What is a Transportation Utility?

Transportation Utility is a municipal utility (like water and sewer) used to fund transportation related needs, including capital, operation, and maintenance costs. This utility would help pay for street repairs and reconstruction, as well as sidewalks.  A Transportation Utility would apply to all properties within the City.

What is a Transportation Utility Fee (TUF)?

Transportation Utility Fee is a user-based charge designed to help fund the City’s transportation needs. This would be billed out quarterly, similar to the City’s water and sewer bills.

Why would the City create a Transportation Utility?

The City has a large system of streets and roads. Maintaining and replacing them as they deteriorate is a significant cost.  There are many streets that need repair and replacement, and the current property taxes do not provide enough funding to cover these costs.  The City tried to enact a Premiere Resort Area Tax (PRAT), but the PRAT failed to pass in the State Legislature and is not an option at this point.

Why else would the City want to create a Transportation Utility?

Funding road and street repairs with tax dollars distributes the cost of this work by property value.  Funding road and street repairs with a Transportation Utility distributes the cost by who uses the streets and roads the most and is the fairest method for street funding that is available.

Could the City spend the Transportation Utility Fee revenue on anything it wanted to?

No. The City can only spend this funding on transportation expenses like road repair and road drainage work such as storm sewer and ditching.

Would the money be spent on public transportation?

Couldn’t the City just leave its funding for the transportation infrastructure the same?

Yes, but the City has limited funds, and can only rehabilitate limited roadways today.  If this were to continue, the roadways on which the community relies will continue to deteriorate, increasing vehicle repair costs for residents and businesses, lowering property values, and making the community less attractive for visitors and prospective businesses and industries.

How would the City decide how much each property owner pays for a Transportation Utility Fee?

There would be two parts to the fee. The much smaller part, called the Base Fee, would be used to pay the cost of running the utility – for instance, handling Transportation Utility billing and appeals. This part would be divided evenly among the customers, so everyone would pay the same Base Fee.

The larger part, called the Usage Fee, would be in proportion to how much the property benefits from the transportation infrastructure the City has. All developed properties would pay a Usage Fee based on their estimated trip generation. A property that generates many trips, like a gas station or fast-food restaurant, would pay a larger Usage Fee than one that sees fewer daily average trips, like a church or a bar.

How much would a residence pay?

The City is looking to raise $500,000 per year through a Transportation Utility to more adequately fund the City’s transportation needs.  To raise these funds, the estimated monthly charge for a single-family residence is about $5.50. The Base Fee estimate is about $0.30, and the Usage Fee estimate is $5.20.

The City will hold a public information meeting to provide more detail on the Transportation Utility on January 19th, 2022 at 5:30 PM.

The next article will explain the basis of the Transportation Utility Fees, especially for nonresidential properties. The third article will compare Transportation Utility Fees to other funding options.