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TDOT audit shows lack of inflationary adjustments

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(The Center Square) – An audit of Tennessee’s Department of transportation shows the department hasn’t properly adjusted estimates based on inflation, hasn’t done a proper information systems update analysis in six years and did not have a consistent evaluation system for rest area maintenance.

The audit was presented to a joint government operations subcommittee on Tuesday as the Tennessee Comptroller’s Office presented its findings.

It said the inflationary aspects of road repair costs has contributed to the backlog of road construction work that has grown from an estimated $8.5 billion in projects in 2014 to $11 billion in 2017 to $26 billion most recently. Tennessee is one of just six states that does not create debt to accomplish road projects and instead has a pay-as-you-go system for funding road work.

Inflation has increased the cost of steel and aluminum 52%, paint 36%, asphalt 35%, crushed limestone 33% and ready-mix concrete 25%, according to the Comptroller.

“The issue we typically have with estimates is that, if a project takes 15 years to get to the leading process, inflation can obviously eat our lunch, if you will,” TDOT Deputy Commissioner Will Reid said. “One of the things that we want to do is take lessons learned in construction and maintenance, feed those back into the delivery process when projects are originally conceived such that we can take those risk out early on.”

Reid said TDOT is in the process of revamping its project estimating process and received a first draft last week. The department’s difficulty is planning projects 15 years into the future and appropriately estimating what inflation will do over that span.

One of the solutions the department is working toward to resolve the road repair backlog is toll lanes, at least partially funded by private companies. The lanes are scheduled to have a dynamic pricing structure and a guaranteed travel speed of 50 miles per hour, the department said.

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