CHARLESTON, W.Va. — The state Division of Highways does not have a complete, centralized inventory of all the real property it owns, according to the state Legislative Auditor.
That’s a violation of the DOH’s internal policies, auditors told state legislators during interim meetings Sunday at the Capitol.
“Without a complete, centralized inventory record of land owned by the DOH, the DOH cannot determine if it owns excess properties that are unneeded. The lack of such an inventory record impedes the agency’s ability to actively market and sell excess property, which could provide valuable revenue to the State,” auditors wrote in their report.
MORE: Audit on DOH records of the agency’s property.
Continued ownership of unused property adds to the DOH’s maintenance and management responsibilities and consumes valuable resources, auditors wrote. Additionally, such unneeded property prevents possible property development opportunities to enhance local economies and deprives communities of real property tax revenue.
And because DOH doesn’t have a good system for keeping track of its property, it relies on sales of opportunity rather than marketing unnecessary property, the auditors concluded.
“Considering the significance of the revenue generated by these sales and the added benefit the counties receive in property tax revenue, it would seem to be in the best interest of all parties for the DOH to identify excess properties and proactively market these properties for sale to the public,” auditors wrote.
The lack of records also means DOH can’t comply with other state requirements such as an annual inspection of property or a vacant land survey from the Board of Risk and Insurance Management.
Eric Hudnall, director of the right of way division for DOH, said steps have been taken to compile a record back to 2007.
Hudnall said the agency’s stance for many years was to not sell its property.
“DOH policy for years was not to sell anything to keep everything that was purchased,” he said.
He added that the philosophy was, “We wouldn’t have bought it unless we needed, it so we never sold it.”
Legislative auditors did point out, though, that the Division of Highways in 2001 paid $511,000 for 9.3 acres intended to be a District 1 maintenance site just north of Poca.
In 2004, DOH paid $182,500 to install a railroad crossing that originally consisted of signal lights and inserts at the property in the unincorporated community of Black Betsy.
But after that the agency decided not to place the maintenance site there after all.
“According to the Bureau of Labor Statistics’ Consumer Price Index, the $511,000 paid in 2001 for the property has the same buying power as approximately $707,000 would today, and the $182,500 additional costs spent by the DOH for the installation of a railroad crossing in 2004 would equate to approximately $235,000 in today’s dollars. Therefore, after this adjustment for inflation, the DOH has an investment of approximately $942,000 on property that has provided no benefit to the State,” the auditors wrote.
“While we have made no attempt to establish a current market value of this property, it is likely that 9.3 acres of riverfront property located five miles from the I-64 Nitro exit could have considerable worth.”
State Transportation Secretary Tom Smith told legislators on Sunday afternoon that he will look into the Black Betsy site and make a determination about what to do with it.
“I’m not an excuse guy. I think we need to take things head on. The Black Betsy site sitting like this for years is a problem,” Smith said.