Private firm reaps extra profits from transportation contracts

[white cloud]

by DAVID SCHECHTER / WFAA-TV

Posted on February 11, 2010 at 10:55 PM

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GRAYSON COUNTY — At the very moment Texans are desperate for more roads, the state has no money to build them.

So the Texas Legislature has turned to a creative financing program called "pass-through" funding. Instead of the Texas Department of Transportation paying for a new road, a local community borrows the money, assumes the financial risk, and builds the road.

TxDOT pays the community back, over time.

Grayson County Commissioner Gene Short says that’s how his community built the new State Highway 289, which he said couldn't have been constructed without pass-through funding.

"I think we got this project 15 to 20 years ahead of time," he said.

In exchange for building SH 289, Grayson County will be repaid for nearly all of its $84 million in construction and financing costs.

"It's not a bad deal, Short concluded.



http://www.wfaa.com/news/local/Private-Contractor-Reap-Extra-Profits-From-Transportation-Contracts-84065567.html

[texastoast]

1. I don't mind private firms getting a contract

So long as the bidding on that contract is inclusive to small businesses. Right now, many of the road contracts in Texas have restrictions placed on bidding that only one or two huge companies can qualify.

This is another way that TxDOT takes care of the big good old boys.

[sonias]

2. Pay to play

That's how "bidness" is done in this state. You spend enough money buying a bill at the Texas Lege and you can earn your money back on one contract.

Owner Gerry Pate is well-known at the State Capitol. In the last three years on record, he donated $100,000 to politicians and spent at least $650,000 on lobbying efforts.

Pate advocated for the bill that made pass-through funding possible.

In Grayson County, Pate set a "maximum agreement price" to deliver the consulting job, agreeing to absorb costs if the project went over budget.

But if it went under budget, by contract, Pate's firm would take 55 percent of the profit.

That's exactly what happened.

:shrug: