HomeMy WebLinkAbout28. Recommendation on Ad Hoc 1
Ad Hoc Committee to Review Alternatives to Special Assessments
Minutes/Notes
September 25,2019
Present: Bill Miller, Matt Mugerauer, Karen Bowen, Vicky Fitzgerald, Gerard
Keuler, Matt Lauritch, Dorm Lord, Koby Schellenger, Ken Arneson, Kelly
Schwab
Excused: Kris Larson, Mark Miller
Staff: Mark Rohloff, Russ Van Gompel,James Rabe
Matt Mugerauer expressed his thanks to the volunteers and noted there is a good mix of
individuals.
Consensus of Chair and Vice Chair:
Matt Mugerauer was nominated to serve as Chair and Vicky Fitzgerald was nominated
to serve as Vice Chair. Both were unanimously approved.
Mark Rohloff gave a concise history of the considerations and options to alternatives for
Special Assessments (SA). (Chronology -Review of Alternatives 2012-2019)
General Discussion Notes/Highlights:
• Goal is to make equitable.
• Alternatives will not eliminate ALL Special Assessments. Assessments will still
apply to some portions (i.e. utilities).
• Discussion regarding how proposed fee had impacted multiple parcels (that may
be driven by the lender for properties)
• Sidewalk program—2500 to 3000 individual legal parcels annually. City follows
ADA guidelines. Eliminating the volume of individual's special assessments was
one side benefit.
• How do residents pay their SA's? Approximately 50% pay in full with the 1st
invoice or 1st tax bill, the other 50 % elects to pay their assessments through a
payment plan.
• Karen mentioned that streets have always been an issue for Oshkosh and
residents—What is the process to pay for emergency work if necessary?
Emergency repairs are in the budget. James explained that some projects come
in under budget and some projects are postponed if the need arises for
unplanned major reconstruction.
• Ken brought up the topic of how residents are notified of their SAs. James
summarized the process; effected residents/businesses are notified 1 year prior to
work and invoiced the following year (close to an 18 month period).
• Karen noted that education and communication to the general public is poor.
How are we to educate them? Matt Mugerauer noted, this is responsibility of the
council.
Discussion of Current Options Considered to Date:
• Continue Special Assessments As Is
• Vehicle Registration Fee (Wheel Tax)
o Not all vehicle in Oshkosh are register in Oshkosh
o It is probable that some businesses would register their vehicle outside the
city to avoid fee.
• Transportation Utility Fee (2018-2019)
o TUF would not spread the burden equally (businesses vs residents)
o 2 classifications used, residential and nonresidential
o Possibility of being repealed by state law
• Eliminate Special Assessments and Borrow/Place On Tax Roll
o Levy and expenditure restraints limit us
o Members asked re: a County sales tax as a source
o Out of city's control—requires County Board approval
o Need to reach out to our neighbor cities to the north
o Municipalities in the county have different needs
Information the committee would like to know/have at the next meeting:
• Is Premiere Tax Resort an option?
• Is a Sales Tax attainable
• How much debt is associated with the city's SA's?
• What is the PASER Inventory (Pavement Surface Evaluation Rating) The
committee wants to understand -James will have information at next meeting.
• State revenue loss and impact on other revenue sources
• Can we replace the current funding source?
• What is the total cost of the goal?
• Other options?
Schedule of Future Meetings—Diane will poll committee members for their
availability on October 9, 16 and 30.
There was no further discussion. The meeting was adjourned at 4:35 PM.
Ad Hoc Committee to Review Alternatives to Special Assessments
Minutes/Notes
October 23, 2019
Present: Matt Mugerauer, Karen Bowen, Vicky Fitzgerald, Gerard Keuler, Matt
Lauritch, Donn Lord, Koby Schellenger, Ken Arneson, Kelly Schwab, Kris
Larson, Bill Miller
Excused: Mark Miller, Mark Rohloff, Russ Van Gompel
Staff: James Rabe
Public: John Casper
Matt Mugerauer expressed his thanks and reviewed the agenda and prior meeting
notes. Matt also introduced Kris Larson, Kris provided a brief bio regarding his
Oshkosh connection as a landlord, tenant, and business owner.
