by Tom Loftus, @TomLoftus_CJ –
FRANKFORT, Ky. – The Kentucky Transportation Cabinet recently paid $625,000 in damages to a highway contractor because the cabinet had not secured the land for a road project before a deadline to start construction that was set in a contract awarded by the Beshear administration.
Moreover, the state has agreed to pay the contractor, The Allen Company, of Lexington, another $850,000 of its scarce Road Fund dollars if work on this big project in Jessamine County does not begin by May 1.
And the damages payment has opened a new front in the war between Republican Gov. Matt Bevin’s administration and that of his predecessor, Democrat Steve Beshear.
The Bevin administration says it was obliged to make the initial damages payment because Beshear’s administration irresponsibly rushed to award the contract before Beshear left office without obtaining the needed right-of-way and resolving utility relocation issues.
“It is unheard of in our cabinet to let a project where the right-of-way is not done yet,” Asa James Swan, chief of staff at the Bevin Transportation Cabinet, said in an interview. “It’s private property and if people don’t want to sell, we have to go to condemnation. That takes a lot of time. For the Beshear administration to do that was incredibly irresponsible.”
In response to Swan’s comments, Beshear issued a statement saying that the damages resulted only because the Bevin administration refused to move the project.
“Neither a few remaining right-of-way issues nor utility issues stood in the way of the contractor beginning work on time, and the contractor stood ready and willing to begin,” Beshear said. “But the Bevin administration stopped all work. … Any liquidated damages being paid (to) the contractor are the sole result of the Bevin administration’s unexplainable refusal to move forward.”
The contract and process
The contract is to extend East Brannon Road in Jessamine County from east of Lauderdale Drive to Tates Creek Road. Supporters say the project will provide badly needed relief for traffic congestion in northern Jessamine County and southern Fayette County and also trigger commercial and residential development.
The Beshear Transportation Cabinet put the project in its final contract bid letting of Nov. 20. The Allen Company submitted the lower of two bids received: $11,185,538. That bid was about $2.1 million less than the cabinet’s estimated cost for the contract.
The Beshear administration accepted the bid and awarded the contract Nov. 30.
The contract contained a note that said work could not begin on the project until March 15, when the Beshear cabinet expected right-of-way problems would be resolved.
In interviews, Swan and Beshear’s Transportation secretary, Mike Hancock, disagreed over the outlook for getting the project started on time when Bevin took office early in December.
Bevin cabinet: Time too short
Records explaining why the project has been delayed provided to the Courier-Journal under a request made under the Kentucky Open Records Act indicate the project was expedited to be bid and awarded before Beshear left office without right-of-way being secured – points that Hancock does not necessarily dispute.
Emails among cabinet officials last October and November refer to it as “an early award” that Hancock asked to be advertised in November with a note that work could not start until right-of-way was expected to be secured. Another cabinet official said in an email, “Intention was to award it before December 8th,” Bevin’s first day in office.
And even in the spring after the decision was made to pay damages to The Allen Company, a district utility agent said in an email, “I am not sure why Frankfort went ahead and executed this agreement when the status of the project has been in question for some time.”
Swan said the Bevin cabinet worked diligently to secure the right-of-way and resolve other issues to get the project started by March 15.
One email between cabinet officials on Feb. 8 said, “It’s looking like one parcel where the larger bridge is located is going to fight us. If they do, we are looking at a year or more before it’s settled in the courts according to our lawyer.”
Swan said, “It just wasn’t going to be ready by March 15. … There was one property owner in particular who didn’t want to sell. That one specifically blew past the deadline. I think there were some others.”
He said only in “the last couple weeks” was he told by a top staff engineer that right of entry to the property has been obtained, but “the utilities, still here in August, are not done,” he said.
“We don’t really know what the Beshear administration was doing trying to get it out the door that fast. But we know that they rushed it,” Swan said. “It’s not just fiscally irresponsible, but it raised the expectations of all of the citizens of Jessamine County by letting something that wasn’t ready to go.”
Beshear secretary: Confident on project
Hancock said it is unusual to let a contract before right-of-way and utility issues are resolved and he did not like doing so. But he said it is not unheard of. And he said he did so in this case on information from the local district and other cabinet officials that right-of-way issues would be resolved by mid-March.
“I don’t believe it was irresponsibly rushed. We had information that led us to believe the right-of-way would be clear within a specified period of time and we were confident in that,” Hancock said. “… If I didn’t have full confidence in my staff’s report or recommendations at that time, I assure you we would not have let it. I wouldn’t have done that.”
Hancock, who worked more than 40 years in state government before his retirement March 3, said that at the end of any governor’s administration there is a push to get many longstanding road projects started. “Working down the home stretch and trying to get as many projects as we could into the construction phase is not unlike any administration in history,” he said. “… Things are being worked on, and people want to see them let before the administration ends.”
Hancock said he could not say how hard the Bevin administration worked to move the Jessamine project. “When the administrations changed, all of the projects were subject to review. And whether work was continuing post haste on that project, I have to assume that it was, at least to a point.”
He said he will not second-guess any actions of the Bevin cabinet. “I don’t have a problem with the Bevin administration taking a hard look at the project and making a decision, but to refer to it as ‘irresponsible’ is my biggest concern,” Hancock said. “… We did that with every assurance that things could work out fine.”
The project’s future
Last month Nicholasville’s City Commission passed a resolution asking the cabinet to complete the project.
But Swan said, “The project is currently on hold. And we have in our agreement with The Allen Company a delay period until May of 2017. Anytime between now and then we can un-pause the project if the funds are there … It has not been canceled.”
In June the cabinet announced that because the cash balance of road funds was becoming dangerously low, it would pause all state-funded projects – halting the start of new phases of each project through this year – until the balance is restored. Swan said that next spring the Jessamine project will compete with other projects across the state for available dollars in the spring.
“I’m sure that it’s worthy for the people of Jessamine County. We don’t deny that,” Swan said. “But remember, because of the fiscal constraints that we’re under, we have to pit everything competitively against everything else for our limited dollars.”
Nicholasville Mayor Pete Sutherland said, “We’re just really, really disappointed” that work on the project has not begun. “We wanted the project. And we expected it to be done and we’re just left disappointed.”
Reporter Tom Loftus can be reached at (502) 875-5136 or [email protected].
