The Road Commission is not a department of Emmet County. It is a separate entity.
2265 E. Hathaway Rd
Harbor Springs MI 49740
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Fax: (231) 347-5787
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The Emmet County Road Commission was established in 1909 and is operated by a three member board of commissioners. The 39 employees of the Road Commission are responsible for a total of 950 miles of roadway which consists of 217 miles of state trunk lines, 244 miles of primary roads, and 589 miles of local roads.
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Road Commission Chairman Frank Zulski’s letter regarding Bond Proposal 2016
In September the Emmet County Board of Commissioners approved a $3.3 million bond issuance on behalf of the Emmet County Road Commission. Because of a state law that prevents road commissions from seeking capital funds through bonds, they must go through county boards of commissioners to utilize bond funding. The Road Commission is responsible for paying off the bond over 15 years, using some of the agency’s annual allowance from Michigan’s state transportation fund to make the payments. With the approval in place, the Road Commission plans to spend the $3.3 million on replacing its aging Levering Road complex as well as some other projects. Road Commission officials hope to request bids for the work over the coming winter and have facility construction begin in Spring 2017.
Sept. 29, 2016
To the Residents of Emmet County:
I am writing this letter on behalf of the Emmet County Road Commission and their request for a bond issuance to complete phase #2 of an improvement plan initiated in 2005 for the Levering facility. I am sure that everyone is aware of the political and financial issues that have been in the news for the past year with how your property tax dollars have been spent throughout the County. My concern is that the ECRC will become part of a backlash that has occurred within the County. I will attempt to inform you of the history of this bond request; as there is a possibility there will be an attempt to circulate a referendum to put this project on hold; which will definitely impact the operational capabilities of the ECRC in the upcoming years. When you are asked to sign a petition you need to know the facts so that this bonding issue for the ECRC does not become part of the issues that the voters of Emmet County had with County spending.
The main fact that I want to get out there and make it very clear is the fact that NOT A PENNY OF PROPERTY TAX DOLLARS collected by the County will be used to pay for this project. All costs of the bond are to be paid by the Emmet County Road Commission. We are a separate entity from the County board. However, State law does not allow us to go out for any bonds; we have to go through the County Board for approval. To keep this as brief as possible, I will answer a response to a question that will surely be asked. There is one mill of property tax that is collected (if assessed) for the local roads in the County. This money does not go to the ECRC, it goes to the Townships so that road improvements can be made from the local level. We were the first Road Commission in the State to request that those funds go directly to the Townships. Our reasoning was simply this; if you pay a mill in County Road tax with your property taxes, then you tell us, through your Township how to spend the money. In working together with your Township officials, to date over $32 million dollars have been put into our local roads since 2005 and the spending of all of this money has been at the direction of your Townships.
The money for the repayment of this proposed bond issue will come from the Michigan Transportation Fund; which is where the ECRC receives most of its funding. We have to survive on a budget which does not allow us very much room for error. Fixed funding requires the ECRC to be more conservative in its management decisions. We have spent over 12 years preparing for this second phase at Levering; we can now afford this through patience and planning; any further delay will be costly.
The issue of improving the facility at Levering was first looked at in 2005. Previously the ECRC had tried to eliminate the Levering facility when the new building was built in Conway. This attempt lasted only a short time before it became evident the north end of the County would not receive the type of service it required in a reasonable time frame. By the way, the “North end” includes all of you living on and north of Stutsmanville and Brutus Roads. The ECRC wants to be able to respond in a reasonable and cost efficient manner so that those residents living in the north end of the County will be able to receive the same service as those living south of the above mentioned points.
As I already mentioned, this planning process for the Levering facility started in 2005, when the Board started looking at the future needs for the north part of the County. We quickly realized that there was no way the ECRC could afford to complete everything needed in one process. The board then decided to go in phases to accomplish what was needed. We then prioritized our immediate needs needs and we went with phase #1; which was to build a building large enough (We actually wanted a much larger facility to meet some of the needs of phase #2, but this was not affordable)to get our plow trucks inside out of the weather. How bad were our needs at Levering in 2005? Just to give you one example, before we built the heated storage building in 2007 our drivers on the north end had to remove their plows from their trucks at night so they could get their trucks inside. This meant if it was storming or below zero the next morning, the drivers had to re-attach the plows before heading out on their routes. With phase #1 completed, our drivers can be on the road in a matter of minutes when they come to work; a huge improvement on efficiency to complete the daily winter maintenance requirements. Although the ECRC would have preferred to have started phase #2 sooner, we realized we needed to pay off the first bond which was issued (Through the Emmet County Board) in 2007. The first bond will be paid off in May of 2017. The records will show that the ECRC made all payments on time in a situation when there was no new money coming into the ECRC. The projections on the newly proposed bond show that our payments will be around $30,000 more than for phase #1. We can easily cover this additional $30,000 with cost savings alone.
