Raleigh –2015 was a milestone year for the N.C. Department of Transportation, not only because it marked the department’s centennial, but also because it saw a number of major reforms aimed at modernizing and stabilizing the funding available for transportation improvements across the state.
Over the past century, North Carolina’s transportation system has evolved from rudimentary farm-to-market roads to a comprehensive multimodal network that connects people and places and serves as a significant economic engine for our state, and much of the focus throughout 2015 was on ensuring that the state’s transportation infrastructure continues to support North Carolina’s growing and diverse needs.
“Governor McCrory had ambitious goals for infrastructure investment and efficiency when he took office. The Strategic Transportation Investments law he proposed and signed in 2013 and the budget he signed in 2015 put those goals into action,” Transportation Secretary Nick Tennyson said. “In the 2015 budget, significant steps were taken to ensure that we have increased and more stable funding for transportation improvements that will allow us to continue investing in our infrastructure and position our state for ongoing success.”
Strategic Transportation Investments Law and Governor’s 25-Year Vision
Efforts to reform how transportation projects are prioritized for funding began in 2013 with the passage of the Strategic Transportation Investments (STI) law, which laid the foundation for additional changes.
The law established a more efficient, data-driven formula to allocate funding transportation improvements on the statewide, regional and division levels, with the goal of meeting the state’s top priorities while providing flexibility to address individualized local needs. NCDOT’s first State Transportation Improvement Program (STIP) developed using the new formula was approved by the N.C. Board of Transportation in June 2015, marking a major milestone for the department and the culmination of two years of work to implement the new process. The STIP is the department’s 10-year construction schedule for transportation projects.
This STIP demonstrates that the new formula is working as intended to make the best possible use of existing resources, with the inclusion of nearly three times more highway projects than under the previous funding formula. In addition, the nearly 1,100 projects across all modes of transportation contained within the plan include improvements in each of North Carolina’s 100 counties, another indication that the new formula and process are benefiting every area of the state.
Along with this good news, however, the development of the STIP also highlighted a substantial challenge: despite allowing NCDOT to pay for more projects, only about 18 percent of the projects submitted for consideration under the new process actually made it into the 10-year work plan due to available funding, clearly indicating that additional revenues are necessary to meet all of North Carolina’s current and future transportation needs.
It also underscored the need for strategic transportation investment over the long-term, which is the primary focus of Gov. McCrory’s 25-Year Vision for transportation in North Carolina, released in September 2014.
Funding Stability and Diversification
One of NCDOT’s highest priorities in 2015 was working with both state and federal leaders to achieve much-needed funding stability and increase the resources available for transportation improvements.
On the state level, Gov. McCrory and the N.C. General Assembly took steps to modernize and stabilize NCDOT’s major funding streams through the passage of several bills including the new biennial budget. Legislation passed earlier in the session revamped the formula used to calculate the state’s motor fuels tax, which serves as the most significant source of state transportation revenue, to make it more reliable and sustainable.
The state budget bill kept these changes intact and made some additional updates, including increasing DMV fees and indexing them for inflation. These fees account for about 25 percent of state transportation revenue and had not been adjusted in a decade. Also, ending the annual transfer of $216 million from the Highway Fund to the General Fund ensures that more transportation revenues will go directly toward transportation improvements.
As a result of action taken in the budget, an additional $1.6 billion is projected to be available for transportation construction projects across the state over the next 10 years. The extra money is being allocated according to the STI law and will allow the department to fund 92 new sections of highways and 23 new non-highway projects, as well as accelerating the schedules of another 90 highway projects and 43 non-highway projects already included in the STIP.
In addition, the budget is providing nearly $500 million more in funding to maintain and operate our transportation system over the next two years, allowing the department to make a greater investment in taking care of existing highways and bridges. These funds are allocated across the state based on need.
