HomeMy WebLinkAboutFS 2013-09-04 Item 2C - Discussion - Revenue Enhancement Option - Transportation Benefit DistrictTO:
City of Tukwila
Jim Haggerton, Mayor
INFORMATIONAL MEMORANDUM
Mayor Haggerton
Finance & Safety Committee
FROM: Peggy McCarthy, Finance Director
BY: Vicky Carlsen, Deputy Finance Director
DATE: August 28, 2013
SUBJECT: Option to Enhance Revenues: Transportation Benefit Districts
ISSUE
Review Transportation Benefit Districts (TBDs) as an option to enhance revenues for the City.
BACKGROUND
At the January 14, 2013 City Council Committee of the Whole Councilmember Robertson, as
Chair of the Finance and Safety Committee, distributed a draft of committee goals that included
researching revenue increases and expenditure decreases.
An Info Memo identifying 3 potential revenue sources was distributed at the June 12, 2013
Finance and Safety Committee meeting. One option proposed was TBDs.
DISCUSSION
Transportation Benefit District
TBDs are quasi - municipal corporations with independent taxing authority, including the authority
to impose property taxes and impact fees for transportation purposes. The purpose of a TBD is
to finance construction of, and operate, improvements to roadways, high capacity transportation
systems, public transit systems, and other transportation management programs.
They were created in 1987 as an option for local governments to fund transportation
improvements. Later legislation amended the TBD statute to expand its uses and revenue
authority and to authorize the imposition of vehicle fees and transportation impact fees without a
public vote. Most recently, HB 1959 was introduced in 2013 to increase the vehicle fee limit of
$20 up to $40 under a TBD councilmatic authority. On May 13, 2013, by resolution, the bill was
reintroduced and retained in present status. The companion bill, SB 5861 never moved out of
the Senate Transportation Committee.
In addition to city TBDs, cities may create a multi - jurisdiction TBD through interlocal agreement.
Areas may include all or portions of cities, counties, transit district, or port districts with approval
of those agencies.
The governing body of a TBD is the legislative authority of the city creating the district, and acts
in an ex- officio in an independent capacity.
Formation of a Transportation Benefit District
Creation of a TBD requires a public hearing and a finding of public interest for formation. The
ordinance establishing the TBD must specify the functions and transportation improvements to
be exercised or funded and establish the boundaries of the district. Subject to provisions in
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INFORMATIONAL MEMO
Page 2
RCW 36.73.160 functions of or transportation improvements proposed to be provided or funded
by the district may not be expanded beyond those specified in the notice of hearing. An
additional ordinance would be needed to establish the fee (if not voter approved).
Funding Options
There are various funding options available through a TBD; most of which require voter
approval.
• Voter-approved annual motor vehicle fee of up to $100. $20 may be imposed without
voter approval if imposed in a jurisdiction-wide TBD.
• Voter-approved sales tax up to 0.2%. Tax may not be in effect longer than 10 years
unless reauthorized by voters.
• Single-year, voter-approved excess property tax levy
• Multi-year, voter-approved excess property tax levy for bond redemption
• GO bonds, revenue bonds
• Local Improvement District (LID)
• Commercial and industrial development fees related to transportation projects
• Acceptance of gifts, grants, donations
Requires Voter Approval
- Annual motor vehicle fee: up to $100
- Sales and use tax: up to 0.2%
- Single-year excess property tax levy
- Multi-year excess property tax levy for GO
bonds
Does Not Require Voter Approval
- Annual motor vehicle fee: up to $20
- Local Improvement District
- Commercial and industrial development
fees related to transportation projects
- Acceptance of gifts, grants, donations
Potential Revenue:
Comparing two options for revenue: a vehicle fee of $20 per vehicle or a voter-approved sales
tax of up to 0.2%. If the City chose the vehicle fee option, revenue would be collected through
the Department of Licensing (DOL) and remitted to the City. DOL would retain 1% of revenue
collected as an administrative fee. Estimated number of vehicles was provided by DOL.
25,600 vehicles at $20 = $512,000 less 1% fee = $506,880
$1,800,000,000 retail sales at $0.002 = $3,600,000
List of existin TBDs and current revenue source
Bainbridge Is and
$20 Mab on
20
Bremerton
$20
Maple Valley
$20
Burien No. 1
$10
Mountlake Terrace
$20
Des Moines
$20
Olympia
$20
DuPont
$20
Orting
$20
East Wenatchee
$20
Prosser
$20
Eatonville
$20
Royal City
$20
Electric City
$20
Seattle
$20
Edmonds
$20
Shoreline
$20
Grandview
$20
Snoqualmie
$20
Kalama
$20
Spokane
$20
Kelso
$20
Tacoma
$20
Kenmore
$20
Toppenish
$20
Kittitas
$20
Wapato
$20
Lake Forest Park
$20
Wenatchee
$20
Lynnwood
$20
$20
INFORMATIONAL MEMO
Page 3
1111411111
Aberdeen
ga,;:,,MIU:kea,
$O.0013 sales tax
Agng
40106%
Snohomish County
111111111;111111111101100
$0.002 sales tax
Castle Rock
$0.002 sales tax
Walla Walla
$0.002 sales tax
Lynden
$O.002 sales tax
Bellingham
$0.002 sales tax
Stanwood
$0.002 sales tax
Leavenworth
$0.002 sales tax
Waitsburg
$O.002 sales tax
Snohomish
$0.002 sales tax
Ferndale
$0.002 sales tax
Sequim
$0.002 sales tax
North Bend
$0.002 sales tax
Point Roberts
$0,01/gallon gas tax
Source: Municipal Research and Services Center of Washington website
RECOMMENDATION
For Information only.
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