Maine Trails, April - May '14
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126th Maine Legislature
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The local squeeze

Road programs in Maine towns and cities, still feeling   the effects of the recent recession, look to local funds and new MaineDOT matching programs to fill the gap

By Kathryn Buxton
 
The problem with a drought is that, often, the effects are felt long after the initial damage has been done. That could be said to be the case for municipal road programs which, like state roads, have been subjected to a continued squeeze on funding that has meant reduced revenue for towns and cities across the state.
 
While state funding for local road funding hasn’t dried up, it has remained flat for most Maine’s municipalities and will be coming under increasing pressure as federal and state highway funding is expected to shrink in the coming years. In 2009, when MaineDOT reconfigured its Urban Rural Initiative Program to establish the Local Roads Assistance (LRA) program, funding stood at $24,209,336 and was distributed to 502 municipalities, counties and Indian reservations in Maine. As MaineDOT has struggled with recessionary budget cuts, the program was trimmed to $22,798,321 in 2010 and since has hovered between $22 million and $23 million. In the new fiscal year, that number is estimated to be $20,751,610.
 
“MaineDOT has one of the more generous local roads programs in the country,” said MBTA President Jim Hanley. He noted that MaineDOT’s history of support harkens back to the early 1900s when MaineDOT’s predecessor, the Maine State Highway Commission, established the concept of “state-aid highways” and agreed to provide funding for an expanded road network. “Keeping up with that generous approach hasn’t been so easy lately,” he added, “but since LRA is based on a percentage of MaineDOT’s budget, the number rises or falls, depending on the size of the Highway Fund budget.”
 
For Maine municipalities struggling to keep local roads paved and plowed, tighter city road budgets have been keenly felt, especially on the heels of a long, expensive winter, with higher than budgeted plowing costs further exacerbating community-wide funding restraints caused by the recession.
 
Shifting responsibilities
 
Emily Shaw, a former associate professor at Thomas College, studied the effects of state budget cuts on Maine municipalities for the years 2008 through 2011. She found that cuts in revenue sharing, local road funding and other state support wrought the deepest cuts in municipal budgets for administration and public works. The cuts were heaviest in 2008 and 2011 when municipalities collectively trimmed more than $50 million from their public works budgets.
 
The effect of those cuts continues as towns’ and cities’ backlogs of rough roads, disintegrating sidewalks and sidetracked road improvement projects grows. A recent article in the Maine Municipal Association’s magazine, Maine Townsman, cited the types of cutbacks municipalities have endured over the past seven years that have impacted the delivery of municipal services. Cuts to capital equipment budgets have meant older equipment, such as city plow trucks, have spent more time in the repair shop.
 
In Caribou, staff cuts have meant longer response times, so it takes longer for potholes to be filled and roads and sidewalks to be cleared of snow. In Lewiston, the city has delayed plans to upgrade city sidewalks for accessibility, trimmed staff hours and put off road improvement projects. In Mexico, the town eliminated the position of road commissioner to save money and transferred his duties to another employee.
 
Shaw’s research also showed a shifting of fiscal responsibility from the state to the local level. As state debt has declined since 2009, municipal debt has increased. Her research also revealed that Maine towns raised property taxes by 5 percent between 2009 and 2011 to help offset state spending cuts on essential services, including roads.
 
‘Sharing the pain’
 
MaineDOT Deputy Commissioner Bruce Van Note remembers the difficult budget decisions that were made at the height of the recession. He said that the Maine Legislature’s Transportation Committee decision to cut the program did not come lightly, but was seen as a necessity. At the time, he said, the budget choice was to either cut $2 million to $3 million (about 10 percent) from LRA or reduce funding for MaineDOT’s light capital paving program, a program also supported by towns. MaineDOT has cut its workforce by 400 (about 20 percent) in recent years, and further significant operational cost savings at the state level were not available.
 
MaineDOT refers to this as “measured, predictable, shared pain” for both MaineDOT and municipalities. “Although we understand municipalities are having to make very tough choices, the loss of Local Road Assistance funding is relatively small and measured, and MaineDOT is doing what it can to mitigate the impacts with other municipal partnership programs,” said Van Note.
 
Those other programs include the MaineDOT’s popular Municipal Partnership Initiative (MPI). First established in 2011, the MPI provides matching funds up to $500,000 for road projects that are a local priority. Since the program’s first full year in 2011, MaineDOT has awarded about $17 million in state MPI matching funds for 63 projects that improved about 62 miles of roads. MaineDOT plans to commit an additional $6 million each year in fiscal years 2015 and 2016 to the program.
 
The MPI program has been so successful, Van Note said, that MaineDOT recently launched two other matching fund programs: the Business Partnership Initiative, generally a one-third state, one-third business and one-third local program to support local business development, and the Planning Partnership Initiative pilot program, a 50-50 state-municipal program to determine the feasibility of projects of municipal value.
 
“These programs leverage the local knowledge and energy of communities and provide mechanisms to move projects of local value forward,” said Van Note. “We value our relationship with municipalities, and look forward to continuing to partner with them,” he said.
 
