The need to pay for street preservation ran headlong into the Spokane Valley City Council’s often-stated opposition to new taxes during the council’s winter retreat on Tuesday.
No one argued against funding roadwork, but council members seemed reluctant to consider creating new tax revenue to pay for it. The city’s estimated annual revenue for street preservation is $2.3 million. Public Works Director Neil Kersten estimated the city needs to spend $13.2 million annually on street preservation and reconstruction.
“This is an ongoing need,” said Kersten. “You need an ongoing, permanent revenue source.”
Councilman Dean Grafos suggested looking to the city’s budget for possible savings and pulling $2 million from the city’s general fund to pay for some projects. “You’d have to take $2 million of programs and services out of the budget,” said City Manager Mike Jackson. “What we’re saying is we need a recurring revenue source.”
The city completed a pavement management plan in 2008 that called for a series of street preservation projects. At the time, city staff estimated there would be a shortfall of $4.2 million a year in available funds. Because of the shortfall, many projects were never completed and now some of the streets have deteriorated so badly that preservation is no longer possible; much more expensive reconstruction is needed, Kersten said.
“The cost of reconstruction is four to six times more expensive than doing a grind and overlay,” he said. Closing a road for reconstruction also hurts businesses a lot more than doing a quick overlay project, he said.
An updated pavement plan now puts the annual street preservation shortfall at $6.7 million, plus an additional $4.3 million needed every year for street reconstruction projects. “We’ve got about an $11 million shortfall,” Kersten said. “This is every year.”
If the city had been able to fund that additional $4.2 million a year it wouldn’t be in this situation now, he said. “If you don’t start it, it’s just going to get worse.”
The number of grants available has dropped off steeply in the past couple of years, Kersten said, adding to the city’s funding problem. Kersten said at the very least he suggests completely funding the needed arterial street preservation projects, which total $6.7 million a year. “You need to maintain the arterials,” he said. “If you can’t fund the residential, it’s not the end of the world.”
Councilman Chuck Hafner said the city’s main role is to provide public safety and good roads. “We can’t continue the way we’re going,” he said. “We’re losing ground.”
“Absolutely arterials are the priority,” said Councilman Arne Woodard. “They have to be.”
Councilwoman Brenda Grassel asked about the city’s 6 percent phone utility tax that funds street projects. The money goes into the street fund, said Jackson, not street preservation. It pays for the city’s street maintenance contract, which includes some small street preservation projects, and also pays for things like snowplowing, Jackson said.
“I think our only alternative, other than getting behind every year and getting like Spokane, is to take a serious look at the revenue options we have before us,” said Mayor Tom Towey.
The city’s funding options include a transportation benefit district that could use a sales tax increase or a car tab fee to raise money, said Finance Director Mark Calhoun. A $20 tab fee would collect $1.2 million a year and a .2 percent sales tax increase would bring in an estimated $3.4 million annually.
The city could also create a business and occupation tax, but those taxes are unpopular and the city would have to hire more staff to impose and collect the tax, Calhoun said. The city also has the authority to impose a utility tax on electricity, natural gas, water, sewer and garbage.
The city would likely need a combination of several of the options in order to collect enough money, Calhoun said. “You cannot impose one single tax and solve the problem,” he said.
Grassel suggested having the council’s finance committee look at the funding options in more depth and said she wouldn’t be in favor of the council imposing anything on its own authority.
“It would need to go to the vote of the people,” she said. “I don’t see it as reality, coming up with $10 million.”