Updated:CHARLOTTE, N.C. —
Gov. Beverly Perdue's proposal to complete Charlotte's outer loop by entering into an extended payment plan with a contractor is legal, the state Attorney General's Office said Tuesday.
The formal advisory opinion, written by Attorney General Roy Cooper's chief deputy, affirms the governor's earlier comments that state lawyers had no problems with the alternative financing idea before she unveiled it in November as the way to finish Interstate 485.
The four-page opinion requested Dec. 9 by state Transportation Secretary Gene Conti appears to keep on track the accelerated completion date for the loop to 2014 -- still behind the original schedule but at least six years earlier than the most recent target.
"We have been unable to identify any provision of North Carolina law that would prohibit the contracting proposal described by NCDOT," Chief Deputy Attorney General Grayson Kelley wrote Conti. "Nor are we aware of any case law restricting delayed payments by a state entity to a contractor."
The letter came a day before Perdue visits Charlotte, where she promised city leaders last year she would find a way to jump start I-485's construction.
"The goal is to complete the loop as efficiently and cost-effectively as possible," Perdue said in a prepared statement Tuesday.
State Treasurer Janet Cowell's office said late Tuesday it remains concerned about the "design-build-finance" concept, which has never been used before in North Carolina. An outside lawyer told Cowell's staff in November he doesn't believe state law gives DOT the power to finance such an agreement on its own.
Cowell spokeswoman Melissa Waller said officials in the treasurer's office "respectfully disagree with the attorney general's opinion" and "support the completion of the I-485 project through other optimal financing methods."
Nearly all of the money for the final five-mile segment of I-485 -- valued at $185 million -- as well as its $155 million interchange with I-85, would still come from cash in DOT's coffers and bonds repaid with federal highway funds.
But the winning bidder for each project also could have to provide up to $25 million toward construction. The state wouldn't pay interest on that amount. Instead, the state would pay the entire bid amount in installments over 10 years.
Transportation officials say the approach will prevent the state from having to pay the entire contract during the construction phase. It also will help the state take advantage of lower construction costs even when it doesn't have enough cash and borrowing capacity.
An outside attorney who advises Cowell on public financing matters had questioned whether the alternative financing was unlawful because the Legislature hadn't explicitly granted that authority.
But Kelley said the General Assembly had authorized DOT "to expedite construction in this manner," through a 2006 law to enter into public-private agreements for road building.
Cowell's views on the financing method are important because her office manages the state's debt and wants to preserve the state's strong debt ratings.
Previous Stories: December 9, 2009: Perdue Stands By I-485 Plan December 9, 2009: New Documents Surface In I-485 Plan December 4, 2009: N.C. Treasurer's Lawyer Worried About I-485 Plan December 2, 2009: Legal Questions Over I-485 Funding Concern Mecklenburg Leader December 1, 2009: Potential Problems Surface With Perdue's I-485 Plan November 9, 2009: Gov. Announces Unusual Plan To Finish I-485 Sooner