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Idaho's Weekly Journal of Local & National Commentary  Week 1514

 

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by Free Market Duck

Ex Gov Kempthorne's original $3 billion Highway Plan exceeds $6 billion...
Idaho Statesman says, "Pass the budget, no strings attached"
(Mar 19, 2007)

Boise, ID – Yahoo, girl friends.  Tax, tax, tax.  Spend, spend, spend.  According to the socialist cheerleaders down at the Idaho Statesman, the Idaho state legislature should just shut up and not question why ex Gov Dirk Kempthorne's "Connecting Idaho" fairytales to spend $1.5 billion ($3 billion with interest) for 13 Highway Projects has suddenly jumped to over $6.4 billion – forcing Idaho to chop 5 of the projects.

   Gosh.  What a surprise-a-roonie.  A cost overrun.  Nothing like this has ever happened before in Idaho -- well, except for about $250 million in Boise's Watergate fiasco: University Place & All The, hmm let's see now who was that, oh yeah, The ex Governor's Men.

   Look at the following costs and cost changes for "Connecting Idaho" from the Idaho Statesman:

“Connecting Idaho” Highway Project Costs (in millions)
as of March 19, 2007

Current Projects

Gov K’s orig budget

Current Budget

Est to Complete

Expected at Completion (EAC)

Diff between orig and EAC

Percent over/under

1. I-84 Orchard to Isaac’s Canyon

$343

$248

$275.1

$523.1

- $180.1

52%

2. I-84 Meridian to Caldwell interchngs

$231

$327.8

$212.7

$540.5

- $309.5

134%

3. Idaho 16 – I-84 to S. Emmett, 4 lanes

$157

$9

$435

$444

- $287

183%

4. Idaho 16 – S Emmett to Mesa

$157

$0

$199.2

$199.2

- $42.2

27%

5. N. Idaho US 95 Wyoming Ave to Sagle

$157

$237.3

$499.2

$736.5

-$579.5

369%

6. US 95 Worley to Setters

$22

$60.9

$13.5

$74.4

-$52.4

236%

7. S. Idaho: US 93 Twin Falls Alt Rte.

$184

$45.1

$0 + reg ITD funding

$45.1

+$138.9

76%

8. E. Idaho US 30 McCammon to Lava Hot Springs

$187

$69.4

$156

$225.4

-$38.4

20%

Sub-Total

$1,338

$997.5

$1,787

$2,788

-$1,350

100%

 

 

 

 

 

 

 

Discontinued Projects (projected at same rate as Current Projects)

Gov K’s orig budget

Current Budget

Est to Complete

Expected at Completion (EAC)

Diff between orig and EAC

Percent over/under

9. US 20 St Anthony to Ashton

$31

$0

$62

$62

-$31

100%

10. SH-1 to Canada

$31

$0

$62

$62

-$31

100%

11. Thorn Creek Rd to Moscow

$18

$0

$36

$36

-$18

100%

12. Timmerman to Ketchum

$105

$0

$210

$210

-$105

100%

13. Smokey Boulder to Hazard Creek (New Meadows

$19

$0

$38

$38

-$19

100%

Sub-Total

$204

$0

$408

$408

-$204

100%

Total

$1,542

$997.5

$2,195

$3,196

-$1,554

100%

 

 

 

 

 

 

 

GARVEE Interest

$1,500

 

 

$3,196

 

 

Grand Total

$3 billion

 

 

$6.39 billion

 

 

   A brief analysis of the above chart shows us:

   There was no real budget estimate to begin with.  The first tip-off that something is wrong is that Projects 3, 4, and 5 ended up at $157 million each.  What’s the probability?  The 2nd tip-off is that the majority of the Projects were under-estimated by at least 100%, with the largest Project over-estimated at 369%.

   A budget overrun that is more than 100% of the original budget usually means that nobody performed a true bottoms-up forecast: i.e., estimate each component cost in a time-phased Critical Path Schedule (CPM), hours and dollars, and add it all up, standard procedure in all engineering and construction projects.  Any project manager with experience could easily do this, add in a 10%-15% contingency, and come in close to time and budget.

