HomeMy WebLinkAboutRoad Maintenance Funding MemoDepartment of Administrative Services
Dave Kanner, County Administrator
1300 NW Wall St, Suite 200, Bend, OR 97701-1960
(541) 388-6570 - Fax (541) 385-3202
www.co.deschutes. or. us
June 15, 2011
TO: Board of Commissioners
FROM: Dave Kanner
RE: Road maintenance funding
Discussions on the subject of road maintenance funding in Deschutes County have been
going on for at least five years. These discussions gained a sense of urgency in 2007,
when it became apparent that the federal money from PL 106-393 would be lost and that
measures would have to be taken to fill a $3 million gap in our road maintenance budget.
(Note that even with the federal money, the County was not fully funding its maintenance
and preservation needs.)
In the spring of 2007, the Board of Commissioners endorsed a four -pronged road
maintenance funding strategy that included:
1. Raising the solid waste tip fee and dedicating revenues from the increase to road
maintenance;
2. Imposing a transportation systems development charge;
3. Increasing the transient lodging tax and using the increase to maintain roads with a
substantial purpose of supporting tourism; and
4. Budget cuts.
At the time of this decision, it was expected that the $5 per ton tip fee increase would
generate about $900,000 per year for road maintenance and that the SDC would generate
$1 million to $2 million annually. It was projected that an increase in the County TLT
from 7% to 9% would generate $800,000 (assuming it survived an inevitable legal
challenge from the Oregon Lodging Association, which we believe it would have) of
which $500,000 would have been dedicated to road maintenance.
These decisions and projections were derailed by the recession and the collapse of the
housing market. The tip fee increase, because of the sharp decline in solid waste tonnage,
has generated only about $500,000 and subsequent Boards have voted to allow the
Department of Solid Waste to keep half of that. The SDC has generated about $200,000
per year and the proposed TLT increase was turned down by the voters in the November
2008 election. The Road Department went forward with budget cuts, eliminating 4 FTE
Quality Services Performed with Pride
positions and reducing the preservation/overlay budget by 60%. Compounding the
problem. the cost of asphalt, oil and gasoline have skyrocketed, severely impacting the
Road Departments budget.
In the meantime. since those discussions of four years ago. there were two positive
developments that delayed this continued dialogue about road maintenance funding.
First, in October 2008, Congress re -authorized the Secure Rural Schools Act. although at
a much lower funding level. which brought in more than $2 million for road maintenance
funding in FYs 2009, 2010 and 2011. and which will bring in about $1.3 million in FY
2012. Next, the 2009 session of the Oregon Legislature approved a 6 -cent per gallon
increase in Oregon's gas tax. along with increases in vehicle registration fees. ODOT's
projections at the time indicated that these increases would bring another $1 million
annually to Deschutes County. Unfortunately, these projections have not come to pass.
Because of the spike in gas prices and the recession. people are driving less and
purchasing more fuel-efficient vehicles. The result is that the increase in the gas tax has
generated significantly less revenue than had been hoped. State motor vehicle revenue
for FY 2011 is expected to be about $1 million below budget. Should this trend continue
into FY 2012, the County will be forced to reduce major preservation and overlay
projects next year. Our ability to do preservation and overlay projects would be severely
impacted in FY 2013.
The cost of fully funding annual preservation and overlay work is about $5.1 million per
year. "Fully funding" maintenance and preservation activities means performing repair,
patching and crack sealing activities on all paved County roads so as to maintain a
pavement condition index of not less than 70, which is considered the line between
"good' and "fair" condition. and to overlay all arterial and collector roads on a 20 -year
cycle. Attachment 1 is a five-year preservation and overlay project list assembled by
Tom Blust. As you can see, it shows that we should be spending approximately $5.1
million annually on these projects. The amount budgeted in FY 2012 is $2.8 million.
(The actual amount spent might be less than that. As noted above, state gas tax revenues
will likely come up short of budget and money that would have otherwise been spent for
preservation will instead be used for routine maintenance.)'.
