Chelan council workshop explores Transportation Benefit District

CHELAN – One of the rewards of being a popular tourist destination like Chelan is the large number of tourists that bring revenue to businesses and lodging in the city. One of the drawbacks is the toll the out-of-towners take on the city’s streets and sidewalks, a cost that the city must absorb.

Tourists do not pay the city’s requisite property taxes, so by extension they do not pay for the upkeep of the streets and sidewalks they use.

A principal topic discussed at the Chelan city council workshop last Wednesday, Nov. 8, was the creation of a Transportation Benefit District (TBD) as a new funding option that would help raise money to maintain this vital component of the city’s infrastructure.

“The main revenue sources for the street fund is primarily property tax and fuel sales tax,” said city engineer Travis Denham. “There’s a list of about 15 or 16 bullet items that we need to complete.”

Denham reviewed the narrowing street fund gap between revenues and expenditures. He contrasted the city’s need to raise more money to address the growing list of needed street repairs against the shrinking availability of dollars to do so.

“At some point the gap between the two is going to be zero,” said Denham. “That means services that we can potentially provide in the future may be limited…the less projects we are able to accomplish; the less matching funds we have for grant opportunities.”

Denham’s presentation segued into an explanation of a TBD by Community Development Director John Ajax.

“A Transportation Benefit Board allows the city to form a board that will define a geographic area that would be the city limits,” said Ajax. “Then that allows for the potential setting up of funding sources.”

Ajax cited two primary ways the TBD generates revenue:

• An extra car tab fee added to city resident vehicle licenses and dedicated solely to transportation projects. Estimated revenue $200,000 annually.

• A sales tax from .01 to .03 percent ($1 to $3 per $1,000) and used by the majority of TBD jurisdictions. Estimated revenue $1 million annually.

“One of the objectives tonight is to get feedback from council on moving forward with forming this,” he said. “The one-tenth of one percent is something the council can do without a vote of the people.”

Ajax noted that recent feedback from a council retreat indicated that the TBD is an “equitable way to share the cost burden of providing street funding with tourists.”

He therefore recommended putting it before the voters for their feedback and, with their approval, raising the one-tenth to a potential three-tenths of a percent.

Nearby communities have formed TBDs and find them an effective vehicle to raise needed street revenue. Pateros formed its TBD in 2018. For a city with a population of about 600 people, the annual TBD sales tax from that district is about $40,000 annually.

The City of Bridgeport with a 2023 population of 2,153, created its TBD in 2017. It brings in about $45,000 annually from tab fees.

The Chelan city council meets at 6 p.m. on the second and fourth Tuesdays of each month.

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