Recap of Current Options Considered to Date:
• Continue Special Assessments As Is
• Vehicle Registration Fee (Wheel Tax)
o Not all vehicle in Oshkosh are registered in Oshkosh
o It is probable that some businesses would register their vehicle outside the
city to avoid fee.
o Pay out monthly
o Fee would apply to vehicles under 8000 pounds (state statute)
o Business owners would pay very little
o Semi's and large vehicles are doing the most damage but they would be
paying the least
o Possibility of being repealed by state law
• Transportation Utility Fee (2018-2019)
o TUF would not spread the burden equally (businesses vs residents)
o 2 classifications used, residential and nonresidential
• Eliminate Special Assessments and Borrow/Place On Tax Roll
o Levy and expenditure restraints limit us
• County Sales Tax/Local Sales Tax/Premier Resort Tax
o Members asked re: a County sales tax as a source
o Out of city's control—requires County Board approval
o Need to reach out to our neighbor cities to the north
o Municipalities in the county have different needs
General Discussion Notes/Highlights:
• Outagamie County has imposed a sales tax effective in January 1
• Matt Mugerauer referenced the matrix with options, pros & cons
• Donn Lord: The apartment association is wondering if there are any cost
savings measures in regards to contractors etc.
o James Rabe stated that over the years costs have been increasing
o Not much can be done to offset pricing
o There is not much of a difference between concrete and asphalt costs
o James also provided a brief overview of contractors and bids:
• Smaller contractors have gone away
• Project size plays a big role in bids
• Bids still coming in,just not as many as in the past (2 to 6
contractors provide bids) which is average
• A sales tax is a viable option
• Vicki Fitzgerald noted that it is an election year
• A county sales tax would have to be passed by the county board
• The county has a good fund balance therefore the board may be hesitant to pass
a sales tax
• Ken asked Matt Mugerauer what the number one thing his constituents want
o Matt noted the one thing that always comes up is roads
• The county board is a tough sell
• A countywide sales tax it would have to be shared with all municipalities
• Kris noted that a sales tax may be used to reduce the tax roll
• DOT guidelines determine the street PASER rate
• May be more equitable to do a transportation utility fee
• There is always going to be inequality
• There is no perfect solution
• Neenah approved ordinance
• James Rabe briefed the committee on the pacer street information and ratings
• State revenue sources are becoming less and less
• John Casper argued that the utility fee is not legal per a legal opinion he
requested from WMC
• County tax would need to be shared throughout the county
• Options for sales tax:
o lobby the county
o lobby the state
• There is a proposed bill at the state level for Milwaukee to add a 1% local sales
tax
• we need to get other municipalities on board
• John Casper pointed out that a referendum may be needed
• Koby Schellenger brought up the subject of residents paying a lower percentage
o Is there an option to have different assessments for residents and small
businesses (residential/nonresidential)?
• A challenge, as we don't want the businesses take the brunt of the burden
• Matt noted that we would like to make this as simple as possible, if it's too
complicated (easily undone?)
• The committee discussed different options for business versus residential. Kris
Larson noted that we should look at the total number of parcels in Oshkosh and
the breakdown is between residential/single-family and non-residential
Information the committee would like to know/have at the next meeting:
• Number of parcels in Oshkosh
• How many of the parcels are residential (single-family) and how many of the
parcels are non-residential (commercial/industrial)
• Citizen survey summary—
o How many years has the streets question been on the survey
o What is the average response (to the above)
• Lobby the State
• Lobby the County
• Other options?
Next Meeting: November 13, 2019
3:00 PM
SB1 (safety building/police department)
There was no further discussion. The meeting was adjourned at 4:38 PM.
Ad Hoc Committee to Review Alternatives to Special Assessments
Minutes/Notes - 3
November 13, 2019
Present: Matt Mugerauer, Karen Bowen, Vicky Fitzgerald, Gerard Keuler, Matt
Lauritch, Donn Lord, Koby Schellenger, Ken Arneson, Kris Larson,
Absent: Mark Miller, Bill Miller, Kelly Schwab
Staff: Mark Rohloff, James Rabe, Russ Van Gompel
Public: John Casper, Wayne Youngwirth
Matt Mugerauer expressed his thanks and reviewed the agenda and prior meeting notes.
General Discussion/ Summarized Notes &Highlights:
• Mark Rohloff provided an updated matrix with options, pros & cons
• Matt Mugerauer referred to the matrix/ comparison of alternatives to special
assessment
• Matt L. suggested a temperature check-Is there one that we can take off of the table?
