Camas Council eyes transportation benefit district as revenue source

As city of Camas officials grapple with how to balance the City’s 2025-26 budget amidst declining general fund revenues, Camas city staff are outlining possible revenue sources Camas leaders may want to consider.

Cathy Huber Nickerson and Steve Wall, the City’s directors of finance and public works, presented one such option to Camas City Council members during their workshop on Monday, Sept. 16.

Known as a transportation benefit district, the revenue source is something common in Washington state and is, according to the directors’ report to Council, currently being utilized in more than 110 Washington cities and towns as of January 2024.

“This is an independent taxing district that can … raise revenues specifically for transportation,” Huber Nickerson told Council members Monday, adding that the benefit district revenues — collected either as a sales tax or in the form of an annual vehicle tab fee — could help the City pay for street maintenance, transportation projects and road-related operating expenses.

“That’s key,” Wall added. “It can be used for operations and maintenance. We have 123.5 miles (of streets to maintain). That includes (pavement) preservation as well as street lights — there are over 3,500 that we maintain.”

Wall said the City’s general fund, which also pays for services such as fire, police, parks and the Camas Public Library, is “a very, very large supporter of the street fund.”

The City receives about $450,000 a year from the state’s vehicle fuel tax, Wall said, but must come up with more than $3 million on top of that amount to maintain its streets.

And when it comes to street preservation in Camas, Wall said, the City is “doing OK, not great” with an overall street pavement condition index of 78.

“We’re still in the good category. It’s not terrible,” Wall said. “But you want to get between 83 and 85. That’s a good place to be.”

In 2014, the Camas City Council voted to take banked capacity from its property tax levy and dedicate it to street preservation. Wall said the City has about $1 million in that fund that it uses to schedule annual maintenance projects in an effort to keep up with minor problems, such as cracks, before bigger, more costly issues can take shape.

“If you try to do some preventative maintenance up front — slurry seals, chip seals … some of those lower-cost solutions — that keeps you in that fair category and you can just kind of bounce along,” Wall said. “We want to maintain our roads in that fair to good category. If you drop below that, the costs tend to go up fairly quickly.”

If the City were to double its street maintenance funds from $1 million to $2 million a year, Wall said, Camas could maintain its current pavement condition index of 78 for another five years. If the City were to increase its street preservation funds to $3 million a year, the City could improve that rating to an 80 in five years. To get to the City’s goal of having a pavement condition index score of 82 by 2027, Wall said, it will cost the City about $4 million a year.

A transportation benefit district could bring in $575,000 in 2025 if the Council were to approve a vehicle license fee of $20 a year, beginning in 2025. The Council could increase that fee to $40 in 2027-28, and to $50 in 2029-30, bringing in between $1.21 million and $1.6 million a year, respectively, but would then need voter approval to raise the vehicle license fee above $50.

The City also could opt to ask voters to approve a 0.3% sales tax for 10 years, which could bring an additional $1.8 million per year to the transportation benefit district, or impose a 0.1% sales tax via Council vote, which would generate approximately $600,000 a year for transportation related projects, operations and maintenance.

Wall said maintaining streets now will help the City avoid high costs in the future.

“If (the pavement condition index) is a 78 today and gets to a 70 or 74, you know we’re going downhill,” Wall told Council members on Monday. “And that gets really expensive, really fast. We’re trying to maintain a good to fair quality of asphalt.”

Currently, Wall added, the City has a $15 million backlog of street preservation projects.

“That will continue to grow the more the (pavement condition index) goes down over time,” Wall said Monday. “And you can get to the point where you’re so far under, it’s hard to ever come back. We could decline citywide and we wouldn’t have enough revenues to bring it back up again. That’s when you start to hear (complaints from citizens) about cracks and potholes.”

To hold steady on the condition of its streets and asphalt, Wall added, the City “would essentially have to double our funding from $1 million to $2 million through 2027.”

Increasing the street preservation funds from $1 million to $4 million per year, he added, “would work through all of our backlog and get us up to that 82 to 83 index.”

The Council is expected to debate revenue diversification ideas throughout the months of October and November, as officials grapple with general fund revenues that are lagging behind its expenditures and prepare to vote on the City’s 2025-26 budget.