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City plans street funding

The Dalles City Manager Nolan Young is working on a tax proposal to fund street work that will be brought to the city council for review in the near future.

At Monday’s goal setting session, he declined to say whether his recommendation will be for a 3 cent per gallon increase in the local gas tax, which he advocated for last summer.

Also discussed last year was having the city partner with the county to form a road district fueled by property taxes, or increasing vehicle registration fees. Young would not say Feb. 3 whether or not the city was pursuing either option.

“We feel this is something that we can no longer hold off,” he said in a follow-up interview. “Our preference would be to bring something to voters in May (primary election) but it could end up being in the November (general election).”

Driving the quest for more capital, said Young, is the city’s need to repair and maintain 88 miles of streets. About 60 percent of these roadways are dilapidated enough to need a more extensive level of work.

The city receives about $450,000 per year from the existing 3 cent per gallon local gas tax, which doubled for a period of 20 years under Young’s proposal in 2013. He wanted the extra money to repay $6.1 million in debt service for upgrades on main arterials and about 60 blocks of streets in neighborhoods that are in poor condition.

The city also receives money from the statewide gas tax, an amount of $810,000 in fiscal year 2012-13. When a share of water and wastewater fees are factored into the budget for road work, the city has about $1.4 million in revenue per year for improvements, but Young said actual expenses are running about $1.5 million.

He recommended last year that the council go it alone with a gas tax proposal because it had the “best chance of success” as all motorists would pay for use of roadways. Young estimated the 3 cent increase would result in area residents spending $24 to $40 more per year for the next two decades.

However, several gas station owners in The Dalles threatened to mount an opposition campaign if the city puts a local tax increase on the ballot.

Doug Hattenhauer, owner of a fuel distributing company, told officials last July that a statewide tax was the only equitable way to impose higher fees. He said, if the tax was levied throughout Oregon, cities with a local tax are not forced to compete with cities that don’t.

“A 6 cent gas tax is unfair to the business owners of The Dalles and the public in general,” he said. “I think you are wasting your time. I don’t think the citizens of The Dalles will support a new gas tax.”

The city tabled further discussion of the gas tax until an investigation had been done on a joint proposal with the county to form a road district.

Young thought it might be more difficult to gain voter approval for that plan because there is a common perception among citizens that property taxes in Wasco County are already high. In addition, he said other taxing districts could be affected through compression.

Under Measure 5, which was approved by Oregonians in 1990, the amount of tax that can be obtained from property taxes is capped. Taxes for education (not including bonds) can’t exceed $5 per $1,000 of a property’s actual, or real market value. Those for general government can’t exceed $10 per $1,000.

When a property’s tax bill exceeds the legal limit, it is reduced uniformly among agencies. Temporary levies are compressed before taxes that fund permanent districts, such as a library, fire or parks district.

For that reason, Young said the city had stayed away from property tax measures in the past. He said that funding avenue had been left open to agencies without as many revenue sources.

Last year the city and county discussed a property tax proposal of $1.1263 per $1,000 of assessed value that would generate about $2 million per year for road work. That rate would equate to almost $169 per year for a residence valued at $150,000.

The county has been interested in formation of a road district because funding for 700 miles of highway maintenance has fallen from $3.75 million per year in 2006 to $2.5 million in 2013. The drop in revenue has resulted from the loss of federal compensation for logging cutbacks in national forests. Timber receipts were once shared with counties that had a large non-taxable amount of land base under public ownership. But a series of environmental regulations enacted in the 1970s and 1980s led to a drastic decline in harvest levels that halted the revenue stream.

County officials do not expect to move forward with a road district proposal until at least May 2015. They want time to inform citizens about the financial need for the funding request and determine if there is strong enough voter support to put a measure on the ballot.

If a proposal for the district is discarded or defeated by the electorate, the Road Advisory Committee for the county has recommended that voters be asked to weigh in on an increase in vehicle registration fees.

The preliminary numbers for that measure raise the present fee by $43, which would generate about $730,000 for Wasco County roads and $435,000 for streets within the city.


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