NVTA staff urge caution on creating a formal policy to fund project cost overruns

NORTHERN VIRGINIA — Staff for the Northern Virginia Transportation Authority told an Authority advisory committee on Tuesday that drafting a formal policy to pay cost overruns on previously approved projects would be legally and administratively complex and could shift financial risk from local project sponsors to the Authority.

The discussion, led by Mike Longhi, the Authority’s chief financial officer, followed committee and full Authority meetings this summer where staff recommendations to deny additional NVTA funding for two resubmitted projects drew extended debate. "My job is to manage risk," Longhi said. "My bias, I'll be upfront with you, is no," he added when asked whether the Authority should adopt a policy to fund overruns.

The matter matters because state law requires NVTA to rank and select projects using congestion-reduction relative to cost; changes to project costs after selection could alter those statutory evaluations and the fairness of funding decisions. Longhi and other staff walked committee members through prior work done in 2015–2016, including an advisory-panel review and an October 5, 2016 Authority action that placed approximately $8,600,000 into a contingency reserve that was not later made available…