• Matt M. asked the question: Do you have an interest in replacing the current special
assessment policy?
o Consensus of the group was yes—a change is desired
o Replace Special Assessments with taxes: Not desirable
General discussion of options generated the following comments (summarized):
• Sales Tax/Premier Resort Area Tax
o Special legislation is required
o Long lead time to approve
o Primary Benefit—visitors would also pay
o Communities with Premier Resort Tax—not similar to Oshkosh:
• The Village of Sister Bay: 0.5% (effective July 1, 2018)
• The City of Rhinelander: 0.5%
• The Village of Stockholm: 0.5%
• The City of Eagle River: 0.5%
• The City of Bayfield: 0.5%
• The City of Wisconsin Dells: 1.25%
• The Village of Lake Delton: 1.25%
• Outagamie County tax begins January 1,2020
✓ https://www.revenue.wi.gov/DOR%20Publications/pb403.pdf
✓ https://www.revenue.wi.gov/Pages/FAOS/pcs-premier.aspx
o County sales tax—Oshkosh may not get full share of proceeds
• Vehicle Registration Fee
o Simplicity of approval and administration is key advantage
o High rate ($65.00 per vehicle) to produce$3.25 million
o Fairness/equity issue due to exemption for large vehicles
o Large traffic generators do not necessarily pay
• Transportation Fee
o Already rejected by Council
o Alternative parcel fee—may be more politically acceptable/simpler
o Basis for alternatively parcel fee is difficult to justify
o Traffic base fee more defensible (see Milwaukee study)
o Chamber still questions legal basis for a fee (see City Attorney's memo)
• Outstanding Issues:
o Sidewalks - should we included in any option (cost$800,000)
o How do we educate people?
o The original ordinance failed -why?
o Can we make a hybrid of fees/ taxes?
o Should there be a cap with any fee?
Information the committee would like to know/have at the next meeting:
• How much would it cost to eliminate all assessments (rough estimate of all)
• Confirm numbers for potential sales tax
• Send minutes before next meeting
Next Meeting: December 4, 2019
3:00 PM
Room 404 City Hall
The meeting was adjourned at 4:45 PM.
Ad Hoc Committee to Review Alternatives to Special Assessments
Minutes/Notes - 4
December 4, 2019
Present: Matt Mugerauer, Karen Bowen, Vicky Fitzgerald, Gerard Keuler, Matt
Lauritch, Donn Lord, Koby Schellenger, Ken Arneson, Kris Larson,Mark
Miller
Absent: Bill Miller, Kelly Schwab
Staff: Mark Rohloff,James Rabe, Russ Van Gompel
Public: John Casper,
Matt Mugerauer expressed his thanks and reviewed the agenda and prior meeting notes.
Presentations to committee:
• City Attorney legal analysis of authority to establish fee (memo attached)
• Jeff Mazanec of raSmith regarding Traffic Based Fee(PPT attached)
Next Meeting: January 15, 2020
3:00 PM
Room 203 City Hall
The meeting was adjourned at 4:45 PM.
of
Oshkosh
TO: Members of the Ad Hoc Committee on Alternatives to Special Assessments
Mayor and Members of the Common Council
FROM: Lynn A.Lorenson, City Attorne
DATE: November 22, 2019
RE: Transportation Utility Ordinance
Questions have been raised regarding the legal basis for the adoption of a Transportation Utility
Fee, specifically the Chamber of Commerce has cited the lack of specific statutory authority for
a transportation fee in Wisconsin Statutes. While the Chamber is correct that there is no specific
statute stating that municipalities may adopt"a transportation utility fee", they are incorrect in
their belief that a specific statute is required for a municipal governing body to act for the public
health, safety, and welfare.
I. Legal Authority to establish a Transportation Utility
Wisconsin Statutes specifically authorize municipalities to act for public purposes, namely the
public health, safety and welfare using all necessary and convenient means. Providing a safe
and efficient transportation system is dearly a public purpose supporting the public health,
safety and welfare. The authority of the municipality to act for a public purpose is limited only
by specific statutory language that would prevent the municipality from taking certain actions.
There is no specific statute preventing the city from creating a transportation utility or enacting
a transportation fee. Public utilities are widely recognized in the Wisconsin Statutes and are a
common and reasonable means of operating facilities and providing services for a public
purpose. Some of the statutory cites and language supporting this are included below:
§§62.04, 62.11—broad grants of authority to municipalities
§62.04 giving the "largest measure of self-government compatible with the constitution
and general law"; providing that the statutes are to be liberally construed in favor of the
rights, powers and privileges of cities to promote the general welfare, peace, good order
and prosperity.
