Ten years after York County voters agreed to pay a penny more in sales tax to fund a massive road improvement program, half of the initial projects are completed.
County officials say they are searching for ways to speed up the 'Pennies for Progress' program.
"We're years behind," County Councilman Tom Smith said. "It was a slow go, but now we need to play catch-up."
Rising construction costs throughout the program's 10-year history, along with the time it takes to coordinate with cities and to acquire rights of way, has caused work to move at a snail's pace.
Funding requirements also cause delays. Before county officials can sign a contract for a project, they must have enough money to pay for the total project. But the sales tax money comes in gradually, limiting the number of projects that can be under way at one time.
To make the program more "pay as you go," County Manager Jim Baker said York County is looking into alternative financing such as a line of credit.
The good news is that tax collections are about 10 percent ahead of expectations, even though most of the money already has been earmarked for projects. Moving ahead quickly on more projects could enable the county to take advantage of today's competitive prices, said Project Manager Myron George of Capital Management and Engineering that manages the program for York County.
Pennies for Progress has two groups of projects. The first 14 were approved in a November 1997 referendum; another 25 were approved in a 2003 referendum that extended the program.
With more financing options, the 2003 projects could be completed by 2013 if there is enough tax revenues, George said.
Half the 1997 projects are finished, and the rest should be wrapped up by 2009, he said. Finishing the final 1997 project -- the S.C. 5 Bypass from S.C. 161 to S.C. 5 West -- is a top priority. County officials are finalizing supplemental funding with the state transportation infrastructure bank. With funding in place, work could start next year.
"Some projects are ahead, and some are not where we'd like them to be," George said. "We're working diligently to move all of those projects forward."
Estimating the cost of road improvements has been a struggle since voters approved the initial seven-year "Pennies" program in 1997. At that time, York County was the first county to take advantage of a new law that enabled counties to use a sales tax for multiple road projects.
In the fall of 1997, voters narrowly approved a 1-cent sales tax hike to pay for $99.2 million in road work. The plan passed with 51 percent of the vote.
It took three years to plan and finish the first phase of one project, S.C. 5 from Montgomery Road to Herlong Avenue, which was widened to five lanes in some places.
By 2004, the program was $38 million behind, and the next year four of the 14 projects were put on hold because there was no money.
The county found extra money through state and federal funding, but because of increased construction costs the budget for the 1997 projects had swelled to $185 million.
Along the way, some projects were halted because skyrocketing oil prices almost doubled construction costs.
Every element of road construction uses oil. Oil prices jumped from less than $20 a barrel when the program initially was approved 10 years ago to about $40 a barrel in 2003 and more than $85 a barrel now, George said.
One project put on hold was just started last year, the widening and straightening of S.C. 5 West from York to the Cherokee County line. Competitive construction prices because few transportation departments in the Carolinas are building meant the contract came in $3 million less than originally estimated.
The entire S.C. 5 West project -- which stretches 9.5 miles from S.C. 5 bypass near York to Cherokee County -- is being done in several phases. The last leg to Cherokee County is expected to be finished in 2009, more than 10 years after work started.
Despite the lag in progress and western York County residents' disapproval of the pace, voters approved "Pennies for Progress" for a second time in 2003 by 73 percent. The $173 million 2003 program is set to expire by August 2011.
In the next couple of weeks, the first 2003 project is expected to be finished. The project will improve visibility at the intersection of S.C. 5 and Shiloh Road, east of York. Shiloh Road was realigned to intersect with S.C. 5 directly across from Dove Landing.
Project managers have started on a vast majority of the 2003 projects, but officials don't know if the $173 million will stretch far enough to cover all the work.
So far, Baker is pleased that tax revenues are steady and strong -- 9.5 percent ahead of projections with $60.7 million collected. The tax can only be levied for seven years and until the $173 million limit for the 2003 program is reached.
"Generally speaking, money for the 2003 project is coming in a bit faster than expected because of growth in the county," Baker said. "We're doing well."
Moving projects along
Determining if there will be funding for all 2003 projects has many variables, including if construction costs will increase and if the sales tax can bring in amounts projected.
"The real challenge," Baker said, "is matching a specified budget with a rapid growth of inflation of construction costs."
Moving forward faster with a line of credit or other alternative funding could help offset that challenge.
For example, if the county has $20 million for projects in the bank and awards a contract for a $15 million project, Baker said the law requires the county to reserve that money. If the next project will cost $10 million, contractors can't start until an additional $5 million comes in.
If the county uses a line of credit, Baker said, the $10 million contract can be awarded. When it comes time to pay, money should have have come in to cover the project.
"It's not like we are out of money," Baker said. "We have to set aside money for a contract when it is awarded, even if we know it's not going to be finished for two years. We'll probably never have to draw on it."
But what if the money doesn't come in as expected?
"Worst-case scenario, you pay interest," Baker said. "If you don't project it correctly, you could have to pick up interest costs. But that could be offset by escaping rising costs of construction."
The county could have completed some of the projects faster and cheaper if bond financing was approved at the time of the vote, Baker said. It could have cost less to finance the projects 10 years ago than pay the rising construction costs when the money was actually in hand.
A recommendation on alternative financing should be made to council in a couple months, Baker said. The county's financial manager and an outside consultant are looking at the long-term impact.