This dilemma is further compounded by the astounding cost increases in oil, gasoline and
asphalt. the basic material components of road maintenance. The cost of overlaying one
mile of road in FY '05 was $124,000. In FY '08, the cost was $222,000. Because the
recession has created a more favorable bidding climate, the cost of this work — all of
which is contracted out to the private sector — has actually come down a Little and is
currently estimated at $210,000. It is unlikely these costs will ever return to FY '05
levels and are in fact likely increase over time. Toni has previously provided the
Commissioners and the Budget Committee a chart (attachment 2) that shows asphalt
The S5.1 million figure is derived as follows: All arterials and collectors should be overlaid (with the use
of full -depth reclamation on approximately 1/3 of these roads) every 20 years. There are 414 miles of such
roads that we maintain. We should be overlaying 20.7 miles per year. The current average per -mile cost of
an overlay is $210,000. The current average per -mile cost of FDR is S320,000. 20.7 x 2/3 x
$210,000=S2,898,000 and 20.7 x 1/3 x S320,000 = S2,208,000. S2,898,000 + $2,208,000 = S5,106.000.
Memo to 13oC re: Road Maintenance Funding Nage 2
June 15.2011
prices far outstripping normal inflation and certainly increasing at a far greater rate than
anv of our revenue sources: particularly our largest revenue source — state gas tax —
which, while increasing in gross dollars, is decreasing on a per registered vehicle basis.
from $43.37 in FY '00 to $39.82 in FY '08 and on a per capita basis from $54.97 to
$49.52 over that same period.
It should also be noted that roads that are not maintained and overlayed on a regular basis
will eventually deteriorate to the point at which they have to be replaced. As a rule of
thumb, the cost of replacing a road is about four -and -half times higher -- $1 million per
mile — than the cost of overlaying a road. Decisions made today will have huge
implications for future generations of taxpayers and road users.
Unfortunately, the Board's revenue -raising choices are limited. There is a moratorium on
the imposition of new local gas taxes as part of the 2009 increase in the state gas tax. The
County could consider a local vehicle registration fee, but with the state having just
raised vehicle registration fees, this may not be an attractive option.
included with this report is a list of funding options prepared by Torn Blust (attachment
3). This includes the funding options already implemented. Note that in the case of a
property tax, under state law, 50% of a county local option levy for road maintenance
must be shared with the cities and road districts in the county. In the case of a levy in the
unincorporated area only, 50% would have to be shared with the road districts. If
Deschutes County were to create a special road district, it would have to exclude the
cities, which are already considered road districts under state law, and any other existing
road districts. Thus the tax rate for a special road district would have to be
extraordinarily high. A 2008 memo from legal counsel explaining this is further detail is
attached. (Attachment 4.)
Also attached is a five-year projection of Road Department revenues/expenditures. This
projection (attachment 5) assumes that the Secure Rural Schools money will expire after
FY 2012 and that we will return to the old funding formula based on actual timber
harvest. It also assumes that ODOT projections for future -years motor vehicle revenues
are accurate. I must emphasize that so far, the ODOT estimates have in fact been Well
over actual revenues. Also attached is a live -year projection based on "expected
revenue,"' an extrapolation of our actual revenue in the current year. (Attachment 6.)
With the above assumptions, Deschutes County is able to budget about $2.8 million
annually for major preservation and overlay projects. The annual need is estimated at
$5.1 million, thus creating a gap of $2.3 million that will only grow over time as
maintenance and construction costs increase. If we use the "expected revenue'
projections, between $1.1 million and $1.5 million would be available in future years,
thus creating an even larger gap.
I continue to believe that all future scenarios for the Road Department must involve
significant budget cuts; cuts that I do not believe can be achieved through additional staff
reductions or privatization. The only way to realistically achieve significant savings is to
N1cn o to BoC re: Road N1aintenance Funding Pauc 3
June 15.2011
reduce road maintenance activities and expenditures and, as politically unpopular as such
a move might be, that necessarily means allowing certain paved roads to become gravel
roads.
The cost of maintaining a gravel road, over time, is about one-half the cost of maintaining
a paved road. While it is difficult to determine exactly what the cost savings would be
from allowing local roads to return to gravel. one way of looking at it. simply as an
intellectual exercise, is as follows:
• Approximately 40% of the paved roads currently maintained by the County are
classified as local roads (280 of 694 miles).
• The fully loaded average annual cost of routine maintenance activities on all roads
is approximately $10.2 million. (That's the total for all personnel and materials
budgeted in the current fiscal year and a number that, for planning purposes, we
assume is adequate for one year's worth of road maintenance.)
