Clintonville’s proposed transportation utility explained
By Bert Lehman
The city of Clintonville continues to explore the option of creating and adopting a transportation utility to help fund transportation projects in the city.
The Clintonville Tribune-Gazette recently interviewed City Administrator Sharon Eveland about the proposed transportation utility fee (TUF).
Eveland said she expected that there would be opposition to a TUF.
“Anytime you start talking about increasing fees or anything about the community having to pay more, there are going to be people that don’t want to do it,” Eveland said. “My hope is that people who are against it are at least listening to the information, and at least learn more about it and what the city is trying to do.”
Despite the opposition, she said she believes that a TUF is best for the community.
“It could be a really good step forward if people are just open to something new and something different, and willing to give it a shot to see what happens,” Eveland said.
Why a TUF
When asked why the city needs a TUF, Eveland said the city doesn’t have a sustained funding source that is sufficient for its street projects and maintenance needs.
The city must rely on receiving CDBG grants for its major road projects.
Most municipalities in Wisconsin receive the majority of their street funding from property taxes. Eveland said a TUF is the best new revenue source option because it is a more equitable source of revenue.
“Right now, you fund a shared municipal service based on how much your property is worth, not how much you use those services, not how much you impact the city services, just what your property is worth,” Eveland said. “To a point, that’s OK, but what a transportation utility fee does, that other funding sources don’t do, is distribute the cost of the transportation system based on your usage of and impact on the system. So, you’re paying for what you use, essentially.”
Eveland acknowledged that the city can borrow money to pay for street projects and maintenance, or it can use special assessments. Special assessments would fund all or a portion of the expenses by placing an assessment on the properties that are directly served by the project.
“That’s done by how much road frontage you have on that particular area,” Eveland said.
She said that’s not an equitable way to pay for street projects because more people use the streets than just the owners of properties along the street project.
Special assessment costs also need to be paid by property owners in 3-5 years with interest, Eveland said.
“It’s a lot to ask of a resident,” Eveland said.
She added, “Trying to find a way that combines sustainability with the equity factor is what we’re really trying to achieve, or what the TUF can help achieve. The only other option for our roads is we just don’t do them.”
Clintonville’s street issues
Not fixing the city’s streets is what the city has done in the past, Eveland said. This has helped create the city’s current problem.
“We have kicked the can as far as this can can be kicked,” Eveland said. “I’ve had some individuals suggest that we just don’t do some roads. And I’m like, that’s what’s got us in this problem in the first place.”
Eveland said she’s not sure why some decisions were made prior to her employment with the city, but in speaking with others, she said is sounds like it was a case of the city just didn’t have funds to do street projects and maintenance.
“At the time those decisions were made, the priorities were not the streets,” Eveland said. “And councils have to make those decisions every day. Priorities for councils shift over time.”
A TUF would help provide funding for maintenance of city streets, something the city hasn’t been properly funding in the past. Better maintenance would also help streets last longer.
Impact on business
Eveland said she understands the concerns of citizens who think the city will lose businesses because of a TUF. But she also said many other factors determine whether a business will stay in the city.
These factors include infrastructure, adequate number of available employees, good housing, and people to purchase their product or service.
“There are a few (businesses) that are going to get hit really, really hard because they have a very high traffic generation rate, but the vast majority of businesses are going to be less than $2,000 a year,” Eveland said.
When speaking with business owners in the city about a TUF, Eveland said the reaction is “mixed.” She said the businesses that would pay higher fees are against a TUF.
Honoring guarantees
When asked what guarantee residents have that TUF funds would be spent on only transportation projects in the city, Eveland said the city would be required to spend the funds only on transportation projects.
“There is no way to break that, that’s an auditing thing,” Eveland said. “We would be in a lot of trouble if we did that (spend TUF fund on non-transportation projects). I can’t be clearer about that.”
She added that having TUF funds for transportation projects and maintenance would allow the city to use other funding sources for other projects.
