or more, the DOT didn't take into account the considerable effects that inflation and changes to project design would have on those costs over time.

The report also found an additional 16 projects that were ongoing as of August and saw similar spikes in their costs. Originally expected to cost $2.7 billion, they are now expected to come in at $5.8 billion, the audit found.

The skyrocketing costs have given arguments to both sides in the debate over whether more money should be put toward roads.

Those seeking more money for highways, including Assembly Speaker Robin Vos (R-Rochester), can point out the audit suggests the shortfall in state transportation funding is more dire than previously thought because costs have essentially been low-balled. Those reluctant to raise taxes for highways, such Sen. Chris Kapenga (R-Delafield), argue the DOT is not giving lawmakers honest estimates or managing its budget effectively.

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Kapenga noted at Tuesday's hearing that a significant portion of DOT projects have only one private bidder, leaving little competition to drive down prices.

"I see concern after concern after concern," Kapenga said, arguing the DOT shouldn't get more money.

But Rep. John Nygren (R-Marinette) and Sen. Kathleen Vinehout (D-Alma) pointed to the steady deterioration in road quality statistics in recent years.

"How are we going to change that trajectory?" Nygren asked.

Even considering the DOT's current cost estimates, officials face a $1 billion gap over the next two years between the amount of money they expect to take in and the projects that are planned.

The audit found some waste and opportunities for savings, but a big contributor to errors in the estimates was failing to account for inflation or other unavoidable costs.

Before 2011, the DOT also did not include the cost of engineering and some other costs such as changes to the scope of the project, auditors found.

In some cases, the cost of projects was more than four times as much as their estimates. For instance, Highway 29 between I-94 and Chippewa Falls was estimated to cost $33.4 million in 1991 but wasn't completed until 2011 at a cost of $147.5 million.