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Clintonville proceeds with study

City considers transportation utility fee

By Bert Lehman


The city of Clintonville will move forward to complete a transportation utility fee study.

The city council approved proceeding with the study, which is currently two-thirds completed, when it met on Sept. 8.

Alds. Tammy Strey-Hirt and Peggy Zaemisch voted against continuing the study.

Five residents spoke against a transportation utility fee during the citizens forum portion of the meeting.

After the public comments, Mayor Richard Beggs said the city does not have all the answers yet in order to make a decision about approving a transportation utility fee.

Rather, the council would just determine if the city should move forward with the study.

“We’re a long way from being ready to say yay or nay,” Beggs said.

How utility fees work

Jon Cameron of Ehlers, the company conducting the study, presented the transportation utility analysis.

“A transportation utility essentially equates the city’s transportation network to a utility, very similar to your water, sewer or stormwater utility,” Cameron said. “User rates are collected to fund both the cost of operations, as well as capital.”

Cameron said the current study has the city, if a transportation utility fee is established, using the funds for both transportation operations and capital projects.

If a transportation utility would be established, the rates would be based on usage.

“In this case we’re trying to quantify the use of the transportation network by property type,” Cameron said. “The generally accepted method across the United States to do this is a concept called trip generation. Trip generation really measures the number of trips or vehicle usage by property type. It’s based on a manual that is published by the Institute of Transportation Engineers.”

Cameron said there is not any direct legislation or statute in Wisconsin that allows for the establishment of a transportation utility.

The Wisconsin League of Municipalities has stated that the general authority to create a transportation utility is linked to a municipality’s home rule authority, Cameron said.

“Which gives municipalities the authority to act for the good order of the city, for municipalities commercial benefit for the health, safety and welfare of the municipality,” Cameron said. “It gives you the means to carry out by appropriation these powers.”

This method of creation has not been challenged yet, Camerson said.

“I can tell you, that in addition to Clintonville, there are a number of municipalities currently looking at establishing transportation utilities,” Cameron said. “So, I think your guess is as good as mine in terms of when the legislature may take this item up and decide once and for all whether transportation utilities, from that point going forward, are allowed in the state or not.”

Cameron said there are a number of factors a municipality should consider to make a transportation utility as defensible as possible, and to also differentiate it from a tax.

This includes rates needing to be cost based and equitable to all customer classes and being easy to understand and administer. Rates should follow the process of cost causation, and rates should be stable.

To differentiate the transportation utility fee from a tax, Cameron said municipalities should place the revenues from the fee into a separate fund to be used only for transportation projects, collect fees in the same manner as other utility charges, ensure the formula for calculating the fee is as accurate as possible and avoid existing tax-exempt properties.

Because municipalities are limited to increasing their tax levy only by the increase in net new construction, Cameron said municipalities are having a difficult time keeping up with the increases in costs for street maintenance.

“Most municipalities from a capital cost standpoint need to rely on the issuance of debt to fund major, and sometimes minor street reconstruction work,” Cameron said. “Municipalities in Wisconsin are limited to how much general obligation debt they can issue. That’s no more than 5% of your total equalized value.”

By the end of 2020, the city of Clintonville will have just under $5.4 million in general obligation debt outstanding, Cameron said. This equates to 46% of the city’s allowable debt limit.

Fee structure

Cameron presented the council three different scenarios on how a transportation utility fee would impact the city’s current Capital Improvement Projects (CIP) for the next several years.

• A single-family residence would be charged a transportation utility fee ranging from $97 to $136 per year, depending on the scenario.

• The fee for a small commercial office building in the city would range between $146 to $191 per year.

• A 10,000 square foot manufacturing facility’s fee would range from $1,421 to $1,620 per year.

Cameron said the city council should provide feedback regarding a transportation utility, the written study should be completed, a transportation utility ordinance should be developed, the billing for a transportation utility should be refined and community feedback should be solicited.

Ald. Brad Rokus said he would like to see a comparison of net out-of-pocket costs for an average residential property.

“Based on the experience I have looking at these, you have the transportation utility fee, which allows you to do more projects, yet you also have property tax savings for the homeowner because of that,” Rokus said.

Beggs asked how the figure of 9.44 trips per day by an average household was determined.

Cameron said it is based on results from the Institute of Transportation Engineers.

“They do a tremendous amount of survey work, research, to be able to validate the number of trip ends per day based on a land use,” Cameron said.

Trips by delivering companies, including the U.S. Postal Service, to a residence to deliver items would be considered trips for that residence, Cameron added.

This means that even if a residence does not have a vehicle, the residence would still have trips charged to it.

City Administrator Sharon Eveland added that two trips would equal one round-trip.

“When you leave to go to work and you come back, that’s in essence, two trips,” Eveland said.

Ald. Brandon Braden asked if it is possible to receive examples of what businesses in the city would be charged under a transportation utility fee.

Eveland said that is something the city plans to do.

“There are a few things we’re still trying to finalize regarding those calculations, so we didn’t want to provide any of that information tonight because we’re not 100% complete with the calculations,” Eveland said.

Eveland said if a transportation utility is approved, it would result in a decrease in the debt tax rate.

“What I want the council and community to understand, that this is not the city looking at another way to generate more revenue,” Eveland said. “What we are trying to do is find a sustainable method that is equitable.”

She added, “A transportation utility is really a more equitable way, because it’s putting the costs of that on those who use it more.”

Costs of assessments

Without a transportation utility fee, Eveland said another option for funding street projects would be with a special assessment. Special assessments for street projects have not been used in Clintonville, but are common in other municipalities.

“The people who own property on that street are the only ones who pay for the cost of that repair,” Eveland said. “Typically, it’s divided up based on road frontage.”

For example, Eveland said the street projects scheduled for next year, which include West 13th Street from North 12th Street to the end, West 14th Street from North 12th Street to the end, and Shaw Street and Paulina Street, would cost a property owner on those streets an average of almost $9,000 in special assessments.

“Imagine getting that bill,” Eveland said. “That’s certainly something that the community cannot afford. That is what we are trying desperately to avoid. But as we showed you with the bar graph, without a transportation utility, and if we don’t continue to be successful getting grants, the road projects are not going to happen unless the council decides to do special assessments. That means no roads are going to get repaired.”

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