RALEIGH — North Carolina State Treasurer Dale Folwell is calling for the replacement of two top officials at the North Carolina Department of Transportation (NCDOT) in the wake of another critical state audit of the agency.
“The continued mismanagement of this agency is a potential threat to North Carolina’s coveted ‘AAA’ bond rating. For over two years, the NCDOT has been writing checks it couldn’t cash, harming taxpayers, road users and vendors,” said Folwell in a statement. “Getting it right and keeping it right are requirements for issuing more debt on behalf of the NCDOT.”
Folwell is calling for NCDOT Secretary Eric Boyette to replace the department’s chief operating and financial officers.
The Chief Financial Officer for the NCDOT is Evan Rodewald, who was installed by former Sec. James Trogdon at a March 9, 2018, NCDOT board meeting. The Chief Operating Officer is Bobby Lewis.
“The treasurer’s office stands ready, and I hope that Secretary Boyette will take this agency in a new and fiscally responsible direction. Citizens deserve a stable and solvent DOT,” Folwell said.
Last year, Folwell called for Gov. Roy Cooper to replace Trogdon after the department’s overspending of $2B was revealed. The NCDOT “eviscerated the Highway Trust Fund by over $1 billion,” said the press release from Folwell’s office.
Citing a recent performance audit conducted by the North Carolina State Auditor’s Office, the NCDOT did not give appropriate pay-raise adjustments. In the audit report, the findings state that the salary adjustments caused the NCDOT to overspend by $39 million. The raises, according to the report, did not comply with statute and gave NCDOT employees an unfair advantage over other state employees.
The North Carolina Retirement Systems is the ninth-largest public pension fund in the country and is currently valued at more than $100 billion. It provides retirement benefits and savings for more than 950,000 North Carolinians, including teachers, state employees, local governments, firefighters, police officers and other public workers.
In addition to the recent audit findings on NCDOT salaries, Folwell said that state lawmakers requested that the Retirement Systems Division (RSD) conduct an actuarial analysis of the impact to North Carolina’s retirement system from the raises given to NCDOT employees.
According to Folwell’s release, the “RSD actuaries found that the average pay increases for NCDOT employees over two years were expected to be 8.20% but turned out to be more than three times that increase, or 26.63%.” The release said actual pay increases over the expectation amount were “more than 11 times the average across all school systems, state agencies, university institutions and community colleges.”
These NCDOT salary increases will have a big impact on the Teachers’ and State Employees’ Retirement System (TSERS), which is a retirement benefit provided to state employees. TSERS estimates pension payments based on state employees’ final average compensation. According to Folwell’s release, the NCDOT salary issue could result in a $176 million increase in the unfunded liability of TSERS, causing state employees in the system to pay more, according to Folwell.
