Cash crunch forcing DOT to lay off hundreds of temp workers, contractors

Cash crunch forcing DOT to lay off hundreds of temp workers, contractors

RALEIGH, N.C. (WRAL) - The state Department of Transportation will lay off hundreds of temporary workers and contractors in the coming weeks because storms and lawsuits have drained the agency’s funding, officials said Wednesday.

Full-time DOT employees and current highway projects won't be affected by the move, said Robert Lewis, DOT's chief operating officer.

State law requires DOT to maintain cash reserves of 7.5 percent of its annual state appropriations, or about $282 million, Lewis said. Right now, the agency has about $300 million on hand, so officials are looking to cut expenses in operations and maintenance areas where not much work is expected in the coming months, he said.

DOT managers are looking at about 1,100 workers, and about half of them will be laid off, he said.

"Our efforts are merely about controlling what we can control form now to December," he said.

Responses to major storms, such as Hurricane Florence last fall, and even rock slides in the mountains cost DOT about $300 million in the fiscal year that ended June 30, Lewis said. In years past, the annual bill for such work averaged about $65 million, he said.

DOT also has had to pay about $311 million so far to defend lawsuits over the Map Act, he said. The Map Act, which lawmakers repealed this year, prohibited people from developing property in corridors set aside for future highway construction. Residents in Wake County and elsewhere sued, saying the law essentially took their property without compensation.

The budget impasse between Gov. Roy Cooper and the General Assembly isn't a factor in the layoffs, DOT spokesman Steve Abbott added.

But slow reimbursement from the federal government for highway repair costs following Hurricane Florence and Hurricane Matthew in 2016 is a major factor, he said.

Lewis said the state has received only about 50 percent of its Matthew-related spending so far from federal highway funds, and only 11 percent of Florence-related spending.

Even with the belt-tightening measures, another big hurricane this fall could pose a problem for DOT, he said.

"We are very limited on how we can respond. That is why we are trying to reduce our expenditure now," he said. "We know we have an obligation to the people of North Carolina to keep the roadways safe, so we are trying to do all we can to make sure we can respond at some level."

The DOT will continue to put about $2.5 billion in highway projects out to bid in the coming months, Lewis said. Those projects will be funded by state and federal bonds and federal grant money and won’t affect DOT’s cash balance, he said.

Copyright 2019 by Capitol Broadcasting Company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.