During the 07/26/2021 Finance Committee meeting the committee took up the issue of the excess general fund allocations and whether or not to amend those allocations to include funding for a transportation utility study.
The mayor’s initial allocations did not include funding for a transportation utility study because the resolution regarding a transportation utility study had only been introduced the week before. Although Alderperson Chad Doran (District 15) had asked for an amendment at the time to include the study, the Finance Committee had declined to make that change. After Alderperson Doran again tried to amend the item during the Common Council meeting, the Council decided to refer it back to the Finance Committee for further review.
In addition to the item regarding excess general funds balance allocations, the resolution asking for funding for a transportation utility was also referred to the Finance Committee.
Alderperson William Siebers (District 1) who is the Chair of the Finance Committee decided to take up the resolution before the allocations because if there was any objection to the resolution there would be no need to talk about financing the study.
The original language of the Resolution #9-R-21 included a clause that stated, “Therefore, be it resolved that the City of Appleton include in the 2022 executive budget funds for the Department of Public Works to work with a consulting firm to determine the feasibility of creating a transportation utility for the city of Appleton that would assess a fee primarily to be used to assist in funding street maintenance projects, but may also be used as source of funds for other transportation services, not including operational expenses such as snow removal or street sweeping;”
Mayor Woodford submitted a memo suggesting that the language be amended to read, “Therefore, be it resolved that the City of Appleton commission a study with a qualified firm to determine the feasibility of creating a transportation utility for the city of Appleton that would assess a fee primarily to be used to assist in funding street maintenance projects, but may also be used as a source of funds for other transportation services, not including operational expenses such as snow removal or street sweeping;”
Alderperson Brad Firkus (District 3), the main sponsor of the resolution, made a motion to amend it with that language.
Mayor Woodford explained that the intent of this recommendation was simply to clarify what the resolution was directing. The original draft of the resolution included language about the allocation of resources for the study and gave directions to the Mayor’s Office to make allocations for the study from the executive budget. The allocation of the executive budget is a responsibility reserved for the mayor, so, although the Council can certainly advise on that, it would only be advisory in nature. This amendment to the resolution would change the focus from advising the mayor on funding a study and, instead, make it binding from the standpoint that the action would direct staff to move forward on the study process.
Alderperson Matt Reed (District 8 ) asked if they had seen indications of potential complaints about an additional fee.
Alderperson Firkus said it would not be not an additional fee because the resolution is asking to eliminate the wheel tax. They would be swapping one mechanism for funding road reconstruction projects with another mechanism. The thought process behind this was, were the study to indicate a transportation utility was feasible from the study, the city might be able to find a way to fund transportation system expenses in a way that spreads costs out more and keeps year to year costs lower for residents. That would be in line with the spirit behind why the city switched to a wheel tax from special assessments, which was to spread those costs out in a way that worked better for residents while also providing the necessary funding to keep up on transportation improvements and maintenance.
Alderperson Reed said the resolution talked about levying a quarterly fee based on the property and the number of trips generated. Were there any hard numbers Alderperson Firkus had seen regarding costs for a residential property? He also wondered if residents might find a quarterly fee a little intimidating as compared to a single annual wheel tax.
Alderperson Firkus said the reason for the quarterly fee was because the city already bills other utilities on a quarterly basis, so a transportation utility would be incorporated into that and it could be an added line on the quarterly water/sewer/etc. bills.
Regarding hard numbers, he had seen an older version of the trip generation study that suggested a typical single-family home generates roughly 8.1 trips per day. If they set a rate of $0.01 per trip a typical residence would have a fee of around $30 a year; the typical household right now has two cars so are paying around $40 per year with the wheel tax. However, he didn’t want to marry the city to any numbers right then, and just gave that for illustrative purposes.
There are different variations and ways for a city to institute a transportation utility fee, and they can add some complexity to make a billing system fairer, but the more complexity a system has the harder it would be to administer. Ideally, they would try to find a happy balance.
The study, at this point, would really just be to determine the feasibility and not plan design, but those are the issues Alderperson Firkus assumed would be taken into account when trying to figure out if instituting a transportation utility is an appropriate approach for the city.
