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Home My WebLink About12/05/2017 12 Annual Vehicle Licensing FeeBUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDASTATEMENT 1 Item No. 12. For Meeting of: December 5, 2017 ITEM TITLE: Ordinance establishing an annual vehicle license fee; and fixing a time when the same shall become effective SUBMITTED BY: Tara Lewis, Financial Services Manager Bronson Faul, Senior Assistant City Attorney SUMMARY EXPLANATION: On January 10, 2017, the City Council created the Transportation Benefit District ("TBD") and assumed the rights, powers, immunities, functions and obligations of a transportation benefit district. On March 21, 2017, the City Council amended the TBD project list to identify the projects within the City that constitute transportation improvements that may be funded by the TBD. This proposed ordinance establishes an annual vehicle license fee in the amount of twenty dollars ($20.00) for the purpose of preserving, maintaining, operating, construction, or reconstructing the transportation infrastructure and funding transportation improvements that have been identified in the approved project list. ITEM BUDGETED: Yes STRATEGIC PRIORITY: Neighborhood and Community Building APPROVED FOR SUBMITTAL: City Manager STAFF RECOMMENDATION: Pass ordinance BOARD/COMMITTEE RECOMMENDATION: ATTACHMENTS: Description D TBD $20 ordinance D TBD2018 Upload Date 11/20/2017 11/28/2017 Type Coyer Memo Corer Memo 2 3 ORDINANCE NO. 2017 - ORDINANCE of the City of Yakima, Washington establishing an annual vehicle license fee; and fixing a time when the same shall become effective. WHEREAS, on January 10, 2017, the City Council created the City of Yakima Transportation Benefit District ("TBD") with boundaries coterminous with the boundaries of the City of Yakima, all in accordance with Chapter 36.73 RCW; and WHEREAS, on January 10, 2017 the City Council assumed the rights, powers, immunities, functions, and obligations of a transportation benefit district; and WHEREAS, on March 21, 2017 the City Council amended the TBD Project list which identifies projects within the City that constitute transportation improvements that may be funded by the TBD; and WHEREAS, the City Council finds it to be in the best interest of the city to establish an annual vehicle license fee in the amount of twenty dollars ($20.00) for the purpose of preserving, maintaining, operating, construction, or reconstructing the transportation infrastructure and funding transportation improvements that have been identified in the approved project list; now, therefore; BE IT ORDAINED BY THE CITY OF YAKIMA: Section 1. An annual vehicle license fee of twenty dollars ($20.00) is hereby established consistent with the Revised Code of Washington (RCW) section 36.73.065, as written or hereafter amended, to be collected by the Washington Department of Licensing on qualifying vehicles as set forth in RCW 82.80.140, as written or hereafter amended. Section 2. The annual vehicle license fee shall take effect for notices mailed in 2018 for vehicle license renewals due on or after July 1, 2018, or as soon thereafter as the Washington Department of Licensing is reasonably able to incorporate collection of the twenty dollar fee; but in no event shall the vehicle license fee be collected sooner than one hundred and eighty (180) days after approval of this ordinance, pursuant to RCW 36.73.065 and RCW 82.80.140. The vehicle license fee shall be collected during the term of the existence of the District and shall cease to be collected upon dissolution. Section 3. The City Council directs the City Clerk to notify the Washington Department of Licensing of the vehicle license fee established in Section 1 of this Ordinance and to request that they take all steps necessary to implement collection of this fee in accordance with RCW 82.80.140. Section 4. If any portion or section of this Ordinance should be held to be unconstitutional, invalid, or unenforceable for any reason, such finding shall not affect the constitutionality, validity, or enforceability of any other portion or section of this Ordinance. Section 5. This ordinance shall become effective and shall be in full force and effect 30 days after its passage and publication in accordance with law. 4 PASSED BY THE CITY COUNCIL this 5th day of