City to use utilities funds for street projects

The city of Spokane owns about 45 percent of the property within its borders, including parks, plants, lots and government buildings.

And more than half of the land it owns – about 11,000 acres – is streets, sidewalks and alleyways.

Those 17 square miles of public rights of way are worth more than $2.7 billion, according to a recent appraisal done for the city. That comes to about $5.68 per square foot.

The property can’t be used for much, other than driving. But under the Integrated Clean Water Plan – the city’s primary strategy to beat a federal deadline to get the Spokane River free of pollutants – streets mean much more than pavement.

Last week, the Spokane City Council approved a 20-year agreement forged among its utilities, finance, and business and developer services departments. Through 2035, the utilities department will pay $5 million every year into the city’s arterial street fund for its use of street property for utility projects.

Those projects include updating the underground system of pipes that ferry water and wastewater to and from homes and businesses, but they also include implementation of the redesigned infrastructure of storm gardens, pervious pavement and other design elements that help prevent polluted water from entering the river.

Under a mandate from the U.S. Environmental Protection Agency, the city has until the end of 2017 to stop virtually all pollutants from entering the waterway.

Rick Romero, the utilities director, recently told members of the city’s Public Works Committee that the $5 million would come out of his department’s rates, reserves and debt. But to justify such a payment, the city first had to figure out how much its street property is worth and how much utilities should pay to compensate for disturbing the street and its regular flow of traffic.

“What’s the reduction in value because you have to do these other things on it?” said Marlene Feist, utilities spokeswoman. “Essentially, there’s diminished value to the right of way because we use it for things besides just transporting people and cars.”

Working backward

The justification for the $5 million payments worked its way backward from promises made by city leaders – including Mayor David Condon, Council President Ben Stuckart and Romero – in the run-up to last year’s vote on the 20-year street levy. The levy passed with nearly 78 percent of the vote, and the city had to make good on its assurance to match the $5 million annually put forward by the street levy with utility dollars.

Such a guarantee isn’t as easy as it sounds. Municipal utility departments have long been carved out of the rest of the city due to reasons of financial accountability. Utility funding comes from ratepayers, who are compelled to pay, and that funding can only be spent on utility projects. The idea is to keep cities from raising utility rates to pay for other projects.

“We wanted to be able to justify the expense in some way, to tie it to something real, to show that the expense that we were incurring in the utility was consistent with what is believed to be the value to the utility,” Feist said. “We didn’t want to overvalue it. We didn’t want to severely undervalue it. We wanted to make sure that we were keeping our funds whole.”

Stuckart said the agreement for use of streets is simply the latest step in the work to implement citywide integration of project planning.

“If you’re going in to replace a water main, you should replace that street at the same time,” he said. “That way, you’re not going back two years later to dig it up and replace the street.”

Stuckart said such integration is estimated to save the city 10 to 20 percent on its projects overall. Worries over financial accountability with this agreement are misplaced, he said.

“We spent a year with a professional company looking at the worth of the street and the worth of the right of way,” he said. “That’s the legal justification for this.”

Feist agreed.

“We’re really clear in our financial statements that this money is going here and it’s going to pay for these things,” she said. “We don’t lose that accountability. What we do get is the dollar savings and efficiencies you get by collaborating on these projects.”

Breaking new ground

Feist said thinking about projects from a citywide perspective, instead of department by department, has led to other discussions of reorganizing City Hall, but she said such discussions were in their infancy.

“Should we, instead of having a water department, a wastewater department and a street department, have a right of way management department?” she said. “What’s driven our decision-making for the last 10 years has been what’s been on the list for the street bond” from 2004.

Now, Feist said, it’s not just pavement condition that will drive street projects, but a number of things.

“We’re going to let different things be the lead. If we have a water main that really needs replacing but it’s below pavement with a condition that’s pretty fair, then the water main is going to drive this,” Feist said. “And if it’s on the Master Bike Plan, we could do pervious bike lanes so we take care of the stormwater. And we’re going to let Avista hop in because they need to put in a gas line.”

Councilwoman Amber Waldref, chairwoman of the Public Works Committee, said the collaboration between utilities and street work is something she’s been “clamoring for for years.”

“I don’t know why streets is in a different department than utilities,” she said. “I’m always for people talking, because sometimes that’s the best way to identify opportunities.”

Waldref said to her the agreement was “about money.”

“This allows us to do more projects in the city, to get more streets paved,” she said. “I think we’re breaking new ground. I hope other cities will look at this and say this is something we should consider.”