   Looks like somebody either eyeballed a tops-down forecast or simply threw in their favorite number.  We already know that Team Kempthorne tried to finagle the bid illegally to their buddies at WGI/CH2M Hill and the Fed Highway Admin forced them to redo the bidding process, which ended up the same after gaming it behind closed doors anyway.  We already know that WGI project management costs escalated 300% from $15 million to $45 million in one year.  The legislature’s JFAC co-chair, Dean Cameron, stated that the original project estimates forced upon the Legislature by Kempthorne were incomplete.  And nobody has questioned why “Connecting Idaho” has not been submitted to the voters as required by the Idaho Constitution, Article VIII, Sections 1,2,3  for going into multi-year debt.  Don’t gimme that crap that the Idaho Constitution is somehow subordinate to other state statutes.  The Idaho Constitution is the Supreme Law of the Land in Idaho, and is subordinate (Article I, Section 3) only to the U.S. Constitution.  IRS Rulings and federal statutes do not supersede the Idaho Constitution.

   Building highways is not rocket science.  The world has been building highways for a hundred years now.  There are simple computer boilerplates and templates of actual costs for the completion of past highway construction all over America and the world.  Kempthorne’s Highway Plan appears politically gamed, just like all the other projects he was involved in while playing politics in Idaho, from his connived low property taxes at Tamarack to allegedly rigging the tenants for the failed University Place fiasco to ramming a $136 million ISBA bond issue through the state legislature in 7 days flat to replace and cover up the illegal temporary financing for the University Place Scam.

     The above chart in which several separate highway projects end up at exactly the same cost usually means that the projects were not really estimated but rather somebody simply threw in a number to get it passed by the Idaho legislature.  In fact, if you remember, ex Gov Kempthorne and then-Speaker of the House Bruce Newcomb, in 2005, hauled Transportation Committee legislators into a private session and browbeat them to death after Kempthorne vetoed his In Box full of Bills which he called “Veto Fodder” until the Legies changed their minds and voted “yes” for his questionable $3 billion Highway Plan.

   Even new Governor Butch Otter has stated that the original estimates were a bunch of hogwash pushed by previous Gov Kempthorne.  Five of the thirteen projects have already been dropped.  The total cost for the remaining 8 projects has already jumped from $1.3 billion to about $4 billion; add in the interest and it jumps from $3 billion to over $6 billion, twice the original estimate with half the projects gone.  That’s assuming the new estimates are better than the original, which I’m betting they aren’t.  In fact, using industry information for most transportation project estimates, the real cost will be around 5-10 times the original estimates.  How far do we have to go before we stop this insanity?  $15 billion?  $30 billion?  (Private highway developers/financiers such as Macquerie from Australia could take over this entire mess, pay us $X billion for 99-year rights, and do it cheaper with private toll roads and innovative ideas from private enterprise while dropping $500 million into a “Rainy Day Fund” for Idaho – just like they did in Chicago and other states.  But then, Kempthorne’s buddies wouldn’t get the contract, right?)

   And what is the leading cause for these “bad” estimates, as reported in one university study?  Outright lying.

   How do taxpayers protect themselves from misguided or ill-informed politicians?  Monitor your state legislators and hold their feet to the fire.  Unfortunately, left liberal newspapers such as the Idaho Statesman think you and your Legislators should just keep your mouths shut and not monitor the Highway crooks.  Wrong.  You should not only monitor your Legislator, you should tell them to hire an independent highway consultant in order to get a 2nd opinion to review the trash Highway Plan put forth by politicians such as ex Gov Kempthorne.  In addition, Idaho Legislators should follow the law and place “Connecting Idaho” on a general ballot for a vote of the people as required by the Idaho Constitution for long term debts.  The Legislature should NOT, I repeat NOT, simply “Pass the budget, no strings attached,” as suggested by the naïve editors of the Idaho Statesman.  That’s exactly how we got into trouble with the failed $136 million University Place fiasco.  And the Statesman should know, since they were the ones who have still refused to connect the dots between the $100 million Ada County Courthouse Scam and the $136 million University Place Scandal while in a conflict of interest position with one of their reporters in bed (literally) with the very law firm he was supposedly investigating – and “she” was the Prez of the Idaho State Bar Association.  Yeah, girl friends, listen to the Idaho Statesman, “Pass the budget, no strings attached,” and you'll end up broke. – FM Duck

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