The white stuff It can cost plenty of green and leave budgets in the red
Everybody talks about the weather. For some, it is just small talk, and all that hangs in the balance are trivial matters like washing the car or deciding if an umbrella will be needed.
For others, like farmers and airline pilots, weather talk affects livelihoods, potentially even human life.
Municipalities, too, are affected by adverse weather, especially because it is so difficult to predict a year in advance. But some type of long-range projection is necessary when preparing a budget for snow and ice control months before the temperature drops to freezing. A poor prediction can mean fiscal disaster.
Many budget directors in northeastern cities will attest that too much snow can spell financial hardship to the tune of hundreds of thousands or even millions of dollars, forcing cutbacks in other areas to pay for snow removal.
New York City’s experience illustrates the point rather dramatically. The city budgeted $13.5 million for snow removal in the winter of 1995-96 and ended up spending more than $100 million.
At least six major snowstorms hit the East Coast in late 1995 and early 1996, leaving behind a lot more than messy streets and stranded motorists. Hundreds of cities, small and large alike, were forced to make some hard decisions on how to pay for massive cleanup costs they never anticipated.
Just as winter weather can vary from region to region and year to year, municipalities vary greatly in how they budget for snow and ice control as well as in their responses to a budget deficit caused by unusually heavy snows.
Vernon, Conn., population 30,000, budgeted $104,516 for snow removal last year, but spent about $260,000. Vernon and numerous other communities confronted with the same predicament benefited from the federal government’s broad definition of what constitutes a “major disaster.” During 1996, the Clinton administration doled out federal aid to about 16 states hit by unexpectedly high snow removal expenses.
A Federal Emergency Management Agency grant for $40,023 helped Vernon cover some of its deficit. The city used about $115,000 of “undesignated reserves” to pay the remaining $115,000, says James Luddecke, chief financial officer.
Then, in response to residents’ anti-tax sentiments and in the midst of three property tax referendums, the city allocated just $69,383 for its 1996-97 snow removal budget, the lowest level in 15 years. But Mother Nature, as usual, failed to cooperate. As of early March, Vernon had already spent $120,000 on snow removal, according to Luddecke.
Sometimes, the need to balance the budget (at least in theory) can significantly affect a city’s approach to budgeting for snow and ice control, as Kansas City, Mo., demonstrates. The city of 450,000 is 320 square miles in size and averages 20 inches of snow per year.
For 10 years, the city’s department of public works has not been funded for the entire amount it needs at the outset of the snow season, says Larry Frevert, deputy director of the department.
The city charter mandates a balanced budget and maintenance of a contingency fund equaling 1 percent of the general fund budget (about $3 million this year). Therefore, the department must set its initial appropriation at a fraction of the estimated total and later, when more money is needed, return to the council with a request to transfer contingency fund money into the snow removal program.
The initial appropriation allows the department to order its salt and sand supplies, replace plows or spreaders if needed, repair equipment and administer early season treatment of bridges for morning frosts. Usually enough is left to fund the fighting of the first snow storm.
Frevert says he has a problem with the city’s thinking that snow removal should be regarded as an “emergency,” which is what contingency fund monies are officially for.
“Our staff has contended for years that because snow can be expected yearly, we should fully budget for a typical winter, fund any excesses from the contingency fund, return any leftover for re-distribution and save the contingency fund for truly unforeseen emergencies,” he says.
Public works is making progress in swaying the council’s thinking, Frevert says. He notes that Kansas City typically requires about $1.8 million per year for snow removal on its streets (2,200 center line miles). Four years ago, his department was only funded for $250,000. This year, it initially received $778,000.
Unfortunately, Kansas City was well above the annual average snowfall amount as of early March, having received 33 inches. A surprise eight-and-a-inch snowfall on Oct. 22, 1996 was partly responsible for the higher accumulation, which has ballooned this year’s snow removal expenses to $2.3 million.
Compounding matters, October’s heavy, wet snowfall damaged or knocked down 200,000 trees. Clearing roadways and hauling away private trees and branches stacked at curbside by residents forced the city to divert funds from other services. Overtime, leasing of extra equipment and other costs totaled $2.5 million, badly depleting the contingency fund.
IT’S ALL RELATIVE
It can be safely said that geographical location plays a major role in formulation of a snow removal budget. A rule of thumb (with some exceptions) might be that the higher a municipality’s latitude, the greater the amount of snow removal money, as a percentage of the overall budget, it sets aside.
Case in point: Juneau, Alaska, population 30,000. As one would expect, the borough takes snow removal seriously and budgets accordingly. Snow and ice control are incorporated into its more encompassing “street maintenance” budget, says Ernie Mueller, public works director. “Our budgets are primarily based upon historical trends,” he says.
