Minutes of the Meeting of the Subcommittee to Study the Cost of Maintaining Highways, Roads and Streets to the Legislative Committee to Study the Distribution among Local Governments of Revenue from State and Local Taxes, NRS 218.5388 to 218.53886, inclusive
August 17, 2000
Las Vegas, Nevada
The meeting of the Subcommittee to Study the Cost of Maintaining Highways, Roads and Streets to the Legislative Committee to Study the Distribution among Local Governments of Revenue from State and Local Taxes was called to order by Marvin Leavitt, Chairman, on August 17, 2000, at 9:30 a.m. in Room 4412 of the Grant Sawyer State Office Building, Las Vegas, Nevada.
COMMITTEE MEMBERS PRESENT:
Marvin Leavitt, Chairman, City of Las Vegas
Mark Calhoun, City of Henderson
Michelle Gordon, Washoe County Regional Transportation Commission (RTC)
Bob Nunes, Douglas County
Geneva Hollis, Nye County
Dave Roundtree, Washoe County Public Works
Steve Varela, City of Reno
COMMITTEE MEMBERS ABSENT:
Steven Bates, Tri-Mac Transportation
Martin Manning, Clark County
Steve West, City of Winnemucca
LEGISLATIVE COUNSEL BUREAU STAFF PRESENT:
Kevin Welsh, Deputy Fiscal Analyst, Fiscal Analysis Division
Bonnie Borda Hoffecker, Secretary, Fiscal Analysis Division
Exhibit A is the Meeting Notice and Agenda.
Exhibit B is the Attendance Record.
Exhibit C is the Breakout of Road Miles for the 3.6-Cent per Gallon County Mandatory Fuel-Tax Distribution Fiscal Years 2000, 2001 & 2002, 1997 Senate Bill 253. Submitted by Rick Oxoby, Operations Analysis, Nevada Department of Transportation (NDOT).
Exhibit D is a handout on the Department of Transportation, Planning Research Division, 2000 Motor Vehicle Fuel Tax Allocation Formula-NRS 356.550, submitted by Rick Oxoby, Operations Analysis, NDOT.
Exhibit E is a handout on Fiscal Year 2002, 3.6-Cent fuel-Tax Distribution Under Existing Formula, and Fiscal Year 2002, 3.6-Cent fuel-Tax Distribution by 2/3 Population and 1/3 Road Miles and with Hold Harmless to FY 2001 Provision, submitted by Rick Oxoby, Operations Analysis, NDOT.
Exhibit F is a handout on the Fiscal Year 2000 3.6-Cent Fuel-Tax Distribution Under Existing Formula, submitted by Rick Oxoby, Operations Analysis, NDOT.
Exhibit G is a handout on the Fiscal Year 2002 3.6-Cent Fuel-Tax Distribution by 2/3 Population and 1/3 Road Miles and with Hold Harmless to FY 2001 Provision, submitted by Rick Oxoby, Operations Analysis, NDOT.
Exhibit H is a letter dealing with Nevada Certified Public Road Mileage (original signed by Barna Juhasz), submitted by Robert Hadfield, National Association of Counties (NACO).
There were approximately 15 persons in the audience.
CALL TO ORDER -- OPENING REMARKS
Chairman Marvin Leavitt called the meeting to order. He asked Kevin Welsh to give a current summary of where the committee stands.
Kevin Welsh, Deputy Fiscal, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), stated the Committee had researched in length the cost of maintaining highways and roads. The decision was there are several variables that have varying levels of significance and by trying to make guesses of the relative significance or relative importance in terms of money or in terms of priorities of the different variables and give them weight when the Subcommittee was not really sure what it is and put them all into the formula. It is very difficult to rationally discuss any of them. The decision was to take the largest variables first and make the decisions rationally based on those variables and get them out of the equation in terms of the new formula. Then run the new formula using those numbers and then take the second level of variables:
· Differences in temperature in maintenance
· Lane miles versus road miles
· The significance of the cost of maintaining traffic control systems included or sufficiently addressed by how we weigh population in the formula
· Flood control issues in the South versus snow removal issues in the North, can they be sufficiently explained in the current formula or are adjustments necessary.
