Farm-To-Market Cooperative Plan - Options [Part 2]

PART 2 - OPTIONS FOR FARM-TO-MARKET ROADS WHEN THE STATE DOT WANTS NO PART IN THEM

It is pretty clear that the era of the state DOT as a parent taking care of local governments is over.  If every local agency was operated by technocrats who had effective strategies for picking up the costs and slack from the state that would be ideal, but it is not realistic.  When so much on a local level depends on who is hired, who is in charge, how much money they have and how knowledgeable they are to address local issues, it is a Pandora's box.  Fortunately, that Pandora's box is far less frightening when that level of control is restricted to roads of very low importance other than to the people who live on them.  Here are some of the reasons a farm-to-market cooperative system stands out:

1. A state or regional cooperative is not assuming control or maintenance responsibility for an entire local road network
2. Only connecting highways are maintained with state or regional forces
3. The system overlays many jurisdictions covering both county roads and municipal streets assuring consistent maintenance standards across many jurisdictions on roads not otherwise owned by the state
4. No patchwork maintenance on farm-to-market roads as maintenance and responsibility is defined by routes instead of just jurisdiction
5. Obtaining state or alternative funding sources is far easier when the responsibility is limited to certain roads
6. The management structure is less complicated since local agencies will not need to be eliminated or reorganized
7. Local agencies will not be constrained as much by this approach since they will maintain substantial control, including construction funding on farm-to-market roads.  
8. Planning will either be on a local or regional level not the state level
9. Cooperative systems maintained by regional governments present opportunities to obtain state maintenance contracts and thus shared funding and resources not currently available to most local agencies on an individual basis.

This fictional map demonstrates a farm-to-market network.  The roads marked with the blue pentagon route numbers are farm-to-market routes while the other roads are either state or local.  The pink lines denote major collector, yellow are minor collector and gray are functionally local.  The farm-to-market routes are not maintained by either the state or the county.  Instead, they are maintained by the Nolan Valley Regional DOT, which is responsible for all farm-to-market roads in 12 counties (out of 96 counties statewide).  It is also contracted for routine maintenance of local roads and streets in 3 out of 7 cities, all towns (including Poolesville shown here) and two counties, including DeKalb shown.  Fairfield County maintains its own separate county road system as it is a more populous county.  The roads marked in grey with the C- designation are separate county maintained roads while the R- roads are county roads contracted to the Nolan Valley Regional DOT for road maintenance.  

The states likewise are having a major problem in that their traditional funding sources (gas and sales taxes) are drying up.  The solution that states have proposed lately primarily are turning roads to the counties, cities and towns.  This does not have to be, however.  For one, aside from using the state DOT two other possible methods can be used to share maintenance responsibility so that local agencies are directly relieved from maintenance responsibility of secondary major roads and streets.  These two options are:

1. Regional or Statewide Local Cooperatives
2. Separate State Agency

REGIONAL/STATEWIDE LOCAL COOPERATIVES

The first of these is the creation of a local cooperatives.  How this works is that the statewide county association and the statewide municipal association partner up to secure funding and recruit counties and cities into accepting a road system administered by a single agency hired and funded collectively by all cities and counties.  At the same time, regions would be divided up based on the existing federal planning regions to administer this system.  Once enough local agencies joined within a specific region so that the minimum population threshold is met (300,000 per the Regional Roads Plan), the regions would be divided up so that each region maintains their own road network.  However, supervision of each cooperative could remain at a state level, but it cannot be part of the state DOT.  This plan would divide up responsibility as follows:

• Funding.  Funding would come from a combination of state and local sources depending on how much funding the state is willing to contribute directly to a regional agency.  Cooperatives may have to be jointly funded with only local resources during the formation of the agency, but once it is established the state should develop a means to distribute state-aid funds to at least finance operations of each regional cooperative or the statewide cooperative.
• Planning.  Planning would be supervised on either a local level or on a regional level.  In many states, planning for transportation is already handled by regional planning agencies, so this would remain pretty much unchanged.  State DOT's would have only an advisory role, but no direct planning authority for cooperative agencies.
• Maintenance.  Maintenance would be transferred from the local level to the regional level either as part of a statewide cooperative agency or by each regional roads cooperative.  With a minimum population of 300,000, each cooperative would be a "regional DOT" with its own staff and supervision overseeing routine maintenance on local roads and managing/inspecting construction projects.  In addition, routine maintenance of surface state routes may ultimately be contracted to each regional cooperative.

