By John Estridge
Franklin County Commissioners approved a contract to resurface two county roads, and talked about the need to secure funds to get more Community Crossings Matching Grant money in the future.
However, everything may be for naught as the state is putting a hiatus on the very popular program due to reduced revenue streams from the pandemic shutdown. Franklin County Auditor Karla Bauman recently received a letter from the Indiana Association of County Commissioners.
It was signed by Stephanie Yager, executive director. It stated:
“…state and local revenue streams are well below forecasts resulting from steps taken to slow the spread of COVID-19. As a result, the state will hold on issuing a second call for Community Crossings grants in July 2020, but INDOT and the State Budget Agency will continue to monitor the financial outlook and re-evaluate options in September following updated revenue forecasts.”
However, it said the grants awarded in January will be honored and funded.
“Communities awarded funding during the 2020-1 call for projects, held in January, can be assured that they will receive the state matching funds as awarded. Many of those communities are moving forward with those awarded projects now and will receive their state funds early in the new fiscal year, which begins in July 2020.”
There was already problems locally with the Community Crossings Matching Grant Program even with the awarding of the bid for the next paving project.
Paul H. Rohe and Company won the bid to pave Huntersville Road and Riley Pike. Its bid of $945,300.48 was lower than O’Mara’s bid of $987,697.36. The bids were opened at the beginning of the commissioners’ meeting with county highway engineer Larry Smith taking the bid documents to a place in the back of the meeting room in order to study them. Later in the meeting, after analyzing the bids, Smith made his recommendation to the commissioners who unanimously approved the bid.
Smith said this will be a 2020-21 pay. The state pays for 75 percent of the project with the county putting up the other 25 percent. It was slated for the July 7 process before that was put on hold by the state.
If it is approved by the state, this may be the final Community Crossings Grant for the county, according to commission vice president Tom Linkel, whose responsibilities include the county highway department. It may be the final grant because Linkel said this is a program that is not supported by county council members. County council controls the county’s budgeting process.
“I can’t get much support out of council for budgeting in the future for the Community Crossings Grant,” Linkel said near the end of the meeting. “I think it’s too important not to take that grant money. Anybody can drive up and see the project we just completed on Highland Center (Road). I think everyone would see how important it is. So, I’m hoping, with Larry’s (Smith, county highway engineer) help, and you guys, we can work it out and find some money so we can support our match fund and continue that program.”
O’Mara recently finished paving Highland Center Road. It has a very smooth surface.
Linkel said with the unfavorable economics right now, many counties, cities and towns will drop out of the grant program, making it more likely the entities that do apply will see their grant applications approved.
“If we can find the money, there’s going to be a lot of counties that’s not able to,” Linkel said. “So, if we can find it, our percentage of getting the grant is going to be very good in getting the grant funds. We’ll work it out.”
Commission president Tom Wilson agreed with Linkel.
“I talked to Larry (Smith, highway engineer) about this and even if we do chip and seal, we would need $500,000,” Wilson said. “Seventy-five, 25 (percent grant) is good no matter how you look at it. I think we should continue.”
“Maybe we can move some money around, I don’t know,” Linkel said.
Linkel said he put all of that in an email to several people associated with the county government and the highway department. He said maybe the county could utilize bond money for the matching money.
“I’m just thinking out loud,” Linkel said.
See related article about what the Community Crossings Matching Grant is and how it is funded.
In other business, commissioners:
*Heard from Amy Lindsey, Franklin County Emergency Management Agency director. She gave a COVID-19 update.
She said there are 124 positive cases in the county, and there have been eight deaths. She said 851 people have been tested, and the positive rate of those tested is around 14 percent. There have been slight increases in positive cases in the 60 and over and the 40-49 categories. There has been a decrease in the seven-day-average number of cases. An increase of testing has been done since late May.
She said for people to keep going with social distancing and when they can’t, to wear a mask.
*Heard from Mary Rodenhuis, the county Purdue extension agent.
She said Indiana law is changing this year. Per her position as county extension agent, she is a member of the county’s Area Plan Commission. She said the law change will mean she will no longer be a voting member of that commission. She can still attend the meetings and partake in the discussions but cannot vote.
Commissioners can appoint someone, with farming knowledge, a county resident and property owner, to replace her. She will be able to vote until October of this year, she said.
Commissioners took the matter under advisement.
Community Crossings Matching Grant Program explained
By John Estridge
Community Crossings Matching Grant Program was established by the Indiana Legislature in 2016.
It matches up to $1 million for county, cities and towns infrastructure programs, which includes bridges and roads. In 2017, the legislature increased the state’s gas tax by 10 cents per gallon, and it is adjusted for inflation. While raising the gas tax, the legislature also increased the special fuels tax and motor carrier surcharge tax. Also, it created a $15 annual infrastructure improvement fee on all vehicles registered in Indiana and a $150-per-year fee on all electrical vehicles.
It was estimated to raise $386 million per year with the bulk, about $300 million, going to fund state highway projects with the remaining $86 million going to the Community Crossings Matching Grant Program for counties, towns and cities.
Prior to the gas tax increase, the gas tax was at 18 cents per gallon and was last adjusted in 2003. Counties with populations less than 50,000 and cities and towns with populations less than 10,000 receive a 75/25 grant. That is where the two counties, Franklin and Union, as well as all the incorporated towns in the two counties, exist in population.
Counties, as well as incorporated communities, receive the money, spend it on project costs and then repay any unused funds after the project is completed. The entities must have the matching money on hand before receiving the grant money. And there is the rub. Many communities and counties are concerned about the falling revenue streams due to the pandemic shutdown. Thus, they are concerned about not being able to have enough cash on hand to put up the matching funds.
The gas tax is a flat tax, meaning it stays at the same level no matter how much the price of gasoline fluctuates. The tax amount is the same whether the gas is 50 cents per gallon or $5 per gallon. What does affect the amount of money brought in is consumption. Very little gasoline was consumed within the state during the shutdown.
On June 18, Jason Semler, a CPA with Baker Tilly Municipal Advisors, talked to the Union County Council members concerning the impact of the pandemic shutdown to local government budgets. He said the full impact will hit in the 2022 budgets. That is because the 2021 budget is based on 2019 income taxes. The economic impact will be felt on 2020 taxes, which will negatively affect the 2022 government entity budgets. He said the company he works for is telling governmental entities to expect the same revenue hits that occurred after the 2008 Recession.
He was talking about funds for the counties’ general funds. The county highway departments depend on gas tax money among other vehicle-related taxes, and those will be affected much more quickly as is shown in the letter Franklin County Auditor Karla Bauman recently received from the executive director of the Indiana Association of County Commissioners. It said the state was holding onto the project applications, which were supposed to be received by the state by July 7.
However, the state will take another look at the projects submitted by July 7 in September, the letter stated.
The delay in awarding grants is due to a reduction of funds from gas tax and other vehicle-related revenue streams during the shutdown.
Locally, the hiatus may last longer. At the June 30 Franklin County Commissioners’ meeting, commission vice president Tom Linkel said he is concerned the Franklin County Council will no longer put up the matching funds to get the grant. He said it is too important of a program to allow it to go away. He said commissioners must find a way to get the funds to cover the county’s matching money.
Sources:
The Indiana Lawyer Jan. 4, 2017 article
The Indiana State Republicans website dated Friday, August 10, 2018.