You don’t have to tell the ECRC how badly our Primary roads are in need of repair; we know. Again, I want to remind you we are on a fixed budget; if costs go up we have to make cuts. Roads are only one of the issues we have to budget for. The season of winter uses up the majority of our budget, but we also have to plan for staffing (through attrition we are down 11 employees), facilities and upkeep, equipment (our aging fleet showed up multiple times last winter; at one time 5 plow trucks were down for repair; this is why we have included $650,000 in the bond for equipment needs), materials such as gravel, sand, salt and culverts to name a few, and unexpected expenses that arise during the year; such as the road failures we experienced in 2015 due to materials that did not perform properly.
Any time we see we won’t have the income to cover the expenses, we have to make difficult cuts; we can’t go somewhere and get additional funding. With the roads it came down to the issue of do we try to repair/build the roads or do we plow them; one choice or the other. The choice was obvious, but there is good news now that new funding is going to arrive through the MTF. We can start repairing our primary roads with the new money that is going to come in; we already have a list of where we will start; with State and Brutus roads at the top. In that time frame we will also do more wedging on the other primary roads to buy time until we can rebuild them. By becoming more efficient at what needs to be done we can save additional dollars; dollars that then can finally be put into roads.
Another portion of the bond is utilizing $350,000 to construct a building where we can make our own salt brine (a de-icing product) for winter usage. Currently we purchase the brine at 35 cents per gallon and we can make it at about 12 cents per gallon; currently our annual costs are about $60,000 to purchase the brine. Along with this process, there are much more savings involved than just the purchase of the brine for the roadways. The brine stays on the roads much better than plain salt and sand; wind and vehicle traffic tend to blow the salt and sand off the roads. With usage of the brine, it means we don’t have to return to an intersection 4-5 times a day in a snow event; meaning less fuel used, less product used and less overtime needed to keep the roads as safe as possible. An additional bonus to the brine is that with less salt usage needed we are also reducing the environmental impact that salt has on our water resources. With these savings, we can then utilize more future dollars towards what you want us to use them for —roads.
What will happen if a referendum is filed and enough signatures are acquired to require an election? First of all, we will have to wait for the next general election after the one this year. I could not get an answer as to if there is one scheduled for 2017. If not, the alternative would be for a special election to be held; which the ECRC cannot afford to pay for. The wait would be no less than one year which would affect our bottom line to a point where scheduled road projects will once again go on hold in order to afford phase #2. We have a current projection of a bond interest cost of 2.32%. If we have to wait, the projection is that the Feds will raise the rates in the upcoming year. A 1% increase would mean an increase of $330,000+ in bond interest alone over the life of the bonds. By going with this bond now we can avoid winter construction; which raises costs substantially. ( Winter construction costs was one of the issues with the first EMS building that was built by the County on M 119) With approval of the bond issue we will be able to go out for bids this January and avoid construction material cost increases as well. We already have the drawn construction plans for the phase #2 improvements at Levering.
If the ECRC misses this window of opportunity the additional delay costs could very well be as much as $750,000. (This includes savings that would not be utilized with no bonds being issued because of a successful referendum) These additional costs with a delay of just one year will definitely take away dollars that would be directed towards roads in the entire County. The timing of the completion of phase #2 at Levering is about as good as anything we could have hoped for back in 2007; when we started phase #1.
If a referendum petition is filed and you are requested to sign it to take this to a an election, I hope that you will realize that this bond request is something that will make the roads you travel and the services you receive better for all of Emmet County, not just the North end. I hope the information I have provided you will let you make an informed decision and that you will refuse to sign a referrendum.
In closing, let me again state the fact that NOT A PENNY OF PROPERTY TAX DOLLARS will be used for any of the improvements and payments that will take place. Other than being required to go through the County for bonding, we are separate from the County. This will be an ECRC debt, not a debt of Emmet County. I urge each of you, for the sake of the needs and costs savings that will take place and the roadwork that needs to be done DO NOT SIGN A REFERRENDUM PETITION which will cause a substantial and costly delay on what needs to be accomplished.
Frank P. Zulski, Jr.
Chairman, Emmet County Road Commission