1. Alternative Financing for City Streets Preservation Is the SMU Right for Your City? Presented By: Dennis Dowdy, PEPublic Works Director, City of Auburn Dick McKinley, MPA, PWLFPublic Works Director, City of Tacoma Pablo Para, PETraffic Engineer, City of Auburn Ashley Probart, AICPLegislative & Policy Advocate, AWC Moderated by: Dan McReynolds, PEPrincipal, Parametrix

2. Alternative Financing for City Streets Preservation Session Goals: – Present the proposed Street Maintenance Utility (SMU) Option for financing street maintenance and operations. – Compare and contrast the advantages & disadvantages of the Transportation Benefit District (TBD) Option vs. the SMU Option. – Present a standard process and rate model for establishing an equitable SMU program. – Determine which cities feel a need for legislative authorization for the SMU which is currently an AWC priority.

3. Our Common Street System Goals Maintain a safe transportation system that: Provides efficient movement of goods and people Maintains and enhances our economic competitiveness Creates tangible return on investments for businesses and citizens

4. Why a new funding source is needed…. 281 Cities and Towns in Washington State are currently responsible for 16,421 miles of streets. Motor Vehicle Fuel Tax (MVFT) Declining – The main source for local agency street maintenance has been diminishing over time due to inflationary pressures, increasing fuel costs and improved vehicle fuel efficiency. Local General Fund Options (Sales Tax, Property Tax, Real Estate Excise Tax etc.) – Declining general fund revenues and other city service needs have left most agencies unable to supplement declining MVFT revenue. Transportation Benefit District – Currently the only other viable option for local agencies to fund transportation needs has limitations and may not work for all cities.

5. Transportation and Economic Development Transportation or Economic Development— Which Comes First? Does good transportation create economic development or does economic development drive the need for good transportation? It seems like a classic “chicken or egg” question. But the relationship between transportation and economic development is a more complicated matter – one does not necessarily come before the other. Transportation and economic growth are interrelated and interdependent. Transportation development and economic development go hand in hand. A good transportation system doesn’t guarantee economic development, but it can help create an environment that fosters economic growth. In turn, economic growth can create a need for increased transportation services. One thing’s for certain, transportation does have a constraining impact on economic development. Source:Ernest Perry, Ph.D., Missouri Department of Transportation, June 2004 OR

6. What is a Street Maintenance Utility? The Street Maintenance Utility is a Utility. Fees are equitably assessed based on land use intensity, trip generation and heavy vehicle impact factors. Revenue goals are set by each agency based on need. Requires voter approval only for initial establishment. Revenue can be used for O&M and preservation of street system, including ADA. Allows rate reductions for low income, seniors and land uses implementing TDM strategies. Allows independent trip generation rate calculations.

7. What is a Transportation Benefit District? Description – Revenue option for funding transportation improvements – Available to cities & counties (used by Des Moines, Edmonds, Lake Forest Park, Olympia, Prosser, Seattle, Shoreline, Snoqualmie and counting) – Commercial vehicles are exempted from increased Vehicle License fees – Project oriented, TBD automatically dissolves upon completion of defined projects – Has several accountability measures Financing options- Councilmanic – Up to $20 motor vehicle licensing fee Voter approved up to $100 – General obligation bonds Up to 1.5% of TBD assessed valuation Financing options – With voter approval (simple majority) – Up to $100 motor vehicle licensing fee – Up to.2% sales and use tax – Property taxes in excess of one-percent limit (for one year period only) – Fees or charges imposed on commercial construction or reconstruction – Road tolls – General obligation bonds Up to 5.0% of TBD assessed valuation

8. Why SMU if we have the TBD? Creates a separate governmental entity to administer Can require ongoing public votes. Not equitable distribution since it exempts trucks in license fees and property taxes don’t represent traffic impacts. Revenue may not cover program need and is dependant on voter reauthorizations. Simpler assessment & collection process than a SMU. Less staff is generally required to establish & operate than a SMU. TBDSMU Administered by existing city government structure Requires only one public vote. Most equitable distribution of burden based on traffic impacts of individual land use types. Rates can be set based on actual needs. Revenue is consistent and reliable based on system needs. Allows rate reductions for low income, seniors and land uses implementing TDM strategies Allows independent trip generation rate calculations

9. Establishing an SMU in your City or Town New state legislation is needed to authorize the SMU option. Once authorized, local agencies would generally need to do the following under the drafted legislation: – A public vote must be held approving an SMU. – Advisory Board is formed consisting of stakeholder representatives. – Define level of service goals and estimate costs for implementing the SMU. – Establish utility rates, assessment and collection procedures.

10. SMU Rate Schedule Auburn’s Model City of Auburn Background Data – 99 Centerline miles of Arterial/Collector Roads – 115 Centerline miles of Local Residential Roads – 91 Traffic Signals – Population over 70,000 – Over 27,000 residential units (SF, condo’s, apart., etc) – Heavy freight and pass through traffic. Model Flexibility – Based on existing Impact Fee Structure – Auburns model is easily adapted for use by other agencies with minimal adjustments for local land use and traffic data.

11. Making Auburn’s Model Work for your City Step 1: Data Collection – Land Use Data Residential (Dwelling Units) Non-residential (KSF) – Local Traffic Data Heavy Vehicle Impact Factor (1450 in Auburn Model) based on WSDOT pavement manual. Average Trip Length (3 miles in Auburn Model) – Program Burden Annual transportation system maintenance costs

12. Making Auburn’s Model Work for your City (cont.) Step 2: Populate SMU spreadsheet and sort into groups by Total Impact Score – Policy Questions: How Many Rate Groups per category? What is burden distribution between Residential and Non- Residential Categories? Step 3: Calculate your SMU Rates

13. Making Auburn’s Model Work for your City (cont.) Sample Rates: $1M Program

14. Is the SMU right for your City? We have seen that depending on the makeup of your city, the variety of land uses, and the dependency of each land use on the freight industry greatly influences whether a revenue source is equitable. We have seen that in many cases although a TBD is a simpler process, it does not provide for an equitable distribution of the burden to keep good roads. We are aware that in order to obtain an alternative source of financing we need our legislators to understand the advantages that the SMU provides to our citizens. Now therefore; Which method do you feel is best for your jurisdiction.

15. Question & Answers