December, 2017. ATTEST: Kathy Coffey, Mayor Sonya Claar Tee, City Clerk Publication Date: December 8, 2017 Effective Date: January 7, 2018 5 2018 REVENUE POLICY ISSUE FUNDING THE TRANSPORTATION BENEFIT DISTRICT SUMMARY PROPOSAL This policy issue is a proposal to fund the Transportation Benefit District (TBD). History Early in 2017 Council established a Transportation Benefit District (TBD) which became effective on February 12, 2017. Council then approved a 20 year project list on March 7, 2017 to address sidewalk and street conditions around the City, but no funding source was approved. This proposal brings back the funding of the TBD by a vehicle tab fee for consideration of inclusion in the 2018 Budget. This option would generate revenue to restore streets and sidewalks by leveraging any available grant funding or debt funding to increase the overall impact of the project list. Without additional funding it is unlikely that all the projects on the current list could be undertaken during the 20 year time frame. Charter Amendment funding is tied up in debt service over the next 7 to 10 years which will preclude any new large projects not fully funded by grants or dedicated revenue sources. This revenue would be dedicated to fulfilling the project list. The impact to vehicle owners would be $20 per year per vehicle licensed in the City. This proposal is aimed at reducing the risk associated with the postponement or failure to maintain infrastructure leading to considerably higher costs to replace that infrastructure should it fail in the future. Attachments • The TBD project list adopted in March 2017 • TBD funding options • A list of Washington cities that have established and funded a TBD including their funding source and amount. • Excerpts from the 2017 Policy Issue that was not adopted into the 2017 Budget but contains additional history and regulation references. Impacts 1. Fiscal Impact - $1.3 to $1.5 million annually 2. Proposed Funding Source - Street Construction Fund. 3. Public Impact - Additional car tab fee to fund needed sidewalk and street improvements. 4. Personnel Impact - None. 5. Required Changes in City Regulations or Policies - Create an ordinance setting forth the new fee. Contract with Department of Licensing to collect the fee. 6. Legal Constraints, if applicable - Council can only impose up to a $20 fee. 7. Viable Alternatives - This is a Council decision. 2018 Preliminary Budget - 5 Notes: • • • • • TRANSPORTATION BENEFIT DISTRICT PROJECT LIST Project District(s) Estimated Construction Cost N. 1st Street Revitalization, Phase 2 (20 year bond) 6th Avenue Roadway Improvements River Road Improvements, 40th to 34th (Aquatic Center) 1st Street and Washington Avenue I/S Improvements Nob Hill Boulevard and Fair Avenue I/S Improvements Powerhouse Road and Englewood Avenue I/s Improvements 3rd Avenue Sidewalk: Nob Hill to Walnut Naches Avenue Sidewalk: Walnut to Pacific 4th Street Sidewalk: Walnut to Pacific Chestnut Avenue Sidewalk: 56th Ave. to 70th Ave. Mead Avenue Sidewalk: 27th Ave. to 28th Ave. Browne Avenue Sidewalk: 7th Ave. to 16th Ave. Mead Avenue Pedestrian Signal at 10th Avenue 44th Avenue Sidewalk: Viola to Randall Park Pacific Avenue Sidewalk: Fair Avenue to Jail Property Fair Avenue Sidewalk: Pacific Avenue to Nob Hill Boulevard Nob Hill Boulevard Sidewalk: 12th Street to 14th Street 88th Avenue Sidewalk: Tieton Drive to Summitview Avenue N. 16th Avenue Sidewalk: Fruitvale Boulevard to River Road 1,4,5 1,5 5 3 2 5 4 2 2 6 3 5 3 7 2 2 2 6 5 Total: TRANSPORTATION BENEFIT DISTRICT FUNDING OPTIONS Option Vehicles Tab Fee Annual $10,802,260 5,591,760 750,000 2,000,000 256,000 728,000 480,000 330,000 315,000 448,200 17,000 336,000 300,000 275,000 300,000 370,000 130,000 650,000 250,000 $24,329,220 Estimated Construction 20 years Contingency 1 76,000 2 76,000 3 76,000 $20.00 18.00 17.00 $1,504,800 1,354,320 1,279,080 $30,096,000 27,086,400 25,581,600 $5,766,780 2,757,180 1,252,380 6 The Department of Licensing estimates there are currently approximately 76,000 vehicles in the City of Yakima. Due to the fixed nature of debt service on large projects contained in the list, it is recommended that a conservative approach be used to estimate project cost and incoming revenue. Should the revenue generated by the TBD funding exceed the ultimate cost of the projects, the project list may be expanded at that time or the TBD discontinued early once debt service obligations have been met. The State charges 1% of the revenue collected as a service fee. The "Annual" amount is net of this fee. Potential excess estimated revenues are shown as "Contingency" in the Chart. 