Secretary addressed Senate Committee Wednesday morning

COLUMBIA, SC – January 28, 2009 – Transportation Secretary H.B. “Buck” Limehouse Jr. told members of the Senate Transportation Committee on Wednesday Jan.28, that his cost saving measures and Act 114, the SCDOT Reform Act, have transformed the South Carolina Department of Transportation (SCDOT) into an efficient and accountable state agency.  He made his remarks in the 2nd annual “State of SCDOT” address.

Limehouse reported to the Committee that the financial stability and efficiency of SCDOT can be attributed primarily to these factors:

• An extensive and on-going cost savings effort throughout the agency
• A shift in priority from new construction to the preservation of the existing 41,474-mile state highway system (which includes 8,344 bridges). Secretary Limehouse has dubbed this strategy, “Fix it First.”
• Act 114 has removed politics from the selection of projects. The SCDOT Commission now prioritizes projects based on engineering criteria alone.
• A newly-created Internal Audit Division has completed a review of the 2006 Legislative Audit Council’s 44 recommendations. The Audit Division reported that SCDOT staff has taken action to address all 44 points.

The Transportation Secretary explained to the Senate panel that cost savings measures have resulted in drastically reducing administrative costs in travel, cell phone usage and purchase of supplies and equipment. Also, SCDOT has undertaken a major conservation initiative related to energy and recycling. Limehouse said, “We recycle everything from office wastepaper to asphalt.”

Limehouse said these efforts have produced a payoff for the people of South Carolina in terms of better roads and bridges. He noted that the administrative costs in SCDOT’s budget for Fiscal Year 2009 has been reduced by $18.7 million. “The Commission which supports our “Fix it First” strategy voted to use these saved dollars by increasing our maintenance budget to make roads and bridges safer, “said Limehouse.

He also noted that SCDOT is currently under budget, and that he expects the agency to finish the year on June 30, under budget.

Limehouse summarized the budget picture by saying that 84% of SCDOT’s entire $1.05 billion budget (from both federal and state sources) is being used for maintenance, construction and mass transit programs.

Despite SCDOT’s stable financial situation, Limehouse pointed out that SCDOT is not immune from harsh economic times.  SCDOT’s primary source of revenue is from both state and federal fuel taxes. The skyrocketing price of fuel in 2008 caused drivers to drive less and buy less fuel. In addition, people sought out carpooling, mass transit options and alternative fuels as ways to reduce gas purchases. He noted that drivers have not changed their driving habits as fuel prices have dropped, and continue to conserve. The result has been a 4% drop in revenue for SCDOT in the past nine months compared to the same time period one year before.

Limehouse said, “We have significant needs in this state and the trend in declining revenues will not help us meet the projected 20-year needs which total $20 billion. We are going to have to find another mainstream source of revenue,” Limehouse added. South Carolina’s state fuel tax stands at 16 cents per gallon. That rate has not changed since 1987.

Senate members asked Limehouse to share his thoughts on the stimulus bill being debated in Washington and SCDOT’s preparations for any funds that South Carolina might receive. Limehouse said that the Commission and agency is still waiting to hear what the criteria in the bill will be, but that Congress clearly wants to fund projects that are “shovel ready.”  That means projects will need to have all engineering, permitting and administrative processes complete and be ready for construction to begin in a short period of time, perhaps as little 90 days, up to possibly 120 days.

Limehouse said the Commission has given SCDOT’s engineering staff the approval to qualify as many projects as possible, depending on the level of funding the state will receive from the bill. Limehouse also stressed that SCDOT engineers are using a formula that will qualify highway projects in every county of South Carolina, so that all areas of the state would share in stimulus funds.

Limehouse gave credit to SCDOT employees for carrying out the initiatives that he started beginning in May 2007. He also credited the continual support of his administration by the SCDOT Commission, the backing he has been given by the General Assembly and the open lines of communication between SCDOT and the Senate Transportation Committee.