On the federal level, policy stability, but less significant revenue impact, was provided with the passage of the Fixing America’s Surface Transportation Act (FAST Act) in December, the first long-term federal transportation funding bill since 2005. Prior to its passage, state DOTs faced a series of short-term extensions that made it difficult to plan for the future. NCDOT currently receives about $1 billion a year in federal funding, which accounts for almost a fifth of its current $4.4 billion budget. Under the new act, the department estimates a 2.8 percent annual average increase in highway funding and a 3.4 percent annual average increase in transit funding over the life of the bill.
To generate further revenue for transportation, NCDOT has also sought to diversify its funding stream through the use of alternatives like tolling, public-private partnerships and private sponsorships.
North Carolina’s first modern toll road, the Triangle Expressway in Wake and Durham counties, has continued to exceed traffic and revenue projections since it first opened to traffic in December 2011. Revenue in fiscal year 2015 was $5.3 million higher than projected in 2009, and year-over-year growth in traffic averaged approximately 24 percent.
NCDOT also reached a milestone in May with the start of construction on the Monroe Expressway, a roughly 20-mile toll highway that will provide an alternative for high-speed regional travel along the U.S. 74 corridor in Mecklenburg and Union counties and is expected to open to traffic in late 2018.
Also in May, the department and private partner I-77 Mobility Partners reached financial close on the I-77 Express Lanes project in the Charlotte region, the state’s first major transportation public-private partnership (P3). The express lanes will provide drivers along 26 miles of the I-77 corridor from Charlotte to Mooresville a choice to pay a toll and use the express lanes to avoid travel delays or continue driving on the general-purpose lanes for free. The private contractor began construction in November. A P3 brings private equity to the development of public infrastructure, and in the case of the I-77 Express Lanes, this funding mechanism will allow NCDOT to address congestion along this corridor in less than four years. It also brings more than $500 million in private funding to build the improvements. The state retains ownership of the right of way and will receive the facility in a fully maintained condition at the end of the agreement.
NCDOT is also moving forward with the use of private sponsorships to help cover the cost of delivering some of its operational programs and services, including an agreement with State Farm® for sponsorship of the department’s Incident Management Assistance Patrols that help clear highway incidents and offer roadside assistance on major interstate routes. In addition, the N.C. Ports Authority, in partnership with USA Investco, broke ground in June on a new cold storage facility at the Port of Wilmington that will support North Carolina’s agriculture industry, as well as moving forward with a wood pellet export facility at the Port of Wilmington with private partner Enviva that will support another key industry for the state.
Herbert C. Bonner Bridge
Another of Gov. McCrory’s and NCDOT’s major priorities was accomplished after years of delay when a settlement agreement was reached in June that will allow the department to replace the aged Herbert C. Bonner Bridge on the Outer Banks.
NCDOT built the existing bridge in 1963 to extend N.C. 12 over the Oregon Inlet, providing better access and service for residents and visitors of Hatteras Island. As many as 13,000 vehicles now cross over the bridge during peak travel days in the summer, and the bridge plays an important part in North Carolina’s $19.4 billion a year tourism industry as one quarter of the county’s overall economic impact comes from Hatteras Island tourism alone. Construction is expected to begin on the replacement bridge, parallel to the existing one, in spring 2016.
NCDOT is also set to begin construction this spring on an interim N.C. 12 bridge on Pea Island where an existing temporary bridge was erected after Hurricane Irene breached the highway in 2011. The interim bridge will be easier to maintain than the existing temporary bridge, and it will provide safe access for the area while the department studies options for a long-term solution at this location.
In addition, plans to construct a 2.5-mile-long Pamlico Sound bridge, known as a “jug handle,” from the southern end of the Pea Island National Wildlife Refuge into Rodanthe will be completed over the next 18 months. This area includes a section of N.C. 12 known locally as the “S-curves,” which was also damaged by Hurricane Irene. The department chose this design over a bridge along the existing route of N.C. 12 because it minimizes impacts to the Pea Island National Wildlife Refuge, the ocean shoreline and the Rodanthe community.