Alderperson Siebers said they needed to be careful because the committee was voting on the beginning of the process and was now discussing things much further along in the process. He said they should just talk about the mayor’s recommendation regarding the study.
Alderperson Katie Van Zeeland (District 5) said she spent a good amount of time looking at different municipalities and their moves to transportation utility type systems. The town of Buchanan has been put on notice by the Wisconsin Institute for Law and Liberty that they plan to file legal action by September 1st if Buchanan maintains their type of transportation utility.
[Per the article, WILL’s position is that state statute only allows utility fees to be charged for “heat, light, water or power.” But, beyond that, there are issues with how Buchanan implemented its transportation utility because it bases its fees on “how much revenue it wants to generate, instead of how much its roads are used.”]
Alderperson Van Zeeland went on to say that typically, when they look at something like this, they would have information provided by staff addressing the Buchanan situation in particular and also giving more information on where the estimates of the study costs were coming from. They didn’t have any of that, so she didn’t feel comfortable with the amendment.
Alderperson Siebers said right now they weren’t talking about funding the study, they were just talking about if they wanted to do a study. If they decided they wanted to do a study then they would talk about funding it.
Alderperson Van Zeeland said that didn’t change the fact that that in order to decide if they should move forward with this study, she would typically see that sort of information from the Legal Services or Municipal Services departments.
Alderperson Vered Meltzer (District 2) was interested in moving forward with the spirit of the wheel tax which removed the special assessments burden, but didn’t want to go in a direction that creates new burdens and new types of inequality, and wanted to know what the short fall of the wheel tax was. The city knew when they started the wheel tax that at some point, they would outgrow the $20. How much would they have to raise the wheel tax to get where they wanted to be as compared to implementing a transportation utility?
Director of Public Works Paula Vandehey said the wheel tax never covered the city’s road reconstruction projects. Rather, the wheel tax replaced the money the city would have gotten from special assessments. Special assessments, followed by the wheel tax, was just one of the revenue sources they used for road reconstruction. Over the past 10 years, the city’s true funding source for road reconstruction projects has become mostly borrowing. The idea behind the transportation utility would be to not only eliminate the wheel tax but also to hopefully reduce the amount of borrowing the city does for road reconstruction. Over the last year, quite a few communities have hired consultants to look at transportation utilities including Little Chute, Waupun, Wisconsin Rapids, Elm Grove, Janesville, and Oshkosh which all sent her their Request For Proposals, so she could use those as a starting point if Council directs.
Alderperson Sheri Harzheim (District 13) said she understood that people might be concerned about potential costs. But the city doesn’t know what the costs are, and until they do this study and try to determine what the possibilities are, they can’t talk to their constituents about what the best way forward is. She was interested in looking into an option for a more equitable and sustainable fee-based system than the wheel tax. If the study comes back and it doesn’t look like a transportation utility would work for the city, then at least they would know. She thought a study was their first step. They were all asking for answers to questions, but they couldn’t get those answers until they did the study.
She also noted that the concerns about the Town of Buchanan were because, in her understanding, they incorrectly implemented a transportation utility. She didn’t think that everyone who put in a transportation utility was going to have a problem and be sued by WILL law. To her, that was an indication that it was even more important to conduct a good study that would help them, if they chose to go that route, to implement a robust system that they could defend and that would be fair for all of their constituents. She was looking for an equitable and sustainable plan, and a transportation utility study was the first step to get there.
Mayor Woodford said it would be helpful for staff to know what the committee’s questions and concerns were and what additional information they would be helpful in assessing whether or not to proceed with a study. Thus far, staff had not received any questions since the item was last discussed at the Common Council meeting on 07/21. If they knew what the questions were, they could work on getting the answers together.
Alderperson Van Zeeland said that for the brand study, the Communications Specialist put together a document that showed what things would go to Council for approval, what would go before the Commission For Economic Development, etc. But for the transportation utility study her understanding was that it would go to the Mayor’s Office and they would no longer have any say.
It sounded like someone off mic told her that understanding was not correct.