• If the cost of maintenance activities on 40% of our roads is reduced by one-half,
the savings average $2.04 million annually. ([$10.200,000 x .4] x .5 =
$2,040.000)
• The average annual cost savings from returning a paved road to gravel, on a per
mile basis, is $7,300. ($2,040,000 ± 280)
However, there is a cost to removing a pavement surface (even a badly degraded one) and
replacing it with a drivable, four -inch gravel base. That cost is estimated at S50,000 per
mile. If that cost is amortized over 25 years at $2,000 per year and included in the
savings figures above. the average annual cost savings is $5,300 per mile: still a very
significant figure.
Unfortunately. these costs cannot be determined on a straight-line basis, since the cost of
maintaining a local road is somewhat less than the cost of maintaining a collector or
arterial. Similarly, the cost of maintaining a road near Terrebonne, which needs to be
plowed less frequently in the winter, is lower than the cost of maintaining a road near La
Pine. There are other variables related to striping, shoulder maintenance, signage, etc..
that will vary widely from road to road. As such, this report deals in averages rather than
specifics.
Additionally. the cost savings noted above assume that we would allow all 280 miles of
local roads to return to gravel. which, while technically possible and administratively
feasible, is probably not politically sustainable (although that's the Boards call to make).
I have no doubt that even raising the possibility of letting paved roads return to gravel
will raise hackles. At the same time. we face persistent public demands for government
to operate less expensively. This is what less expensive road maintenance operations
look like: Gravel roads rather than paved roads.
I urge that you not delay a decision on whether to pursue this particular cost -reduction
action. Although the effects of the decision will not be seen on the ground for many
years out into the future, the decision cannot be put off to a future Board. That's because
the process by which roads would be returned to gravel involves a present-day decision to
Memo to 13oC re: Road Maintenance Funding Page 4
lune 15. 2011
stop patching and crack -sealing such roads, allowing them to deteriorate and then, when
they reach the point of being undrivable, tearing them up and putting down gravel. That
process could take ten years or more (during which time, property owners along those
roads might become very unhappy with the condition of "their" roads; another political
consideration).
At this point, there are two things I need from the Board of Commissioners before
moving forward:
1. A decision on allowing local roads to return to gravel and direction to staff to develop
a list of local roads that are the most likely candidates for such action, with, if possible.
estimated savings for each identified road.
2. Direction as to whether to pursue any other revenue options.
1 look forward to discussing this further with you in a work session.
Memo to 13oC re: Road Maintenance Fundiniz face 5
June 15. 2011
DESCHUTES COUNTY
H
U)
J
W
W W
J
Z
a o
zz
0 LL
< 0
> W
Ce
W Z
U) W
E
WEa
WO
LU}
N
r
u -
0 0 0 0 0 0 0 0 o 0
0 0 o co o (n o O 0
M m V N O m (n In V O
O N (0 0 Lc). co- 0 O
m co M co N 0 Lo no
M 0 m 0 0 co 0
E9 E9 69 E9 69 (9 (9 ((7 LO
O O
Y 0
2 N
3
7 zc
0 0 ca LL
@ O
O-- 0_-0
CO C C CO
> 2) ON T
U U V
0W W0
O O
o (n
co n
N O
0)
M 03
(9 E9
0
E 0
F-
0
o ro T
co 2
O
O N
CL 0 >
T
= LL LL
oo L
N
a) .0
0 0 U
>, 0
m0
11 El.")
m c 1---E
0 0
0 (n
o_ v
(n ti
v
N
(9 69 03
$649,650 Alfalfa Mkt Rd (Overlay)
N
co o E
T J
2 N
T p
@ 0 >
0 N U
CZ N
O
> D 3 m O ac) >
O_ (ti i @om0
m a) 65=-,I-- 'p a) ii
cc Y -o0 O a' 0 0
(0 c6 0. 0 c6 , Q' Q'
cC w p m 0) o
-2-2 N N O O
O
(0 O 0E E ON > ›. N
O O O O O O
O O O O O 0
N V 0 0 WO
o 0 N O O
m O co 0 0 O
co co co 0
0) EA EA N')
2 >,
T 3
ca
@T a) -o -
O
z m E o
tO
U a 0 m f 0 m
o.o iY o o Y 3
U
N 0 y 2 m z
@ N Y co C Y 0 o co 4_3-
o _c0 �cC
j0 Q'c m0 E
c ca
V O B O O
O o 00 N 0 Wo> O
OF-- ON 0 0 Oo. ZO
00
n O
n o
0 0 0 0 0 0 0 0 0 O 0
0 0 0 0 0 u; 0) 0 u; 4.00
N 0 0- m (0 m MO
4---- ti 0) CO- N CO- 0 M 0 O
0 I� 0 CO CO Cr (O N WO
N = 0 0- Cr E9 m N
69 E9 03 E9_' E9 _' (9 tf/
E9 (9 Kl (9
Q) 2 a) O 2
N V 2
Q O T c O m m
L O (q > N CO M /".--5-_-.0 T
O Z O0 m@
> () a) o E m O O T@ m m m o
0Q) m - L -' 3 (1.)