Mr. Welsh continued by stating the second level of variables will not be addressed until the formula is put into effect and variables are evaluated after the formula is in use. The new formula is based on 2/3 population and 1/3-road miles. The old formula took into account area and the new formula does not. Motor vehicle miles traveled is comparable to population, the only difference is plus or minus a few percent.
Mr. Welsh explained there were eight recommendations from the committee. Four of the eight recommendations could be incorporated into one Bill Draft Request (BDR). The four requests were:
· Continue the Subcommittee or Standing Road Committee with the responsibility of:
1. Reviewing on an annual basis the road inventory, having an appeal process and reconciling the road inventory every year.
2. Reviewing the fiscal implications to the county and city road departments with the new formula.
3. Reporting back to the main committee any necessary adjustments.
4. Have a complete road inventory audit every ten years.
Those four recommendations, if put under their own BDR’s, the Subcommittee or Standing Road Committee would come directly under the Legislative Commission and making changes or modifications necessary during the year would be difficult. His understanding was a BDR to extend the Road Committee for another interim is being drafted. If the previous recommendations are included in that BDR, then the Road Committee would respond to the Legislative Committee as they do currently and necessary adjustments or modifications could be made when the Committee deemed vital. Mr. Welsh explained this is an easier and more efficient way to set up the committee.
Mr. Welsh discussed county road miles; Class A, Class B, Class C roads that NDOT has estimated for the year 2001, when the new formula is in effect. He reminded the Committee those numbers are not the numbers that will be used. The numbers would only be used to test the new formula and to give the Committee an idea of how the formula works. If the Legislature passes the bills and comes time to change the formula, then the Subcommittee will go back and revisit all of the numbers and come up with the most current available. There is a plan to include an appeal process so the county, city or town road departments would be able to appeal if there were a problem. Only after the appeal process would the numbers then be adopted for the purpose of applying them to the new formula.
APPROVAL OF THE MINUTES FORM THE APRIL 12, 2000,
APRIL 27, 2000, AND MAY 19, 2000, MEETINGS
MS. GORDON MOVED FOR APPROVAL OF THE MINUTES OF THE SUBCOMMITTEE’S MEETINGS HELD ON APRIL 12, 2000, APRIL 27, 2000, AND MAY 19, 2000. THE MOTION WAS SECONDED BY MR. CALHOUN AND PASSED UNANIMOUSLY.
DISCUSSION AND POSSIBLE ACTION REGARDING PROJECTED
COUNTY MAINTAINED CENTER LANE ROAD MILES
John Whitaker, Roadway Systems Division Chief, NDOT, expressed his support of the four recommendations previously mentioned by Kevin Welsh. He stated that NDOT does not create policy, if policy needs to be clarified or created they go to the Attorney General. There were four topics discussed:
· Alley’s, when they can be identified, are not included in gas tax as it is now.
· Data Base Anomalies-Churchill County in FY 2001 has a large Federal other mileage, which was a keystroke error, 500 miles that should not be included. Department of Taxation has been notified. (Exhibit C) The other anomaly is with Humboldt County; 650 miles must go back to the County category not the Federal category.
· Bureau of Land Management Mileage and how it may affect the 2001 gas tax year-The Department of the Interior is taking about 90 percent of the BLM mileage in Nevada and taking if off the public rolls. That prevents the State from collecting gas tax mileage. This action would be discriminatory to the Western States. There is an opinion in to the Attorney General currently to find out if this affects the cities and counties at the local level. If that happens and the new gas tax formula is not retroactive to January 1, 2001, Mr. Whitaker explained that other miles would go down considerably for the Federal and Other category. There will probably be no BLM mileage within the counties. Almost 11,000 miles will be taken off the rolls. This would cause a serious impact to the counties. The reasons for this change are to decrease maintenance costs and liability.