She laughed and said she guessed that was a question she needed answered. Usually when things go to the Mayor’s Office, they’re no longer in the reach of the Council to make such decisions. [I was kind of confused by what was going on with the resolution also. When it was introduced, it had initially been referred to the Mayor’s Office, and it wasn’t clear to me what its journey was going to be after that.]
Alderperson Firkus clarified that that the resolution was just to do the study. Approving the resolution wouldn’t mean that they were going to create a transportation utility. They were going to get a study that would look into whether it was feasible for the City of Appleton to build a transportation utility. If the answer came back as a “yes”, then it would be up to the Council to decide if they wanted to move forward with a request for a plan design. He noted that a plan design was a key thing. They were talking about a transportation utility as if it was one thing, but the reality is that plans can differ greatly from one community to the next. Buchanan designed theirs in such a way that residential properties are being charged around $315 per year. Neenah, however based their fees off of estimated residential use, and their homeowners are only charged $23 a year.
There is a wide variation in how transportation utilities can be designed, but Appleton is not at that point yet. Right now, what they want to do is, with the help of consultants, to see if a transportation utility is something the community could consider. If not then they were out easy, and didn’t need to get too deep into something they could not do or would be too big of a monster to handle. They would be free to consider other options to address the city’s transportation system funding.
Director Vandehey mentioned there was another step in there. Based on the city’s purchasing policy, even if the resolution was approved and sent to the mayor who directed the Public Works Department to prepare a Request For Proposal, that RFP would still need still have to go through the Municipal Services Committee and the full Common Council for approval.
There were no more questions. The committee voted unanimously to approve the amendment to the resolution, and then voted unanimously to approve the resolution as amended.
The committee then moved on to the recommended allocations for the excess general fund balance. As mentioned, funding for the transportation study had not been included in Mayor Woodford’s original recommendations because the resolution had been introduced very shortly before he presented his allocation recommendations.
However, in a memo to the Council he was recommending that the allocations be amended by “reducing the allocation for enhanced crosswalks by $50,000, the allocation for Parks by $25,000, and creating a new line under Pedestrian Safety, Infrastructure Maintenance, & Public Spaces for Transportation Utility Study in the amount of $75,000.”
Alderperson Meltzer started off the discussion. The original proposal had been to use $100,000 to fund two enhanced crosswalks without having to borrow money. The amended proposal would take away $50,000 which they would then have to borrow to pay for one enhanced crosswalk and use that $50,000 to fund the transportation utility study. But if Council decided they wanted to do the study, couldn’t the mayor put that into the 2022 general fund budget so that they could still do the study and avoid the $50,000 worth of borrowing? Did these things have to compete with each other?
Mayor Woodford said they could take that approach, and he said it was a viable path, but they are not in an environment where there are significantly more resources for the city. They have a limit on the amount of property taxes they can levy for operating expenses, so if the Council did what Alderperson Metzler suggested, the cost of the study would necessarily offset other operating priorities because there will not be new money coming in to fund the city’s operating expenses. Healthcare expenses and wages for city employees take up a great deal of the new money that’s available in a given year. Using the excess funds balance to pay for a study would be a way to fund the study and not offset existing operating priorities, while also not requiring them to borrow. In fact, they can’t borrow for the study because it’s not a capital project nor does it ultimately lead to a capital project. That was the reason he supported the change. The recommendations for the allocation of those excess funds were his best recommendations based on the priorities Council had stated in the past and the things they were trying to accomplish as a city. If they wanted to take a different path in terms of supporting the transportation utility study, that would certainly be viable, but it would result in different types of tradeoffs.
Director Vandehey, in response to a comment by Alderperson Siebers, said they came up with the $75,000 figure for a transportation utility study based on talking to other communities about how much they had paid.
Alderperson Hartzheim reiterated what she had said during the Council meeting. While she understood that enhanced crosswalks are very valuable to Appleton residents, she believed that the $50,000 would potentially do more for the city as a whole by funding the study.
