City looks at options to pay for roads

It’s no secret.

Too many of Auburn’s arterials, streets and roads are in sorry, tooth-rattling shape, and there’s not enough money in the City kitty to keep them in decent condition for too many years longer.

In plain terms, the streets are losing ground.

Which is why Auburn’s Transportation Benefit District (TBD) last December approved imposing a $20 annual vehicle license tab fee on city motorists to cover part of the cost of street preservation.

The TBD estimated the license tab fee would bring in $800,000 a year, or $16 million over 20 years, which is the planning window.

But in light of fierce public push back to the imposition of that fee, on Feb. 22 the TBD agreed to put off for now the final step – sending the legislation to Olympia for approval.

The estimated $7 million the City needs over the next 20 years is based on the following schema: to the baseline of $2 million the City receives every year in funding, add car tabs and sales tax.

Yet, with the car tab fee up in the air, the City will be $5 million short of what it needs in the long term. That is, looking forward to what needs to be done in the next 20 years to keep its streets in good-to-fair condition, the City is staring down a $5 million annual gap in its pavement preservation program.

On Monday a committee composed of four members of the Auburn City Council and City Finance Director Shelley Coleman examined alternatives to the car tab fee.

Today, Coleman said, the City provides for street maintenance via the general fund and construction in three special revenue street funds:

• Arterial streets fund 102: gas tax, grants, transportation impact fees, and occasionally Real Estate Excise Tax (REET) funds, divided into first quarter, REET 1, and second quarter, REET 2, funds.

• Local street funds: sales tax received on construction and $50,000 annually from the water, sewer and storm funds, and sometimes REET funds.

• Arterial street reservation: 1 percent of utility taxes from water, sewer, street and garbage utilities, 1 percent utility taxes from cable TV, electrical facilities and phone utilities, plus grant funding and occasional REET funds.

Coleman said there is $21.5 million in unobligated funds that could be used, one time for streets, but they are unreliable for ongoing programs for any length of time.

Some options

Here are some of the ideas floated Monday, although, it must be noted, the committee has barely begun its work:

A utility tax increase of an as yet undetermined percentage.

Real estate excise taxes, the use of which presents several caveats. According to state law, REET 1 funds can only be spent on public works projects of a local government for, among other things, planning, acquisition, construction, reconstruction, repair, replacement, rehabilitation or improvement of streets, roads highway, sidewalks, street and road lighting systems, traffic signals and bridges.

The REET 2 part of real estate excise taxes can only be levied by cities or towns that are required or choose to plan under the state’s Growth Management Act. State law defines capital projects that REET 2 could fund as “public works projects of a local government for planning, acquisition construction, reconstruction, repair replacement, rehabilitation or improvement of streets, roads, highways, sidewalks, street and road lighting systems, and, among other things, planning, construction reconstruction, repair or rehabilitation or improvement of parks.”

The City cannot use park impact fees because they are restricted funds.

General fund revenues, which are mostly unrestricted; however, Coleman cautioned, the city has expenditures that must be paid, and those monies usually come from this fund.

Coleman was reluctant to use the City’s cumulative reserve funds.

They could find the money by cutting the budgets of City departments.

Councilman Bob Baggett said he preferred to tap the City’s existing resources instead of hiking utility taxes or cutting departmental budgets, which in some cases would likely mean layoffs.

“I really think that all of those avenues you mentioned, REET 1 and 2, and some of the other ones, those would be the ones we would want to go after first, before we go after departmental monies out there that they have earmarked for everything.

“…At the same time, we have to be a little pragmatic and honest with ourselves, and we really have to face the music – these roads out there are absolutely terrible, and we’ve just been pumping along here … and we have not been funding these things when they should have been funded. There’s a lot of good stuff we can do for our city out there, but there have to be priorities here, and those are the things we need to look at, and it’s not just the $20 car tab fee,” Baggett said.

All of the above are only ideas at this time, as Deputy Mayor Largo Wales stressed.

Wales asked Coleman to bring to the next meeting a recommendation on “what we can hope for from REET 1 or REET 2. I would also be interested to know what would be generated by a .5 percent increase in the utility tax, just something to look at.”