Different structure. Big savings.

Facing dwindling funding sources and escalating costs, Lakes Highway District officials say they have chopped hundreds of thousands of dollars in expenses by restructuring the agency.

"We figured we could continue what we were doing, and that's kind of stupid, we could just give up, or we could think of ways to be more efficient," said Commissioner Marv Lekstrum. "And that's what we did."

Highway districts are forced to get creative, Lekstrum explained, as they face a sea of revenue challenges.

Districts receive a diminishing amount each year from the Forest Reserves, Lekstrum said, adding that last year his district received half of the initial $185,000 payment.

Revenue from the users tax on fuel is also down 21 percent, Lekstrum said, as more drivers fill up fuel-efficient cars.

"The fuel tax is figured on the gallons purchased, it isn't figured on the dollars you spend," he said.

Even after raising property taxes, the district's current purchasing power is down 42 percent from the year 2000, he said.

Costs, meanwhile, are up 34 percent, due to the increasing price of asphalt and fuel for equipment.

"With a half billion dollars worth of infrastructure, how do we keep it from turning into gravel?" said Lekstrum, adding that the district maintains 267 miles of road.

By making changes.

In the past year and a half, the district has reduced its 15-member road crew by five, three of the employees accepting a $21,000 incentive to retire early.

Their maintenance work is now covered by contracted workers, which Lekstrum said saves on insurance and overtime.

The highway district also recently hired an engineer tech and engineer, he said, charged with engineering work that was previously contracted out.

"They were both hired with the expectation they would save us money," Lekstrum said. "The engineer, his entire yearly cost, including benefits, is paid for every 11 weeks (in his work), as long as we have projects to keep him busy."

The crew reduction and internal engineering has saved about $378,000, Lekstrum said.

He estimated the district also saved between $300,000 and $1 million on three recent road rehabilitation projects because of contracting out labor and keeping engineering in-house.

"That's a trade-off I would do every day of the week," Lekstrum said. "More productivity with less cost."

On top of those changes, the district has also reduced its clerical staff by 7 percent, Lekstrum said, which saved about $23,000.

The agency's work week was reduced to four days, and it consolidated its workshops.

The district rewarded the remaining employees with a 2 percent raise this year, which Lekstrum said cost just over $20,000.

"We still ended up with savings," he said.

Post Falls Highway District isn't about to consider any changes like that, said Commissioner Lynn Humphreys.

"We have about adequate manpower to do the job that we need," he said of potentially freezing positions or contracting out work. "We feel we can do as good as or better a job staying in-house, as opposed to going outside the box."

His district faces the same funding shortages, Humphreys acknowledged.

The agency deals with it by prioritizing projects, he said.

Snow removal tops the list, he said. Then the district analyzes what funds are left over for maintenance and new road construction.

"That's how we deal with it. We look at what we have for the remainder, after the wintertime is over," he said.

Constructions projects, he added, are limited to those with funding secured from years back.

"We're not looking at new projects in the current fiscal year that haven't been on our radar for several years," he said.

Eastside Highway District isn't following the Lakes model either, said Eastside Commissioner Jimmie Dorsey.

Eastside has different needs, he said, with primarily gravel roads and remote offices serving three sub districts.

"The terrain is so different between what they do and what we do," Dorsey said.

Although the district has frozen one position, he acknowledged, he is unsure there will be more reductions.

"You look at the staff you have, and if they're working efficiently just to maintain (the roads), any reduction in staff means less maintenance," he said.

His district is doing the best it can in light of the budget problems, he said.

"I was personally hoping they (the Legislature) would look at increased funding," he said.

Lakes Highway District continues to look for potential savings, Lekstrum said.

"We've essentially picked all the low-hanging fruit," he said. "It's going to become more and more difficult."