The Vancouver City Council on Monday unanimously adopted six ordinances as part of a plan to generate about $7 million a year in critically needed new revenue for street maintenance, repairs, replacement and capital projects.
“It’s an important step in moving our community forward,” Mayor Tim Leavitt said following the council’s vote.
The council took action to create a new funding stream from a mix of vehicle tab fees, a business license surcharge hike and a utility tax increase. No one spoke against the funding plan during Monday night’s public hearing.
The city council approved forming a Transportation Benefit District, which is a step required by state law to raise money specifically for transportation improvements. On Dec. 7, the district (made up of city council members) will have the ability to impose an annual $20 car tab surcharge that will go into effect in six months, payable when drivers renew their licenses. After two years, the plan is for the district to raise the car tab to $40.
As of July, more than 75 such districts have been established statewide, according to the Municipal Research Services Center.
The council had set a goal to adopt a sustainable street funding program by the end of the year. A city Commission on Street Funding, composed of representatives from the city council, community, businesses and neighborhoods, formed in April to consider sustainable street funding and review public feedback. The commission submitted its findings and recommendation to the council Oct. 1.
The council also voted Monday to increase the business license surcharge, currently at $50 per employee, to $60 per employee. After two years, the intent is to boost the surcharge by another $10, for a total of $70 per employee. (The cap is 400 employees, and businesses with less than $12,000 annual gross receipts are exempt.) The surcharge has not been changed since 2007.
Also Monday, the council approved a 1.5 percent utility tax hike for all customers of city water, sewer, stormwater and garbage utilities, providing the plan’s largest funding component. The rate increase will cost the typical household an additional $1.64 a month, or about $20 a year, city staff said. The utility tax currently is 20 percent.
In addition to the fresh revenue from the car tabs, business license fees and utility taxes, the city will funnel new state gas tax revenue and funds from retired debt service on past road projects into street funding. The city’s existing street funding is derived from the general fund, the gas tax, business license surcharges and real estate excise taxes.
According to a recent study, at the city’s existing funding level of $22.6 million a year, overall street conditions will decline, and costs will skyrocket through 2035. This year, the amount of street work that should be done but is being deferred totals about $130 million. In 20 years, the amount of deferred maintenance will soar to $250 million at existing funding levels.
