Don’t Shut Rest Areas, Lease Them!
By Allen Louderback • Mar 17th, 2009 • Category: State GovernmentWhy does it take a free fall in our economy for our state government to cut spending and improve efficiency? With a budget of $38 billion a year for the Commonwealth of Virginia we should act in a business-like manner as a matter of course, instead we are just now tightening in some areas that should have been done as part of normal practice. How we are tightening raises some question, though, such as with the proposal to close the rest stops along our interstate roads. This action does not make a lot of sense. The state should be catering to and accommodating tourists and travelers in the Commonwealth by showing our hospitality.
There is a way to handle this problem that makes more sense, especially from a business perspective. The Virginia Department of Transportation (VDOT) should lease out these facilities to the private sector so they may bring in businesses such as McDonalds, Burger King, Taco Bell or other fast food operations. We can then move from maintaining rest rooms, mowing grass and maintaining buildings to actually receiving income from the leasing operation of these facilities. The existing facilities would benefit the lessees because they would not have to build restrooms but could build around them. The lessees would be responsible for maintaining the property and restrooms which would take a financial burden off the state. VDOT stated in one of its public hearings that by closing 25 of the 41 rest stops in the state, they would save $12 million. Why not lease all 41 locations and save $20 million and in addition gain the annual lease revenue?
This is being done in other areas already; there is no reason it can’t be done in Virginia as well. The New Jersey, Ohio, Pennsylvania and Florida turnpikes have already moved ahead with this approach and are currently providing great service. VDOT has implied that the federal government would not allow us to do this in Virginia. Why? If these four states can do it why can’t Virginia? We need to stop making excuses and work harder for good solutions.
The benefits of leasing, as opposed to closing, our rest stop areas are twofold. First, it would allow us to continue providing service to our traveling public and secondly, it would present an area for truck drivers to rest on their trips, thus increasing safety and improving the flow of traffic. This is a win/win situation. It is an area where the state can cut costs, save taxpayers dollars and provide a service that is necessary to improve our economy and better enhance service to tourists and travelers.
There are at least two additional areas in VDOT where savings can result. First, the state is discussing closing down some residency offices throughout the state. Instead of closing those offices, which would cause VDOT employees to travel longer distances to provide services, we should turn their operation over to localities. That would allow the local governments to consolidate their equipment and operations and give them the opportunity to take over other operations from VDOT. Since the state has allocated and identified certain funds for road maintenance, these funds should be sent to the localities for them to contract with local individuals for snow removal, mowing and other necessary operations including road maintenance and repairs.
An advantage in this approach would be providing local contractors work on projects in their community and building the local economy as well as allowing the localities more flexibility in how they contract their services. In localities where this has been done, it has provided efficiency and savings greater than the state was able to accomplish for road repairs and construction.
The second is something that sometimes slips by because as citizens we don’t know how VDOT establishes its priorities for expenditures. VDOT replaces fence along divided highways at their expense at a current cost of about $32,000 per mile. This is done on a regular cycle instead of on as needed basis. But the real question should be why are we doing it at all? Fencing at a five foot height does not stop deer from jumping into the road. In addition, in areas that livestock is fenced in, the farmer should incur or share the cost to make repairs since that is the requirement on secondary roads. They have replaced fence along Interstate 81 and State Route 211 that was still in good condition, only because of their time table and the fact they had funds in that category. This change can also result in millions of dollars in annual savings.
Allen Louderback , now living in Luray, represented Virginia’s 15th District in the House of Delegates from 2000 to 2005. He also formerly served as an investigator and manager at the Government Accounting Office (GAO), the federal governments’ investigative and oversight arm, for 18 years. Currently a private business owner and management consultant, Louderback’s expertise lies in budget streamlining, efficiency and business productivity.
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Allen,
I just sent you an email. There is breadth & depth to this discussion; however, at the root is this – a powerplay to FORCE localities to take on VDOT responsibilities for local roads.
Whether you subscribe to this approach (which you clearly do) or not, is fine debate. Reasonable folks on both sides make cogent points. In fact, I’ve been directly involved in helping localities consider this option; however, as soon as the finances that they would receive – as codified in state law – came into focus they quickly backed away
All that aside, the reasons being offered for these changes are going UNCHALLENGED & UNSUBSTANTIATED. I hope you can help shine light and bring some transparency and TRUTH to this debate.
For example – cuts to VDOT construction staff will INCREASE costs for the same service, due to reliance on high-priced consultants. Does the financial analysis truly exist for this move? If so, it would be fun to see it – unless, of course, it’s NOT ABOUT SAVING MONEY………….
Allen,
I support your thoughts on leasing the reststops. I can see pushback from fast food franchisees at nearby exits, but there is so much fast food competition it can’t be a significant factor. However, the claim (you characterize it as “implied”) that Federal law won’t permit Virginia to lease these reststops need to be explained with certainty. I wonder if you could get that answer.