· Future assessments and where to go from there.
In response to a question by Chairman Leavitt, Mr. Whitaker stated BLM blades off, creates some drainage for the roads approximately every 10 years. Much of the time a rancher who uses the road will do the maintenance on it. There are about 12 roads in the State that show dual maintenance. The roads that are maintained by the counties through a maintenance agreement or easement but go through BLM land will not be removed from the rolls. However, if there is no agreement or easement then it more than likely will be taken off the rolls. Mr. Whitaker suggested the counties contact the Department of the Interior and United States Senators Bryan and Reid.
Robert S. Hadfield
Robert S. Hadfield, Executive Director, NACO, explained in late 1977 or early 1978 all of the counties accepted all of those roads for public rights way because BLM stated if counties did not maintain the roads the roads would be closed. The roads are legally County roads. In response to a question by Mr. Whitaker, Mr. Hadfield mentioned there are resolutions and correspondence with the Department of the Interior that will prove who was to maintain the roads.
Mr. Whitaker, in response to a question by Chairman Leavitt, noted without a maintenance agreement or something that shows the roads were deeded to the counties BLM wants to take those roads off the rolls.
Mr. Hadfield stated the Department of the Interior is instigating this policy and it is a budget driven issue. The counties either had to abandon access to public lands or step up and maintain the roads leading to the public lands. He opined it was all part of the “road-less” initiatives and the “un-roaded” initiative. There are county roads that the Department of the Interior and Forest Service is calling “un-roaded,” this new term will make the road inaccessible to the public. Mr.Whitaker explained this change would not decrease the total money available but the distribution will change.
In response to a question by Chairman Leavitt, Mr. Whitaker explained the discrepancy between mile inventories could be due to the fact that 1999 is using 1998 data and 2000 is using 1999 data and so on.
Steve Jackson, Transportation Analyst, NDOT, explained he had met with all of the counties and cities since the last Subcommittee meeting in April and found:
· Counties and cities were unsure of the true mileage due to turnover in the management.
· Counties and cities were educated (after the primary count) as to what types of roads do qualify for maintenance and what type of roads do not, based on road type.
· It is possible that some of the counties and cities included some of the “B” type miles in the numbers and that could be the reason there are changes in one data year to the next data year. A full assessment would be necessary to true up mile numbers and this is what is preferred by NDOT.
· NDOT took the numbers from the counties and cities and did a 10 percent audit as requested by the Subcommittee. Those numbers where accepted by the Subcommittee as miles to be used to develop formulas by Operations Analysis.
Chairman Leavitt questioned how to make the inventory more accurate and in response, Mr. Whitaker suggested a 100 percent assessment. He continued the 100 percent assessment could not take place until after January 1, 2001. Mr. Whitaker also emphasized he felt good about the numbers and they are the best numbers that the Department has had in a long time. To reassure the Legislature, remind the members a 10 percent audit had been completed. He stated the only way to true up the numbers is to do a 100 percent audit.
Mr. Jackson suggested asking the counties for two separate numbers to alleviate confusion:
1. Number of “C” type or better roads (eligible for gas tax revenue).
2. Number of miles eligible for certified public road miles.
Alan Kalt, Churchill County Comptroller, stated his concern of the anomalies found on the spreadsheet (Exhibit C) for Churchill County. He explained that the numbers taken to the Legislature must be credible. If legislation were passed the hold harmless would be made possible on the current year. The number taxation has is with the modification through Churchill County. There are problems with the numbers proposed and Churchill County cannot accept the numbers.