Once established, all local agencies would by decree declare that a certain percentage of the highway system be designated as farm-to-market and would be given a ratio based on population.  How it would work would be:

• Fair Distribution: Higher ratios provided to lower population counties and lower ratios provided to higher population counties.  By-laws would need to be clearly written to prevent certain counties from hoarding mileage at the expense of other counties.
• Higher Functional Classification Takes Priority: Functionally local roadways cannot be added to the system until all eligible collector and arterial roadways are on the system first.
• Local Connecting Ratio Limit: Functional local roads must meet a minimum criteria for acceptance and must be limited based on the overall available ratio once all other roadways have been designated
• Recommended Threshold: Thresholds would be set for those ratios, but the overall ratio would mean that, added to state highway system miles, 25-40% of the public road system would either be state or farm-to-market.  No more than 50% of the public road system should be on the farm-to-market system  
• State/Farm-To-Market Balance: State maintained miles would be calculated together with farm-to-market mileage meaning that a county with a higher ratio of state maintained roads would have a lower ratio of farm-to-market roads if the county is compared to another county in the same population threshold with fewer state maintained miles
• In the instance that the state maintained 10% of the roads with a cap of 35% for state and farm-to-market roads, the coooperative would administer 25% of the highway system in that county
• In the instance that the state maintained 20% of the roads with the same public road ratio cap, the cooperative would administer 5% of the highway system in that county

The farm-to-market system by design puts a regional cooperative directly responsible for a set ratio of roads meaning that funding is pooled from multiple sources to maintain certain roads.  Funding would be distributed per-mile instead of per-county on these roads and they would be treated as highways.  However, the regional cooperative could expand their responsibility to cover other roads and streets in individual jurisdictions if the local agency is willing to finance it.   The goal of the farm-to-market system would be to transfer paved local roads and streets of higher functional classification or construction standards to the collective in turn for an agreed on sum contributed either from a special fund, an agreed on percentage of local taxes or a combination of the two.  In poor rural counties, it would not usually be possible to both contribute to the system and operate their own system without raising taxes or diverting funding from other sources thus why they would be permitted to contract out their entire road networks.  In fact, a farm-to-market cooperative plan does not have to be statewide in function.  For instance, an individual metropolitan area could choose to adopt this method of administering roads while a more rural area would be more interested in combining all routine maintenance activities under a single agency.  

The concept behind the cooperative method is to create a means that local agencies can by-pass the legislature and the state DOT to consolidate road maintenance authority, but that is limited by the contract laws within the state.  If they can legally do this, the local agencies within the cooperative can prove to the state government that they are willing to try new concepts and that they are able to prove that their model is effective thus encouraging the state to adopt the plan as a statewide policy allowing for state funds to be distributed for the purpose of regional control.  However, if contract laws forbid shared service interagency agreements then it will require an act of the legislature to make legal.  If not, then it can be instituted initially as a collective of all interested counties and municipalities.

SEPARATE STATE AGENCY AS A COOPERATIVE

Most state legislatures these days have been unwilling to innovate in terms of transportation, but perhaps if they believed that something like this might work they might create their own cooperative agency as an arm of state government.  This new cooperative would exist with the sole purpose of managing road maintenance and securing financing for the farm-to-market road network and would most likely be offered to local governments on a voluntary basis.  Other than a supervisory role to make sure that state standards are being followed, the state DOT would work separately from this organization.  This agency would also have its own funding.  The goal is to make sure that farm-to-market funding is not commingled with state DOT funding to assure that a set ratio of funding is always available to maintain farm-to-market roads.  In this cooperative model, local agencies would pay an operations fee like they would in the regional cooperative plan, but the fee would be based on a per-mile basis.  However, that fee could be reduced or eliminated if a dedicated state funding source would finance operations leaving only maintenance costs to the local government.  This means if the rate-per-mile is $2,500 per mile and the state paid half, then the local government would only have to match the other half.  This means if a county finances 35 miles of farm-to-market roads in a year that instead of paying $87,500 they would spend half of that.

Unlike the local collectives, the state legislature would create the by-laws that dictate ratios and roadway selection on these roads.  It would likely be similar to the above rules for local collectives, but local governments would have less direct contact or involvement with the agency.  Most likely it would be known by some name as the [State] Department of Farm to Market Roads or [State] Department of Secondary Roads.  While it would in effect duplicate services with the state DOT, it would still relieve local agencies of a substantial burden reducing costs on a local level.  To be most effective, however, it should also come with a clause allowing local agencies the option to contract remaining roads with the state farm road agency as long as it is done at their own expense.

