Commissioner looking beyond Jan. 15 vote

Published 4:17 pm Tuesday, December 11, 2007

By By JOHN EBY / Niles Daily Star
CASSOPOLIS – Road Commission Engineer-Manager Joe Bellina's presentation to the Cass County Board of Commissioners Dec. 6, on two Jan. 15 millage requests, was more educational than a hard sell.
"There are only so many revenue sources available," Bellina said. "It's going to be up to the residents of this community. Part of this effort is to put as much information out there as possible so that they make an informed decision.
"If they choose not to fund it because they feel the roads are adequate or it's just not in their best interests or they're unable to fund it, then that's the decision they make and everyone has to live with it," Bellina told commissioners.
"I understand the roads are in bad shape, and I can see why we need money," Commissioner Ed Goodman, D-Silver Creek Township, said. "But I have to think of the constituents I represent. Gas prices have gone up. It costs more to go to work. They've lowered our salaries. They're outsourcing all the jobs. And they're privatizing all the good jobs at the state.
"They always leave it to the middle class, the working man, to pay for all of this," Goodman said.
"Believe me, I would be the first out there to say, 'Yes, we should pass this millage,' but I have to look at people on fixed incomes who can't afford it. Should we let the roads go to hell in a handbasket? No! But I don't know if it's going to pass. Do you have another plan for revenue?"
Bellina said, "Yes, we can contract with other government agencies, like we did with the county to pave the parking lots. We've done paving in years past in St. Joseph County to the east. I was in contact with Berrien County earlier (last) week to see if they would be interested in us making their patch material. We can do those types of things. What we cannot do is manufacture gravel like we do and sell it on the open market. There are limitations to how we can compete with the private sector."
As it stands now, Cass County Road Commission's asphalt plant will not open in 2008, as no local paving will be done. The plan is to save diminishing funds to allow for substantial paving every other year.
No township matching funds are budgeted for 2008, compared to the $456,580 spent in 2007 and $385,476 spent in 2006 to help the 15 townships resurface and maintain local roads.
Truck purchases are being done on a lease basis to spread costs over five years, making necessary vehicles affordable, but tying up capital for future needed purchases.
Road striping has been cut back "severely." Mowing may be a lower priority for an agency whose buying power has been eroding since 1984, when it had 88 employees – compared to 56 today.
"The current number of employees is the minimum needed to provide the community expected services during winter snow-plowing operations," said Bellina, who joined the Road Commission in 2004.
Bellina said the cost of basic materials, manpower and benefits in the past decade exceeds the Road Commission revenue stream (inflation, 14 percent; labor, 13 percent; benefits, 91 percent; salt, 17 percent; diesel fuel, 105 percent; gasoline, 112 percent; liquid bitumin, 78 percent; and bituminous emulsion, 82 percent), meaning instead of the $35,000 it cost as recently as 2005 to pave one mile of roadway 20 feet wide with 1.5 inches of asphalt, it costs $53,500 in 2007 – a 53-percent jump.
Those are some reasons the Road Commission persuaded the county Board of Commissioners by a 10-3 vote Nov. 1 to place two millage proposals on the Jan. 15 presidential primary ballot – one for half a mill for primary road and major street improvement and one for local bridge and street improvement.
The Road Commission is responsible for construction and maintenance of 269.04 miles of county primary roads and maintaining 744.79 miles of county local roads. At the direction of the townships, the Road Commission also constructs and improves county local roads.
The Michigan Department of Transportation is responsible for an additional 122 miles of state and federal highways within the county.
A state statute formula also determines how much would be directed to the Road Commission, Niles, Edwardsburg, Cassopolis, Vandalia and Marcellus.
Each 50-cent tax per $1,000 state equalized value would generate $828,400 the first year of the four-year levy, 2008-2011.
"Before I ask anyone for money," Bellina begins his presentation, "I try to determine that it's actually needed, so the first question I ask every township and village I go to is, 'Are your roads in good enough condition? Are you satisfied that they drain properly, are they striped routinely, are they smooth enough, is signage adequate, are trees trimmed? If the answer's yes, my wife's waiting for me at home. But the answer is usually no, so we need to examine why."
As an Act 51 agency, most Road Commissions rely on fuel taxes in a variety of forms for funding. Federal fuel taxes are applicable on a limited number of arteries – about 50 percent of the primary system, or roughly 10 percent of the county's total road system. "Those are very targeted funds," Bellina explained, "and the estimate is that by Fiscal Year 2009, federal highway transportation funds will be in the red by $4.2 billion. The feds have not figured out yet exactly how to fill that hole."
