The Reno Gazette-Journal, Marilyn Newton / AP
Monday, Oct. 8, 2012 | 5:30 p.m.
The state Transportation Board was caught flat-footed when it learned that $20 million could be added to the already inflated cost of the new freeway between Reno and Carson City.
"There is no excuse why this board never heard of it," said Lt. Gov. Brian Krolicki, a board member.
"There were a series of poor judgments and poor decisions that were not known to the board," he told the state transportation executives.
The original cost estimate of the 8 1/2-mile freeway section in Washoe Valley was under $400 million and was scheduled to be completed in 2009. It encountered numerous problems and wasn't opened until this year at an estimated $575 million cost.
Newly installed Transportation Director Rudy Malfabon told the board Monday that the department had intended to inform the board in June but "It got lost in the shuffle."
Gov. Brian Sandoval said, "I feel we were blindsided." Board member Tom Fransway said, "This is definitely a big surprise."
Malfabon and department counsel Dennis Gallagher said there was a dispute over the price of the land taken for the project and the case went to binding arbitration.
The land owners wanted $28 million for the land and water rights. Malfabon and Gallagher said the department did not put a price on the water rights. Under questioning by the governor, they said the department never made a counteroffer.
After a five-day hearing, District Judge Brent Adams decided the land was worth about $9 million and the water rights $5 million. The department now has the water rights and will have to decide what to do with them.
There is interest on the judgment dating back to 2007, and Sandoval said the fees will be in the "seven figures," putting the total cost to the state at $15 million to $20 million.
Attorney General Catherine Cortez-Masto suggested the board be briefed in the future on pending litigation "so we would not be blindsided."