JVG_210205_UTILITY

An excavator digs up asphalt along Rockport Road in Janesville last year. The city council is considering creating a transportation utility to pay for road maintenance.

JANESVILLE

The Janesville City Council is seeking input from the business community as it moves forward with planning for a proposed transportation utility that could be implemented in 2022.

If established, a transportation utility would shift a significant portion of the road-funding burden onto commercial properties, which generate larger traffic volumes than residences, said Max Gagin, city finance director.

A study session Thursday was supposed to be the council’s final discussion on the transportation utility before voting in March, but members agreed another session would be helpful, particularly to field input from businesses.

Council members have considered several structuring options for a transportation utility, which would be designed to substantially reduce, and eventually eliminate, borrowing for road maintenance.

The council Thursday chose to focus on a blended transportation utility structure that would include debt issuance in the first five years to ease upfront utility fees.

The structure includes:

  • 25% debt issuance in 2022, with debt issuance decreasing each of the next five years until it is eliminated.
  • Elimination of the $20 wheel tax.

Projections show that, over time, owners of single-family homes would pay less overall toward road maintenance than they would if the city maintained the status quo after 2027.

The key, council members recognized, involves communicating to property owners that they would save in the long run even though they see another charge on their utility bills.

Council members also agreed that city officials should discuss how they can ensure more spending or debt issuance will not replace the savings realized from cash-funding roads.

Several members acknowledged that the pandemic has caused economic hardship, which should be considered, they said. That was a driver for choosing a blended option that would decrease the utility fee in the first five years.

Under a transportation utility, businesses would pay much more than they do now for road maintenance. Tax-exempt entities such as churches also would have to pay for roads as they do for water and trash collection.

Council members acknowledged that many businesses have suffered in the pandemic and they will consider that moving forward.

The city currently fixes 12 miles of road each year on top of other as-needed maintenance.

Road construction and maintenance are funded through three primary channels. Sixty-eight percent of the cost is paid through borrowing, 18% through the stormwater utility and 14% through the wheel tax.

As costs rise, the city is looking at significant increases in debt—and therefore interest payments—over the next 10 years, Gagin said.

The city has state- and council-imposed limits on how much money it can borrow each year, and it issues debt for other capital projects in addition to roads, Gagin said.

A transportation utility functions like a water, stormwater or trash utility, using a user-based fee to pay for road repair. Essentially, it uses cash to pay for roads instead of borrowing.

A transportation utility charges property owners a per-trip fee based on the use of the property, whether commercial or residential. Every time a vehicle leaves or enters a driveway counts as one trip.

Trip averages are determined by national data used frequently in construction. For example, a company building a new subdivision uses that data to determine road dimensions, Gagin said.

The data used for the utility determines single-family homes average 9.4 trips per day, Gagin said.

The council is scheduled to vote on the utility March 22. Council members agreed the vote should happen before a new council is elected in April because current members have been studying the issue.

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