Mayor Woodford said he wanted to reiterate something he had said two or three times during the Council meeting which was, this recommendation was not about changing the crosswalk program or the pacing of those improvements. This was strictly about the funding source for those crosswalks. There’s a distinction between things like consulting services and capital projects, and the city’s means of funding capital projects are different than those for funding studies. He wanted to be very clear, this was not a discussion about choosing between installing a crosswalk or conducting a transportation utility study. This was just about the funding source. This proposal would allow both to happen.
Alderperson Metzler said the crosswalks were in the Capital Improvement Plan and are going to happen whether they were funded by borrowing or by the excess fund balance. “When I look at this transportation utility, it seems like it could potentially offer us a future where we can fund our enhanced crosswalks without borrowing for them, but if the study comes back with the feasibility being ‘no’ then we did just loose and opportunity to not borrow for that crosswalk, so it’s kind of like there’s this carrot that’s farther away from me that’s a really, really huge carrot, but very close to me there’s a very, very large pothole and I’m not sure if I can jump over it. So that’s the way I feel about the decision I’m faced with right now. I would appreciate any more input from the mayor and from Public Works to help me weigh what I’m doing to move forward.”
Director Vandehey said the study would not come back and say it wasn’t feasible. It would come back and say how many trips they estimated the community taking. They would then have to decide how much to charge per trip and how much revenue to bring in through the utility fee. The Council would then be able to decide if they wanted to do that or not. The study would not come back and say it was not feasible. It would offer options to the Council which would then decide if it was something they wanted to do.
Mayor Woodford mentioned the recent discussions about changes to the snow removal and yard waste/leaves/bulky overflow collection practices by the Department of Public Works and said, “We are as a community running up against some hard realities in terms of our ability to maintain levels of service, to maintain infrastructure, and to do it in a way that meets the high expectations that our community has for us. And it’s abundantly clear that there aren’t gonna be changes in the immediate term in the regulatory environment in our state in terms of how local government is funded. And so, we need to think, if we want to maintain our community at the high level of expectation that our community has set for us (which I would argue is a good thing in many cases) we have to think about and examine other ways of funding and supporting those activities. And so that’s at the heart of what this conversation is about, and doing a study will help us understand what’s possible here and then it’s up to the Council to decide within that universe of possibilities what do the constituents that you represent think is gonna be acceptable and how do our constituents feel about this tension between the resources it takes to maintain at the level of expectations we set and otherwise…. This is a deeper conversation about how we maintain our community.”
Alderperson Van Zeeland said her constituents are concerned about not getting the things that they think they need in their neighborhood, one of those things being an enhanced crosswalk. They wanted a safe way to cross Calumet Street to the park, and it was hard for her to say to them, after fighting for three years to get this crosswalk, that all of a sudden there was this money but it was not going go towards something in the neighborhood that was tangible. District 13 does not have a single enhanced crosswalk, and she thought spending the money on the study would be a hard thing to sell to her constituents.
Alderperson Firkus reiterated what the mayor said. This was not going to affect the number of crosswalks the city installed. It was only about which pot of money out of which those crosswalks would be paid for. He understood where that perception was coming from and thought it was something that would need to be addressed with members of the community, but at the end of the day there was no tension between funding the study and installing enhanced crosswalks. They just needed to decide if they were going to fund the study with money from the city’s operations budget so that they could pay for capital improvement projects with the excess fund balance, or were they could to borrow for capital improvement projects so that they could use the excess fund balance to pay for the study.
Alderperson Meltzer wondered since they were going to still do everything in the CIP could they not reduce the allocations for Parks by $75,000 instead of just $25,000.
Parks and Recreation Director Dean Gazza said that depended on the committee weighed the importance of parks as they evaluated where to direct the allocations. As the Parks Director, he thought this money was very important for them to address some of the issues in Jones Park. Losing $25,000 out of an initial allocation of $200,000 was not bad, but a $75,000 reduction would be a pretty big dent, and he would prefer that not to happen, although it was certainly up to the Alderpersons to determine their priorities.
Alderperson Meltzer asked what the $75,000 impact would look like.
