Last March, as the wet winter carried on battering the region’s roads, La Plata County’s Public Works Director Jim Davis faced a familiar challenge.

Among his small list of annual projects – his department maintains 222 miles of asphalt and 431 miles of gravel roads – he had planned to pave County Road 301 in 2023, much to the delight of the residents who live nearby. The road runs north-south on the Florida Mesa near Pastorius Reservoir.

The prolonged freeze-thaw cycle and the cold conditions of last winter had taken a toll. CR 301 was in terrible shape, pitted with potholes.

“It looked like it had been bombed,” Davis said.

But on the northern end of the county, CR 501, which runs from Bayfield up around Vallecito Reservoir, had severely degraded as well. It was already paved, and in March, Davis advised the Board of County Commissioners that funds should be redirected from CR 301 to CR 501.

“You’ve got to maintain what you have,” Davis told commissioners at the time. “If we let this go another year or two or a little bit longer and we get some more severe weather like this, we could end up turning that paved road into a gravel road.”

Residents who use 301 regularly contacted the county to voice their disappointment, and Davis ultimately worked out a solution. The Road and Bridge department would address the issue on 501 and find a way to fund a chip seal project on 301, providing a smoother driving surface at a lower cost than the asphalt project that was initially planned.

The event highlighted what keen observers of the county’s finances – primarily the administrative and public works staff – have been aware of for years. The funding for the Road and Bridge department is severely inadequate.

In 2019, the county’s long-term finance committee called the issue a “crisis.”

The problem stems from a complex web of factors, but essentially comes down to two facts: first, La Plata County’s property taxes have not gone up since 1986; second, despite the county’s healthy general fund balance, state law prohibits the county from transferring money from the general fund over to the Road and Bridge fund.

For three years, the county has come up with a clever solution. However, officials are signaling with increasing frequency that their stopgap measures are no longer enough, and a tax increase is likely necessary.

In 2019, the county’s long-term finance committee forecast that the county would have an operating deficit by 2022. Of course, they could not foresee the post-COVID-19 boom that would drive up sales tax revenue.

In 2020, the county’s sales tax revenue exceeded projections by $3.9 million. Revenues exceeded the budgeted forecast by $5.5 million in 2021, and $1.6 million in 2022.

This was a boon for Road and Bridge.

In theory, the Road and Bridge department is funded primarily by property taxes and the Highway Use Tax Fund.

“A lot of counties in the state of Colorado survive only on property tax and HUTF, maybe some other federal funding here and there,” Davis said. “But if you look at our bottom line with just that, you would see we'd be in a world of hurt.”

And so, since 2022, the county has upped the annual amount of sales tax revenue directed toward the Road and Bridge fund from $2.7 million to $7.7 million. The transfer has comprised roughly half the fund’s operating revenue.

The move is a loophole of sorts that allows the county to sidestep the restriction enshrined in state law preventing it from moving general fund dollars to Road and Bridge.

“We’re trying to prop Road and Bridge up,” County Manager Chuck Stevens told the BOCC last month. “As we all know, it’s a temporary solution.”

But it may not last long.

Unlike property tax, the department’s intended primary funding source, sales tax is relatively less predictable. And so with declining sales tax revenue forecast for next year and a potential recession on the horizon, officials are beginning to increase the volume of the alarm first sounded by the long-term finance committee in 2019.

In a Sept. 26 budget meeting, County Finance Director Adam Rogers told the BOCC that “this very well could be the last year” the transfer is an option.

The county has to split any property tax funding delivered to Road and Bridge with the three municipalities in the county, meaning that although it could redirect property tax revenue, it would lose 50% of it to municipalities.

“The deficiency in the Road and Bridge fund is real, it is not going away, it has to be addressed at some point,” Stevens said in the same meeting. “We are putting Band-Aids on a sucking chest wound.”

In a county with the fourth-lowest property taxes in the state, talk of raising taxes can be a fickle thing.

The county’s property tax rate of 8.5 mills, meaning $8.50 paid on every $1,000 of assessed value, has not increased since 1986 and has never been raised by the voters. The 1992 Taxpayer Bill of Rights amendment meant all tax increases had to be approved by voters.

In 2015 and 2016, the county supported ballot questions that asked the voters for an additional 2.4 mills. Both failed to pass.

But in public meetings over the last year, county officials have indicated it may soon be time to go to voters once again.

The issue will not appear on the 2024 ballot, however a 2025 ballot question on whether to raise the mill levy is possible.

Davis said he would like a reliable funding stream of at least $6 million. Next year, the Road and Bridge fund is expected to see $1.6 million in property tax revenue.

He dispassionately notes that although he has a “pretty significant backlog” of road maintenance projects, it is up to the BOCC, as a proxy for the voters, to weigh in on “what do people want the county to look like?”

A now outdated study from early 2022 shows that at the time, the county had 30 miles of gravel county roads that surpassed the 400 average daily traveler threshold, meaning they needed to be rebuilt, widened and paved. The old study projected that an additional 24 miles of road would hit that benchmark by 2040.

“It's considered a deficiency,” Davis said of those roads.

Because of the outdated numbers and rising costs, Davis was reluctant to provide a cost estimate for that work. Although the cost of labor can vary greatly depending on what other maintenance or widening is necessary, paving can cost upward of $250,000 per mile in materials alone.

“You could give Jim (Davis) $100 million today and he’d be back next year saying ‘I need more,’” Rogers said to commissioners last month.

In the meantime, Stevens said the debacle concerning paving on CR 301 and CR 501 is demonstrative of the vast experience and creativity exercised by Davis and Road and Bridge Superintendent Mike Canterbury.

“If we had a steady, sustainable income, then it would just allow Jim and Mike to prioritize those roads and know: we've got the money, we're getting these roads done, these projects are going to get done,” Stevens said. “We wouldn't have to do this shuffle like what we had to do this year.”

rschafir@durangoherald.com