Lawsuit Over Road Funding Program Leaves Funds in Limbo

A dispute over how to distribute $225 million earmarked for road repairs in Texas oil field counties could force officials to let the money sit idle for months.

LaSalle County, a South Texas community in the heart of the Eagle Ford Shale, recently filed a lawsuit against the Texas Department of Transportation over the County Transportation Infrastructure Fund Grant Program. The suit, filed in Travis County court, accuses the agency of ignoring state law in distributing the funding.

“There are a number of counties that have been funded that aren’t in shale plays,” LaSalle County Judge Joel Rodriguez Jr. said. “All the rules state that the intention is to give money to counties with increased energy production.”

The Legislature approved the program last year to address county roads affected by energy development, particularly those counties in South and West Texas seeing the most drilling activity. Rural roads throughout both regions bear the damage of tens of thousands of trucks traveling on them to access new gas wells. Local officials have cited the crumbling infrastructure as a key cause for a recent spike in fatal traffic accidents.

Senate Bill 1747 directed TxDOT to distribute $225 million to counties through a grant program. Of the state’s 254 counties, 191 applied for a portion of the funding, identifying more than $1 billion in road improvements.

Last month, TxDOT announced plans to distribute the money to all 191 counties. While shale counties in South and West Texas are receiving among the largest grants, some officials have questioned why millions in funding are being distributed to counties in other parts of the state.

“If safeguards are not in place to assure that the funds are going to counties which have demonstrated degradation to their roads resulting from energy-sector activities, then funds will not be distributed in accordance with the intent and purpose of SB 1747,” state Rep. Ryan Guillen, D-Rio Grande City, a sponsor of the bill, wrote in an April letter to Texas Transportation Commission Chairman Ted Houghton.

TxDOT spokesman Bob Kaufman said none of the $225 million in funding has been distributed yet.

“The lawsuit filed by LaSalle County could slow down, or stop, all usage of these funds, depending on how the court rules,” Kaufman said.

The lawsuit argues that TxDOT is refusing to follow the program’s guidelines, which has led to ineligible counties being awarded grants. Specifically, the lawsuit contends that the agency ignored language that requires that grants be awarded to “areas of the state affected by increased oil and gas production.” The lawsuit also alleges that most of the counties that applied for the grants did not submit “road condition reports” that were required under the statute.

“The Legislature’s award, once chopped into 191 unequal pieces, will be of only blunted impact in those regions, such as La Salle County, whose roads have borne the heaviest load of the Texas energy boom,” the lawsuit states.

Kaufman said TxDOT was limited in how it could comment on the issue because of the ongoing lawsuit.

“We can confirm TxDOT followed the letter of the law, and the Legislature’s intent, by providing a formulaic distribution to counties impacted by increased energy sector traffic,” Kaufman said.

State Sen. Carlos Uresti, D-San Antonio, who authored SB 1747, said he believes TxDOT was following the law correctly. While his bill as originally proposed would have targeted the funding on counties most impacted by energy development, the version that passed was changed to make more counties eligible for the funding. The changes were needed to persuade legislators to break from long-standing tradition and allocate funds for county road projects, he said.

“In order to pass the bill, I had to get the votes, and that involved me in broadening the language of the bill,” Uresti said. “Since this is the first time this has ever been done in at least 50 years, I thought it was a pretty good start.”

Uresti said he hoped to address the energy sector infrastructure problems more forcefully in the 2015 legislative session. In the meantime, he hopes the lawsuit is resolved quickly so that the $225 million, which he described as a “Band-Aid,” can begin improving roads around the state.

“If TxDOT is not able to distribute these funds, it’s almost as if LaSalle is pulling that Band-Aid and that doesn’t help anyone,” Uresti said.

Rodriguez said the final version of Uresti’s bill was “a beautiful bill” that was not being properly administered.

“We’ve been open to TxDOT, and they just don’t shoot straight,” Rodriguez said. “They’ve made rules they haven’t followed or won’t show you how they’re coming up to their own logic.”