Should York County voters OK $225M for projects they already approved? Here’s the case

If more than half of the money in a new Pennies for Progress referendum would pay for roads voters already approved in prior campaigns, but haven’t been built yet, why should voters vote “yes” again?

“It’s the biggest bang for the cost,” said Britt Blackwell, chairman of the six-member citizen commission that formed the new list.

Commission members say they understand voters will need convincing. The commission’s case relies on a mix of unprecedented economic conditions, unfavorable alternatives and a broad reach of smaller improvements that everyone will see.

On Wednesday night, after more than a year of public input meetings, the commission finalized a more than $410 million project list for November’s general election. York County Council will review it next month and can vote whether to put it on the fall ballot. Council can’t change the list.

York County’s record $410 million Pennies road list is set. Did your road make it?

If the vote passes, York County would continue to charge a one-cent sales tax for road improvements for an additional seven years. Among projects for the fifth Pennies campaign, $225 million would go to complete prior projects. Only one of the prior four Pennies campaigns topped $225 million in total, and none had that much money for new projects.

Commission members aren’t happy that so much carryover money is needed, but they believe it is.

“The bomb went off,” said Blackwell, noting the COVID pandemic and inflation. “So there’s nothing the (county) staff could do about that, the way the construction and road costs and all that have just gone crazy.”

Why are costs so much higher?

Eight unfinished projects from prior Pennies votes would carry over. They have a combined budget of $322 million, and $225 million of that amount would go on this fall’s ballot.

Some projects, like the U.S. 21 and S.C. 51 widening near Carowinds in Fort Mill, increased in cost due to scope changes — to widen more roadway or group smaller projects together. All eight projects increased due to inflation. Other carryover jobs include additional U.S. 21 widening in Fort Mill, S.C. 557 work in Lake Wylie and drainage improvements in Rock Hill.

“Inflation is truly just a blanket across all,” said assistant county manager Kevin Madden. “Because all of the projects are buying the same asphalt, the same pipe.”

Materials and labor have been part of what at times have been 100%-200% price increases, said Pennies director Patrick Hamilton. The COVID pandemic caused material shortages and labor market changes, but also pumped considerable money into state, federal and local infrastructure projects. A saturated construction market led to higher prices, too, Hamilton said.

While it’s hard on wallets, the typical voter understands inflation, Blackwell said. Countless items from groceries to new homes cost more now than they did even just a few years ago, he said. Most of the carryover projects were budgeted for a vote in 2017, with some on the 2011 ballot.

“Hopefully people will understand that reality,” Blackwell said.

Limited options for Pennies funding

Part of the case for the new list is the alternative.

“I’m having a hard time understanding it, but one thing I do understand is all of these projects are halfway funded,” commission member Chad Williams said of carryover jobs. “So the answer is to not do them or put them on there.”

The commission isn’t able to change inflation, but it can choose whether voters are able to finish the carryover projects.

“It’s not like we can abandon them,” said commission member Montrio Belton. “And if he’s telling us that’s what the numbers are, then the numbers are what the numbers are.”

Because the carryover projects are already underway, commission members say they believe costs will be easier to manage compared to brand new jobs.

A “yes” vote in November would clear the deck by finishing projects that came in much higher than expected and targeting smaller, new intersection improvements throughout the county, Blackwell said. Then, future Pennies campaigns might not have to deal with the issues this one does, he said.

“This becomes a clean-up Pennies,” he said.

York County’s dilemma over soaring road construction costs: pay now or delay work?

Shock and heartburn over high costs

But Blackwell also says he was shocked to see so high a carryover cost for the fifth Pennies campaign. Williams said it gave him heartburn.

“It’s not a good feeling, but I’ve digested it and we’re trying to make the best we can out of something,” Williams said.

Commission member Zachary Zapack is concerned the cost will hit voters the same way.

“Joe average citizen is going to look at it and say, wait a minute, this is way past what I’m (expecting to see),” he said.

A year ago, it looked like there might be one or two carryover jobs, and a relatively small amount needed to finish them. Those figures would’ve been in line with the most recent Pennies vote in 2017 when three carryover projects at $60 million accounted for a little more than 20% of the more than $277 million total.

Commission members were told in recent months to expect significant carryover costs, but only saw final figures in the past few weeks. By that time, the commission’s biggest public input meetings were over.

“We would’ve approached the meetings a whole different way if we had known this,” Williams said.

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History of Pennies cost overruns

This fall’s campaign isn’t the first to face cost overrun questions.

Projections ahead of the first Pennies vote in 1997 fell well short of the money needed to complete listed projects. There was nothing like Pennies in South Carolina then, though many counties have adopted similar programs since. Early campaigns built new roadways that were unlikely to come without them, but forecasting issues led to public reviews and the county bringing the program in-house after starting with consultants.

The process of projecting public spending and road construction costs seven or more years in the future has improved, but it still isn’t easy, said Blackwell, a former York County Council member and chairman.

“We’ve always collected more money than it was set up for, but we’ve always had the cost overruns,” Blackwell said.

Though the last Pennies vote in 2017 ended up with the most extreme overruns yet, it also provides some reason for optimism. Between when voters approved it that fall and tax collections started the next spring, York County advanced funds in anticipation of coming tax proceeds to get projects started faster. Road work began quickly.

“The first five projects, on time and under budget,” Blackwell said. “That’s what I wanted to hear. And then all hell breaks loose. Staff really could not control that.”

Without the COVID pandemic Pennies was on pace to achieve all its goals, Blackwell said.

“That, on Pennies 4, was being achieved until all this happened,” Blackwell said.