It was the eve of the new millennium. Fear was in the air. Doomsdayers predicted that when clocks struck midnight on January 1, 2000, computer systems across the globe would go kaput and create power outages, shut down transportation systems, shutter banks, and unleash chaos on the planet. Undeterred by the future calamity, Oregon’s Department of Transportation issued its new 20-year plan to keep Oregon moving. The stated objective:

“The investment policy places the highest priority on safety and managing and preserving the physical infrastructure.”

Clocks may not have stopped, but the plan did begin a ticking time bomb at ODOT. The chaos, rumbling beneath the surface for years, has exploded within the embattled agency and the priority of preservation now seems focused on preserving the department itself.

The agency director called it quits at the end of last year and two interim directors have warmed the chair since. Sources familiar with the search say finding a permanent replacement has been — to be kind — challenging. A head-hunter has tried, but all the heads are ducking. It appears no one, at least those with the competence to run an agency like ODOT, want to go anywhere near it due to a lack of political, public, or funding support. It is highly unlikely a permanent director will be hired until after the gubernatorial election in November.

It didn’t used to be that way. The year 2000 represented the halcyon days for ODOT. It was essentially debt free and asphalt was laid with regularity across the state, using money from Oregon’s gas tax.

Today, ODOT is saddled with about $4 billion in debt from major projects and the gas tax has, well, run out of gas. The debt service alone for projects is about $335 million a year, which consumes the entire state share of the gas tax. Total evaporation. And more debt is looming for projects like the I-5 Bridge, Newberg Bypass completion, Rose Quarter widening, and the Boone Bridge in Wilsonville.

Voters, with a whopping 83% of the vote, just body slammed the Legislature’s plan to increase the gas tax even though it would have cost the average driver only about two bucks a month more at the pump. Questionable spending, ballooning cost over-runs, toe tipping with tolling, and billion-dollar accounting errors have eroded the public’s confidence in the agency.

Next session, legislators will be reticent to vote for another gas tax increase or even title and registration fees to repave highways and fix guardrails. But Oregon’s roads continue to degrade and bridges continue to crumble.

Legislators can be motivated to vote for revenues that buy new projects. It allows their constituents to see and feel what their money is getting them. Watching rock being laid on the street doesn’t generate that kind of enthusiasm.

A New Idea

One possible solution is to perform major surgery at ODOT. Remove the cancerous debt to the extent practical (repaying callable bonds and reissuing new debt backed by non-ODOT revenues when market conditions are feasible), halt future debt entanglements, then embark on a major lifestyle change by returning to the core function and priority of “managing and preserving the physical infrastructure” it already has.

Here is a bold idea for the Governor and Legislature to consider: Create an entirely new, stand-alone, state agency focused on only major, capital-consuming infrastructure projects from bridges to airports, and beyond. Call it the Oregon Department of Critical Infrastructure.

Yes, this is different than how things have always been done. But why not envision things that never were and say, “Why not?

Take Apple, for example. Its core mission is designing and building things like iPhones and MacBooks with extensive memory and highly sophisticated graphics. But they don’t build either the memory or graphics infrastructure. They go to specialized companies like Micron, SK Hynix and Nvidia to build those for them.

To be sure, there are issues to be addressed in any such model. Unlike the private sector, state government does not have competition for its products. The new agency would still have to be designed carefully by legislators to mitigate tendencies to gold plate projects, creating cost overruns and time delays. Using public-private partnership models that operate under Guaranteed Maximum Price contracts with carrots and sticks would be one approach.

But there are potential benefits. No more cannibalizing gas taxes or registration fees. Keep those revenues at ODOT to perform core functions of preservation and maintenance and smaller capital projects on a pay-as-you-go basis like was done prior to 2001. Without that burden, legislators would not have to raise gas taxes for years to fund core ODOT responsibilities.

Large infrastructure projects like the Abernethy Bridge or Newberg-Dundee Bypass are not constructed by state workers anyway. They are contracted to private firms who have the expertise to perform the task. State agency personnel have primary responsibility for subject expertise management and oversight of the contractors.

This would create an agency where large infrastructure project expertise is housed under one director, one roof. The state’s best get transferred there. No distractions or auxiliary demands. No pointing the finger of accountability at someone else. Their mission is to do one thing and do it well.

Certainly, there would be coordination with ODOT and other agencies who will ultimately receive the project deliverable. They would be the clients in this model and a potential revenue stream for ODCI.

Funding the agency

Core revenue to fund the work of the new agency could come from both new and redirected revenue, as well as federal resources. Legislators are much more apt to vote for revenue that builds things rather than simply maintains what we already have.

Sen. Bruce Starr (R-Dundee) has floated an idea to convert Oregon’s Climate Fund into a Cap & Invest program, capping emissions while at the same time generating up to a billion dollars or more each biennium for major infrastructure projects. State General Fund revenues of about $300 million a biennium could be directed to ODCI as core investment capital. They already do at least that amount now on a piece-meal basis.

Additionally, cities, counties, and transit districts, rather than self-funding in-house personnel, could be clients as well, using the broad spectrum of ODCI subject expertise to consult and/or manage their own projects.

Just these two state allocations alone could generate up to $1.3-$1.5 billion a biennium for core capital and debt service. Federal matching dollars for qualifying projects would enhance that core capital even further.

Would the idea face opposition? Does asphalt crack in the winter?

Of course, there would be opposition from anyone else who see themselves losing what ODCI would get.

But if not this, then what? The status quo won’t cut it. Road user fees must be liberated from subsidizing any more debt and returned to the purpose originally intended, fixing and maintaining the investments we already have. Its role as a payday lender should come to an end.