Reducing Wait Times and Improving Customer Service at DMV
Gov. McCrory identified customer service as a priority for all aspects of state government. In response, the N.C. Division Motor Vehicles has introduced a broad range of improvements over the past year that build on previous measures to help reduce wait times and improve customer service at DMV offices throughout North Carolina.
These efforts began in 2013 when DMV introduced extended and weekend hours at 19 driver license offices. As a result, 85 percent of North Carolina residents are now within a 30-mile radius of an office with these extra hours. Today the number of extended hour offices has grown to 21 sites. The division also conducted a Reduce Wait Times Pilot, which tested various time saving measures and customer service amenities at 25 of North Carolina’s busiest driver license offices.
In October, Gov. McCrory announced upgrades that would be made throughout North Carolina over the coming year based on this pilot, including the addition of cameras and other equipment at every license examiner station to help speed up service, self-service kiosks to provide access to online services, and the acceptance of credit and debit cards at driver license offices.
At the same time, Gov. McCrory also announced full implementation of online driver license renewal, which DMV had begun testing in June 2015. More than 30,000 customers renewed their driver license online in a one-month period during this pilot. Online renewals actually exceeded or matched the in person renewals during two weekly periods and today more than 200,000 citizens have renewed their license online. By eliminating the need to visit a driver license office in person for some transactions, DMV is helping reduce wait times for everyone. The division’s goal is to have 30 percent (about 600,000) of all eligible license renewals in a year completed online. Other available online services include applications for duplicate licenses and address changes for driver licenses and vehicle registration.
Along with all these efforts, DMV is also debuting new more durable and secure driver licenses and has also introduced new more efficient, state-of-the-art mobile units that can provide driver license services anywhere in the state. These mobile units will be transported in specially outfitted SUVs, and are expected to serve more than 20,000 customers during stops in their first year of operation, nearly three times the number of customers served annually by the division’s current RV-style mobile units.
The division also plans to increase the number of stops made by the mobile units, which will eventually allow it to serve more than 36,000 customers annually. Seven current part-time DMV offices will be served by the new mobile units, resulting in additional cost savings. The new units also cost 70 percent less to purchase than the current mobile units, and as a result of all these savings, the division estimates that the cost for processing each driver license or ID card application through mobile service will decrease by 60 percent.
Priorities for 2016
Following a landmark year, the department will continue to execute all these major initiatives. For example, the Strategic Transportation Investments law requires NCDOT to continually refine its process for prioritizing projects, including continued use of a work group to develop improvements. Creation of the next STIP using an updated prioritization process will largely be completed during 2016.
While increased funding stability has been achieved at both the state and federal levels, the state still faces a great need for sustainable funding sources that offer increased certainty for transportation improvements over the long term. At both state and federal levels, motor fuels tax represents the largest source of funding, but changes to the fuel efficiency and alternative fuels usage will translate into reduced revenue from that old stand-by. Collaboration will be needed at all levels to devise sustainable solutions that will help fulfill Gov. McCrory’s 25-Year Vision and ensure North Carolina’s continued well-being.
The Division of Motor Vehicles will continue implementing its new technologies and customer service improvements at more offices throughout the state. The new mobile units, which are currently being tested in several communities, will be deployed across North Carolina in the coming year. Increased promotion of the available online services should yield substantial time savings for both citizens and staff in 2016 and beyond.
“We are proud of the milestones we have achieved over this past year, and we thank our many partners for their support of North Carolina’s transportation system,” Secretary Tennyson said. “Through a concerted team effort, we are making investments today that will help meet current and future demands on our transportation infrastructure and greatly benefit our state over the long run. We look forward to similar progress in 2016 and welcome the opportunity to continue serving our state in such a vital way.”
More information regarding NCDOT’s recent performance and achievements is included in the department’s 2015 Annual Performance Report.