°'
Lip �,-_ Ta) n LO 3 > 2 >
>> m _m' z> S' 0 m >CIO 0
@ _ - 0 ro 0
ci .. N Z m >> m Q I> K 0 2
> @ <o 0 p O
-;;;(4,10,E, N> c a) m 0 ci >, (T),7)
NZ @ 3= O m E C J
conxonz o 25 0o o° (O2 0011 >0)
0
rn
0)
O
69
Lapine State Rec Road (FDR)
0 0 0 .1- 0 0
M
(O V 0- 0 WO
m O M 0 N O
0 M V 0 0 0
'V 0- CO
E9 ' (9
09
69 69 Oil fA
0 0
m m0: L
D 0 0 (0
o_ 'C O
(0(0 - U) 0
U 0
J U
c-
0 co
� L
0)
(n _
� a)
cutm Z
zo
(0 O
_c.4)
E
)0\1-1-ttclketEaT 2.
0
cD
69
1
69
0
L)
69
'n
yr
69
0
69
N01/1S03
u0
Cr)
69
0
Cr)
69
u0
N
69
0
N
69-
01.0Z
?
O1.OZ
6002
8002
LOOZ
9002 W
>-
9002
17OOZ
£00Z
ZOOZ
1-OOZ
pt; TikciArtesir 3
DESCHUTES COUNTY TRANSPORTATION FUNDING
IMPLEMENTED LOCAL FUNDING SOURCES
June 2011
• Rural Area Systems Development Charge (SDC)
Implemented in July, 2008 (Deschutes County Resolution 2008-059)
Estimated annual revenue:
FY 11-12 budgeted revenue $250,000
Statutory authority:
ORS 223.297 to 223.314. SDC's must be established by resolution or
order adopting the calculation methodology and a list of the improvements
to be funded with the SDC fees. A public hearing and 60 day legal
challenge period is required prior to adoption. Adoption of SDC's does not
require a vote of the public. Use of SDC's is restricted to capacity
increasing capital improvements.
Other jurisdictions currently levying:
At least 9 counties in Oregon have implemented SDC's.
• Solid Waste Hauler Transportation Fee
Implemented in 2008 — tipping fee increase of $5 per ton
Estimated annual revenue:
Revenue history:
FY2009 $861,470
FY2010 $708,567
FY2011 $291,740 (Budget Committee decision to reduce transfer to Road
Fund by half)
FY2012 $285,773 (budgeted)
Other jurisdictions currently levying:
No other counties currently assess a transportation fee on solid waste.
Transportation Funding
June, 2011
Page 2 of 4
DESCHUTES COUNTY TRANSPORTATION FUNDING
POTENTIAL LOCAL FUNDING SOURCES
• Transient Lodging Tax
Proposed TLT increase was turned down by voters in the November 2008
election.
Estimated annual revenue:
Current rate of 7% generates $2,626,000 (11-12 estimate). An increase of
2% (9% total) would generate additional revenue of $750,000 per year
(current law may prevent these funds from being used for road purposes).
Statutory authority:
ORS 320.300 to 320.350 (note: ORS 320.350 imposes a moratorium on
local transient lodging tax rate increases with certain exceptions)
Other jurisdictions currently levying:
No counties currently levy a room tax for transportation purposes.
• Local Gas Tax
Estimated annual revenue:
$0.01 per gallon gas tax = $800,000 per year (note: County's share would
depend upon revenue sharing agreement with the cities).
Statutory authority:
Oregon constitution Art. IX Section 3a, ORS 319.010 to 319.430. Gas tax
must be approved by the voters (ORS 203.055) and is then imposed by
ordinance. Collection of tax is administered by the State.
