Thursday, June 20, 2024

Chelan City Council agrees on Transportation Benefit District funding option

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CHELAN—The city council selected the funding option of three-tenths of one percent for the city’s new Transportation Benefit District (TBD) on Tuesday, May 14, at its regular bi-monthly meeting. As required by state RCW, the measure will go before voters for their approval.

Mayor Erin McCardle explained the options available to fund the TBD and where the city stands with existing dollars.

“Over the next six years we have about $24 million in projects that need to be completed,” said McCardle. “And when we have available $300,000 or less each year in terms of matching funds, we’re really not going to be moving forward very quickly on any of those projects.”

“The growth of property tax revenue capped at one percent annually plus new construction has not kept up with annual inflation rates,” said McCardle. “That has caused local municipalities to figure out local ways of raising additional revenue to keep up with inflation and the cost of doing business.” 

McCardle added some side notes:

  • Street preservation is ten times less expensive than replacing streets.
  • For every $100 of property tax paid in the City of Chelan, the city receives $12.26 out of that $100. Seventy-five percent of that $12.26 goes to the Public Works Street Department.
  • There are 112 TBDs across the state.
  • More than 65 percent of Chelan’s taxable retail sales are generated by visitors.

A review of funding options included the impact of each on locals and its financial impact to the city.

→ Car tabs – High impact on locals. Low to insignificant to the city

→ Permit fees – Low impact on locals except when related to affordable housing. Low to unreliable impact to the city.

→ Sales tax increase (based on 2023 sales and use tax figures). Low impact on locals. High impact to the city.

  • At .01% (8.4% to 8.5%) $405,597.
  • At .02% (8.4% to 8.6%) $811,195.
  • At .03% (8.4% to 8.7%) $1,216.792.

“You can see how this could transform how we approach projects,” said McCardle, approximating that “40 to 60 percent of the incoming TBD funds would be used for pavement preservation; 20 to 40 percent grant match for projects within the State Transportation Improvement Plan (STIP); 10 to 20 percent for sidewalks, ADA upgrades, and city traffic projects.”

The public will have the opportunity to weigh in on the process through a community survey in August, an open house in October, the top five projects added to the STIP in November, and council approval of the STIP next January. 

The city held a public hearing on Dec. 12, 2023, and established the TBD by ordinance. Following another public hearing held on Jan. 23, the city assumed TBD rights, powers, functions, and obligations by ordinance. The TBD board elected Mayor McCardle as chairperson and had an educational briefing on April 2024.

As the council discussed the three taxing options, council member Bob Goedde cited Link Transit and its TBD successes.

“They were originally at two-tenths of one percent and then they want to four and here recently they went to six,” said Goedde. “If you give the people the option of what is going to happen with this money…I think the public will understand and I think we need to go three-tenths.”

Accordingly, Goedde proposed “that we move forward on three-tenths of one percent and do a great job of informing the public.”

The motion was seconded and approved without objection.

Mike Maltais: 360-333-8483 or michael@ward.media

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