Clintonville seeks revenues for road work
By Bert Lehman
The city of Clintonville will spend up to $25,000 for a Transportation Utility Fee study to determine if it would be a feasible source of revenue for street repairs.
The city council approved the funds, to come from the city’s Capital Fund Balance, at its June 9 meeting.
The council also authorized the city administrator to sign a contract with Ehlers to conduct the study.
Three years ago, the council directed City Administrator Sharon Eveland to find alternative revenue sources for capital projects, such as street repairs.
A transportation utility fee is one of the alternative sources Eveland found during her research.
Eveland told the Finance Committee when it met June 8, that she was requesting authorization for the funds and to sign a contract with Ehlers, the city’s current municipality finance adviser to conduct a transportation utility fee study.
Ehlers would partner with RA Smith to conduct the study.
Eveland said the city normally sends out requests for proposals (RPFS) from companies to do studies like this, but she said since the city has an established relationship with Ehlers, she did not think sending out RFPs was necessary.
Eveland said Ehlers is doing the same type of project for a few other municipalities, and RA Smith is the only company in the state Eveland is aware of that has assembled these types of studies.
“This is something that I am really passionate about and really believe in,” Eveland said.
Prior to the committee meeting, Eveland said a council member had contacted her, asking if a transportation utility fee would cause the city to be denied CDBG funds because the fee would make it look like the city has more money than it actually has.
That is not how the CDBG program works, Eveland said, adding that a transportation utility fee would help guarantee the city would have the matching funds available that are required for CDBG funds.
“It’s just a consistent source of income that allows us to ensure that we’re able to at least do the minimum on our major projects, and potentially to do even more,” Eveland said.
She added that to receive CDBG funds, it is required that low to moderate income residents represent at least 51% of a street project area.
Three options to pay for road work
“We’re eventually going to start getting streets where that is not the case,” Eveland said. “We have three options at that point. One, you don’t do the project. And when are you ever going to get that street done? Two, you have to borrow additional money, and you guys have seen how expensive these roads are. To borrow to fix a roads would kill any plan we’re trying to make to reduce our borrowing. Or three, you have to do what other cities do, and you special assess the cost of that project to the residents that live on there.”
Eveland acknowledged that most residents could not afford a special $10,000 assessment to be paid over several years.
“This (transportation utility fee) is the only option we have without grant money for road repairs,” Eveland said.
She said she would not recommend a transportation utility fee to the council unless it is accompanied by a tax levy reduction.
“This is not me saying, ‘Let’s just find another way we can get more money out of the community.’ That’s not what this is,” Eveland said. “It is an attempt to be a more equitable distribution of the financial burden of roads and to give us a consistent and reliable source that is not our debt.”
Finance Committee member Jim Supanich said the fee structure would be important for a transportation utility fee to work, and it is that structure that worries him.
Mayor Richard Beggs said not many citizens, as well as city officials, know how a transportation utility fee works, and that is one reason conducting this study is important.
“I’m a big fan of finding the answers,” Beggs said.
Supanich agreed with Beggs that the city needs to move slowly on a transportation utility fee.
He added that the city needs to have a good understanding of the implications of such a fee.
He also said one of the advantages of a transportation utility fee is that all money collected through the fee must be used on city streets repair or equipment used for city streets repair.
Grant funds limited
With the current economic situation, both on the state and federal level, Supanich said grant funds, which the city has relied on in recent years for street repair projects, may become more difficult to obtain.
“It’s important that we look at this, but we need to take a good, hard look at it,” Supanich said. “And if it doesn’t look like it’s a reasonable option for us, then I don’t want to go forward, but I think we need to spend the money in order to find out if that’s the way to go.”
Eveland said that the city should have enough information about midway through the process to update the council on how a transportation utility fee would work for the city.
The study could be canceled if the council did not think the fee would work.
“We wouldn’t have to commit to the full $25,000,” Eveland said.
She added that through the process, the city will host community meetings for citizens to attend.
Surveys would also be used throughout the process.
“Once we have the information, we can put it out to people,” Eveland said.
Finance Committee Chairman Mike Hankins verified with Eveland that there is little track record of other communities in Wisconsin enacting a transportation utility fee.
Eveland shared a few examples of municipalities in Wisconsin that have enacted a transportation utility fee.
“There’s none to really look at as far as post-implementation,” Eveland said. “This is definitely picking up steam in the state. There’s a lot of communities that are looking at these now.”
She added, “It’s critical that if we do this, especially in the beginning, if you do this, you need to make sure you do it right. And we cannot do that without outside assistance.”