Note: 2009 legislature imposed a 4 -year moratorium on city and county gas
tax ordinances and required voter approval of such taxes after January 1,
2014 (ORS 319.950).
Other jurisdictions currently levying:
Multnomah County ($0.03), Washington County ($0.01), there are also 14
cities that levy a gas tax.
• Local Vehicle Registration Fee
Estimated annual revenue:
Dependent upon fee. The County currently has 199,254 registered
vehicles. A registration fee of $15 (biennial registration period) would yield
Transportation Funding
June, 2011
Page 3 of 4
$1,494,000 per year. Under state law 40% of the collected fee goes to the
cities within the county unless the cities agree to a different percentage.
60% of $1,494,000 = $896,000 per year.
Statutory authority:
ORS 801.040 to 801.041, and 803.445. Registration fee must be a whole
dollar amount and cannot exceed the state fee (currently $54 biennial). Fee
must be approved by voters and established by ordinance.
Other jurisdictions currently levying: Multnomah County adopted a $38
(biennial) vehicle registration fee in 2009 to help fund the Sellwood Bridge
replacement.
• Aggregate Fee (Natural Resource Transportation Fee)
Estimated annual revenue:
$300,000 per year @ $0.15/ton (based on DOGAMI estimate of 2,000,000
tons per year consumption in Deschutes County).
Statutory authority:
ORS 203.035 to 203.055. Must be approved by the voters and imposed by
County ordinance.
Other jurisdictions currently levying:
Columbia County ($0.15 per ton) fee is levied on the transportation of
aggregate into or within the County.
• Transportation Utility Fee (Road User Fee)
Estimated annual revenue:
Dependent upon fee structure. $1 per month (single family dwelling) =
$750,000 per year (county -wide) or $250,000 (unincorporated only)
Statutory authority:
Fee implemented by County ordinance. Monthly fee charged to residents
and businesses (similar to sewer or water fee) used for road maintenance.
Fee is based on type of dwelling or business and estimated trips generated
by usage.
Other jurisdictions currently levying:
A number of cities, but currently no counties, have implemented a
transportation utility fee
Transportation Funding
June, 2011
Page 4 of 4
• County Service District for Roads
Estimated annual revenue:
Dependent upon funding method. A rural district (unincorporated area) tax
levy rate of $0.53 would generate $3.0 million (based on FY 10-11 taxable
assessed values)
Statutory authority:
ORS 451.010 to 451.620. Requires vote to form district. May assess
service or user charges, connection charges, district ad valorem taxes,
issue bonds, local option taxes or any combination of these.
Other jurisdictions currently levying:
Washington County
• Property Tax (Local Option Tax)
Estimated annual revenue:
A county -wide rate of $0.18 would generate $3.0 million.
A rural -only rate of $0.53 would generate $3.0 million.
(based on FY 10-11 taxable assessed values)
Statutory authority:
ORS 280.040 to 280.145. Must be approved by the voters. Tax can only be
authorized for 5 years or, if fora capital project, the expected useful life of
the project up to a maximum of 10 years.
ORS 368.705 to 368.710 — 50% of the tax shall be apportioned to cities.
Other jurisdictions currently levying: ?
• County Road Bonding Act
Estimated annual revenue:
Bond amount specified by governing body.
Statutory authority:
ORS 370.010 to 370.240. Authority to issue bonds must be decided in an
election. Funding amount needed for redemption and interest payments on
outstanding bonds is added to the general levy of taxes (levied upon all
taxable property within county). Money raised under this authority must be
used for the construction and maintenance of permanent roads in the
county.
Other jurisdictions currently levying:
AST •ritc ev-T
-TES
tu
0
TO: Dave Kanner
Memo to Dave Kanner
RE: Road Districts
October 28, 2008
Page 1 of 4
DESCHUTES COUNTY LEGAL COUNSEL
MEMORANDUM
CONFIDENTIAL
FROM: LAURIE E. CRAGHEAD
Assistant Legal Counsel
Ext. 6593
RE: County Local Option Levy for Roads DATE: October 28, 2008
CC: Mark Pilliod FILE NO.:
In September, Mark forwarded me your e-mail with your various questions regarding various
alternatives for the County seeking additional real property tax revenue for funding construction,
maintenance and repair of County roads. At that time, I was able to answer some of the
questions but needed to do additional research on others. I apologize for taking so long to
respond.