Conservative and resourceful
 
In Kennebunk, the town has been conservative when budgeting and resourceful when financing road projects – looking to bonds, as well as competing for state highway matching grants. Kennebunk Finance Director Joel Downs said they have planned far out in advance of anticipated state funding reductions and implementing gradual property tax increases to compensate.
 
“By absorbing the reduction slowly, we have managed the growth in the property tax rate such that our taxpayers did not get hit with a big increase in a single year,” said Downs.
 
Throughout, roads have remained a priority for available town funds. The current administration, Downs said, sees good roads and bridges as integral to the services it markets to its largest local industry – tourism.
 
“During the past several years we have tried to maintain and improve our road system in a controlled, measured manner,” said Downs. “We understand the value to the community to have roads in good condition. Kennebunk relies on tourism dollars, and we want our visitors to have a very positive experience. Smooth, well maintained roads may seem minor, but people remember the small pleasures that keep them coming back.”
 
Kennebunk has looked to other sources of road funding and, in some cases, has issued municipal road bonds. The town has taken advantage of MPI grants for several projects: Route 1/Portland Road  (from the intersection of routes 1 and 35 to the Kennebunk/Arundel town line); Route 35/Port Road (from the lower end of Port Rd toward Kennebunk Lower Village); Mill Street (where it crosses the Mousam River in West Kennebunk); and Route 9 / Western Avenue (in the heart of Kennebunk Lower Village).
 
“Leveraging state funds has been a significant benefit for Kennebunk. We plan to continue applying for more funds in the near future,” said Downs.
 
‘Frustrating’ time
 
“The last few years have been the most frustrating and challenging of my career,” said Presque Isle City Manager Jim Bennett, who also has served as city administrator in Westbrook and manager in Lewiston, Old Orchard Beach, Sabattus and New Gloucester. He said that, in addition to flat state road funding, cities and towns have been caught in a tug of war with the State House over revenue sharing funds that since 2008 have declined as the state held back funds from municipalities to help balance the state budget.
 
Bennett said Presque Isle has done what it can to counteract the cutbacks, cutting its budget drastically: the 2015 Presque Isle budget is more than $660,000 less than the city’s 2008 budget. The city did enact one property tax increase, but has tried to hold the line there by eliminating 19 percent of its workforce and shrinking city services. To balance its road budget, Presque Isle has put off purchases of new highway equipment and delayed road repairs, including work on city sidewalks, drainage and planned intersection improvements. In some cases, the city has had to make some very difficult choices.
 
Case in point is Academy Street/Route 10 that feeds into Presque Isle’s Main Street/Route 1 and serves as a major commercial route for local manufacturers, including agriculture and forest products companies. The road, said Bennett, is in tough shape and is getting some paving work done, but the city had to forego a full reconstruction because it could not afford to earn full MaineDOT funding for the project.
 
U.S. Route 1, Presque Isle’s Main Street, needs work, too. The rutting has gotten so bad in the pavement that it has become something of a local safety hazard.
 
“The ruts are bad. I mean, three or four inches deep in places, and right downtown,” said Bennett. “We had a pedestrian who was injured crossing the street, it’s that bad. I don’t know how we’re going to be able fix that any time soon.”
 
‘Bag of money’
 
In Yarmouth, Town Manager Nat Tupper said the town has been fortunate to avoid much of the hardship being felt in many Maine communities. He said the property tax base has remained strong, and the town has been able to absorb much of the recent cuts in state funding by implementing limited property tax increases and careful budgeting. Still, the town enacted its first sewer fee this year to help offset the need for a property tax hike, and town roads, he said, could always use more money. The town has rebuilt about 30 roads in the past 20 years, and some of those roads are due for maintenance paving. That work has been put off, so the town can address more pressing road reconstruction needs.
 
Finding the right balance between maintenance paving and reconstruction is a big challenge these days, according to Yarmouth’s Public Works Director Erik Street. “If you look at some of those roads that are in line for maintenance paving and they are a ‘B’, and you’ve got roads that are a ‘D’ and need to be reconstructed, it can be a tough decision,” said Street.
 
He said one of those has been the decision to begin work on North Street, a project starting up this summer. The road is not in as rough shape as some town roads, but the road qualified for maintenance paving funds from PACTS, and the town was able to pair the paving project with a MaineDOT MPI grant to complete work on the shoulders. That work will be completed in two phases over the coming months. For the MPI project, Yarmouth will fund $78,550 (50 percent of the work). For the PACTS / MaineDOT pavement overlay portion of the project, Yarmouth’s costs will be $17,850, or 10 percent of the total project.
 
Tupper is matter-of-fact about the kinds of choices the town has made: "If you gave us a bag of money with $100,000 or $200,000, there are roads we would fix. There’s no question about that. It is the one area of public investment that people would support greater expenditure and effort – if the tax rate were not already being pressured so hard."

 

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President's Message | Page 3 of 9 | 126th Maine Legislature