Mobile County voters will have the final say this November on a sweeping $66 million package of road and bridge upgrades after the Mobile County Commission gave its approval this week to launch the 2014 Pay-As-You-Go Program.
The program, unique to Mobile County among Alabama’s counties, is a financing method that lets the county fund road and bridge improvements without raising taxes or taking on new debt. Instead, the county sells and buys back bonds on the same day, a maneuver that frees up money already collected through a decades-old property tax fund without saddling taxpayers with interest payments.
That special fund traces back nearly 90 years, to when the Alabama Legislature set aside 6.5 mills of ad valorem, or property, taxes for counties to use through a dedicated Highway Tax Fund. According to Assistant County Engineer Bryan Kegley, the county uses that revenue to purchase and immediately buy back bonds, a same-day transaction that shifts the money into a Pay-As-You-Go account where it becomes available for road work.
“It essentially takes money out of the highway tax fund and puts it into a Pay-As-You-Go account. Then we can spend it,” Kegley said. “But you can only approve funding on what the citizens approve by vote, which has to be in the engineering report that defines the projects.”
That engineering report, totaling $66 million, is what commissioners signed off on this week. It lays out 40 separate projects covering 93.1 miles of road construction, paving and repaving, along with the construction of two new bridges and a range of other infrastructure work across the county.
Of the total cost, the county’s Highway Tax Fund will cover roughly $55 million, with an additional $12 million coming from federal funding sources to round out the package.
If approved by voters on Nov. 4, the 2014 program will mark the 15th Pay-As-You-Go initiative since Mobile County first adopted the funding model in 1977. Every one of the previous 14 programs has cleared the ballot box, according to county officials.
All 11 municipalities in Mobile County stand to benefit from the proposed work, with roadway upgrades planned in each one. The city of Mobile, the county’s largest municipality, would see the most extensive benefit, with improvements planned across 33 miles of roadway under the 2014 program.
Kegley said the Pay-As-You-Go structure roughly doubles the amount of money the county can put toward road projects compared with a conventional bond sale. “In a regular bond program, you sell bonds and then you take the proceeds from those bonds, you start the design process, right of way acquisition, utility relocation and you bid it, but the whole time you’re paying interest on those bonds,” he said. “In the Pay-As-You-Go Program, the money is already in that special tax fund. So not only are you not paying interest, the money is in a checking and savings account that’s actually accruing interest.”
Among the highlights of the plan are two new bridges: one on Padget Switch Road over Carl’s Creek in Bayou La Batre, and another on Wilmer-Georgetown Road over Big Creek. Those two structures are the costliest single projects in the program, priced at roughly $4 million and $3.7 million respectively.
“Two of the county’s largest responsibilities to taxpayers is public safety, and providing adequate and safe roads for our constituents,” said Mobile County Commissioner Jerry Carl. “I am excited to see these road improvements as they provide a better quality of life for our constituents, as well as bring in much needed economic development to Mobile County.”
County officials say the full engineering report, including maps and detailed descriptions of all 40 projects, is available for public review online through the county’s website ahead of the November vote. If history is any guide, the program’s long, unbroken track record of voter approval since 1977 suggests strong odds that Mobile County’s road and bridge network will soon see its largest infusion of Pay-As-You-Go funding to date.