City Hall,2T5 Church Avenue P.O.Box 1130 Oshkosh,WI 54903-1130 920.236.5000 http://www.ci.oshkosh.wi.us
§62.11(5) Wis. Stats. — Except as otherwise provided the Council shall have the
management and control of city property, finances, highways, navigable waters and
public service; the power to act for the government and good order of the city, for its
commercial benefit and the health, safety and welfare of the public; and the power to act
by all necessary and convenient means. The powers given to municipalities are limited
only by express language.
Public utilities are recognized by other sections of the statutes and a common and
reasonable means of operating facilities and providing services for a public purpose -
§§66.0621, 66.0807, 66.0809, 66.0811 and 66.0813
§66.0621 Wis.Stats. Revenue obligations.
"Public utility"means any revenue producing facility or enterprise owned by a municipality and
operated for a public purpose as defined in s. 67.04 (1) (b) including garbage incinerators, toll
bridges, swimming pools, tennis courts,parks,playgrounds, golf links,bathing beaches,
bathhouses, street lighting, city halls,village halls,town halls, courthouses,jails, schools,
cooperative educational service agencies,hospitals,homes for the aged or indigent, child
care centers, regional projects, waste collection and disposal operations, sewerage
systems, local professional baseball park facilities, local professional football stadium
facilities,local cultural arts facilities,and any other necessary public works projects undertaken
by a municipality. (emphasis added).
67.04 (1) (b) public purpose means "the performance of any power or duty of the issuing
municipality". (emphasis added).
If Council determines to establish and operate a Transportation Utility, the ordinance must
describe a reasonable method for achieving the objectives related to the public purpose of
protecting the health, safety and welfare and any fees established must bear a reasonable
relationship to the services provided.
II. Methodology for establishment of the Transportation Utility Fee
A. Reasonable Method — the Committee/Count l must be able to articulate why this is
reasonable method for achieving the public health,safety and welfare need—the method
does not need to be perfect, but must be reasonable. The Council should be able to
articulate what considerations were a part of their decision to establish the utility. For
example,the Committee/Council may indicate that they are refocusing on the streets and
sidewalks as an integrated transportation system as a whole which everyone uses to
operate a business,to bring goods to your business,to bring employees and customers to
your business,to go to work,to receive goods,or have services provided to you and your
property—police,fire, garbage pick-up,focusing on use of the transportation system and
City Hall,215 Church Avenue P.O.Box 1130 Oshkosh,WI 54903-1130 920.236.5000 http://www.ci.oshkosh.wi.us
benefits received. The Committee/Council may consider shortcomings of the current
system.
The draft ordinance considered by Council earlier this year contained the following findings
in this regard, which may be modified or replaced as the Committee/Council may
recommend:
FINDINGS: The City of Oshkosh Common Council finds that the timely
reconstruction of City streets to ensure safe and efficient travel throughout the City
is a fundamental City responsibility. A structurally sound and well-maintained
street system enhances livability,property values and economic vitality of the entire
City. In the past, the cost of street reconstruction has been financed, in large part,by
levying special assessments against abutting properties on a project by project basis.
This Iocnli7ed perspective for street reconstruction arises out of the nature and legal
limitations for special assessments. It can result in abutting property owners paying
significant sums for benefits to their property and beyond. It can result in significant
financial hardship. As a lien on property,the special assessment may limit financing
and refinancing opportunities. For these reasons and others, the Common Council
finds that a community wide transportation utility fee applicable to all properties on
a community wide basis, paid in monthly installments to a specially designated
account for street reconstruction is a more equitable and less burdensome approach
to financing street reconstruction in the City.
In order to protect the health, safety and welfare of the public, the Common Council
is exercising its authority to establish a Transportation Utility and set the rates for
transportation management services. The City is acting under the authority of
Chapters 62 and 66 of the Wisconsin Statutes, and particularly at least the following
statutes: §§62.04, 62.11, 66.0621, 66.0807, 66.0809, 66.0811 and 66.0813 Wisconsin
Statutes.
The provisions of this Article shall apply to all (developed and undeveloped)
property located within the City of Oshkosh, including without limitation all
property owned by local, state and federal governments, non-profit organizations
and all other property whether subject to real property taxes or exempt therefrom.
