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Treasurer’s complaints about study funding latest dustup in $6B interstate project

State Treasurer Nancy Kopp says her office was stymied in its efforts to do a thorough analysis of the $6 billion public-private partnership interstate project. (The Daily Record / Bryan P. Sears)

A required review of a proposed agreement to build toll lanes around the Capital Beltway was limited because the Office of the Treasurer was denied funding to hire outside consultants, Treasurer Nancy Kopp says.

Those limitations, she said, made it impossible to independently review the Maryland Department of Transportation’s favorable projections for the $6 billion interstate and toll lane expansion project, which is structured as a public-private partnership.
“Given the state’s experience with the Purple Line P3, we determined early on that the report required under (state law) for this proposed P3 Agreement should have a broad focus on the various costs and risks involved, rather than the narrow focus on payment structures that (the treasurer’s office) used for its 2016 report on the Purple Line P3,” Kopp’s report noted. However, (the treasurer’s office) was stymied by funding and time limitations that prevented this broader analysis from being adequately conducted.”
Gov. Larry Hogan is proposing the expansion of the Capital Beltway in Maryland and a part of Interstate 270 using toll lanes. The new lanes would likely be built by Accelerate Maryland Express Partners, a 16-company group led by Australia-based Transurban.
Kopp’s report to the General Assembly is part of a required 30-day review period in advance of a vote by the Board of Public Works. That vote is not yet scheduled but could come as soon as the board’s July 28 meeting.
Michael Ricci, a Hogan spokesman, said Kopp should have been able to find the money within her office’s existing budget. Last year, the agency reverted $500,000 to the general fund, he said.
“It is DBM’s position that the treasurer’s office, as guardians of the state’s resources, should be able to find the $100,000 within its $6.7 million budget,” Ricci said.

The Metropolitan Washington Council of Government’s Transportation Policy Board is scheduled to reconsider a June vote that removed the toll lane project from a list of those set to receive an environmental review. The lack of such a review could jeopardize federal approval.

Hogan sought the reconsideration as he continue to press for the toll lane expansion of portions of Interstate 495 and I-270.
It is not clear if the report by the treasurer’s office will affect how Kopp, a member of the Board of Public Works, will vote on the project.
Josh Tulkin, director of the Maryland Sierra Club, said the incomplete review should raise questions for Kopp and Comptroller Peter Franchot, who, together with Hogan, make up the three-person board
“With a project of this magnitude, with the lessons and mistakes from the Purple Line, one would expect the Treasurer to be granted the resources to do a full analysis,” said Tulkin. “That she was not able to complete the financial review, representing both treasurer and comptroller, is disturbing. The state’s two fiscal watchdogs cannot allow a $6 billion dollar contract to go forward without full review.”
The treasurer was not available for comment. A Kopp spokeswoman did not respond to a request for comment.
It is also unclear if this will affect Franchot’s vote. Franchot, a Montgomery County Democrat, is a candidate for governor.
“Comptroller Franchot is aware of the treasurer’s request and strongly believes that Treasurer Kopp should have the resources she needs to fulfill her statutory obligations to thoroughly review the financial proposals and conditions involved in this unprecedented project, which is one of the largest P3 projects in North America. The comptroller hopes that DBM and the Hogan administration will reconsider its decision denying the treasurer’s very reasonable request,”  said Susan O’Brien, spokesperson for Franchot.
State law requires the Office of the Treasurer to review public-private agreements. The proposed toll lane expansion included a 123-page agreement and more than 1,100 pages of exhibits.
Kopp wanted to hire the state’s bond counsel firm to assist in the review at a cost of $100,000. The Department of Budget and Management denied the request for funding.
Kopp asked lawmakers to consider requiring the state to pay for future reviews.
I think members of the Board of Public Works should be concerned about the fiscal impacts of this agreement, many of which are unknown,” said Del. Marc Korman, D-Montgomery and chair of the House Transportation Subcommittee. “Instead of third-party, red-team type analysis to guide the decision-making of the non-chief executive members of the BPW, we just have the optimistic views of the agency.”