Facing diminishing reserves, County may propose levy to fund road department
As the $14 million cash reserve that funds the County Road Department dwindles, the Lincoln County Commission has set out in earnest to find a new funding source before the reserves are depleted.
With a current annual budget of $3 million, the Road Department could exhaust those funds in a little over four years if no solution is found.
County Administrator Darren Coldwell told the Commission at its Jan. 24 meeting that he’s asked the Road Department to cut about $1 million from its budget, spread equally across the Libby, Troy and Eureka districts, to bring it down to $2 million a year.
But because budget cuts alone wouldn’t be a sustainable, long-term solution, Coldwell also raised the possibility of putting up to a public vote a road levy, possibly as soon as later this year.
Currently, Lincoln County is one of only two counties in Montana — the other is Mineral County — that does not impose a road tax upon its residents.
Coldwell, the three commissioners and Marc McCully, the County’s road foreman for the Libby district, all saw the need to inform the public about the status of the road fund and the rationale for imposing a road levy, as well as the need to include them in the process of coming up with a solution.
“I think we need to have some work sessions, because I want to do more than just discuss the problem,” said Commissioner Mark Peck. “I think we need to be really clear what are the impacts” of both imposing a levy and cutting the budget.
Historically, the road fund was supported by Secure Rural Schools (SRS) payments and by timber receipts. The loss of both in recent years — and the uncertainty of whether they will return and, if so, how much money they will provide — are cause for the Commission’s concern.
“I don’t want to see that cash reserve just completely be depleted,” Peck said. “We can hope that timber comes around, (though) it’ll take some time. (And) if they approve SRS, that buys us time.”
Peck also pointed out that the return of those funding sources would mean the County either would not have to impose a levy or would not have to impose as many.
The cash reserves once contained over $20 million.
Significantly reducing the annual road budget below $2 million could have equally significant repercussions, including diminished services and maintenance and possibly even layoffs, Coldwell said.
“That’s what I’m concerned about,” Peck said. “If we cut too far we’re going to lose what we’ve gained in maintenance and infrastructure that’s been put into roads.”
McCully said it costs $600,000 “just to open the doors.”
The results of reducing the road budget from $3 million to $2 million weren’t clear.
Coldwell crunched the numbers for five hypothetical levies — $1 mill to $3 million at $500,000 intervals — and the tax impact on homes valued at $50,000 to $350,000.
He said the $1 million levy was not enough to sustain the road fund in the long term, and said he didn’t think the $3 million levy was “going to float” with County residents.
Nonetheless, he suggested putting it out there because “maybe I’m all wet, maybe people will say road department services are more important than the extra money a year.”
Under a $2 million levy, which theoretically could support the reduced annual $2 million road budget, a home valued at $200,000 would be assessed an annual tax of $152.57, according to Coldwell’s calculations. “These are numbers we need to start floating out there to see what’s realistic,” he said.
Coldwell noted that the tax would only affect County residents not living in one of the incorporated cities.
If the Commission decides to put a levy vote on the November 2018 ballot, Coldwell said the County Elections Department would need all related information by the first week of August, “which means we all have to spend quite a bit of time answering questions, going to senior citizens dinners, (and) going to public forums” in the coming months.
Peck said he wants more clarification and understanding of all the ramifications.