Update: The second reading of the ordinance to establish a transportation benefit district (TBD) passed 6-1 at the Oct. 20 City Council meeting. The first TBD meeting will be at 6 p.m. on Monday, Nov. 17 at City Hall.
The Mercer Island City Council is considering creating a Transportation Benefit District (TBD) that would generate extra revenue for transportation improvements.
Through the new independent taxing district, the city will be able to require a $20 vehicle license fee, which would bring in estimated $350,000 each year. The first reading of the ordinance passed 5-1 at the Oct. 2 City Council meeting, with Councilmember Mike Cero voting against it.
The creation of a TBD is about needed transportation funding, said Finance Director Chip Corder.
“Without this new funding source, Mercer Island will have to significantly scale back its planned transportation projects for 2015-2020 and beyond,” Corder said. “The majority of the Council would rather approve a new revenue source than make more project cuts.”
Islander Ira Appelman spoke in opposition to the TBD at the public hearing. He said that the definition is very broad, and that the money generated could be used for things other than roads.
“For example, the City Council is trying to put buildings into Mercerdale park, and they could use that money for parking for buildings,” he said, talking about the plan to put an arts center in the park.
Cero said Appelman was “spot on” in his analysis.
“This is not good policy,” Cero said. “(We have) surpluses in the general fund, yet we’re asking for more money… It’s not a revenue issue, it’s a spending issue.”
TBDs were created by the State Legislature in 1987, said Christina Schuck, assistant city attorney.
The City Council establishes and acts as the governing body of the TBD. It can enact a license fee, capped at $20, without voter approval.
Schuck said that a “transportation improvement” is specifically defined in the statue as “a project that must be contained in a state, regional or city transportation plan.”
TBD monies would most likely be used to fund arterial street projects contained in the City’s 2015-2020 Transportation Improvement Plan (TIP), which include Town Center streets, Corder said.
“We’re not interested in testing the limits of the state’s definition of a transportation project,” Corder said.
The funds could free up a portion of real estate excise tax (REET) revenue to fund other transportation projects, such as pedestrian and bicycle facility projects.
Corder said that it’s also possible that the city could use TBD monies for a public transportation project, though there isn’t one listed in the 2015-2020 TIP.
“That could change in a future TIP, which is updated annually, depending on the actual metro bus service cuts made by King County,” he said.
The 2015-2020 TIP, which the Council adopted on June 16, amounted to $16.8 million and assumed, for planning purposes, that a TBD would be created.
The city’s 2015-2016 Preliminary Budget, which totals $120 million, is also based on that assumption.
The ordinance will be up for a second reading and adoption at the Oct. 20 Council meeting. The Department of Licensing would start collecting the fee six months after that, Schuck said.
“The need for additional funding is there,” Corder said.
If the TBD is adopted, its first meeting will be on Oct. 27. Specific projects that funded by TBD revenues would be discussed then, Corder said.