PHASE-IN PERIOD

If this system is created from scratch, a phase in period would be needed ranging from 3-10 years depending on the system size and level of upgrades needed to bring the roads to maintenance mode.  The High Risk Rural Roads Program funding can greatly speed up the process allowing roads to be upgraded to full state standards where the roadway can be easily transferred to the state for routine maintenance.  However, many other areas have not received such upgrades.  If funding is otherwise unavailable for safety upgrades along new routes, then existing funding in the program will be needed to begin replacing traffic signs, guardrails, clearing out brush and replacing pavement markings, then the system expansion should be limited to 9-10% of the highway system per 3 year span taking no longer than 10 years.  If that federal funding is available, then this growth rate should be annually with the system established in a 1-4 year span.  In the sample state, the system starting out at 20% with a goal of 50% would take 3 years to establish with federal funds and 9 years without those funds.  

The chart below compares the responsibilities of the farm-to-market system with individual counties contracting with the state.  While both have advantages, the chart highlights the differences.  Some things have changed since this chart was made including "Partial State Secondary" redefined as "Farm-To-Market Cooperative" and "Captive Local" changed to "State Contract Road".  

The chart above indicates plans whose names have changed, so some clarity is needed.  "Partial State Secondary" describes the Farm-To-Market Cooperative Plan while "Captive Local" describes the State Contracting Plan.  The chart compares and contrasts the state's duties in each plan.

MAINTENANCE RESPONSIBILITY OF THE FARM-TO-MARKET SYSTEM DEFINED

Maintenance on this system is designed to be limited to only routine maintenance functions.  By design, the state will not be able to use state-aid maintenance funding to pave roads, build or replace bridges, construct new roads, widen or realign existing roads or fund any expensive roadway projects.  "State-aid maintenance" is a different funding pool from other state-aid funding.  Many states have state-aid project funds for local governments.  This funding is specifically reserved by the state to provide partial state maintenance on a secondary system of highways.  The funding is designed to be used entirely for the following road maintenance activities in order or priority:

• Traffic control (centralized through the state's traffic operations office, regional cooperative traffic operations, statewide cooperative traffic operations
• Includes engineering and maintenance of traffic signs, pavement markings and traffic signals
• Each region should have at least one PTOE hired to supervise traffic control
• Installation, maintenance and repair of guardrails and bridge rails
• Other minor bridge repairs
• Traffic engineering
• Field engineering, inspections and other construction supervision on smaller maintenance projects
• Design of local roadway projects when requested by local governments on a per-case basis paid for by each partner local agency
• Larger road projects are contracted out or handled by state DOT
• Pothole patching and minor roadway repairs
• Ditch clearing and minor drainage work
• Mowing and brush cutting
• Snowplowing and winter maintenance
• Other maintenance activities including paving, bridge repairs and other projects if locally-financed and/or residual funding allows

FUNDING SOURCES

The fundamental difference between a farm-to-market system vs. a general budget for a consolidated highway system is that with limited mileage it typically operates on a cost-per-mile basis.  Nonetheless, criteria can be based on population, lane miles, actual road mileage or any combination of the three.  If actual mileage is chosen, then a cost average per lane miles should be decided.  The examples below recommend $2,000 per lane mile.  Since most roads are two lanes, a working average of $4,000 per mile will be used.

THE FUND MATCHING METHOD

If the unique local collective option is used by local governments, funding could actually come from shared revenues from every local agency across the state.  In order for that to be applied in a fair and orderly fashion, the method most ideally would work this way:

(Population of City or Unincorporated County + Farm-To-Market Lane Miles Within City or Unincorporated County) / (State Population + Statewide Lane Miles)*

OR

(Population of City or Unincorporated County +  Farm-To-Market Road Mileage Within City or Unincorporated County) / (State Population + Total Statewide Road Mileage)*

*Mileage calculated in counties or cities deducts state highway mileage

The recommended rate is $2,000 per lane mile, so the average rate per mile is calculated to be $4,000 per mile.  This means that in an unnamed rural county in an unnamed state, you have the following criteria:

• Total population is 10,000,000
• Total statewide road mileage is 125,000 miles
• Unincorporated county population is 20,000 residents
• County road mileage is 565 miles
• Farm-to-market road system mileage in county consists of 30% of the road network
• State road mileage in the county consists of 15% of the road network
• Statewide farm-to-market system mileage consists of 25% of the entire road system or 31,250 miles
• The amount budgeted based on $4,000 per mile is $125,000,000
• 169.5 miles of formerly county roads are on the farm-to-market system

Thus in this county you have:

(20,000 residents + 169.5 miles) / (10 million residents + 125,000 miles) = 0.199%

Taking that ratio and multiplying it against $125,000,000 is how much the county will be required to pay into the system.  That total is $249,006 to have the county relieved of 169.5 miles.  If the state matches that amount-per-mile by half, then the county will then have to pay $124,503 and the state will be responsible overall for $62.5 million of the budgeted $125 million.

