NC Department of Transportation Financial Implosion

May 15th, 2020

The NC Department of Transportation remains paralyzed by a worsening financial situation in the department and state.  At present, the DOT has postponed the majority of road construction projects across the state, except for those where construction contracts had already been entered in to and some design-build projects.  Recent reports from the State Auditor’s office reveal that the NCDOT exceeded it’s planned spending in the 2019 fiscal year by $742 million.  The budget had originally called for DOT spending of $5.94 billion, but instead, the DOT spent $6.68 billion, or 12.5% more than authorized.  Obviously, this spending problem preceded the COVID pandemic, which has now made the situation even more dire as fuel tax revenues have collapsed with less vehicles on the roadways.   

To add insult to injury, the NCDOT has begun sending out notices to property owners who are affected by suspended projects that on cases where the NCDOT had previously made an offer, all offers are being withdrawn effective immediately.  Then, further, for those cases that have settled, but where deeds have not yet been executed by all parties, that those settlements are withdrawn or put on hold effective immediately.  The best the DOT is able to advise is that at such time that the DOT has the funds to move forward again on the project, that they will be reaching out to our office to determine the next steps on resuming negotiations or finalizing outstanding settlements. 

The eminent domain and land condemnation lawyers at Henson Fuerst remain concerned regarding the lawfulness of some of the above actions and are investigating all possible legal remedies available to property owners who have reached settlement agreements, but which the DOT is now refusing to honor or pay on a timely basis.