Hikes in the costs of oil-based products like asphalt and fuel are stretching Flathead County’s budget thin, forcing county officials to consider funding cuts or decreased services while preparing next year’s budget.
The hardest hit departments are the county’s largest and most fuel-dependent: Flathead County Road and Bridge and the Sheriff’s Department. The combined fuel and oil budgets for the two departments has increased from $622,960 in 2005 to $1,031,656 for the proposed fiscal year 2009 budget – a 66 percent jump over three years.
The situation is most dire at the Road and Bridge Department where the work is particularly reliant on oil and the loss of federal funds could further decimate the budget. The result, county officials say, is that it’s unlikely any paving of gravel roads – already a controversial issue in the county – will occur in the next year and that the number of overlay and chip sealing projects will decrease.
“We’re going to be doing less work as compared to what we were doing in past years because part of our budget is being consumed by the rising petroleum prices,” Dave Prunty, public works director, said.
Last year, the county road department did overlay work on 23 miles of county roads and completed about 0.25 miles of new paving, mostly for small stretches at points where gravel roads joined with busier, paved roads. The total cost for the overlay was $1.8 million, with $1.25 million of that going toward material costs alone.
This summer, Prunty said, the department is expecting to do about 12 miles of overlay work, about half what it completed last year. And with paving costs estimated between about $250,000 and $300,000 per mile, new paving is expected to stay limited to those small stretches joining gravel and paved roads – far short of what several local citizen groups have demanded.
It’s a tough position for a department and county already pressed by mandates from the state’s Department of Environmental Quality to mitigate dust and citizens eager to see the same.
“Like regular citizens, we are grappling with rising gas prices and trying to do the best we can with the situation thrown at us,” County Administrator Mike Pence said. “We don’t want to just keep things equal, we’d like to do more than that. But with the budget we’re looking at we’ll be doing well to maintain services.”
The biggest price hike for the roads department comes in the cost of asphalt. The mix used to resurface roads consists of gravel and sand held together with a binder called liquid asphalt, which is made from crude oil. As oil prices rise, so does the cost of paving.
In 2005, the county was paying $180.25 per ton for asphalt, Prunty said. This year, the bid for asphalt was $343.33 per ton – a 90 percent increase over the past three years.
Increases in the cost of propane and diesel fuel used to transport, heat and lay asphalt are adding to the sticker shock, too. Over the same three-year time period, Prunty said the department’s average cost for diesel has climbed almost 53 percent from $2.07 a gallon to $3.16, while propane costs have jumped from $1.08 per gallon to $1.85.
Meanwhile, the U.S. House rejected a bill earlier this month that would have continued a program for four years that provides millions of dollars to rural counties hurt by federal cutbacks in logging. Unless lawmakers make a successful move to renew the bill in coming months, the county roads department, which receives about $900,000 a year from the program and another $500,000 from a similar program that would also be affected, stands to lose as much as 20 percent of its budget.
“I keep thinking they’re going to pull something off – Congress always seems to wait to come through until the last minute,” Pence said. “But it’s looking worse and worse.”
The county is considering other options to buoy the roads budget, including a local option vehicle tax where an added tax – up to .7 percent of the vehicle’s value – is added onto registration fees. Half of the revenue generated would go to the county, while the remaining 50 percent would be split between the county and its incorporated cities on the basis of population.
Several other Montana counties, including Missoula, Yellowstone, Gallatin, Cascade and Lewis and Clark, already use a similar tax to bring in anywhere from $1.5 million to $6.4 million annually.
Other Flathead County departments are also struggling to become more fuel-efficient or to adjust their budgets to allow for the increasing costs. The Sheriff’s Department has already overshot its gas budget for this year by about $29,000, Sheriff Mike Meehan said. On an average day the department has six patrol vehicles driving about 80 to 100 miles.
“Personnel costs still make up the overwhelming majority of our budget, but it’s significant – anytime you see those types of increases that money has to come from somewhere else,” Meehan said.
County deputies have begun to file incident reports from the road electronically, he added, saving the time and gas that it required to come back to the main Kalispell office. The department is also looking into switching out some of its patrol cars to more fuel-efficient sedans, but Meehan said there are limited choices for vehicles capable of handling the extra electronics a police vehicle requires.
Still, other technologies are a ways off for many fuel efficiency changes, especially for large machinery, and added funding is proving elusive. State law limits the county to a tax levy increase of one half of the Consumer Price Index average over the last three years, or about a 1.6 percent increase on property taxes.
Tax dollars from the county’s upsurge in growth in recent years has provided the county enough new revenue to cover the funding gap needed to maintain a fairly constant level of services, Pence said. The increased population, however, hasn’t provided enough new money to increase the level of service to compensate for the growth in population.
And with huge increases in gas and oil related costs occurring at the same time as a slow down in new construction, the stopgap provided by revenues from growth may soon disappear.
“This year, I think we’ll be able to work around increases,” Pence said. “But if these costs continue to rise and growth revenue drops, I don’t see how property tax increases alone will allow us to keep even the current level of services. We’d be in a position where more drastic budget cuts would be necessary.”