For example, instead of applying for a CDBG grant to fund road projects, the city could apply for that grant for a new swimming pond or to reconstruct Jirschele Stadium.
Eveland clarified that there is no guarantee that the city’s overall property tax rate will go down if a TUF is approved, because there are many factors that are used to calculate the city’s tax rate. Factors include the amount of state aid the city receives, city health insurance premium increases, and assessed property values in the city.
Even though residents are asking what the overall impact on the city’s tax levy will be if a TUF is implemented, Eveland said the city will not give a specific answer because of the many factors that play a part in computing the tax levy.
“I don’t want anybody to come back and say, ‘You lied,’” Eveland said. “That is the last thing that I want anybody to think I am doing.”
She added, “What I can promise you, is that, the city is going to do everything it can possibly do to reduce the levy to help offset some of those (TUF) costs.”
She said a TUF would help decrease the debt portion of the tax levy.
Why not borrow more
If a TUF is not approved, and the city would have to essentially pay $800,000 a year in debt payments if it wanted to do all the road projects on its Capital Improvement Plan, Eveland.
“You have to pay whatever you borrow off within a three-year time period, before you had to borrow again,” Eveland said. “Otherwise, we’d max out on our debt.”
She said that adding $800,000 to the city’s tax levy would increase the property taxes for an $80,000 home by around $282.
Under this scenario, she said some of the businesses in the city would pay less under a TUF plan, than they would be under a plan to add more debt to the property tax levy.
Why not cut the budget
Some residents have suggested that the city cut its budget in order to fund the street projects and maintenance.
Eveland said creating the city’s yearly budget is a three-month process. The city’s CIP includes all the projects that need to be completed, but are not scheduled because the projects don’t fit in the budget.
Not giving employees raises, or making them pay more for health insurance are not good options, because Eveland said the city will start to lose employees.
“We have to remain competitive,” Eveland said. “It is difficult for a community like Clintonville to attract employees. Thankfully we have some really good employees here that are really dedicated and been here for a long time. But it’s incredibly difficult to attract employees. If you start cutting benefits and wages and stuff, people are going to run for the hills. It’s important that we take care of our employees, so that they take care of the community.”
City facilities are in terrible condition because the city can’t afford to replace them, Eveland said.
“There is so much need in this city that it is incredibly difficult to prioritize,” Eveland said. “I would ask that if there are things that people think we should cut, then they should be telling us what to cut.”
In the past, Eveland said savings in each year’s budget were moved into the undesignated fund balance.
In recent years, some of these savings have been moved to the capital fund balance and debt service in an effort to reduce the amount of borrowing.
“There are always things we can cut, but with cuts, come cuts in services,” Eveland said. “And so, if the community thinks we should cut things to reduce our budget, then the community needs to be telling us which services they are willing to give up, because that’s the only way that happens.”
A couple of years ago Eveland said she proposed eliminating leaf pickup in the fall in an effort to avoid purchasing a new leaf truck for nearly $250,000. There was outrage in the community, and a new truck was purchased by the city.
“It’s not like we can just cut and still do everything we’re doing now,” Eveland said.
Referendum question
Some in the community have suggested that the city should place a referendum question on the April election ballot, asking residents if they want a transportation utility in Clintonville.
Eveland said placing such a question on the April ballot would be a bad idea because there is still a lot of information the city doesn’t have regarding a transportation utility.
She noted that city residents elect council members to make those decisions.
“I think the expectations that everything go to referendum that’s controversial is not the best way to go,” Eveland said. “I think the elections need to stand for themselves. I think if the community is unhappy with the decisions the council is making, then they address that through the election process.”
Ultimately, it is the decision of the council as to whether a referendum question be added to an election ballot, Eveland said.
She added that if there is a referendum question placed on a future ballot, it would only be an advisory referendum.
“There is nothing that would make that binding,” Eveland said.
Eveland encouraged residents and business owners to contact council members to express their opinions about a TUF.
Another reason Eveland isn’t in favor of a referendum question is she doesn’t want a TUF to become a “campaign.”