AD VALOREM METHOD

If few to no local agencies are willing to pay into the system to finance farm-to-market maintenance, another method that may be tried is the ad-valorem approach.  This would be the easiest to enact and would be the least invasive are either tag fees or vehicle registration fees.  To make it easier for low income motorists, a payment plan should be offered so that the fees can be as reasonable as paying a toll a few times a year.

The example above recommended $4,000 per mile for a farm-to-market system consisting of 31,250 miles.  At $125,000,000, the state DOT's own funding is $2 billion per year.  This means if state funding sources alone were used it would require 5% of the budget annually.  Under this plan the state would lose funds to the separate agency meaning a 10% cut off the top to the state DOT.  A way around that cut is to raise fees.  These fees would obviously come from one of two sources: registered motorists or registered vehicles.

In the case of registered motorists, let's assume that there are 5.75 million registered vehicles.  The fees would be calculated as follows:

• Required budget for 31,250 miles: $125,000,000 ($4,000 per mile)
• Vehicle registration fee would calculate per vehicle as $125,000,000 / 5.75 million = $21.74 per vehicle

Obviously these costs are quite high, so a funding match would likely be ideal combining the statewide collective method with the fee method.  In very rural counties who cannot handle the funding match, tag/vehicle registration fees would be higher while in higher population urban counties a higher funding match can reduce the fee.  In the example above, let us assume that the fee is $10 annually per motorist and 10,000 vehicles are registered in the county.  This means that the county covers $149,006 with their own funding while residents pay $10 more to purchase a tag.  

THE FUNCTIONALITY OF FARM TO MARKET ROADS

In the example above, it is important to remember that it was difficult to get an exact calculation of the required rate per mile.  In addition, this number was designed to cover full maintenance including paving.  If paving costs other than patching remain a local matter, the rate per mile could be realistically reduced.  Overall, the redesign of the farm-to-market system splits the responsibility not only between state and local, but also divides the funding sources and even the agency in charge.  While these farm-to-market roads are essentially "state" roads, they are not necessarily under any state DOT jurisdiction.

POSTED ROUTES NUMBERS ON THE FARM-TO-MARKET SYSTEM

Posting route numbers on secondary roads is usually a state option, but usually at least some kind of reference marker is needed.  The option to post them like highways, however, should be considered if the system is set up to have 35% or less of the road system state maintained.  If nothing else, roads on the federal-aid system classified major collector or arterial should have 24" x 24" route markers signed according to Figure 2D-6 of the MUTCD while minor collectors and roads that are not federal-aid should be unsigned or signed with a low profile route sign.  Since these roads would be partially state-maintained, this would mean that if nothing else a few state numbered highways could be posted along important secondary roads.  However, this also depends on the relationship the states have with the local governments.  Policies will need to be reviewed and truck routes and truck prohibitions clearly posted along county highways.  Since the states will not be able to prevent cities and towns who have roads on the routes from blocking truck traffic through downtown areas, that must be worked with.  Many secondary routes will also be substandard in design and construction as well since the state will have no authority over construction standards on state-aid local highways.  

WHY THIS PLAN IS EFFECTIVE MEANS OF IMPROVING LOCAL ROADS

The Farm-To-Market Cooperative Maintenance strategy is a compromise plan for states who want to reduce and/or avoid taking on more responsibility in states where a majority of local agencies are functionally incapable of fully complying with state and federal standards for construction and maintenance.  Most states across the US have obligated local governments to fully maintain the majority of federal-aid eligible roads without the expertise or adequate funding to do so.  The strategy is designed so that a minimal investment is put forth from the state for very basic routine maintenance on a portion of the local road network while continuing to entrust the majority of local funding to local agencies.  Thus, local agencies are left in charge of planning and construction of all local roadways while routine maintenance is handled by a state or regional cooperative agency on the most heavily traveled portion of the local road system.

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