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Roads
Transportation Utility Fund and Referendum
On May 16, 2017, City Council voted to create a Transportation Utility Fund. This fund would be dedicated for the operation, improvement, maintenance, and rehabilitation of roads and funded through an $18.50 per month Transportation Fee on each utility account. That fee was scheduled to begin on July 1, 2017.

On May 22, a group of citizens filed a petition for referendum which places the Transportation Utility Fund and Fee on hold, and allows the citizen group to collect signatures to place the item on the ballot. The petitioners need to collect at least 1,210 valid signatures by Friday, July 7. If the signature count is met, this item will go on the November ballot. Until the time when the referendum is declared valid or not, the Transportation Utility Fund and Fee have been placed on hold.

Fund Requirements and Decision
The requirements of this fund are that:

  • Monies can only be used for Road Maintenance and Rehabilitation
  • An annual report as a part of the budget process will be provided
  • The fee will be re-evaluated if the City gains more or less road funds through the state's B&C gas tax or other sources
  • The fee will expire June 30, 2028 when all of the City's bonds will be paid off

You can see the agenda, listen to the recording, and when available, view the minutes from this meeting at http://bit.ly/HC-archive. This decision was the result of a lengthy process. For more information on that process and what led to this decision, please see the information below.

What are the state of the roads?
Over the last few years, a consistent compliant from residents has been the condition of the roads. In the 2017 resident survey, 70% of the respondents stated that roads should be the top priority for the City. Out of all 19 service categories, roads received the lowest quality rating with only 19% of respondents thinking they were good or excellent. The Mayor and City Council have been working diligently to find the best solution.

In fall 2016, the City Council hired PEPG Consulting to inventory all the roads in Highland. Unlike previous studies that were largely based on computer models, this study was based on visual assessment, core samples, and subsurface testing of all roads. This approached allowed the City to evaluate the condition of each road, identity the cost effective maintenance or repair strategy, timeline, and prepare cost estimates. Based on the results of the study, 45% of our roads are in poor or failing condition. In addition, many of our roads are deteriorating quickly from fair to poor making them much more costly to repair.

Rehabilitation Repair Map


Right now, the City spends about $450,000 on road maintenance. The Road Maintenance Map identifies the maintenance projects completed since 2012. This money comes from funds that are collected as part of the gas tax. The study showed that $500,000 is the proper amount to spend on road maintenance for only those roads that are not failing. This is within the current City Budget.

Additional money is needed for the rehabilitation of poor and failing roads and future maintenance of these improved roads. In order to rehabilitate all these roads, an estimated $7,140,510 is needed or about $1,000,000 per year over the course of 7 years. Of the $7,140,510, $5,623,000 was identified by the study as needing to go toward pavement repair and $1,517,510 identified by staff to go toward curb/gutter, drainage issues, etc. The study estimated that postponing these necessary repairs would increase the cost by 83%.

The Maintenance and Rehabilitation Plan and Treatment Map show the City's plan year by year for the next seven years to maintain and rehabilitate roads. Again, the funds for the maintenance projects are currently within the City budget. Funds for rehabilitation projects were planned to come from the Transportation Fee as they are currently not in the budget.

What will this mean for me?
After considering all the options, the City Council weighed two possibilities: a property tax increase and a transportation fee. For the information related to a property tax increase, click here.

The Transportation Fee that was approved is $18.50 per month per utility account.

What would the fee do?
1) The fee is a flat $18.50 per month per home on utility bill regardless of property value.
2) All properties including tax-exempt ones such as schools and churches would pay a fee.
3) Monies will go to a dedicated road fund that could not be used for other purposes.

What was the process for the Transportation Fee decision?
After years of research including an updated study in 2016, five Open Houses help in April and May of this year, and many other conversations, City Council voted for the Transportation Fee at the May 16, 2017 City Council meeting. It would have taken effect on the July 2017 utility bill.

It will not go on the ballot for a vote unless the referendum signature count is met. According to Utah State Law, that is the only way for an item like this to be put on the ballot.

What is the status of the City's Budget?
The City’s budgeted General Fund for this year is $8.8 million in revenue with $8.65 million in expenses. Of the $8.65 million, non-discretionary money makes up $5.64 million. This is money that we are contracted, or required by statute to pay such as police and fire services, debt payments, and library operations.

That leaves $3.01 million. Of that, $1.53 million makes up departments that are funded by fees for service. For example, court fines pay for the operation of the court and garbage fees pay for the garbage tipping and dumping fees.

That leaves $1.48 million of truly discretionary funds. Those funds pay for City departments and expenses which include parks and trails, Administration, Finance, Records, office equipment, city events, etc. Over the last several years, the City Council has reduced expenditures and will continue to find ways to reduce future expenditures. Unfortunately, the Council felt that the amount of funds needed to meet the road repair and rehabilitation needs cannot be met with these discretionary funds as the need is too big. When the total road rehabilitation needs are $1 million per year, it would mean cutting our discretionary funds by 68% to find the needed $1.48 million.

See the chart below for an illustrated version of this.

Discretionary Monies Graph


Didn’t the state just raise the gas tax for more money for roads?
In 2016 the State Legislature passed an increase in the Class B and C gas tax to go towards roads. However, because gas prices have stayed lower than expected, that intended increase did not actually happen. In the 2017 session, the Legislature did make efforts to correct this, however the increase is not anticipated to come until 2018. This money is needed for road maintenance and projections show that it will not be enough to fund the vast rehabilitation projects needed.

What kind of economic development is occurring in the City?
In order to generate the required $1,000,000 in additional revenue needed for roads, Highland City businesses would have needed to generate $200 million in additional sales. This would require more than triple the current number of businesses currently located in Highland.

How much money is in the City's Reserve Fund
Right now Highland City reserves are as low as $500,000 depending on the time of year. See the 2014-2017 balance sheet graph below.

Balance Sheet Graph


What would happen if Highland continues to spend the same amount of money on roads?
Repair and maintenance costs that are estimated to be 83% higher then they are today if roads fell into the next rehabilitation or repair category. Roads are much cheaper to repair than to rehabilitate. See the attached PCI (pavement condition index) infographic below for an illustration of this.

PCI


How was the 2016 Road Study performed?
Unlike previous studies that were largely based on computer models, this study was based on visual assessment, core samples and subsurface testing of all roads. This approach allowed the City to truly evaluate the condition of each road, identity the appropriate maintenance or repair strategy and timeline, and prepare cost estimates. It goes well beyond what we previously had to use.

Where can I find more information?
Please see the past newsletter articles at the bottom of this page, read the newsletter each month, watch City Council agendas, follow us on Facebook and Twitter, or stop by at City Hall. You are also welcome to email or call the Mayor and City Council.

What information was discussed as a part of this decision?
The Mayor and City Council held a series of public open houses to present information and gain feedback. The presentation given is available here. You can see additional area specific information below:

  • Thursday, May 11 at City Hall (City-wide)

Survey Results
As a part of the Open Houses, attendees were asked to take a survey on their thoughts on the situation. Below are the results of the survey.

Survey Results