The N.C. Department of Transportation has long symbolized what’s wrong with state government. The agency has spent billions of dollars over the decades with few controls and little accountability, its budget viewed by legislators as a giant slush fund to further their political agendas. Its divisions have historically been headed by bureaucratic deadwood determined to maintain the status quo at any cost. Its powerful board has been a repository for political patronage, its members disdainful of citizen input unless it comes from their highway industry buddies. A culture of racism has permeated the agency, as evidenced by numerous discrimination lawsuits. A relic of a bygone era, DOT has practically defined the term institutional arrogance.

Public perceptions of DOT have not changed a lot in recent years. After Durham activists successfully derailed the misguided Eno Drive plan, a classic DOT steamroller concept, they’re now furious that the alternative East End Connector is not one of the projects in the department’s recently unveiled draft Transportation Improvement Program (TIP), which runs through 2012. “Is DOT nursing a grudge because Durham citizens successfully lobbied against their pet Eno Drive project?” wrote a local citizen in a letter to The Herald-Sun. “Because of its past actions, the DOT has very little credibility with the citizens of Durham,” wrote another.

The decision to further delay Chapel Hill’s Columbia Street project has tongues wagging in similar fashion. The subject of an intense dispute between the town and UNC, the project languished despite a 1998 agreement on the design after university officials decided they wanted more lanes. The two parties reached consensus in 2003 to keep the original design in exchange for town approval of UNC’s coveted chiller plant, though some university officials remain less than enthusiastic about the compromise. That should have resolved the matter, however, and town planners expected the project–Chapel Hill’s number one transportation priority–to be funded for completion in 2007. Instead, DOT pushed the date back to 2009, giving new life to old conspiracy theories. “Our suspicion is that some UNC booster in Raleigh is doing [UNC] a favor by going around the system and yanking the project,” says a town official.

The excuse DOT has offered for the delays is simple: The money just isn’t there to move more quickly. In December, DOT revealed that projections showed the system running out of cash this fall, requiring a major rollback in the TIP project list and timetable. This surprised observers, who noted that just three years ago DOT carried a bank balance in excess of $900 million.

But the shortfall is real, and the reasons are more a reflection of positive changes DOT has made than any fiscal mismanagement or political machinations. In 2002, the legislature passed the Cash Allocation Management Act, which allowed DOT to draw down its cash balance with low-impact projects such as preservation and maintenance, signalization and public transportation rather than new roads. More importantly, DOT has been developing and enhancing an environmental stewardship policy the past five years that has led to a radical transformation of its road building practices and expedited numerous projects for the better.

Under the old DOT, engineers followed their asphalt muse, ignoring environmental and other inconvenient considerations, plowing ahead with new road projects–until they hit brick walls, often in the form of clean water and other federal regulations. This created huge bottlenecks, as mitigating environmental damage from new roads takes years, not weeks. Stalled projects meant wads of cash accumulating in the bank, as the money had been allocated for the projects but couldn’t be spent until the problems were resolved.

Today, the environmental component is built into the planning process and integrated throughout the design and construction phases. DOT helped birth the Ecosystem Enhancement Program, an unprecedented collaboration between traditional foes DOT, the state Department of Environment and Natural Resources, and the U.S. Army Corps of Engineers that is the first of its kind in the nation. In 2003, DOT established the Office of Environmental Quality, which coordinates and oversees green programs department-wide. The chartering of 20 Rural Planning Organizations to mirror the state’s urban transportation planning structure has given rural residents a level of access to the process they have not previously enjoyed, with consequent environmental benefits. These and other initiatives have garnered DOT more than 20 national awards from the Federal Highway Administration and other transportation agencies.

In addition to preserving thousands of acres of wetlands and other sensitive habitat, DOT’s new philosophy has satisfied business interests by clearing out the bottlenecks and streamlining the permitting process. But as a result of that and construction costs that have escalated well beyond the rate of inflation, the gas tank is now close to empty.

Just why it took so long to figure out that money was scarce is a matter of debate, but a historic lack of accounting oversight contributed to the problem–like rich folks who don’t need to worry about their day-to-day account balances, DOT just wrote checks. With far more projects on the state’s needs list than can be accommodated, scaling back the TIP (which had never been grounded in reality anyway) was the only prudent option. The Columbia Street improvements and East End Connector will happen, promises DOT spokeswoman Ashley Memory, if not as quickly as many would prefer. “Our commitment to building these projects has never wavered,” Memory says. Like the wetlands that the programs are designed to protect, however, the institutional changes at DOT are fragile. The Huns who once controlled DOT are unhappy with the new priorities and have expressed their wish to return to the good old days when politics, not policy, ruled the road-building roost. Despite the national recognition and demonstrated success of the environmental stewardship programs, or perhaps because of them, the old guard is fighting back. Sen. Clark Jenkins of Tarboro, a former DOT board member who sees environmental concerns as an obstruction to progress, slipped a provision into the Senate budget in May that would have eliminated the job of Deputy Secretary Roger Sheats, a key architect of the environmental programs.

Jenkins said that Sheats had upset communities by needlessly delaying transportation projects. The laughable irony of this comment notwithstanding, Jenkins was probably correct on one account: Sheats was part of a group that recommended replacing the Bonner Bridge in Dare County, which connects the Outer Banks to the mainland, with a longer span that would protect the Pea Island National Wildlife Refuge. That plan drew the ire of Senate President and Dare resident Marc Basnight, who wanted a bridge that paralleled the old one. Basnight ultimately got his way, even though parts of the roadway at the Outer Banks terminus may ultimately end up under water, and the plan faces numerous environmental hurdles (and a possible lawsuit) that engineers have yet to overcome.

Whether Jenkins was carrying Basnight’s water or simply displaying antagonism to his personal environmental bogeymen is not clear (Jenkins was out of town and unavailable for comment). But the attempt to purge Sheats failed, as DOT Secretary Lyndo Tippett navigated that minefield by reorganizing the department in advance of final budget passage. Sheats had one of his functions transferred to another division, and the upshot of that move remains to be seen. On the other hand, Tippett issued an atypically strong statement that “We’ve made great advances, and to lessen our commitment to environmental stewardship is not the direction in which I want to go.” Memory says the department has no intention of rolling back the clock: “Roger worked very hard with the secretary to build the culture of environmental stewardship,” she says. “This will continue.”

Survival is a powerful motivator, however, and those who stand to lose the most from permanent cultural changes at DOT are likely to fight till they drop. That includes many of the lifers who still manage little fiefdoms within the department, as well as some higher-ups. One of those, Deputy Secretary Dan DeVane, symbolizes the holdover element as well as anyone: One of his primary functions is legislative bagman, cutting deals with power brokers in the General Assembly to keep them happy.

Major obstacles remain before the changes at DOT can become institutionalized. Foremost among these is overhauling the Byzantine funding formula and district system that consolidates power in the hands of a few. Developed in the 1950s, the outmoded system has resulted in resources being disproportionately funneled to a few low-population areas of the state. Not coincidentally, one of those is Basnight’s district: Since 1990, Dare and other coastal counties Basnight represents have consistently ranked in the top 10 in per capita spending, while congested urban areas have ranked in the bottom half despite major traffic problems; Cumberland County, which includes the Charlotte metro area, ranks 98 out of 100 counties.

Any adjustments in the formula will have to come from the General Assembly, and that’s not likely to happen any time soon. Meanwhile, the battle for the heart and soul of DOT will rage on, probably for years. Those who criticize DOT for not moving fast enough on particular projects would do well to take note of the bigger picture and support the agency where and when it most matters.