Juneau relies on National Weather Service snowfall figures. Those figures show an average of 104 inches of snow per year, but the amount has varied greatly — from 40 to 260 inches.
Juneau must spend more for snow removal than comparably sized Alaskan municipalities because of its hilly terrain, says Mueller. Moreover, its location on the southeastern coast means temperatures frequently fluctuate around the freezing point. Snow, rain and freezing rain can alternate, sometimes causing hazardous conditions that require extensive remedial action.
Juneau’s situation is somewhat unique in several other respects. Its snowfall season — Nov. 1 through April 15 — is longer than most municipalities’. And because the borough is a unified municipality, it is responsible for rural as well as city snow removal.
The borough’s FY97 budget allocated about $3,260,000 for street maintenance, 40 percent of which is for snow/ice control, according to Mueller. Street maintenance is almost entirely paid for with property taxes. Those who do not live on a road pay property taxes for such purposes as police and fire protection, but do not pay the portion earmarked for street maintenance.
For 10 years, the city had a snow removal contingency fund for use in the event of a severe winter. Only once did the borough need to dip into the money, taking out about $50,000. About five years ago, the borough’s municipal assembly concluded that there was no need for the fund, which had ranged from $250,000 to $500,000, and discontinued it.
Today, if the public works department were to exceed its budgeted snow removal amount, “We would go back to the [Municipal] Assembly and ask for more money,” says Mueller. If the borough ends the fiscal year with a surplus, the money goes back into the pot to be appropriated to the next year’s street maintenance budget.
Municipalities that do not want to find themselves slammed by huge bills like so many cities in the Northeast last year can consider protecting themselves with snow insurance.
Insurance companies, always on the lookout for a potential market, have added snow insurance to their lineup of weather-related and “Act of God” types of coverage (hurricanes, floods and earthquakes for example).
The cost could range from $10,000 per year for a small town to several hundred thousands of dollars per year for a big city, depending on average annual snowfall, deductible, geographical size of a city and other factors.
Policies are structured in different ways. The most common type of policy covers the number of inches of fresh snow in a designated month or season.
Penn Insurance, Needham, Mass., suggests a municipality determine its deductible by taking its average annual snowfall (based on the past 30 winters) and adding 10 or 15 inches, says Rick Penn, chief financial officer. Generally, the higher the deductible a municipality has (the number of inches of snowfall it must pay to remove) the lower its premium.
Needham, a Boston suburb of about 50,000 people, could serve as an example. The city must budget about $10,000 per inch for snow removal, and averages about 50 inches of snowfall per year.
According to Penn, Needham could choose a policy costing about $55,000 per year that would offer as much as $400,000 of coverage for up to 40 inches of accumulation in excess of 60 inches.
A municipality may also elect to purchase catastrophic coverage at a much lower cost. For example, a policy might cost $10,000, but would only kick in once a city with a 50-inch average annual accumulation exceeded 75 or 80 inches of accumulation.
Snow insurance has only been around for a few years, so it is difficult to quantify its cost-effectiveness. However, a recent article in Public Issues, a magazine published by Armonk, N.Y.-based bond insurer MBIA, cites one policy holder, Woodbridge, N.J., as a local government that probably wishes it had acted sooner.
The township’s 1996-97 snow policy cost $19,800. Woodbridge is responsible for up to 50 inches of snow removal and would be reimbursed $15,000 per inch above that amount, to a maximum of 90 inches.
The problem is, it came a year too late. While Woodbridge had budgeted $580,000 for the 1995-96 snow season, it spent $1.3 million. Had the current policy been in effect, Woodbridge would have reaped $420,000.
APWA SPONSORS NORTH AMERICAN SNOW CONFERENCE, APRIL 27-30
Municipalities’ snow and ice control needs have spawned a wide array of new equipment, materials and technology.
Officials can learn all about these new developments at the North American Snow Conference, April 27-30 at the Hyatt Regency Crown Center in Kansas City, Mo. The show is sponsored by the American Public Works Association, the Kansas City chapter of APWA and the city of Kansas City.
The agenda features seminars and roundtable discussions on topics including best winter management practices, measuring cost-effectiveness of snow fighting and developments in anti-acing/de-icing chemicals. An exhibit hall full of winter maintenance products will be open to attendees all four days.
Full registration costs $275 for APWA members, $305 for nonmembers. One-day registrations are $100 and $120, respectively. For more information, call APWA at (816) 472-6100.
Power sweepers speed up city’s snow removal
Cities in northern climes that must contend with snow removal each winter often need more than just snow plows and other heavy equipment.
Smaller equipment like snow blowers and small plows can clear sidewalks in front of city hall, touch up around doorways or clean off an outdoor skating rink for a youth league hockey game.
