Edmonds Beacon - Your Hometown News Source

Edmonds City Council Member Diane Buckshnis has released a question and answer sheet explaining many questions asked about a TBD. It is very long but should give a good overview and answer your questions about the TBD.

“I would like to provide an objective view of this issue and so here is everything you need to know about Proposition 1,” Buckshnis said. “Here are some questions and answers that I have been asked over the last couple of months. ?”

What will Proposition 1 do?

If passed by the voters Proposition 1 would increase the local transportation user fee by $40 per vehicle licensed in the City of Edmonds to a total of $60 (or $5 a month per car).

It is estimated this would generate an additional $1,000,000 annually to support local transportation programs and projects.

The board of the Edmonds Transportation Benefit District (ETBD) plans to spend $500,000 per year of this new revenue source on street re-paving projects to slow the on-going decline in quality of the Edmonds street system.

The remaining $500,000 would be used to help fund a list of 36 separate transportation capital projects that will improve safety, relieve congestion, replace aging signal systems, and provide for completion of sidewalks at key pedestrian connections.

The ETBD might also consider revenue bonds, which would allow the City of Edmonds to accelerate construction on these 36 projects.

What is a TBD?

A TBD is a quasi-municipal corporation and independent taxing district created for the sole purpose of acquiring, constructing, improving, maintaining, and funding transportation improvements within the district boundaries.

A TBD can impose a variety of different fees or taxes to collect revenue to be used for these purposes. The City of Edmonds City Council formed the ETBD in November, 2008.

The Board adopted ETBD Ordinance No. 1 on February 17, 2009 which imposed a $20/year local user fee (license fee) for vehicles registered in Edmonds that require a state vehicle license.

This initial fee produces approximately $580,000/year, which is being spent entirely on maintenance and preservation of Edmonds streets, sidewalks, signals, and City-owned streetlights.

These activities include pothole patching, crack sealing, striping, re-lamping, replacement of damaged sidewalk panels, crosswalk maintenance, and signage maintenance, repair, and replacement.

How much of the TBD fee would go to transportation projects in Edmonds?

Half of the $1,000,000 generated each year by the proposed new $40 TBD license fee would be spent on specific transportation capital projects to enhance vehicle and pedestrian safety, relieve congestion, achieve compliance with Growth Management Act concurrency requirements, and improve our inventory of non-motorized transportation facilities including new sidewalks and bicycle pathways.

The City’s 2009 Transportation Plan provided the list of capital projects and these were further organized by the ETBD board into a prioritized list.

The City would have $500,000 in local money to pursue these projects if Proposition 1 is passed by the voters within the District on November 2.

This money could be used as matching money to attract federal and state transportation grant funds to stretch their impact as far as possible, or used to provide debt service on revenue bonds issued to support construction of a portion of the projects on the list.

These monies could also be used on a pay-as-you-go basis to make smaller capital investments in our street system.

What kinds of projects would the money fund?

As stated above the ETBD has indicated its intention to use half of the money generated to pursue a list of 36 transportation capital projects addressing safety, congestion, concurrency, and pedestrian and bicycle facilities.

The other half of the funding (also $500,000) would serve to re-start the City’s street paving program.

The City has not had the resources available in its street fund to do routine paving since 2007.

This lack of an on-going paving program will lead to continued deterioration of the city’s streets over time. The rate of this deterioration will also increase with time if no maintenance paving is done.

How do we know which projects will be built first?

The 36 capital projects on the list were placed in an approximate priority order by the ETBD board.

This priority will guide staff in pursuing matching money for these projects. It is difficult to know in advance, however, which projects might receive grant monies first.

If significant grant funds, or other matching money, were acquired for a project somewhat farther down the list it is likely the TBD board would choose to move ahead with that project rather than spend a high percentage (perhaps 100 percent) of local money to complete a project higher on the list.

In this way the available locally-generated money can be used as efficiently as possible.

?Have citizens been involved in this process?

Citizens have had multiple opportunities to get involved and stay informed regarding Edmonds transportation issues in general and the ETBD in particular.

There were several advertised public meetings and hearings when the ETBD was initially formed in 2008 and the initial fee established in 2009.

There have also been several opportunities to comment on and/or testify to both the Edmonds City Council and the ETBD board regarding the proposal to increase the license fee by $40/vehicle/year.

A great deal of useful input was received that helped shape the current proposal.

The City’s website has several pages devoted to both the existing ETBD as well as to the ballot proposition.

The development, review, and approval of the City’s new Transportation Plan in 2009 with its integral Capital Improvement Plan was heavily influenced by a citizen’s advisory committee and provided several opportunities for both written comment and testimony.

?Is this fair and equitable?

There is, of course, no perfect fee or tax.

This vehicle license fee proposal does, however, provide an excellent association, or nexus, with the use of the money for transportation programs and projects.

Each vehicle using our local streets pays a fee to do so and the revenue generated is used to take care of the streets used by those vehicles.

Having a reasonable nexus between the fee and the use of the money is the first test of fairness on any new tax or fee proposal.

Why can’t our property taxes pay for our streets?

Cities and Counties have strict limits on the amount of property tax that can be collected within their jurisdictions.