B. Fees must be reasonable and bear a reasonable relationship to the services provided. The
specific statute related to fees is:
§66.0628 Fees imposed by a political subdivision.
(1) In this section:
(a) "Political subdivision"means a city,village,town, or county.
(b) "Reasonable relationship" means that the cost charged by a political subdivision
for a service provided to a person may not exceed the political subdivision's
City Hall,215 Church Avenue P.O.Box 1130 Oshkosh,WI 54903-1130 920.236.5000 http://www.ci.oshkosh.wi.us
reasonable direct costs that are associated with any activity undertaken by the political
subdivision that is related to the fee.
(2) Any fee that is imposed by a political subdivision shall bear a reasonable
relationship to the service for which the fee is imposed.
(4)(b) .... the political subdivision shall bear the burden of proof to establish that a
reasonable relationship Prists between the fee imposed and the services for which the
fee is imposed.
We cannot reasonably count traffic at every driveway. Some examples of things you may
consider:
i. Trip generation reports or studies
ii. The relative impact of the type of traffic between residential, commercial and
industrial uses
iii. If you use categories by type of property or use, are the properties in each
category reasonably comparable in their use of the transportation system?
How many categories are needed?
iv. If you use impervious area—greater impervious area may mean more room for
people and stuff—more employees, customers and goods;more traffic to bring
more stuff to the property; larger vehicles with larger impacts and higher
standards of construction—higher costs.
v. Does not need to be perfect,but must be reasonable as defined by the statute
The draft fee resolution considered by Council earlier this year contained the
following findings, which may be modified or replaced based on the
recommendations of the Committee and findings of the Council:
WHEREAS, the Common Council finds that it is reasonable to charge
property owners for their share of transportation facilities costs based on their
estimated use of and impact to the transportation system; and
WHEREAS, the Common Council finds that it is reasonable to establish a
single fee for each dwelling unit for residential properties within the City of
Oshkosh based upon the volume, size and type of vehicle traffic reasonably
anticipated for typical residential parcels; and
WHEREAS,the Common Council finds that for undeveloped, commercial,
mixed-use, industrial and institutional parcels the amount of impervious surface
reasonably correlates to the use of and impact to the transportation system
considering the volume, size and type of vehicle traffic reasonably anticipated for
these parcels and considering the standards of construction necessary for
commercial vehicle traffic.
City Hail,215 Church Avenue P.O.Box 1130 Oshkosh,WI 54903-1130 920.236.5000 http://www.ci.oshkosh.wi.us
In summary, the City may use necessary and convenient means to act in the public interest for
health, safety and welfare. Providing a safe and efficient transportation system is clearly a
public purpose and there is no statute preventing the City from creating a public transportation
utility should the City choose to do so. Utilities are a common and widely recognized means of
operating facilities and providing services for public purposes. If the City establishes and
operates a Transportation Utility, the ordinance must describe a reasonable method for
achieving the objectives of providing safe and efficient transportation facilities and any fees
must bear a reasonable relationship to the services provided.
City Hall,215 Church Avenue P.O.Box 1 130 Oshkosh,WI 54903-1130 920.236.5000 http://www.ci.oshkosh.wi.us
Transportation User Charge Overview
Street Program Funding
Alternatives
November 22, 2019
Jeff Mazanec, PE
Sr.Consultant
(92 T dZ2- 7tCG?C2Si til3.CflfF1
rciSrri ith
0)8435734
Presentation Preface
✓ This presentation was originally prepared in 2003, using
actual project data with client permission.
• Some information in the presentation is not current, and will
be pointed out. The approach, concepts and user charge
examples all accurately represent the funding concept.
Learning Objectives, to understand:
■ ...the characteristics of user charges that distinguish them
from taxes.
■ ...the concept of trip-based transportation user charges.
■ ...how application of average weekday trips forms the basis
for a user-based charge structure.
1
Trip-generation based user charge funding
for transportation offers cost equity among
users, reliable and dedicated funding,
with greater accountability.
This discussion covers these primary topic areas...
Background, definitions and authority...
Development and calculations—Village of North Fond
du Lac case study...
Impacts, considerations and questions.
3
How are local transportation costs
funded in Wisconsin?
o Generally by a combination of several sources:
■ Local property tax/general fund
■ Federal /state funding
• Special assessments/impact fees
• Developer contribution (private development)
■ Tax incremental financing (renewal, new public development)
And Rarely...