Split Region Levies
One question was whether or not the County could seek a local option levy that applied only to
properties in the unincorporated areas of the County. The answer is, "Yes, maybe."
At first glance, state law appears to prohibit differing taxing regions within the boundaries of a
single taxing authority. Article 1, Section 32 of the Oregon Constitution requires "No tax or duty
shall be imposed without the consent of the people or their representatives in the Legislative
Assembly; and all taxation shall be uniform on the same class of subjects within the territorial
limits of the authority levying the tax." Additionally, ORS 280.060 requires uniformity in the
application of local option levies.
In Jarvill v. City of Eugene, 289 Or 157, 613 P.2d 1 (1980), the Oregon Supreme Court,
however, found that the constitutional provision does not prohibit differing taxing regions so long
as the state or local government has findings as to why the "class of subjects" are different and
that the difference in class of subject justifies the difference in the tax application. In that case,
the City of Eugene citizens passed a city charter amendment allowing the city council to
establish a downtown taxing district. Id. at 159. The city council then created such a district
and adopted an ordinance calling for an ad valorem tax only on the property in the downtown
area.
Memo to Dave Kanner
RE: Road Districts
October 28, 2008
Page 2 of 4
The Court found that the tax did not violate the Oregon Constitution despite other similar
property within the city not being taxed. According to the Court, because the purpose of the tax
revenues from this new district was to revitalize the city's downtown area, the class of subjects
could be limited to the downtown properties because those properties being taxed were located
to uniquely benefit from the tax revenue and share the same unique conditions that
necessitated the tax. Id. at 181.
Therefore, the Jarvill case provides the "yes" in answer to whether the County could establish a
local option levy for road funds that applies only outside the incorporated areas of the County.
That case also provides the "maybe" in that the County would have to include in the order
findings as to why the unincorporated area has conditions that are unique from conditions inside
cities and the county would have to show that the unincorporated areas would uniquely benefit
from the tax that would not be applied countywide.
At first glance, the findings would appear to be simple in that the roads proposed to benefit from
the revenues from the new tax are uniquely located outside the limits of any of the cities. An
argument could be made, however, that city residents drive on the county roads as well
resulting in a benefit to a class of subjects other than just the property owners in the
unincorporated areas. Although this may be true for some property owners within incorporated
areas, the frequency of those property owners using those rural roads is not as significant as
the use of those roads by the rural property owners. Thus, this latter argument against the
property owners in unincorporated areas being a unique class of subjects is not as strong as the
argument for the unique class of subjects. I found no case law, however, to help decide this
issue.
Although I did not find any case law to help with the constitutional issue, the County has a
County Code chapter that allows for different taxing regions within the County. Deschutes
County Code ("DCC") 4.32.050 lists the criteria for creating split taxing regions. Those criteria
are:
"A. Differences in services to be provided in different geographic areas must be real and
substantial.
B. Geographic boundaries shall be drawn so that services provided within designated
areas are qualitatively different from services provided within other geographical areas.
C. Services provided within the different geographical areas must be unique.
Any differences in tax burdens shall be based upon the actual costs of providing
services. "
Therefore, if the County establishes a separate levy area excluding the cities, findings will have
to be crafted showing compliance with the above criteria.
Apportionment of Local Option Tax Revenue
Another question you asked is, if the County can establish a local option tax that is levied only in
the unincorporated areas of the County, whether the County must still share not Tess than 50
percent of the tax revenue with the cities and road districts within the County. This question is
based on the requirement in ORS 368.710(1)(a) that requires the minimum 50 percent
apportionment to the cities and road districts " in the same proportion as the amount of taxable
Memo to Dave Kanner
RE: Road Districts
October 28, 2008
Page 3 of 4
property in each district bears to the whole amount of taxable property in the county. To answer
the question, however, case law is of no help despite this statute being the subject of a half
dozen cases dating as far back as 1918.
Although cities are considered separate road districts under ORS 371.060, because none of the
property within any of the cities will be assessed, the cities should not be entitled to a portion of
that 50 percent apportionment requirement. On the other hand, the various road districts other
that the cities would be entitled to the apportionment.