More Pennies for future?
Baker thinks voters realize how "Pennies for Progress" helps the community.
Harriet Womack, a York County resident since 1956, agrees with using a sales tax to fund road widening and other improvements for safety and congestion issues.
"With the penny sales tax, you don't realize you're paying it," Womack said. "Everyone has to pay, not just property owners. It's the best way to pay for it; everyone uses the roads."
She said she'd vote for another Pennies program if it improves the traffic situation.
Baker said the county's continuous growth will undoubtedly cause officials to go back to the voters for a third initiative.
There are several changes Baker said will be considered on a third program, such as financing and adding flexibility with the order projects are completed.
Also, Baker said there is nothing in the current program to ensure the previous phase is completed before moving to the next.
The S.C. 5 bypass is the most vulnerable because it's the last project in 1997, and Baker doesn't want it and other projects to fall through the cracks. A future Pennies could call for completing the previous phase first, then moving down the new list.
The county is exploring options to determine when the third vote could hit the ballots.
"The safest thing to say is no later than 2010, but we don't know for sure," Baker said.
Tax revenue collected under 1997 plan
Total 1997 budget
Year 1997 projects to be completed by
Tax revenue collected under 2003 plan*
Total 2003 budget
Year 2003 projects to be completed by
Total projects proposed
Total projects completed
Pennies for Progress has an updated Web site. Visit www.penniesforprogress.net for more information.
• S.C. 274 from S.C. 49/55 to Little Allison Creek; work should start this fall, part of $26.9 million
• Cherry Road from York Avenue to Heckle Boulevard, $3.1 million
• S.C. 72 from Black Street to Heckle Boulevard, $5.5 million
• S.C. 5 Bypass from S.C. 161 to S.C. 5; work could start in 2008 if funding is available, $12.9 million
Some work performed:
• S.C. 5 from Cedar Grove Road to Cherokee County Line, part of $44.3 million
• S.C. 161 from Newport to York; should be done in June, $14.6 million
• S.C. 901 from S.C. 72 to I-77; should start construction in November, $14.6 million
• Ebenezer Road from Dotson Street to Glenwood Drive; should be done in December, $1.5 million
• Gravel roads are nearly complete, $9.3 million
• S.C. 5 from S.C. 5 Bypass to Cedar Grove Road, part of $44.3 million
• S.C. 5 from Montgomery Drive to Cherry Road, $10.9 million.
• S.C. 160 from I-77 to Gold Hill Road, $10.2 million
• Fort Mill Northern bypass, $15.1 million
• S.C. 274 from Little Allison Creek to S.C. 161, part of $26.9 million
• Saluda Street from Boggs Street to Heckle Boulevard, $120,000
• Herlong Avenue and India Hook Road, $16.2 million
• Mount Gallant Road from Anderson to Celanese roads; construction planned for next summer, $8.4 million
• S.C. 55 and Rhyne Road intersection, $700,000
• S.C. 321, Ferguson and Ridge roads intersection, $900,000
• Porter and Firetower roads intersection, $700,000
• S.C. 324 and Cameron and Gordon roads intersection, $830,000
• S.C. 55 east of Clover, $8.8 million
• Fort Mill Southern bypass, $15.2 million
• S.C. 49/211/97/Nimitz Road, $22.4 million
• Tega Cay/ Gold Hill connector, $1.5 million
• S.C. 274 intersection corridor, $7.1 million
• Gravel roads group one, $4.2 million
• U.S. 21 from Cherry Lane to Sutton Road, $17.1 million
• White Street railroad crossing and realignment, $2.5 million
• McConnells Highway from Heckle Boulevard to S.C. 324, $7.6 million
• Mount Gallant Road from David Lyle Boulevard to Anderson Road, $6.7 million
• Mount Gallant Road from Celanese to Twin Lakes roads, $8 million
• S.C. 557 from Kingsbury Road to S.C. 49, $6.5 million
• Ebinport Road from Cherry Road to India Hook Road, $6.3 million
• S.C. 160 from Springfield Parkway to Lancaster County, $2.5 million
• Riverview Road from Eden Terrace to S.C. 161, $1.2 million
• S.C. 72 from S.C. 901 to Rambo Road, $6.8 million
• S.C. 274/279, $8.6 million
• Springhill Farm Road from S.C. 51 to U.S. 21, $4.6 million
• S.C. 51 from 21 to North Carolina, $5.9 million
Some work performed:
• S.C. 5 and Reservation Road intersection; should be complete next summer, $500,000
• Bird Street and University Drive intersection; should be complete next summer, $800,000
• S.C. 49 and Paraham Road intersection; should be complete late this year, $800,000
• Mount Gallant and Paraham roads intersection; should be done next summer, $88,500
• Shiloh Road and S.C. 5 intersection; should be done in the next few weeks, $1.1 million
• Rawlinson Road; should be done next summer, $560,000
Design when cash flow permits:
• Ebenezer Road from Frank Gaston Boulevard to S.C. 161, $4 million
• Eden Terrace Road from Bradley Street to Anderson Road, $4.5 million
• S.C. 169 from Gold Hill Road to Zoar Road, $1.6 million
• Gravel roads group two, $4.2 million
Progress of the 'Pennies for Progress' projects (costs are estimates)