■ Wheel tax
4
2
What about wheel taxes
in Wisconsin?
Beloit wheel tax supplements street program funding...
• Cost is $10 per car, collected by WI-DMV with annual
registration
■ Generates about$270,000 per year
19,500 properties; 36,000 population
Sheboygan wheel tax began in about 1992; was
phased out in 2006 by council action
• Initially$10 per passenger car per year, now$6
® At$101yr, raised $300-$330k annually based on about 35,000
passenger cars(population was about 51,000)
■ First$250k used for street program costs; balance used for
bridge maintenance
What other kinds of revenue sources fund
local street programs outside Wisconsin?
In some other states, monies from...
o Franchise fees
■ Serial levies
• Local!County fuel taxes
® Utility taxes, and
® Transportation user charges...
3
First, what is a "user charge" per Wisconsin
Public Service Commission?
• Charges are for the services and facilities provided
to customers
✓ The basis for the charge must be reasonably related to
the cost of the service or product
s Charges must be just and reasonable
Different classes of users may be charged different
rates if the different rates can be justified
• Charges may not be unjustly discriminatory, as
between rate payers
7
What is the basis for individual
customer charges?
• Charges for existing utilities are based on a reasonably
accurate determination of benefit or consumption
® Metered consumption —water, electrical power,
natural gas...
® Estimated consumption—wastewater, most often
based on metered water consumption
® Allocated impact— individual share of total
impervious area for storm water user charges
Transportation user fees—share of trips generated by
individual properties, sometimes also accounting for
heavy truck impacts
HE*
4
How does this differ from property taxes?
Property taxes are
"Ad valorem"
• Based on ownership of the property
• Assessed regardless of whether the property is used or not
• Assessed whether the property or owner benefits from the
service or not
® Calculated on a fixed proportion of the value of
the property with respect to the total value of
properties against which the tax is assessed
Not assessed on properties that are exempt from
taxation, regardless of whether or not the exempted
property uses or benefits from the service
9
What authority exists for establishment of
transportation user fee structures?
In Wisconsin, home rule authority, on the basis that
municipal governments have the power to act for the...
o ...good order of the city
o ...municipality' s commercial benefit
® ...health, safety and welfare of the public
...And have the authority to carry out its power by appropriation
and other necessary and convenient means
Home rule authority-as the basis for transportation user charges
- has not been tested in Wisconsin. It was, however, the basis for
the original stormwater user charges before specific enabling
legislation was created.
ui
5
Example? The Village of North Fond du Lac...
> Is a typical Wisconsin village, incorporated in 1903
® Economic base was historically centered on a major railroad
yard maintenance facility(>500 employees)
® Slow, steady growth over>100 years, resulting in aged
infrastructure, requiring significant reconstruction
> Has these current funding characteristics...
® Special assessments once for upgrade to
"improved"street condition only
• New infrastructure is contributed by illiii
developer or tax-incremental financing e�
® Some State funding, at less than 25%of i� Ws .•
costs(Anticipated to decline) -r11 ffillir
• All other costs funded by property taxes ME Wiglifim
era
Why did North Fond du Lac consider
alternative funding?
)- Village has the same funding issues as most Wisconsin
communities:
■ Public unhappy with variable tax impact of street
reconstruction costs, particularly with major projects
• No intention to increase street budget; strong desire to avoid or
reduce borrowing
• Public requested funding options to stabilize costs and spread
payment throughout year
And believes ALL property owners benefit equally from
streets, so NO special assessments for maintenance
or reconstruction
6
Key elements considered in development of
the North Fond du Lac user charge model. . .
• Targeted revenue needs based on NET transportation
cost, excluding new construction
• Village 5-year CIP and annual operating budget
formed basis for projected revenue needs
- Large trip and heavy truck traffic generator is currently
tax exempt and does not pay for use of transportation
infrastructure
Intent to change funding method, not increase budget
Iiy
13
Which transportation system costs could be
included in the user charge system?
Administrative expenses > Capital Improvements
Personnel (Labor) • Slurry seal and resurfacing
• Administrative labor • Sidewalk program
• Street and terrace maintenance • Reconstruction(NOT new
• Facility!equipment maintenance
construction)
Operations and maintenance Debt Repayment
expenses
• Streets and terraces
• Facilities,vehicles and equipment Equip.
