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Administrator Says Highway Provisions Not Likely to Save Taxpayers Money

Count Sturgeon Bay Administrator Steve McNeil among those wondering how the new rules restricting the work that county highway departments are allowed to do will save money for city taxpayers.

The county will complete between $70,000 and $80,000 in work on city streets by the end of 2011, all awarded through an open bidding process. That represents 11.6 percent of the nearly $647,000 the city will spend on streets this year (an additional $922,500 was spent on the Egg Harbor Road project near Wal-Mart, all of which Wal-Mart reimbursed the city for). Including the Wal-Mart work, $1,569,500 in street work was awarded to private contractors in 2011.

But in Gov. Scott Walker’s budget bill passed in June, he inserted new rules that prohibit county highway departments from performing work for municipalities with populations over 5,000 people. The provision was meant to push the work into the private sector and save taxpayer’s money.

While the provision will succeed in shifting work from the government to the private sector, it’s unlikely to save taxpayers money, McNeil said. The county won those projects by coming in with the lowest bid, he said, so it’s simple logic that says: “we’ll have to pay more.”

“There’s one less bidder in the mix,” McNeil says, but that’s not the only reason costs are likely to rise. “Now, let’s say the highway department made a profit by coming in under their bid on a project. In that case that surplus goes into next year’s county budget and the taxpayer gets 100 percent of those savings. Now if a private contractor does the job for less, do you expect that the company will give the money back? I wouldn’t expect them too. So it costs the taxpayer there as well.”

The county is also under contract to perform maintenance on highways 42 and 57 for the state Department of Transportation, including snow and ice removal. Since the department’s revenues are being cut, the county has said it won’t continue to perform that maintenance unless the state is willing to pay substantially more for the service.

The state could contract with a private entity or a neighboring county for snow and ice removal, but those options are likely to cost substantially more as well.