2018 Preliminary Budget - 6 7 LIST OF WASHINGTON CITIES THAT HAVE ESTABLISHED TBD'S Jurisdiction Year TBD Established Funding Source Aberdeen Airway Heights Anacortes Arlington Bainbridge Island Battle Ground Bellingham Black Diamond Bremerton Bridgeport Buckley Burien Carbonado Castle Rock Centralia Clarkston Covington Dayton Des Moines DuPont East Wenatchee Eatonville Edgewood Edmonds Electric City Ellensburg Elmer City Enumclaw Everett Ferndale Fife Friday Harbor Grandview Granite Falls Kalama Kelso Kenmore Kittitas Lake Forest Park Lakewood Leavenworth 2012 0.13% sales tax 2013 0.20% sales tax 2014 $20 vehicle license fee 2013 0.20% sales tax 2012 $20 vehicle license fee 2014 $20 vehicle license fee 2010 0.20% sales tax 2015 $20 vehicle license fee 2009 $20 vehicle license fee 2017 $20 vehicle license fee 2012 $20 vehicle license fee 2009 $10 vehicle license fee 2012 $20 vehicle license fee 2012 0.20% sales tax 2014 0.20% sales tax 2014 0.20% sales tax - replaced a $20 vehicle license fee 2013 $20 vehicle license fee 2014 0.20% sales tax 2008 $40 vehicle license fee (nonvoted) 2013 $20 vehicle license fee 2012 $20 vehicle license fee 2012 $20 vehicle license fee 2013 $20 vehicle license fee 2008 $20 vehicle license fee 2012 $20 vehicle license fee 2015 0.20% sales tax 2015 $20 vehicle license fee 2013 $20 vehicle license fee, 0.10% sales tax 2014 $20 vehicle license fee 2011 0.20% sales tax 2015 $20 vehicle license fee 2014 0.20% sales tax 2011 $20 vehicle license fee 2015 $20 vehicle license fee 2012 $20 vehicle license fee 2012 $20 vehicle license fee 2012 $20 vehicle license fee 2012 $20 vehicle license fee 2008 $40 vehicle license fee 2012 $20 vehicle license fee 2010 0.20% sales tax 2018 Preliminary Budget - 7 8 LIST OF WASHINGTON CITIES THAT HAVE ESTABLISHED TBD'S Jurisdiction Year TBD Established Funding Source Longview Lynden Lynnwood Mabton Maple Valley Marysville Mattawa Mercer Island Monroe Mountlake Terrace Moses Lake Mount Vernon Normandy Park North Bend Olympia Orting Othello Port Orchard Prosser Richland Ridgefield Roy Royal City Seattle Sedro-Woolley Sequim Shelton Shoreline Snohomish Snoqualmie Soap Lake Spokane Stanwood Tacoma Toppenish Tumwater Twisp University Place Vancouver Waitsburg Walla Walla 2017 $20 vehicle license fee 2012 0.20% sales tax 2010 $40 vehicle license fee, 0.1% sales tax 2011 $20 vehicle license fee 2012 $20 vehicle license fee 2013 0.20% sales tax 2015 0.20% sales tax 2014 $20 vehicle license fee 2012 0.20% sales tax 2011 $20 vehicle license fee 2017 $20 vehicle license fee 2016 0.2% sales tax 2013 $20 vehicle license fee 2011 0.20% sales tax 2008 $40 vehicle license fee 2011 $20 vehicle license fee 2012 0.20% sales tax 2015 $20 vehicle license fee 2009 $20 vehicle license fee 2018 $20 vehicle license fee 2008 Unfunded - 0.2% sales tax repealed in 2012 2014 $20 vehicle license fee 2012 $20 vehicle license fee 2010 $80 vehicle license fee, 0.10% sales tax 2014 $20 vehicle license fee 2008 0.20% sales tax 2015 0.20% sales tax 2009 $20 vehicle license fee 2010 0.20% sales tax 2010 $20 vehicle license fee 2013 $20 vehicle license fee 2011 $20 vehicle license fee 2012 0.20% sales tax 2012 $20 vehicle license fee, 0.10% sales tax 2012 $20 vehicle license fee 2014 0.20% sales tax 2016 0.20% sales tax 2009 $20 vehicle license fee 2015 $20 vehicle license fee 2012 0.10% sales tax 2011 0.20% sales tax 2018 Preliminary Budget - 8 LIST OF WASHINGTON CITIES THAT HAVE ESTABLISHED TBD'S Jurisdiction Year TBD Established Funding Source Wapato 2012 $20 vehicle license fee Wenatchee 2011 $20 vehicle license fee Wilkeson 2014 $20 vehicle license fee Zillah 2011 $20 vehicle license fee 9 2018 Preliminary Budget - 9 10 Excerpt of TBD Rules and History from 2017 Budget Proposal Creating a TBD The laws surrounding TBD's can be found in the Revised Code of Washington Chapter 36.73 and the related citations found there. The legislative authority has the power to form a TBD and make the initial decision regarding transportation improvements. Once the