Commission and residents discuss opt-out
The Haakon County Board of Commissioners took their three-year, $500,000 opt-out reasons to the public in three meetings at three locations around the county, Philip, May 5, Milesville, the afternoon of May 9, and Midland the evening of May 9.
Commission Chairman Gary Snook and Vice Chairman Ed Briggs took the attendees through a PowerPoint presentation on the chain of events that lead to the opt-out, how the board decided on the amount and length and how the opt-out would affect each county resident.
The items that lead to the opt-out included the 1995 tax freeze, rising costs, 1995 tax base versus 2011 expense costs and state mandated programs.
Snook noted the tax freeze that was implemented in 1995 by Governor William Janklow and the state legislature has caused several South Dakota counties to opt out in the past 26 years.
Snook said, "A lot of people don't realize, if your evaluations go up after 1995, someone else's had to go down to compensate. The county could not take in any more dollars than in 1995."
Snook showed how the interest on the cash management account also affected the county's revenue. The interest is down to $11,500 the lowest since 1995. The highest interest was $95,500 in 2000.
Snook said health insurance costs for 1995 were about $30,000 and now with 10 less employees the insurance each year is upwards of $250,000. Briggs said last year there had been a 15 percent increase and this year was 13 percent.
Highway department costs for gravel and fuel have increased by three times since 1995, Snook said. Fuel and gravel were in the $40,000 range and now are near $120,000. Culvert and cutting blade costs have also nearly tripled. Snook said the Federal Emergency Management Agency funds are probably what kept the county from opting out three years ago. "I think they've done a pretty good job trying to maintain expenses," said Briggs.
Snook said the first thing the board did was talk with Neville and Val Williams, highway department administrative assistant to see what was needed to get the county back to where it needs to be. Aging equipment and gravel were the two big factors. During the meetings questions about the equipment replacement were asked. Neville said that some of the county pickups have over 200,000 miles and repair expenses are constant on them.
Although tractors were on the list of possible purchases, Neville said the county would continue to lease them as that is the cheaper operational cost. But, he said if the companies stop that policy, the department would be forced to purchase new.
In regards to road graders, the county had been designating $75,000 each year for future purchases. With the lack of funds, they have not done that for the past few years. The county had been in a rotation cycle where the graders were swapped out every five years. With that plan was a buy back option the county utilized on the graders.
Snook said that there is a possible silver lining, the pipeline. He said if it comes through the county could receive an estimated $400,000 annually. Snook said the board hopes that the pipeline will give the county enough money so they don't have to opt-out again.
"One very important thing to consider is just because we opted-out for $500,000, it doesn't mean we have to use it all," said Snook. As the board sets the budget each year, the members will decide then how much money will be needed, up to the $500,000. Briggs said the board studied the figures and did not want to go with too low of a figure and then have to opt-out for additional funds. Commissioner Steve Clements said Jackson County had to do that. He said their amount is just a band-aid, and doesn't fix the problem. He said there are roads in Jackson County that haven't seen a blade in five years. Snook said the county went into the hole by $235,000 last year, even without graveling. "It will cost a lot to get the roads back to where they need to be," he said.
When questioned about the gravel stockpile, Neville said he has enough gravel for about five years, spread out over 11 sites. Briggs said the county has not crushed gravel for two years. In that time the cost of crushing has almost doubled. Briggs said the county would like to crush gravel at some of the pits so it is close to the areas that are in need of gravel. He said with the cost of fuel it would be too costly to haul gravel from a pit far from the needed area. Briggs said, "Point is if you don't have it and can't haul it, do you tell those people drive on what you have?"
Kenny McIlravy, Philip, questioned the board as to the amount of funds raised by the wheel tax and the new vehicle registration fees imposed by the state legislature this year. Snook said the wheel tax revenues are approximately $67,000. Haakon County Treasurer Patti Rhodes said the registration fees are estimated at $99,000. She said the amount was supplied to her from the South Dakota Department of Revenue.
McIlravy said that the county would then have $667,000 generated in 2012. Snook agreed, but added, when the commission chose to opt-out for $500,000 they did not have the estimate figures for registration fees, nor did they know when they would receive them. Clements said those figures will change, and might go down as people choose to not register vehicles they once did because of the increased costs.
Neal "Obie" Brunskill asked why all the funds were designated to the general fund and not the highway department. Snook said, other areas were also in need of funds, such as mentally ill, support of the poor, and the jail. The board would have had to do two separate opt-outs, one for those funds and one for the highway department. Snook said the board felt it was better to just do the one opt-out, but that the majority of funds were slated for the highway department.
Ed Heeb, Midland, said he was skeptical of the amount ever being less than $500,000. "Costs will continue to go up. Costs will not go down," he said. He asked what if the county keeps going as they are. Commissioners Rita O'Connell and Clements said they might have to close the courthouse and the business would have to be done out of Pierre.
A petition has been turned in to refer the opt-out to a public vote. The opt-out public vote will be Tuesday, May 31, with all voting precincts open.