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The Road Commission for Oakland County has approved the agency’s 37th three-year budget, laying out anticipated agency revenues and expenses for the 2018 to 2020 period.
The Road Commission has operated on a rolling, three-year budget cycle longer than just about any other governmental agency in the state of Michigan. “This three-year budgeting process has allowed RCOC to anticipate challenges and opportunities before they arrive and to plan accordingly before these issues are on top of us,” stated RCOC Board Chairman Eric Wilson.
Wilson added the three-year budgeting process allowed the agency to anticipate the drop in road funding that marked much of the last decade. “As a result of our budgeting process, while many road agencies were surprised by the drop in road funding over the past years, and therefore had to hastily lay off employees, we saw it coming and took steps ahead of time,” Wilson said. “As a result, we reduced our workforce by more than 35 percent between 2007 and 2012 without laying off a single employee.”
The three-year budget, officially known as the Three-Year Financial Plan, considers state budgeting forecasts and other sources to anticipate potential changes in RCOC revenue and expenditures. For the three-year period containing fiscal years 2018, 2019 and 2020, the plan anticipates revenue from RCOC’s largest funding source – state-collected vehicle-registration fees and fuel taxes – will rise modestly each year.
Wilson noted the Three-Year Financial Plan takes into account the increase in state-collected vehicle-registration fees and fuel taxes (gas and diesel) that took effect Jan. 1 of this year, but does not include revenue from the second half of the 2015 state road-funding package. The package called for half of the new funding to come from the state’s General Fund beginning in 2019 and increasing in 2020 and 2021.
“It remains to be seen if there will be sufficient revenue in the state’s General Fund to support the additional road funding,” Wilson stated. “We believe it is fiscally prudent not to assume we will see this revenue until and unless it actually arrives.”
The revenue estimates used the document are based on state Treasury forecasts, analysis of other forecast related to the economy (for example, annual vehicle sales numbers directly impact state vehicle registration fee revenues).
The Three-Year Financial Plan is the result of a months-long budget-planning process involving all RCOC department directors and other key staff. The process involves detailed reviews of the agency’s operations, staffing, equipment, needs, etc. as well as revenue. During this process, the RCOC Financial Planning Group prioritizes needs during the three-year budget cycle and allocates anticipated revenue based on those priorities.
“This is a very healthy and productive process,” Wilson said. “It allows every agency department the opportunity to anticipate its needs and expenses for coming years and to make the case for potential funding or staffing. The agency leadership then collectively decides what the highest priorities are and funds those items.”
Items that are not funded through this process are placed on an “unmet needs” list, and can be considered for funding if additional dollars become available.