Prior to ten years ago property taxes were not allowed to increase more than 6 percent annually (plus any new voted debt or tax on new construction) and in most years local governments found it necessary to impose the entire 6 percent increase to keep up with inflation and our citizen’s demands for higher service levels.

Beginning in 1999 with Initiative 695 a series of citizen initiatives had a dramatic impact on how local government services are financed in Washington State. I-695, or more accurately the state legislature’s response to I-695, eliminated the Motor Vehicle Excise Tax (MVET) costing the City of Edmonds approximately $1.5 million dollars annually which had been providing much of the funding for street maintenance and paving.

The next big blow came when subsequent initiatives and legislative action severely limited the growth in property tax revenues to initially 2 percent annually, and then to 1 percent annually (plus new voted debt and new construction).

These precious General Fund dollars from property taxes are used to provide all of the City’s basic governmental obligations, including both Police and Fire services.

The cost of providing these critical functions has grown each year and has done so at a rate noticeably higher than the arbitrary limit on property tax growth of 1 percent.

This has placed great pressure on other sources of City revenue. Chief among these is sales tax. With property tax unable to keep up with increasing demands for General Fund dollars sales tax has been counted on to make up the difference (along with B&O tax in many cities, but not in Edmonds).

Since sales tax revenues are a direct result of economic activity this could only work if the economy continued to grow at a robust pace, which it did for several years.

When the economy eventually turned the other direction municipal budgets were strained to the breaking point.

Prior to this recent economic crisis the City’s General Fund had been trying to make up for the revenue loss from MVET by providing larger contributions of GF revenue to the Street Fund. With the economy turned downward that has been almost impossible to do with the money available.

What is needed is a new, stable source of funding for streets so transportation programs and projects don’t need to compete with public safety for General Fund support. Streets will just never win that competition.

How does Proposition 1 affect economic development?

Having a well-developed and maintained transportation system is vital to both our local and regional economic vitality.

We must maintain the ability to easily move goods and services into and out of our city, transport people to and from their places of employment, schools, medical care facilities, shopping, and other activities.

We must also maintain the system so that our public safety organizations can provide rapid response times to all areas of the city.

Good pedestrian and other non-motorized facilities are an important quality of life issue for our citizens and they will help keep Edmonds on the list of desirable places to live and work.

Who is responsible for maintaining City streets?

Our City streets (133 miles of them), sidewalks, signals, signs, markers, and all other city-owned improvements located in the Right-of-Way are maintained by our street crew, a group of six maintenance specialists plus their working supervisor and a half-time division manager, for a total of 7.5 FTE.

?Why can’t the City pay for street maintenance and overlays?

The city street network consists of 133 center-line miles of city-owned streets. To have a sustainable system, i.e. one that is of stable quality and not getting worse each year, would require us to pave our arterial streets approximately every 15-20 years and our residential streets every 25-35 years.

This would require an annual investment of approximately $1.5 million in paving projects alone.

Adding in maintenance costs of approximately $1.5 million as well would mean we need to provide a total of approximately $3.0 million annually (in 2010 dollars) to achieve sustainability.

It is simply not possible to carve out a budget that size without approximately half of it coming from the General Fund. This would require cutting other General Fund departments back by a like amount.

The City’s public safety budgets include 70 percent of the budgets that would need to be cut. That is an unrealistic expectation.

Therefore a new revenue source is needed.

Why are so far behind in street paving?

We are behind because the City has not been doing an appropriate amount of maintenance paving for over ten years.

This has resulted in a street condition rating that continues to drop over time and the rate of that decline is also increasing.

??When and how would we start paying the fee?

If passed by the voters in November all vehicles licensed after March, 2011 would have the additional fee collected at the time of their renewal.

What vehicles would have to pay?

Passenger vehicles

Trucks that weigh 6,000 pounds or less

Motorcycles

Commercial passenger vehicles and trucks that weigh 6,000

pounds or less

Combination trucks that weigh 6,000 pounds or less

Tow trucks

House moving dollies

Trucks used exclusively for hauling logs that weigh 6,000

pounds or less

Taxicabs

For-hire or stage vehicles with 6 seats or less

For-hire or stage vehicles with 7 or more seats that weigh 6,000

pounds or less

Private use trailers over 2,000 pounds

Motorcycle trailers

Travel trailers

Fixed load vehicles that weigh 6,000 pounds or less

Mobile homes licensed as vehicles

What vehicles are exempt?

All farm vehicles

Campers

Off-road vehicles

Snowmobiles

Mopeds

Personal use trailers with a single axle and less than 2,000

pounds scale weight

Commercial trailers

Combination trailers

Trailers used exclusively for hauling logs

Horseless carriage, collector, or restored-plate vehicles

Converter gear

Government vehicles

Private school vehicles

Vehicles properly registered to disabled American veterans

?What happens if Proposition 1 does not pass.

If Proposition 1 does not pass the City will have to fund all street operations and maintenance costs using only existing revenue streams.

These would include approximately $750,000/year in gas tax revenue and $580,000 from the existing $20 local license fee imposed by the ETBD.

This total of approximately $1.4 million annually is almost identical to what the city spent on streets in 1996.

The purchasing power of that money is now 39 percent less than it was in 1996.

?How can I find out more information about specific projects?

The City recently placed some additional information about the ETBD on its website including project descriptions for each of the 36 capital projects on the approved list.