Dearborn Heights, Mich., a suburban Detroit community of 60,000 people, had a need for something smaller and more maneuverable for clearing surfaces such as sidewalks, asphalt walking trails, inaccessible corners of parking lots and four pedestrian bridges crossing over a creek.
About four years ago, the city purchased two power sweepers from Sweepster, Dexter, Mich. The sweepers, which have polypropylene and wire bristles, clean light snow as well as heavy wet slush.
A five-foot sweeper is mounted on a riding mower and removed during the summer months. A six-foot sweeper is mounted on a skid steer loader.
Superintendent of Public Works Jim Swain says the city is responsible for snow removal at 10 complexes.
It used to take six people per complex to get the job done; now two can do the job in about the same amount of time.
One operates the brush while the other touches up any small, inaccessible areas and spreads a de-icer such as salt or calcium chloride.
Swain says the new power sweepers have helped cut in half the number of hours his employees spend on snow removal.
The maximum accumulation the brushes can handle depends on factors like whether the snow is powdery or wet and whether drifting is present.
Public, private sectors cooperate to plow streets
Over the past 15 years, the suburban Chicago village of Schaumburg, Ill., population 75,000, has witnessed a transformation common to small and medium-sized cities nationwide: A dramatic increase in townhouses, condominiums and subdivisions governed by homeowners’ associations. Many of these developments have cul-de-sacs and little or no space between living units, which means there is no place to push snow without impeding pedestrian or vehicle traffic.
Schaumburg averages 40 inches of snow per year, and spends from $600,000 to $700,000 per year on snow removal. From one-quarter to one-third of that money goes to private contractors.
Plowing the streets used to be a straightforward job, but during the 20-year tenure of Director of Public Works Bob Miller, it has become more multi-faceted.
Miller has arranged for village reimbursements to homeowners’ associations that plow their own cul-de-sacs, winter equipment rental, the use of non-departmental personnel when needed and direct arrangements between the village and private contractors. In total, about 25 percent of village residents have their plowing done by private contractors.
In the public works department, the first line of defense is 68 employees whose wintertime duties include snow and ice control. They work with 29 pieces of equipment.
Schaumburg does not own all of its snow removal equipment. Three front-end loaders, which would cost about $70,000 apiece to purchase, are leased. The village has signed a five-year agreement with McAllister Equipment, Alsip, Ill. to lease the equipment from November through March each year.
Still, that is not always sufficient, as some snow storms are big enough to require even more front-end loaders. But because of demand for the same equipment by O’Hare Airport, shopping malls and office complexes, the village had to find a way to ensure availability.
Retainers paid to a local contractor amounting to $3,500 per month/per loader help the village ensure availability of two loaders for the months of November through February.
Any unused retainer money can go toward summer equipment rental or purchase of gravel or asphalt from the contractor.
Public works employees work 12-hour shifts during snow storms. Schaumburg also has trained non-public works employees to handle snow removal-related jobs in the event of a major snowstorm. About 25 additional employees, including building inspectors, engineers, dispatchers and police and fire personnel, can be pressed into service if necessary.
The village’s agreements with homeowners’ associations help Schaumburg officials avoid a lot of headaches.
Miller says some of the older subdivisions have narrow roads that end in cul-de-sacs without turnaround circles. This makes plowing with village-owned equipment difficult because the driver would have to back down the street and plow out or plow to the end and back out. Snow plowed onto sidewalks and driveways has also been a problem.
However, contractors handling homeowners’ associations’ plowing often are landscapers with smaller, more maneuverable equipment, says Miller. Schaumburg will not enter into a plowing agreement with an association unless the contractor is bonded and insured.
The agreements with associations are normally one-year contracts. In the most recent fiscal year, Schaumburg spent $122,700 to reimburse the 32 associations for plowing 229 streets ending in cul-de-sacs.
The village retains responsibility for plowing through streets. In other instances, when the village deals directly with a private contractor, three-year agreements are the norm. The private contractors plow 130 cul-de-sacs in subdivisions with single-family structures.
Miller is responsible for clearing 212 center lane miles of streets (this is actual mileage, although most are 32-foot-wide, multi-lane streets that require more than one pass by a snow plow).
The 212 mile-figure is 64 percent higher than it was when Miller started on the job; cul-de-sacs have increased by 74 percent. Nevertheless, Miller notes, “We haven’t added any people, but we have supplemented our personnel and equipment” by means of the agreements with homeowners associations and private contractors.
Miller says Schaumburg’s snow removal program saves the village about $317,000 per year, based on the added cost of wages for the additional people that would be needed and the monthly payments to purchase six front end loaders.