transportation improvements have been identified, the Council must conduct a public hearing with at least ten days' notice. Following the hearing, Council may establish the TBD by ordinance if they make the finding that the action is in the public interest. There are a number of requirements for the ordinance establishing the TBD that must include the functions and transportation improvements to be funded then also establish the boundaries of the TBD. To take advantage of some other benefits in the law, the boundaries should be the city limits. The transportation improvements proposed may not be expanded beyond those that were included in the initial hearing notice unless there are further notices and findings are made that it would be in the public interest to expand the improvements. Once formed, the Council acts as ex officio and independent members of the TBD governing body. The City treasurer acts as the ex officio treasurer and the registered voters residing within the district are the electors. Funding a TBD There are multiple funding options once a TBD has been established. The most common is a $20 vehicle license fee and can be established with a vote of the governing board if the boundaries of the TBD are the same as the boundaries of the City. After 24 months the fee can be increased to $40 by the governing board and then to $50 after another 24 months. An important note is that actual fee cannot be imposed within 180 days after being passed and that the department of licensing will keep a 1% administrative fee. The only other revenue that may be imposed without a vote of the electors are fees on certain construction projects but the fees have to be reasonably necessary as a result of the impact of construction. All other funding sources must be approved by a vote of the electors. They include a one year ad valorem property tax, an ad valorem property tax to pay off voter approved general obligation bonds, vehicle tolls and a sales tax. Projects The legislature has defined "transportation project" to mean a project contained in the transportation plan of the state, a regional transportation planning organization, city, county, or eligible jurisdiction. A project may include investment in new or existing highways of statewide significance, principal arterials of regional significance, high capacity transportation, public transportation, and other transportation projects and programs of regional or statewide significance including transportation demand management. Projects may also include the operation, preservation, and maintenance of these facilities or programs. There is also a set of criteria that have to be considered when choosing which transportation improvements to put on the project list and includes improved travel times, air quality, freight mobility and other criteria as may be developed by the governing body. 2018 Preliminary Budget -10 11 Material Change Policy and Annual Report The TBD shall also develop a material change policy to address major plan changes that affect project delivery and financing. At a minimum, the policy must address material changes to cost, scope, and schedule, the level of change that will require governing body involvement, and how the governing body will address those changes. The policy must also include a provision that if a transportation cost exceeds its original cost by more than twenty percent, there will be a public hearing to solicit comment from the public regarding how the cost change should be resolved. Another requirement is the TBD shall issue an annual report to the public and newspapers indicating the status of costs, expenditures, revenues, and schedules. Termination Once construction is complete, the TBD must terminate day-to-day operations and exist as a limited entity that oversees the collection of revenue and the payment of debt still in effect. When the debt is complete and paid, the TBD has thirty days to dissolve itself with notice of the dissolution published. Assumption In 2015, the legislature allowed for a city to assume the rights, powers, functions, and obligations of the TBD after notice and a hearing. This can be done through ordinance or resolution and after a finding that the public interest or welfare would be satisfied by the city assuming those duties and obligations. 2018 Preliminary Budget -11