During their November 20, 2007 meeting, the Board of County Road Commissioners approved a re-organizational plan for the Road Commission in order to work within the agency’s proposed 2008 annual budget. A Public Hearing is scheduled to hear comments on the proposed 2008 Budget at the Road Commission office at 1:05 p.m. on Thursday, December 6, 2007.
The changes in organizational structure included the merging of some departments and supervisory responsibilities, as well as the layoff of four employees. Upon the Board’s approval of a revised Organizational Chart, the layoffs and staffing changes were imposed in addition to eliminating 10 other vacant positions; this action brings the staffing level of the Road Commission from 156 full-time employees (FTEs) to 143 FTEs, plus two seasonal employees.
With this reduced staffing level and a number of other cutbacks being proposed in the 2008 annual budget, the Board hopes to address the agency’s ongoing financial constraints due to dwindling Michigan Transportation Funds (MTF) over the last few years. (The MTF is the primary funding source for the Road Commission; it subsidizes transportation agencies statewide with revenues acquired through gas and diesel taxes, and vehicle registration fees.)
Earlier this year, the Board held several Working Sessions to review and discuss the proposed 2008 budget, which was prepared and presented by Dan Ackerman, Finance Director for the Road Commission. Over the past few months, Ackerman has been working with Steve Puuri, Managing Director, and other Road Commission management staff, to streamline costs and services in order to work within the agency’s revenue limitations. Even though the coming year will produce the largest budget the road agency has ever managed, most of the $65.3 million will come from grant dollars that are designated for specific road improvement and bridge projects; these are funds that encompass restrictions and local match requirements, per state and federal funding regulations.
In actuality, the agency has been experiencing a steady decline in its MTF money since 2004, and the Michigan Department of Transportation (MDOT) predicts it will continue to decrease by 5% or more in 2008. Likewise, the substantial funding provided at the federal level, which the Road Commission has secured for some major road improvements, is also expected to decrease after next year’s windfall.
“Our primary funding has been steadily decreasing since 2004 and will continue to do so until our state legislators take action to address the critical need to secure additional transportation dollars,” proclaimed Puuri. “If no proactive actions are taken by our legislators, we will all need to get used to less road and bridge maintenance.”
The anticipated 2008 MTF revenues are expected to be $16.7 million, compared to $17 million in 2007, and $17.1 million in 2006. With the ever-rising costs of doing business, and the continued reduction in MTF dollars, (which chiefly pays for annual winter maintenance supplies and services, preventive road maintenance, capital improvements, grant-related matching requirements, and administrative costs), the Road Commission’s budget can no longer sustain the organization at its current service or staffing levels.
“By 2009, we fully anticipate that we will be able to provide only the most essential services because our operating costs are continuing to escalate as our revenue is decreasing. There won’t be many grant dollars or local contributions to offset our strained budget either due to the economic downturn being felt throughout Washtenaw County, the state, and at the federal level,” Puuri explained.
During the Working Sessions, the Board was advised by Puuri and Ackerman that with the proposed strict budget cuts, the Road Commission could have a projected fund balance of at least $4 million by the end of 2008. This is the funding level that the Board and staff have committed to hold in reserve to respond to the unpredictable winter weather or other unexpected system breakdowns. This amount of reserves is a normal threshold for a road agency.
For the time being, the Board has approved four layoffs and the elimination of the 10 vacant positions which, as a result of a 2006 hiring freeze, were held open after employees retired or resigned. Most of the recent position eliminations occurred within the Subdivisions and Permits sections, due to the substantial decline in residential development in Washtenaw County. The position of Transportation Planner was also included among the budget cuts.
“Some of the laid off employees may be recalled next spring, if they are still available, to assist with the heavy workload scheduled for the 2008 construction season, but we cannot predict if that will take place until next year,” Puuri explained. “Having to impose these layoffs and cutbacks in our services is never an easy choice to make nor are these decisions taken lightly by our Board and management staff,” said Puuri.
“We hope our financial situation will improve soon so that additional layoffs and other service reductions will not be necessary. We are committed to do our best to provide a high quality service to the public, but if we must continue to reduce our staffing levels, it will become increasing difficult to do so,” concluded Puuri.
Contact
If you require assistance with media information, contact Val Cooper, Public Information Officer, at (734) 327-6675 or via email at: cooperv@wcroads.org.