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Secretary of Transportation Gene Conti said his agency has not communicated well on the new financing plan for the I-485 loop around Charlotte.

The plan calls for the contractor to front $50 million of the $340 million cost. Conti emphasized that, if the contractor borrows its $50 million from a bank, the state will not back that loan.

Conti also said that the state will pay the contractor its $50 million over ten years with no interest - "an extended payment plan," Conti said in a meeting today with reporters and editors from the News & Observer and Charlotte Observer.

Conti emphasized those points in the aftermath of questions raised by State Treasurer Janet Cowell over whether the Transportation Department has the authority to add to the state's debt load.

"We just haven't communicated very well," Conti said. 

Attorney General Roy Cooper said his office never issued a formal opinion on whether the Department of Transportation can use a new financing plan to pay for finishing I-485 in Charlotte.

Both Gov. Bev Perdue and transportation officials indicated a few days after the plan was announced that Cooper's office signed off on it. The plan involves the contractor financing $50 million of the $340 million project and the state paying the company back over ten years.

"Prior to announcing the plan, we worked with the (Attorney General)’s office as we developed the design-build-finance program for completing I-485," Perdue said in a prepared statement on Nov. 24, two weeks after announcing the plan. "During this process, the Attorney General’s office indicated that our plan was legal."

Cooper said his office "provided advice as this process went along" to both DOT and the office of State Treasurer Janet Cowell, who has questioned whether the transportation department has authority to add to the state's debt. Cooper won't disclose what advice his lawyers provided. But he made clear his office was never asked for a formal opinion on a plan for 485.

"If we are given a specific plan for a written legal opinion," Cooper said, "then obviously we will do it and that opinion will be made public."

Perdue, Cooper and Cowell are all Democrats. Cooper said agencies can present ideas and get advice about those ideas and routinely do so.

"Our mission is to make sure that any financing plan be done within the law," Cooper said.

So does the DOT plan fit within the law? "We are giving advice," he said.

A Charlotte-based lawyer hired by State Treasurer Janet Cowell's office concluded that the state Department of Transportation does not have authority to go into debt under its plan to complete I-485 around Charlotte.

Cowell's office released the opinion (see link below) Thursday as part of a public records request by the Charlotte Observer and The News & Observer. The opinion is part of a disagreement between Cowell's office, which authorizes the state's debt, and the transportation department under Gov. Bev Perdue, which is trying to build the final segment of the long-unfinished highway loop.

Perdue last month announced plans to finish the road using a new financing mechanism that included the agency guaranteeing $50 million in debt by a private contractor and paying it back over ten years.

Steve Cordell, a lawyer with McGuire Woods' Charlotte office who specializes in public financing, said state law authorizes the transportation department to enter into partnerships with private companies but doesn't grant the agency or the partnership an independent authority to borrow money.