Transportation utility could pay for road work
By Bert Lehman
The fact that no other municipality in Wisconsin has a transportation utility hasn’t deterred the city of Clintonville from moving forward with its research into possibly implementing one.
At the Aug. 30 Finance Committee meeting, Clintonville City Administrator Sharon Eveland shared with the committee more information about transportation utilities as well as a draft of a sample ordinance implementing one.
A transportation utility charges residential and commercial members of the community a fee to help pay for transportation needs.
Eveland told the committee that she believes a transportation utility would go a long way in generating new revenue to improve the city’s streets.
“Everyone here is clearly aware (the city’s) needs far outpace our ability to generate revenue,” Eveland said.
She added that she contacted the Wisconsin League of Municipalities to get its opinion about transportation utilities, but as of the meeting, hadn’t received a response. She said Clintonville City Attorney Keith Steckbauer would also contact the League of Municipalities.
Eveland told the committee that she believes a transportation utility could generate $350,000 to $400,000 per year.
“It does require groundwork. It does require some administrative work,” Eveland said.
Any transportation utility that is created must connect the rates charged to the use of the transportation system, Eveland said.
The city of Weston, when it had a transportation utility, used road frontage as a way to calculate transportation utility fees.
“I would personally not recommend that,” Eveland said.
Eveland said she preferred a trip generator method.
“Everything that I have read seems to indicate that that is able to provide the strongest connection with the use of the road,” Eveland said. “And it’s the most legally justifiable.”
Through her research, she said residential properties are generally charged a flat rate in a transportation utility.
The goal is to structure a transportation utility rate system so the city is able to cover the costs of all its transportation needs, Eveland said.
Eveland stressed that any funds raised through a transportation utility must be used for the transportation needs of the city and cannot be transferred to the city’s general fund. But funds from the general fund can be transferred to the transportation utility.
She added that if a transportation utility is implemented, it is up to the city to decide if any entities are exempt from the utility. This would be based on different criteria.
In the sample transportation utility ordinance that Eveland shared with the committee, it included a 100 percent reduction for residents receiving energy assistance and if they didn’t own a vehicle. The reductions are meant to help offset the burden on low income residents.
Eveland said her research also indicated that schools are “hit hard” with a transportation utility. She indicated that exemptions could be used for the schools.
Committee member Jim Supanich asked if the city would intend to use transportation utility funds to replace deteriorating roads.
Eveland said the city of Clintonville probably wouldn’t use transportation utility funds for those types of projects, but could once the city has its street maintenance under control.
“Because we are so far behind on a lot of stuff we would probably have to continue to borrow for the major reconstruction projects,” Eveland said.
She added that smaller street repair work could probably be funded through a transportation utility.
At past committee meetings, discussions were held about using revenue bonds to borrow for a major street reconstruction project. Eveland acknowledged that this idea originally sounded good, but after more research, she found that it could put the city in a bad position.
“Because this is something that we are not sure the state won’t clamp down on, like it is trying to clamp down on the wheel tax, or that it may get challenged in court, I would not suggest that we tie ourselves to long-term debt on the idea that this money is going to be there,” Eveland said.
Supanich said if the city eventually creates a transportation utility, he would like the rates to be reasonable for residents.
The sample transportation utility ordinance that Eveland shared with the committee also included a date of sunset in which the transportation utility would expire in six years if the city council did not take action before then to abolish it or extend it.
Committee Chairman Mark Doornink said he liked that idea because in six years the members of the city council could change.
Eveland added that six years is enough time to show what she believes will be the benefits of a transportation utility.
Discussion turned to how a transportation utility would be implemented if the city decided to move in that direction.
“The initial startup is going to be very difficult,” Eveland said.
She said this includes the IT worked required to get it up and running.
“But that’s typically the case,” Eveland said. “The more administratively difficult it is, the more closely connected it is to the usage. You could just flat fee everything based on residential and commercial, just flat fee it. But that has not held up very well in court. So administratively it’s going to be difficult.”
Supanich asked if a full- or part-time employee would need to be hired to help with the administrative work involved with a transportation utility.
Eveland said that could be possible. And if that happened, and that person’s sole job was to work on transportation utility items, the wages could be paid with funds generated by the transportation utility.
“I think we have to be careful with that too, because we don’t want to create a transportation utility to repair roads, and then suddenly we’re hiring to manage something, that as you said, taking funds away from what people are asking to be repaired,” said committee member Lance Bagstad.
The city will continue to research transportation utilities and the ramifications of implementing one in Clintonville.