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Home My WebLink AboutFS 2015-05-19 Item 2B - Update - Transportation Benefit DistrictsCity of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM TO: Mayor Haggerton Finance & Safety Committee FROM: Peggy McCarthy, Finance Director BY: Vicky Carlsen, Deputy Finance Director DATE: May 13, 2015 SUBJECT: Option to Enhance Revenues: Transportation Benefit Districts - Update ISSUE Review Transportation Benefit Districts (TBDs) as an option to enhance revenues for the City. 3T*1Xe1a901NL 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. At the September 4, 2013 Finance & Safety Committee meeting, general information was provided on TBD including what a TBD is, formation, funding options, potential revenue, and what agencies, at the time, had created TBDs. The information below has been updated as needed including listing TBDs formed after the last Committee update. 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 and laws pertaining to TBDs can be found in RCW 36.73. 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. Additional legislation has been introduced but, to date, none have been enacted into law. 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. 9 INFORMATIONAL MEMO Page 2 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 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). 2014 Proposed King County Transportation Benefit District and Impact to the City In 2014, King County pursued the creation of a County -wide TBD. The proposed funding sources would have been $60 vehicle license fee and a 0.1% sales tax. Both of these revenue sources needed to be voter approved. King County placed the measure on the April 22, 2014, election date. The measured failed with a 53.95% no vote. As part of the County's proposed TBD, all cities within the County would have benefited financially. Under the proposed TBD, the City could have received just over $500K annually. 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. 27,900 vehicles at $20 = $512,000 less 1 % fee = $552,420 $1,800,000,000 retail sales at $0.002 = $3,600,000 10 INFORMATIONAL MEMO Page 3 List of TBDs as of Sept mber 2013 and current revenue source Bainbridge Island $20 Mabton $20 Bremerton _$20 Maple Valle $20 Burien No. 1 $10 Mountlake Terrace $20 Des Moines ` $20 Olympia `` $20 DuPont $20 Ortin $20 East Wenatchee $20 Prosser $20 Eatonville $20 Royal City $20 Electric City $20 Seattle $20 Edmonds $20 Shoreline $20 Grandview $2'0 Sno ualmie $20 Kalama $20 Spokane $20 Kelso $20 Tacoma $20 Kenmore $20 Top enish $20 Kittitas $20 Wa ato $20 Lake Forest Park $20 Wenatchee $20 L nnwood $20 Zillah $20 Aberdeen $0.0013 sales tax Snohomish County `Mc� ;t'�,�'� {t�^r{z.ra',,,,trt, tat „�%3u,�u/'I,�,,,,�,�11,;., $0.002 sales tax Castle Rock $0.002 sales tax Walla Walla $0.002 sales tax L nden $0.002 sales tax Bellingham $0.002 sales tax' Stanwood $0.002 sales tax Leavenworth $0.002 sales tax Waitsburg $0.002 sales tax Snohomish $0.002 sales tax Ferndale $0.002 sales tax Se uim $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 Since the initial information was provided to Committee, several additional jurisdictions have created transportation benefit districts. Anacortes $20 Everett $20 Clarkston $20 Roy $20 Ed ewood $20 Soap Lake $20 Enumclaw $20 "1 "C ,s tt�rae,V?,�i t �.�, c {h j af/ F 11 ,J4^im „ ✓I�ya fnr VJ I.a { /r°3 r r t ,d`, k?Ll�ru +h"�io' ty, rPm r n , .t, r iNM gtl„�V,,.� '` h , -rP kP St, stt.Pr ✓ dd,S,. £fr .fs . !; +; t ^',ftf ,rk y;, Jlkd4t 6:/: .. 1t��k s;4sekir s /,is. Aberdeen $0.0013 sales tax Arlington $0.002 sales tax Marysville $0.002 sales tax RECOMMENDATION For Information only. ATTACHMENTS 11