Oversight of DOT contracts questioned

The Iowa Department of Transportation has awarded 47 contracts valued at $1 million or more - more than $168 million worth - since 2013 without approval by the Iowa Transportation Commission, prompting some to call for stronger oversight rules.

The spending is legal and falls within the Iowa DOT's statutory obligation to regulate Iowa's transportation system. Lawmakers and commission members began raising questions upon learning after the fact that the agency outsourced a $9.1 million contract for an out-of-state vendor to run Highway Helper, a free roadside assistance service launched this month in Cedar Rapids and Iowa City.

'We need to look at the function of the commission's oversight to make sure what is being done is what we need and want in the state,” said state Sen. Tim Kapucian, R-Keystone. 'That is supposed to be the purpose of the commission. We need to vet these things and make sure we get the most for our money.”

The issue arose after commission members were quizzed about Highway Helper last July, only to realize not only hadn't they approved the contract, they didn't even know about the three-year deal with Prairie Land Towing Co. of Wisconsin.

The expense came shortly after the Legislature passed a 10-cent-per-gallon gas tax increase, prompting concerns the tax wasn't being spent as promised on crumbling roads and bridges.

The Highway Helper contract, in the works for nearly a year, was an expansion of a popular offering in Des Moines.

Wells and city water

Highway Helper is among dozens of high-dollar, publicly financed contracts awarded each year by the transportation agency that don't receive another layer of scrutiny through the governor-appointed transportation commission.

A taxpayer watchdog group criticized the process, saying it allows unchecked spending and contributes to government growth.

'That's how government works, and frankly that is how we get government budgets and government spending ...

, which occur probably by the books and letter of law. But if you get to the root of problem, is this really how taxpayer money is intended to be spent?” said Chris Ingstad, policy director of Iowans for Tax Relief, of Muscatine. 'If I'm a legislator, I'm wondering why our voice wasn't heard.”

The blowback drew attention, and Iowa DOT Director Paul Trombino briefed Gov. Terry Branstad's office about the authority of the commission after a September commission meeting, according to emails obtained through a records request. Branstad's lawyer withheld two additional emails, citing an exemption protecting work of a lawyer related to litigation or claims made against a public body.

According to data provided by the Iowa DOT, since 2013 the Iowa DOT paid 262 contracts worth at least $100,000 outside the panel's purview.

One project is the conversion from wells to city water at the Interstate 80 rest area near Wilton.

The Iowa DOT hired Ricklefs Excavating LTD of Anamosa for the $3.6 million contract to construct water and sewer lines for the rest area.

'We were having troubles with some of the wells,” said Steve McMenamin, administrator of the Iowa DOT rest areas. 'The regulations and testing weren't doing so well. They were old wells that had been there from the beginning.

'It wasn't good water to begin with, and it got to the point is was discolored.”

A change in Wilton city administration helped facilitate a deal where the Iowa DOT would bear the brunt of the cost, and Wilton would maintain the utility, McMenamin said.

Examples of high expenses since 2013 include:

' $59 million for 26 rock salt contracts

' $15.6 million for fleet fuel-card services

' $14 million for a motor-vehicle-card issuance and identity management system

State code defines the duties of the commission, the Iowa DOT and the Iowa DOT director.

The commission

The seven-member commission, with no more than four members from one political party, provides oversight of Iowa's long-range transportation plan, among other functions. The commission exists to buffer political pressure and to avoid pet projects of elected officials, Kapucian said.

The code requires DOT's director to present a proposed budget to the commission before the end of each year. Every June, the commission is called to approve the five-year transportation plan, which most recently came in at $3.2 billion.

At a September meeting, Iowa DOT general counsel David Gorham advised the commission that its authority is generally policy and planning for construction, maintenance and improvements of the primary road system. The Iowa DOT, on the other hand, manages daily operations and regulation of the road system, which would include Highway Helper.

'As far as on the daily operation level or with a contract like (Highway Helper), the commission under existing law doesn't have the power to do that kind of a thing in terms of giving an up or down on daily operations-type contracts,” Gorham said.

Commissioner John Putney, a former state senator from Gladbrook, began raising questions about why the members don't have a say in big expenditures.

'So we could have some instances where the DOT decided to spend $50 million and we would not be able to do a thing about it, or say anything or have any oversight,” Putney said.

Commissioners should address changing its role with the Legislature, Gorham said. Putney said last week he wants the Legislature to examine the issue.

'I believe there's a few of us that are interested in really analyzing that as to just what our oversight abilities are and responsibilities are,” Putney said. 'If it is just to go in and rubber-stamp everything the Iowa DOT proposes, we don't have much of a mission.

'But we don't want to get into micromanage it.”

Kapucian and some commissioners, including Putney, would like to see the state establish a dollar threshold whereby high-dollar projects require approval through the commission to ensure more accountability.

'If they are getting complaints about it and they are not making the decision, and it's being made unilaterally by the Iowa DOT with no other input, that can be problematic,” said state Sen. Tod Bowman, D-Maquoketa, chairman of the Senate Transportation Committee.

The Iowa DOT manages the $1.2 billion Road Use Tax Fund. About $365 million comes from state appropriations, which is about 5 percent of the state's budget.