Chairman Leavitt suggested investigating the Churchill County situation. He noted there are three sets of numbers that have been discussed:
1. Numbers under the Federal Report.
2. Numbers under the formulas that currently exist.
3. Numbers under the proposed formula after the Legislature approves the formula.
In response to a question by Chairman Leavitt, Mr. Whitaker stated no other problems were found with the numbers for Churchill County and he apologized for the error. A letter had been written to the Department of Taxation to correct the situation. He also offered for Mr. Kalt to visit his office to compare the certification sheets sent by Churchill County and the spreadsheet.
Chairman Leavitt requested a spreadsheet that shows each county and has three columns for each of the different reporting criteria, to help people clearly understand the different numbers. At the bottom of the spreadsheet there will be an explanation as to why certain mileage will not equate to other mileage, and what is included and what is not included (i.e. Interstate Highways are not included.) Mr. Whitaker agreed that it would be helpful to also show the numbers given to NDOT by the counties and the document would include that.
Robert Hadfield expressed his concern for the lack of public comment from Road Superintendents and he reasoned they are working on fixing the roads. He suggested it would be broad assumptions to believe that everyone agrees with the numbers but most likely the numbers confuse them. He urged the Subcommittee to recognize that the lack of input from the counties does not mean they agree.
Tom Grady, Nevada League of Cities, indicated his concern with the assumptions being made, because of the lack of comment, that all of the counties must agree with the numbers. His concern was so great as to request Kevin Welsh to attend the League of Cities meeting to explain what the Subcommittee has done in order to inform the elected officials of the goings on. Mr. Grady suggested the silence is as a result of not understanding the numbers and formula. He advised there be one set of numbers so people will understand. Currently there are too many sets of numbers and he believes not many people know which numbers they are studying. He also offered help to NDOT with the certification of road miles if necessary.
In response to a request by Chairman Leavitt, Mr. Hadfield urged the Subcommittee to resolve the situation by setting up several regional meetings in different counties to allow everyone the opportunity to understand the numbers. He suggested there be a maximum of four different locations in order to allow for proper input.
Mr. Whitaker declared his approval and suggested that in conjunction with accumulating input, NDOT will bring the certification sheets, the mileage tables that show the BLM mileage by type and show step by step how gas tax is built. Also the summary sheet suggested by Chairman Leavitt will be made available at those meetings.
Carl B. Shrider
Carl B. Shrider, Roads Superintendent and Solid Waste Manager, Esmeralda County, explained that the numbers turned in by Esmeralda County have not changed and should be the same unless the criteria has been changed.
Bob Wickenden, Nye County Public Works, indicated the inventory has been a problem with the Subcommittee. He explained starting the 100 percent audit as soon as possible would be helpful, along with a clear and concise method as to how the classes of roads are determined. In response to a question by Chairman Leavitt, Mr. Wickenden believed that the problem with the mileage is the class of roads and the education being done would fix that problem. He also suggested if “A” and “B” type miles are problematic they should be reported separately and distinctly.
Mr. Varela questioned what number would be used as a base number for “hold harmless”. He suggested that the Subcommittee recommend a year to be used for the number and the counties need to agree to that. He continued by suggesting using “C” or better road classification, coming up with a new inventory for that and using that as the base number.
Mr. Nunes stated each entity has been accustomed to enjoying certain revenue. He continued by noting it would make more sense to base the “hold harmless” on a dollar value and over time, and as the inventory and the miles are perfected and fine tuned, they will adjust underneath and eventually you would get out of that situation.
Kevin Welsh declared the “hold harmless” situation had already been voted on and a recommendation has already been made to the Legislative Committee. The road miles are not relevant to the “hold harmless”. The available money would be distributed to the counties as of the base year and then any additional would be distributed according to the new formula.
Rick Oxoby, Operations Analysis, NDOT, urged the Subcommittee to revisit the number of road miles and possibly delay the use of the numbers for fiscal year 2001 tax distribution.