County Road District
As stated above, we do not know if a court would accept the County's findings for declaring the
property owners in the unincorporated areas as a unique class of subjects. Even if the court
would accept such findings as adequate for excluding the cities from the local option tax levy,
we do not know if the court will accept not providing the cities with any portion of the tax
revenue. Therefore, forming a county road district per ORS 371.055 through 371.110 and ORS
Chapter 451 (county service districts) would be the safest method for establishing and levying
ad valorem taxes, under ORS 280.040 through 280.145, outside the cities for County road
purposes.
Although the County road district will actually be a County service district form under ORS 451,
that service district is still a separate legal entity from the County. At first glance, this difference
in entities appears to not make a difference because ORS 368.710 appears to apply to any local
option tax levied for road purposes. Additionally, an argument could be made that it is unlikely
that the Oregon Legislature would maintain and even amend in 1999 the apportionment statute
yet allow counties such an easy out from that apportionment requirement as creating a county
road district.
Because that apportionment statute falls under the heading in ORS Chapter 368 of "COUNTY
ROAD FUNDS," however, a local interpretation is that the apportionment requirement applies
only to local option taxes levied by a county and not a county road district. Therefore, the funds
raised from the local option levy would not need to be apportioned amongst the cities and road
districts.
Initially, I thought that there would be a problem with forming the county road district in that all
the other road districts would have to be merged with the county road district or dissolved. For
most districts, the elimination of the existing road districts would be required because ORS
198.180(1) defines a special district as including a county service district and ORS 198.720(2)
says that "A district may not include territory included within another district formed under the
same principal Act when the other district is authorized to perform and is performing the
services the affected district is authorized to perform."
County road districts, however, are formed under a different principal act than other special road
districts. County road districts are formed and operate under ORS 371.055 through 371.110
and ORS Chapter 451. The principal act for special road districts is ORS 371.301 through
371.385. Therefore, it is unlikely that all the special road districts will have to be dissolved or
merged with the county road district if the County forms the latter. Additionally, the special road
districts will not be performing the same services as the county road district because the county
road district would be funding the construction, maintenance, and repair of public roads that are
Memo to Dave Kanner
RE: Road Districts
October 28, 2008
Page 4 of 4
in the county's road maintenance system and, therefore, classified as county roads. Special
road districts maintain, repair, and, possibly, construct public roads that are under the county's
legal jurisdiction but are not in the county's road maintenance system and, therefore, not
classified as county roads.
I hope this information has been helpful. Please let me know if you need any further
information.
DESCHUTES COUNTY ROAD DEPARTMENT
FIVE-YEAR RESOURCE I REQUIREMENT PROJECTIONS
RECOMMENDED FUNDING OPTION
FY 2014-15
FY 2013-14
FY 2012-13
FY 2011-12
FY 2010-11
O CO O O) O L() O O N
N- I-0 O N O CO O O N
U O O O L() O N O O h
ate+M co- O co O co- N O
O CO V Lo I. O co r CO r
(I) r CO L() co co O V
O co- N r---
✓ r
CL
O 0 0
- 0 0 O) N
CO O O CO V
- O O CO CO -
CO
CO L(▪ ) O 0
- N r N
-o v r 0 0 01O v0 O - 0)2 O) 0 0 O) 0 r O) 0 O N 0 O D7 r
U r O) O D7 O M CO O tD NO O CO N CA
tD
0 L N O CO O N- CO O r i� O O U) i� r
N—.4- o N- O O o- co O N- O L0 O) CO O
2 co Ln N 0) co O O r O0 O
CL M (D N r N (D
N— r r ,-
-Lo
'O co Ln O O O co r 0 h co O O co h
y co r O co O CO CO O O — O O O) O O
U V L() O O O) O 0 N 0 O CO O
C.) L() N LO L() O Lf) O (D O O O CO O) tD
• r - N- N- O O O CO CD L0 0 O O) r tD
2 N L() N CO co N. () coL- O co h
d M (D O co- r N (D
N— r r r
4'' O O 0 0 r CO O N tD CO 0 0 - N CO
N 0 0 0'- N- O CO O r 0 0 D7 D7 O
6) r O O O O r O r (D N O O CO
U • V O O V O 10 O r L() O O O CO CO In
M N 10 N- N co r M m CO 0 D7 - M CO N r N CO CO N CO r O O
C.)