Non-Cap 7.113
Vehicle/equipment replacement i,o% O&M
Debt
16.6% Labor `6.6%
19.8%
Admin
4.6%
Ily 1-1
7
How were user charges calculated?
Consistent with methods used in existing transportation
user charge systems, dating back to 1985...
• Establish revenue needs as target budget
® Use ITE trip generation rates and volume factor to
determine total number of trips
and residential 1 non-residential split North Fond du Lac
• Include heavy truck factor in Trips by Category
non-residential cost allocation (optional)
• Apply appropriate credits and
exemptions to calibrate the model
Residential
Non-
Define customer classes for Residential
residential and non-residential 49' S1'"
IS
How is the ITE Trip Generation data used?
The Institute of Transportation
Engineers publishes data compiled
from hundreds of studies across the TRIP
U.S. TRIP
f
Trip generation rates for various GENERATION
property uses
TL fltla•YWo�7 M i
• "Trips"are"trip ends,"sot"visit"=2
"trips"
• Average weekday trip generation
rates are used for user charge cost
•Wwlw,Mw 9Whh
allocation
® Rates are tied to volume factors
{gross area,fueling positions,employees,etc.)
itc=
1G
8
How would it relate to residential
properties in North Fond du Lac?
North Fond du Lac's residential
properties include approximately...
Fixed Annual Charge for
1,300 single family homes,9.57 trips/day Residential Properties
• 190 dwelling units in multi-family s130
properties, 6.63 trips/day $90
• 435 mobile home units, 4.81 trips/day y66
✓ Compute unit cost and rates
• Charge quarterly on current Ell ® CI
utility bill; not tax-deductible for
Single- Apartment Mobile
residential property family Home
Fee for FULL funding of yansportation system
Fee for funding ONLY street reconstruction costs.
!I . 17
How is the user charge calculated for
non-residential customers?
Start with the revenue requirement for non-
residential property and total trips per property
• Estimate heavy truck
trips (optional) Annual Cost vs.Score
• Apply credits (owner o $16
input where necessary) o $12
PVM
Compute score and o $s
develop rates within
75
categories $a
< $o
✓ Resolve appeals 0 5 10 15 20
Score-Trips and Truck Factor
'_0
9
How would this apply to
non-residential properties?
ITE Land Use: 630—Clinic ITE Land Use:845—Gas station/
Compute user charge convenience store
• Trip generation rate is 31.45 % Compute user charge
trips per 1,000 sf,@ 12,500 sf, • Trip generation rate is 162.78trips
=393.13 trips/average per fueling position;@ 6=976.68
weekday trips/average weekday
• No heavy trucks;score=3.00 • With 1—9 heavy trucks per day;
• Annual user charge=$2,540 score=7.5
• Annual user charge=$6,400
Relevant property value -
$2,500,000 assessment % Relevant property value-$350,000
COST IMPACT of$2,540(-2.7 t/ % COST IMPACT of$5,250(--3.60
customer) customer)
II~ 'I
Would any properties be exempt
from the user charge?
Not on the basis of ownership or tax status, but...
Yes, on basis of fundamental user charge concept
• Undeveloped properties—no trips generated
® Vacant properties—no trips generated
• Properties that themselves are part of the transportation
infrastructure
• Municipal street garage(but not other municipal facilities)
• Mass transit system facilities(?)
• Possible exemption from charges during periods of temporary
vacancy
Appropriate exemptions are important to
calibrate—and validate—the model. IN*
10
What are the net effects of this funding option?
Street program costs are reallocated...
® Residential property owners pay less on basis of trip generation
than on property value, as...
® Tax-exempt properties pay their share
• School districts—all school district"customers"inside and outside
the municipality
• Exempted private utilities,government facilities,churches and non-
profits face new costs
® And non-residential taxed properties, generally...
• Pay more,if they have low property value and generate high traffic
loads
• Pay less,if they have high property value and low traffic loads
23
Which properties, or types, are tax exempt?
How much is their share? Who pays it?
Total Tax Exempt Property Share - 18.9%
9.8% Railroad—RR company customers
3.8% N Fdlc School District-—50%Village residents
2.6% Village of N Fdlc—Taxes,water/wastewater user fees
1.4% Church School—Student tuition
0.5% Churches—Congregation
0.4% Fdlc County Housing Authority—County taxes
0.1% Alliant Energy—Power utility customers
0.1% SBC Communications—SBC customers
Notes: (1)Percentages shown are of TOTAL user fee budget
(2)Assessed value of tax-exempt property is approximately 16.9%of
assessed value of taxed property.