The Road Commission was restricted from full utilization of federal funds starting in 2003. Before then, it could prove it was less costly than private contractors, do work and receive 100-percent reimbursement of federal funds allocated to Cass County. This is no longer allowed, he said, resulting in the exchange of federal funds with the state at 75 cents on the dollar – costing this community more than $1 million.
The Road Commission's other main source of fuel tax revenue is state fuel taxes. Gasoline fuel tax is 19 cents – unchanged since 1997, when a four-cent hike was approved. Prior to that it was raised two cents in 1983 and 1984. The Consumer Price Index (CPI) increase applied since 1997 would adjust the gasoline fuel tax to 25 cents in 2007.
Diesel fuel tax of 15 cents has not changed since 1984, when it increased two cents. It also increased two cents in 1983. A CPI adjustment since 1997 would value the diesel fuel tax at 30 cents in 2007.
"Because those revenues are tied directly to the number of gallons sold, and not a percentage, like sales tax," Bellina said, "the Road Commission did see a 7-percent increase in state revenue between 2002 and 2006, but as the price of fuels overall has escalated, the amount of gallons are starting to settle off. In 2007 we anticipated a reduction, but revenue remained flat. We're anticipating a 4-percent reduction in 2008."
"The only other option for money at the Road Commission is money from local property taxes," Bellina said. "The county doesn't have a property tax applied to the road system. Of the 15 townships, we have one with a road millage (Marcellus) and one village (Marcellus) with a road millage."
"As anyone should do, including a homeowner or a community of any sort, when you see this change between buying power and income, you need to fill that gap somehow," Bellina said. "I would agree that the first answer is cutting costs wherever you can. Times are tight."
But daily expenses have already been reduced in a variety of ways. The Road Commission operates its own gravel pit, asphalt plant and paving operations. These activities helped save construction costs on county primary roads, as well as on local roads in townships and villages.
Implementing new paving ideas, such as lower paving temperatures and use of life-extending additives further saved money.
A calcium chloride plant was constructed to reduce the amount of winter salt needed. Mowing is done with regular employees, rather than part-time summer staff.
"We've done as many things as we can think of to reduce costs," Bellina said. "If we can't cut costs, we have to look for increased revenue."
President Bush stated he will not consider a fuel tax increase even in light of infrastructure failures, such as the Minneapolis bridge collapse.
"At the state level," he said, "there are currently two House bills which seek to address the funding problem by implementing increases to the fuel tax" on both gasoline and diesel fuel that would correct the disparity and increase both three cents per year for three years.
Commissioner Minnie Warren, D-Pokagon Township, asked about the impact of three cents per year.
"It would far outstrip the millage," Bellina said. "That would increase Road Commission revenues 40 percent."
These bills, HB 4575 and 4576, have not seen any movement since May.
The Road Commission passed a resolution Nov. 1 in support of this legislation and sent it to lawmakers and Gov. Jennifer Granholm. He invites local politicians to lend their voices if they deem the legislation "appropriate. Legislators hear from us at the Road Commissions, but they don't hear from anybody else, so we're asking everybody to speak up."
"There seems to be little hope of the state addressing the problem," according to Bellina. "Even if the state passed fuel tax increases, it would have little or no effect on township road conditions. Townships are not Act 51 agencies and receive no fuel tax revenues, but the Road Commission cannot spend more than 50 percent on road construction, so the townships will have an ongoing funding problem to solve. Unfortunately," lack of federal and state solutions "brings the problem right back to the local level as the only other funding source available. Historically, Michigan has been in the bottom 20 percent nationwide as far as road funding. (In 1992) we were the lowest-spending state per-capita in the Union. If you don't think the roads are in the condition that you'd like, it's now up to us. There's nobody else to look to for help."
Bellina told Commissioner Debbie Johnson, D-Niles, that since the millage is a countywide question, no area of the county passing proposals will see additional money unless one or both requests pass countywide.
"If the millage issues pass and there's an increase in Road Commission funding (not paving in 2008) will have to be reconsidered," Bellina told Johnson.
Johnson also asked him about Lake Street in Niles, which is federally fundable. "That work is not tied to this discussion at all," Bellina said. "That's a separate pot of federal money.
"In essence, to most people it may not look like it needs it, but once you pass a certain point on a roadway, it becomes ineffective to consider anymore. If you can do a thin paving operation of an inch and a half to two it's very cost-effective compared to waiting another 10 years when it's really obvious to everybody that it needs to be done. At that point, you're talking about taking the whole road apart and starting over."