CO
RESOURCES
N r r N - N r (N-
CD
O) 0 0 0 0 0 0 0 O CO O O r N O
N O O 0 0 0 O 0 O O) r O
V o O O r- co co — O co O CO - r
O O O co- r 0 N- M L() O L() CO CO M
co V O CO O) 0 CO tD CO O N- O) CO tD
V N N O N N - O) O O N
co- O N (D O N r N (D
N— r r r
c
N O)
CD
CD o
U) w W
N
CL rll t -1-
Q ° Z D
m
U i Q Z
CL U - H W
E U) O W
Z
= Z w H
W D_
O C7w1U
C7 O0ww
Z H w Q> LL
m
cL U 0 O --
(15. H 0-1-0,-,0
M Z 0 0 0 2 IL
RESOURCE TOTAL
REQUIREMENTS
ROAD MAINTENANCE
PRESERVATION PROJECT TOTAL
CAPITAL OUTLAY
CAPITAL PROJECT RESERVE
OPERATING CONTINGENCY
REQUIREMENT TOTAL
Note: funding shown does not include non -road revenue and expenditures (reimbursable work done for other departments, cities, etc)
Note: FY 2011-12 includes a one-time $600,000 fed grant for maintenance chip seal - shown as revenue and increased road maintenance expenditure
Arck c,4 rt tli 5
DESCHUTES COUNTY ROAD DEPARTMENT
W
z
w
w
ce
w
1-
U
W
w z
N O
zj
O a
E=O
U O
W z
i
0
• z
CL
1-1-
z
-Lz
W W
2
wz
_• w
_ 2
w• O
U
11J Ce
U
ce
0
cnw
ce
ce
>w
w
LI
v r- o a) o In o o in
O In O N O CO O O In
▪ 13 O CO O In O N CO O N.
.- M O O CO O M O O t0
C(„) M M U) N O 0 O CO e•
N G) N M In M 0 co h
›-O N N- N
U- a`
11,631,610
0 0v 111
0 0 a) In In
O O CO CO
O O (O N t0
O In (3) co
V co In N-
,-
r r r Ill
(D N 0 0 0 CO N O F- O O M_ h
G) In d 0 0) O— (V O N N 0 0 Q) N
t7 V CO CO O O O M CO O O O CO N CO
y O 00 O (D O r 00 O T O O (O N-
O 00 M O 0) Q) co tO O In Q) M t0
N O (D M In co M O (r:' co O
>- Q. N O In Ill
LL r r r
FY 2012-13
FY 2011-12
FY 2010-11
y coMM O 000 O 00 CO O CD
V
V N O V O d M0 O
0) r In I6677I66 O
O co Q) M N IID N ▪ CO CO 4
C T- o 4
O O In Q)
- 0 0 Q) CO t0
N O O O O
O O O O (" O
In O o O I
o
•'0 0 0 0 M N t
0 0 0 0 N t0
d (V 0 0 0 V fes- O co C) - O O Q) Q) t7)
Q1 N. O O O O N. O x- CO., N O O CO N CO
Z V 0 O V O In (O - T. O O O (D V T-
7 M N In N. N CO 0 - O CO 0 d 0) CO 0
T-
03 CO N N N M r _ 00 O 00
N 1- O - t0 - N (0
-Q) 0 0 0 0 0 0 0 O CO 0 O Na)
G7 N O 0 V d 0 0 0 0 0 O Q) 0
Q1 V O 0 O) N. O O r O O O CO V
O O O C) O N- M In O Ln (O co M
7C N CO N O N N ID O r O O N
m
(`•) O Nt0 O N ,— N t0
r e- r
RESOURCES
CASH (inc. cap. Reserve)
c
rn
0,
4)
o
W
LL
,a 00 W
Z
▪ F >
(n O W
H z 0C 00
F-
L±I
C W U W
CD - = U
W
F' OW Q U.] WF-
Z LT Lt c
Z W O O W
W o U O
RESOURCE TOTAL
REQUIREMENTS
ROAD MAINTENANCE
PRESERVATION PROJECT TOTAL
CAPITAL OUTLAY
CAPITAL PROJECT RESERVE
OPERATING CONTINGENCY
REQUIREMENT TOTAL
Note: Motor Vehicle Revenue in FY 12 through 15 is shown at "expected" levels - 10% below current ODOT estimate
Note: funding shown does not include non -road revenue and expenditures (reimbursable work done for other departments, cities, etc)
Note: FY 2011-12 includes a one-time $600,000 fed grant for maintenance chip seal - shown as revenue and increased road maintenance expenditure