'Pennies' coming up $22M short

The pennies fell short of promised road projects again.

A $22 million shortfall because of increased costs and poor accounting is prompting York County to phase out the project manager who has overseen the "Pennies for Progress" program for 10 years and his firm, Capital Management and Engineering.

The county is determined to complete road projects approved in 1997 by voters -- half of which are still undone. It's too soon to determine the shortfall's impact on 2003 projects, County Manager Jim Baker said Monday in a special called council meeting.

"We promised too much and didn't know how the money would hold up, that's how we got into this," Councilman Curwood Chappell said.

The company had told the county about a $7.7 million deficit in August, but Baker and the county finance director recently discovered the amount of the shortfall was a lot more, Baker said.

Just last week, CME said the county would need an estimated $16 million to $22.8 million to complete the 1997 projects.

"It was surprising to see such a dramatic increase in the estimates over a short period of time," Baker said. "The county's real disappointment was due to the fact that the incremental increases that were noted by CME had not been immediately brought to the attention of county staff."

Most of the $7.7 million deficit was because on an unresolved issue with money expected from the state, said Baker, who was planning for alternatives if that money didn't come in when county officials discovered the additional deficit.

The remaining shortfall is the result of:

• a $2.5 million grant that was included twice;

• Estimates for the design and work on Cherry Road, Albright Road and S.C. 5 bypass is now $10 million more than expected; and

• n an overestimation of interest.

"Both the county and the public needs to know that as conditions change and new plans must be made, they'll receive information immediately as it becomes apparent," Baker said.

'97 projects a priority

Fourteen road improvement projects that were voted on in 1997 under the 1-cent sales tax program were expected to cost $99 million. It's now estimated to cost more than $211 million to finish all of them, Baker said.

Finishing the seven remaining projects is a priority for Baker and the council. The remaining projects include Cherry Road, S.C. 274, the S.C. 5 bypass and Albright Road.

"Completion of the 1997 projects is a must," said Councilman Tom Smith. "I don't think 'us' has been the face of Pennies. The biggest thing for me is us -- the county -- and we are going to be the face of this project."

It's not known how much this shortfall will delay road construction. In October, officials said all 1997 projects could be wrapped up by 2009. The final 1997 project -- the S.C. 5 Bypass from S.C. 161 to S.C. 5 West -- was slated to start in 2008.

More than $10 million of the money needed to finish the road work could come from the interest earned on 2003 program funds, Baker said. The cost of finishing the 2003 projects could be built into the next program when it's put on the ballot again around 2010. Another option is capital improvement funds.

This isn't the first time the county has needed to find money for the 1997 program. In 2004, projects from the first program were put on hold as the county scrambled to make up for a $37.8 million deficit caused by rising construction costs. The state transportation infrastructure bank and federal funds have made up for most of the initial shortfall.

The current shortfall won't be as easy to make up because state and federal money is not as available now, Baker said.

Transition to take months

The transition from CME, which also manages other capital projects for the county, will be made over several months. Taking care of the money for the program will be the first county responsibility, Baker said.

The county already was in the process of taking over some of the project management and engineering. Four new staff positions were approved Dec. 3 to oversee some of the Pennies work.

Preliminary job descriptions for a facilities program coordinator, two capital sales program managers and a capital sales program accounting clerk have been created, but Baker said they may need to be revised.

CME Project Manager Myron George said it's good that the county is taking over the financial responsibilities of the program.

"We have had discussions about the county taking direct oversight of the financial work more directly. That's good news for us," George said Monday. "The county needs to have very direct knowledge of what's going on a day-to-day basis with that."

The county didn't anticipate taking over the whole management process when these new positions were created, Baker said.

CME will finish some of the projects it has already started while the county shifts to becoming the program manager. Baker said a more detailed plan will be discussed at Monday's meeting.