_6
11
Are there disadvantages?
• Change is Hard! — New concepts in public works
funding take time to understand and adopt!
• Higher Costs For Some — Some NON-residential
property owners pay more, on a net cost basis, than
before
• Initial Effort—Getting started requires time to develop
and explain the rate structure and to develop trip
generation base data, all similar to efforts required for
initiating a storm water user charge system
- New Charges for Tax-Exempt Property Owners
27
What are the advantages of utility funding?
Revenue stability—Reliable funding base with potential to
improve bond rating when borrowing is required and develop fund
balance
Equitability—Allocation of cost to all property owners is according
to their use and impact
Accountability—User charge funds are dedicated to only
transportation system costs
Property Tax Reduction—Potential to significantly reduce mill
rate if"1 for 1"concept applies(<30%reduction in N Fond du Lac)
t Simple Administration —User charge billing can be incorporated
into existing utility bills; property charge updates tied to existing
permit process and utility ownership update procedures
12
Are trip-based transportation user charges
right for your community?
Maybe, if...
A strong concentration of major trip generating
operations are located inside your community
Heavy truck traffic generators are located inside your
community and use local streets
You have a high percentage of tax-exempt properties
® Non-profit organizations
• Government facilities
® Exempted utilities
29
What kinds of concerns might arise with this
new type of funding method?
Tax vs. User Charge?
® Key distinction is link between property owner actions or
behavior and resulting charges
Legal basis of formation?
® Current option in WI is home rule authority
Similar to storm water utility formation prior to enabling statute
Tax payer amendment (TPA) restrictions
Option for user charge revenue in lieu of equivalent general
revenue
Current political climate
i Education of the need for public works funding options is critical
to making effective, responsible informed decisions
uy so
13
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31
14
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Ad Hoc Committee to Review Alternatives to Special Assessments
Minutes/Notes -5
January 15,2020
Present: Matt Mugerauer, Karen Bowen, Kris Larson, Matt Lauritch, Koby Schellenger,
Mark Miller, Ken Arneson (arrived 3:10 pm), Donn Lord (arrived 3:19 pm).
Absent: Bill Miller, Kelly Schwab, Vicky Fitzgerald, Gerard Keuler
Staff: Mark Rohloff, James Rabe, Russ Van Gompel
Public: John Casper
Committee Chair Matt Mugerauer expressed his appreciation for the group's commitment.
Matt also explained the process of a quorum and instruction for any actions that may be
taken.
Once a quorum was present, the committee began to discuss all previous ideas, topics,
suggestions, recommendations, scenarios, situations etc. Previously considered solutions
such as a trip-based fee, vehicle registration fee, and a flat rate fee were all discussed. The
committee reiterated its belief that eliminating special assessments was a worthwhile goal.
After considerable discussion, Kris Larson made the following motion:
Motion to Enact a Special Assessment Fee as follows:
• Single and Two Family parcels will be charged $8/month
• All other developed parcels (Multifamily units/Businesses) will be charged
$50/month
• The designated funds will eliminate all special assessments in Oshkosh including the
sidewalk replacement program
Koby Schellenger 2nd the motion
Discussion/ Clarifications:
• All fees collected will be allocated to replace all special assessments for street,
sidewalk, driveway aprons and utility laterals on reconstruction projects. Projects to
construct brand new roads would remain the financial responsibility of developers
even with the establishment of this fee.
• Intent would be to keep the fee frozen for a time to determine if revenue is sufficient;
Fee to be reviewed in three years.
• It was acknowledged that prior to consideration by Council, a strong effort would be
needed to educate citizens (focus groups, workshops, attend community meetings)
• Expectation of the group is the fee will take effect ASAP (i.e. in time to impact 2020
CIP)
• The committee understands that city staff will need to research the legal
ramifications of the recommendation and may have to modify the proposal to
address potential legal issues.
Vote:
• Motion passed 7-1
Chairman Mugerauer will report the committee's recommendation to the Oshkosh City
ty
Council at the January 28, 2020 Council Meeting.
Next Meeting: None scheduled at this time
The meeting was adjourned at 4:55 PM.
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