Steve Jackson (previously mentioned) stated he was new to the responsibilities of the fuel tax allocations. In the past he had assisted in compiling the spreadsheet that goes to the Department of Taxation, year after year. Historically the mileage qualifiable for fuel taxes has been estimated out of the total certified public miles. The outcome is an estimated figure. He suggested the counties and cities have two reporting tools, which would make the numbers more accurate and more clearly defined. Mr. Jackson provided the Subcommittee an explanation of how to derive the mileages that were qualifiable for fuel taxes out of the eligible certification miles. He stated NDOT was able to do a full statewide inventory, and based on that number, they came up with a set figure. The counties and cities would then certify their public road miles to NDOT and then knowing what were “C” type or better gave NDOT a base to know what was qualifiable for fuel taxes. For example, Nye County may have certified 1,200 miles and based on the inventory/audit NDOT would say 800 of that would be qualifiable for fuel taxes. From that base they went from year to year. If the following year 1,250 were certified, then (NDOT would not be able to do a full inventory every year) the changes are those new roads, which would be of the “C” type or better. In most cases, upgrades are done in relation to making new “A” or “B” type primitive roads. NDOT would then credit the 50 miles to the 800 of the previous year’s qualifiable road mileage to equal 850 miles that qualify for fuel taxes. Continuing, Mr. Jackson stated that was how NDOT gauged the estimations by the counties and cities due to the lack of manpower.
Mr. Whitaker informed the Subcommittee that NDOT used to perform assessments on a yearly basis by mapping quadrangles, called a quadrangle check. The mileage assessment from the quadrangle check can be used to analyze the process mentioned by Mr. Jackson and see if the numbers are still realistic.
Mr. Varela questioned if the Subcommittee was going to delay presenting inventory numbers to the Legislature because of the inability to conduct a 100 percent inventory by session and would that hold up application of the new formula. Chairman Leavitt stated if it took a year longer to produce an accurate inventory that would be the Subcommittees’ recommendation.
Mr. Whitaker informed the committee five regional meetings had been scheduled within the State. It was his plan to build gas tax in front of the counties and if possible use those numbers for the inventory. He noted the current inventory numbers are the most accurate and he felt good about them, but he estimated the 100 percent inventory could change the numbers between 10‑20 percent.
In response to a question posed by Chairman Leavitt, Mr. Whitaker indicated over the past two years, ten counties had increased their inventory by more than 20 percent. Chairman Leavitt suggested holding the next meeting after all the counties had been met with to inform the Subcommittee of the outcome.
FORWARDING RECOMMENDATIONS APPROVED AT THE
MAY 19, 2000, MEETINGTO FULL
MR. NUNES MOVED TO FORWARD THE FOUR RECOMMENDATIONS OF THIS SUBCOMMITTEE TO THE FULL LEGISLATIVE COMMITTEE. THE MOTION WAS SECONDED BY MS. GORDON AND PASSED UNANIMOUSLY.
Chairman Leavitt suggested after the personal discussions are completed and there is a better understanding of the inventories and other matters a meeting will be scheduled. He invited all members of the Subcommittee to attend any or all of the meetings in the rural areas, and he mentioned he would be in attendance.
Mr. Hadfield mentioned the meeting locations:
· Pahrump-Clark County, Nye County and Esmerelda County.
· Washoe County-Storey, Douglas, Carson City, Reno and Sparks.
· Battle Mountain-Humboldt County, Elko and all the cities in Humboldt County, Lander County and Winnemucca.
· Ely-White Pine County, Lincoln County, Ely, Caliente and Eureka.
The meetings are scheduled for October 9th through the 20th; and Battle Mountain and Ely meetings will be scheduled for the same day.
Tom Grady (previously identified) requested there be in attendance:
· One Commissioner/Councilman
· A person from finance
· A road person
There being no further business before the Subcommittee, Mr. Leavitt adjourned the meeting at 11:23 a.m.
Bonnie Borda Hoffecker
Marvin Leavitt, Chairman
Copies of the exhibits mentioned in these minutes are on file in the Research Library of the Legislative Counsel Bureau, Carson City, Nevada. You may contact the library at (775‑684‑6827).