Director Gazza said they had originally thought that because Jones Park was down in a ravine that it would be a bit cooler, but it actually gets warmer down there because there’s no air movement. They made a huge investment in the park and the amphitheater. There’s a lot of people who congregate in that area, and they have a need for shade. If they use capital borrowing to cover those costs, that will defer a different park project and result in park projects being pushed down the road. He thought addressing the Jones Park issues was pretty important at this point.
It sounded to Alderperson Meltzer like removing the allocation for the enhanced crosswalks would not interfere with the progression or timeline of enhanced crosswalks but taking it from the Parks allocation would interfere with the timeline and progression of the Jones Park improvement.
Director Gazza confirmed that.
Alderperson Doran appreciated all of the questions and discussion from the committee. There was clearly some concern about using the crosswalk program money. He suggested as an alternative that they could take the $65,000 from the Council Chambers project and $10,000 from Parks, which would allow them to basically fully fund both of those projects. Then they could continue to look for other ways to fund the Council Chamber project in the 2022 budget.
He thought it was important to continue to look for ways of funding the utility study now because the city gets further and further behind every year with street repairs because the wheel tax is not keeping up as the main source of funding. Doing this study quickly could potentially help them at budget time as they look for future funding options.
Alderperson Van Zeeland stated, “In regard to that suggestion, I just want to make very clear that I think the safety of pedestrians and the accessibility of government is more important than shade in a park.”
Alderperson Meltzer, in the interest of being thorough, asked what it would look like if they were to take the money from the Industrial Park Land Fund.
Mayor Woodford said, as with any of these possibilities, they would either be deferring a priority or pushing something to borrowing. He thought the outcome in the case of industrial park acquisition would be that they would have to borrow to make those acquisitions which, from a timing perspective, could complicate the ability to make opportune acquisitions.
There were any number of allocations they could change to take this money from and that was the challenge of resource allocation. The committee was having a prioritization conversation, and he didn’t have much in terms of additional insight to offer other than to say that anything they do will either slow something down, simply not be done, or get pushed to borrowing. “I’ll just, for what it’s worth, to remind the committee that the recommendations before you are really, I would hope, a reflection of things we’ve talked about before and the priorities that have come up over time, but it’s up to the committee and up to the council to do with these resources what you will.”
The benefit of these dollars was that they will allow the city to deal with some of their priorities more quickly than if they had to wait for a budget process—and also in a more straightforward way than going through the 2022 budget where they would have to offset other operating priorities. He understood the challenge of wrestling with this. It was a challenge to put together the recommendations that were presented to the committee.
The committee voted 4-1 to approve the amendment with Alderperson Metzler voting nay.
Alderperson Meltzer explained that nay vote by saying, “I feel that it’s worth saying, I’ve been speaking a lot at this meeting and I don’t want to leave loopholes and leave things hanging. I voted against that because then if there was traction, I would have looked at making a different amendment to take the funding from somewhere else, but because the committee has expressed their views and there is not traction for another amendment–that amendment passed, it did not fail–so I will support the item as amended.”
Alderperson Siebers said he expected there was going to be discussion at the Common Council meeting about this item. He thanked the committee for the discussion and also the Mayor and the Directors.
The committee then voted 4-1 to approve the allocation recommendations as amended with Alderperson Van Zeeland voting no.
[Reducing the enhanced crosswalk allocation made sense to me. It sounded like the city has made long-term plans that already included borrowing for those enhanced crosswalks, so they wouldn’t be borrowing more than planned by reducing the allocation. On the other hand, the other capital project items in the allocation seemed to be projects on top of the city’s long-term plans so would result in additional, unplanned borrowing. As was also stated, the city can’t borrow for the transportation utility study itself because there are state laws about city’s borrowing for things that aren’t capital projects.
At this point, I’m not for or against creating a transportation utility, but I think conducting a study would help give a better idea of how one would work in Appleton.]
View full Finance Committee meeting details and video here: https://cityofappleton.legistar.com/MeetingDetail.aspx?ID=870496&GUID=DD514FDF-5240-4D1C-B29F-DF019BE94D0C&Options=info|&Search=
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