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NCDOT Cash Balance Issues Delay Hampstead Bypass Project

By Christina Haley O'Neal, posted May 11, 2020

The Hampstead Bypass is one of a growing number of area projects impacted by the effects of the COVID-19 pandemic on the N.C. Department of Transportation's coffers.

Since the NCDOT is now below its cash floor balance, no new agreements or contracts can move forward, affecting the department's ability to purchase right-of-way for projects, among other activities, said Chad Kimes, NCDOT's Division 3 engineer.

"This has a direct effect on right-of-way acquisition. Therefore, the right-of-way process on the Hampstead Bypass is suspended," Kimes said Monday.

Some activity on the Hampstead Bypass continues with engineering work. But the inability to obtain right-of-way acquisition (purchasing land needed to complete construction projects), would keep the construction from moving forward, he said.

The Hampstead Bypass consists of a set of projects, one roadway that extends from N.C. 210 to the north of Hampstead including three interchanges, and another that connects the U.S. 17 Wilmington Bypass to N.C. 210.

The Hampstead Bypass is on a shortlist of area projects that are able to move forward with preliminary engineering over the next 12 months. No other work is taking place on any other projects outside of the list, Kimes said.

The sharp decline in revenue has resulted in NCDOT falling below the statutorily mandated cash floor of $293 million, according to a May 4 release from NCDOT. According to state law, once the department falls below the cash floor it can no longer enter into new contracts that spend money on transportation projects.

The NCDOT is funded through the motor fuel tax, highway use tax and division of motor vehicle fees.

"The drop in revenue from these sources due to COVID-19 will result in more than $300 million in lost revenue for this fiscal year, which ends June 30. An additional shortfall of more than $370 million is projected for FY21," stated the May 4 release.

The department was already strapped for cash, facing issues from Map Act settlements and impacts to its coffers from natural disasters, such as major hurricanes.

Additionally, COVID-19 has caused a severe reduction in gas tax revenue, with traffic on some state roadways being reduced to 50%, said Lauren Haviland, spokeswoman for NCDOT's Division 3, which includes New Hanover, Pender and Brunswick counties.

The numbers are "changing daily, and NCDOT has no historical data to utilize to assist in projections," she said in a recent email, adding that the COVID-19 situation and its effects on NCDOT's budget are constantly causing the numbers to change.

Active construction projects, however, are still moving forward, such as the Military Cuttoff Extension project in Wilmington.

The northern section of the Hampstead Bypass was scheduled to go out for construction bids in September, and the southern section was slated to go out for bid in September 2022, Kimes said. 

"We anticipate this project being delayed at this point," Kimes said, adding that for every month that land purchases are delayed, that's another month the Hampstead Bypass will not be able to go out for construction bids.

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