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A handful of years ago the Legislature and Governor enacted a Local Option Sales Tax for Counties to use to fund transportation related projects and programs. The tax can be up to $.005 or one half percent. Since inception seventeen counties have enacted this sales tax option. Included are Cass County's neighboring counties Hubbard, Beltrami, Wadena and Todd, with Crow Wing County soon heading to hold a public hearing on this subject as well.

To date Cass County has not opted to pursue this revenue source. The County Board and Highway Department has been managing the funding of the County's highway needs by supplementing the State Aid revenues with Cass County property tax revenues. Last year, 2014, approximately $1,700,000 of property tax was used to maintain roads and construct pavement preservation projects on the State Aid system.

There have been recent attempts at the Legislature, and with the Governor, to increase State revenues for transportation. There is a growing shortage of funds state wide for not only County transportation needs, but also for the State highway system as well. Cass County has been stepping up to fill the funding gap with local funds with the focus on maintenance and system preservation. The last Legislative session was dubbed the "Transportation Session" by legislative leaders and the Governor giving us hope that our needs were finally going to be addressed. Though there was acknowledgment of the needs there was no consensus on how to fund them.

In preparing for submittal of the Department's 2016 budget request the Highway Department staff reviewed our maintenance needs as well as reviewed our construction program to see how the road system was doing. What we found was that the schedule of our pavement preservation construction projects was not meeting the needs of the system. Maintenance staff and managers were identifying sections of these scheduled projects that were in need of major repairs prior to the scheduled construction project. Also, we were identifying that the scope of the projects were expanding and becoming more expensive due to timing of the projects. An example of this is that where the project was programed for a thin overlay initially, was expanded to a mill or reclamation project five years later when construction actually happened. The increased costs for these projects causes' future projects to be shifted out in the schedule, thus causing more delays in delivery and additional costs.

Presently Cass County's road system consists of 814 total miles. 532 miles of State Aid Roads, of which 400 miles are paved. There are 282 miles of County Roads, of which 64 miles are paved. There are presently approximately 105 miles of the State Aid paved system that are rated as poor or very poor. Of these roads 80 miles are currently programmed in the five year construction program, though as stated in the previous paragraph some of these miles will be shifted out into future years. This leaves us a gap of 25 miles of poor rated pavements. From our pavement rating data we are projecting that at the end of this five year construction plan approximately 65-70 more miles of our roads will have declined from fair condition to poor condition. With the current available funds we see that these needs will be delivered at a rate of approximately 14 miles per year. So the rate of funding will keep pace with the needs, but the 25 miles of poor pavements will continue to pressure the system and sway decisions regarding the timing of delivery of projects. The amount of money needed to address this 25 miles is $4,000,000.

Another issue identified, in our preparation of next year's budget request, was the increasing cost of gravel and calcium chloride. We performed a brief analysis regarding the cost effectiveness of paving gravel roads versus perpetually placing gravel and calcium chloride. What this analysis showed was that if a gravel road could be prepped for pavement relatively cheaply, paving would be cost effective. This preparation work would have to be limited to minor grade shaping and placement of minimal additional gravel. The cost effectiveness could be expressed in terms of time of investment payback, which is estimated to be 15 years, at today's costs, for an improvement that would be expected to last a minimum of 20 years. There are 20-25 miles, of our 120 miles of gravel roads being treated with chloride, which would qualify for pavement. We have estimated the cost of this to be $3,000,000, with an estimated annual budget savings of $175,000 when completed.

A driving consideration for those that have implemented this tax was the effect on the residents of the County(s). In most instances it was found that the majority of the revenue would be generated from expenditures by others who do not live in the respective County, but do use County roads as well. This would be the same for Cass County with approximately 80% of the anticipated $1,070,000 annual revenue, coming from non-County residents. A more detailed determination of this percentage is presently being analyzed by the University of Minnesota Extension Services.

In conclusion what the taxpayers of Cass County would be getting for their investment would be roads in better condition, or roads with higher service levels, for lower long term costs. We have labeled this as doing the right thing at the right time which would reduce the need for future year increases in the Highway Department budget requests. At such time that the State steps forward and does its job in funding the State Aid system's needs, this local option tax could be revisited.[[In-content Ad]]

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