As for the fencing maintenance, services, snow removal, road maintenance, etc., the prior comment from “Informed VDOTer” sounds on target. There is no “free” way to get any of this done, and a FRAGMENTED use of outsourcing, privatizing, consultant hiring, etc. doesn’t sound like an improvement in efficiency. At the same time if localities are currently equipped to do it at a lower marginal cost than VDOT, you have to pay attention.
CFoster,
All good points. I particularly like your suggestion to “explain with certainty” regarding privatization of the rest areas. If there’s a good, concise answer – let’s be sure to fully hear and understand it.
The same is true for ALL of the proposed changes. At some level, we should be able to see a line-item summary of the proposed changes and how much each of these is estimated to SAVE in actual dollars-and-cents. No dancing around about efficiency, business process re-engineering, ad nauseum. This is purported to be about money – so let’s see/hear the high-level summary of how it’s envisioned we realize the needed savings.
That would afford transparency, as well as the opportunity to weigh the singular cost/benefit of each decision. For example, if rest areas only save $20 million out of a $600 million savings need – perhaps (?) it’s not critical for that particular piece to go. Same thing for residencies – how much does closing them get us? Is the negative impact in service levels favorable and/orproportionate to the savings to be realized. Contrarily, if cutting Construction Inspection actually COSTS more money then why would we be pursuing that change (which, by the way, it will cost more – consultants will backfill the need to satisfy regulatory and codified requirements)
Sorry to be a little verbose. In summary, I like your suggestion and take it one step further. Let’s see a line-item listing of the proposed changes and how much each is suggested to save. THEN we’ll have a higher level of understanding and debate.
In addressing privatizing the rest stops, Governor Kaine recently stated that he would prefer to privatize the sites but cannot because “while the state maintains interstate highways and rest areas, they fall under federal jurisdiction”. This becomes an issue of state rights. If we are responsible for maintaining the highways and rest areas we should be able to determine how we go about doing that. This is an encroachment on state government by the federal government as the 10th amendment of the US Constitution states. Since Gov. Kaine is head of the National Democratic Party and with his connections to Pres. Obama, he should push to have the law changed to correct this infringement.
In response to Informed VDOT’er, I disagree that there would be a need to increase the use of consultants and that localities would not be able to get better prices on maintenance. Consultants are not necessary to maintain roads only one engineer per a certain population formula would be needed to oversee plans for projects in each county. Other duties can be performed by private sector without consultants at less expense. A recent example comes to mind. In my area tree branches and brush were trimmed along an 800 ft section along our highway by a private citizen. VDOT sent a crew of 6 people and 3 vehicle to shred this brush, taking 6 hours to complete. A job that two individuals could have completed in two hours.
Allen,
VDOT’s “Blueprint” calls for a 22% reduction in construction inspection. That work will not go away – it will simply be done by consultants at much higher prices. That’s not my opinion, that’s in black & white. This is one example – there are many parallels where the cuts, purported to be needed for “cost savings”, just don’t add up (literally). That means it is about something else…..at least for those areas…….
As for private sector performing work, without consultants, at less expense……..please check the math on how that’s going with interstate outsourcing. You, the taxpayer, are now paying MUCH more than what was being done with VDOT forces 3 years ago. Have you noticed improved results for that increased cost? I bet not. In fact, I happen to know not because of my role within the agency. VDOT is now re-negotiating these contracts for those private firms to do EVEN LESS to save money.
I’m a BIG fan of doing good business no matter who delivers it. In fact, I believe there are BENEFITS to removing the state bureacracy out of that process IF it can be outsourced with same/similar results and competitive prices. As I stated in my earlier post, I’ve been PERSONALLY involved in helping localities consider this alternative – but the finances are a non-starter. Not because they don’t want to do the work. Not because they don’t think there are things they can do better at the local level. It’s because the finances are a losing proposition as currently framed in state law.
I respect a lot of what you’ve stated here but the sad song about 6 state workers, 3 vehicles, etc. is just worn out. VDOT is the most studied state agency of our generation. Is there room for improvement – ABSOLUTELY. Is there wanton waste at the front lines? Not in meaningful numbers. Now, if you want to wax poetic about the misled priorities of this adminstration – prioritizing dollars on boondoggle transit and bike paths over the delivery core services, then I can listen. Do the math – VDOT has an annual budget of 1.2 billion, but can’t afford 12 million a year to keep the rest areas open.?!?!? Again, this ain’t about finances. No doubt that the times call for hard decisions and focused reductions, but the emasculation of VDOT is happening for philosphical and political reasons — NOT financial ones. No surprise that the pain is happening in the most visible, public, and impactful ways……………..as the end justfies the means………
I thank you for the forum for sharing intelligent views on this topic. Ultimately, I simply wish someone would call for a LINE-BY-LINE detailing of the proposed budget cuts. Until then, the governor’s office and those who do his bidding are slipping the noose on dealing with this in an open, honest, and transparent way – to the impact of every taxpaying Virginian that will realize too late what’s been done to them.
Shutting down the rest areas? Where would I go to the bathroom? But, then again thats probably point. I pee on the side of the road, get a ticket for it, thus increasing revenue for the state. Bad idea to us but I am sure VA thinks its GOLD.