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City briefed on new Transportation Benefit District revenue and possible uses
Summary
Finance director Jeff Albrecht briefed the council on June 17 about TBD revenue from a 0.1% sales tax that took effect Jan. 1, 2025; the tax is projected to yield about $400,000 in 2025 and approximately $500,000 annually thereafter, and staff advised considering maintenance, sidewalks and grant‑matching uses.
Jeff Albrecht, the city's director of finance and interim city administrator, briefed the council on June 17 on revenue and possible uses for the Transportation Benefit District (TBD) sales tax the council established last year.
Albrecht said the TBD was formed by council resolution on April 11, 2023, and that the council authorized the first one‑tenth of one percent (0.1%) sales tax on Sept. 28, 2024; the tax took effect on Jan. 1, 2025. Because of reporting timelines, the city began receiving the TBD sales‑tax receipts in March 2025. Albrecht told the council the tax is projected to generate a little more than $400,000 in 2025 and about $500,000 annually in typical years, subject to sales‑tax fluctuations.
Why this matters: the TBD revenues create a new recurring local funding stream that the city can use for transportation projects and operations. Albrecht emphasized the TBD money can support capital and operating needs, and he urged the council to consider maintaining an adequate fund balance to respond to unanticipated needs and to preserve flexibility if grant funding changes.
Albrecht highlighted several areas where TBD funds could be applied:
- Pavement maintenance: staff estimate historical maintenance is underfunded; the city's pavement maintenance program had been about $50,000 per year but may need to be closer to $200,000 annually. The CIP reflects an increase beginning in 2027.
- Sidewalk maintenance: the sidewalk program was paused for three years and is scheduled to resume in 2026 at $200,000 every other year; TBD funds were discussed as a possible ongoing support.
- Grant matching and contingency: because the city relies heavily on grants (a four‑year average shows about 58% of transit and streets funding from grants), TBD funds could be used to match grants, fill gaps when grant availability changes or to stabilize projects if outside funding declines.
Albrecht also explained how the TBD can generate revenue: the city has already adopted one‑tenth of one percent by council action; a second one‑tenth of one percent would require voter approval. The TBD may also use a vehicle‑registration fee (car‑tab) as an additional option, which also has specific statutory requirements.
Albrecht said staff had not yet proposed specific allocations and recommended the council first assess priorities, maintain reasonable fund balances and monitor grants while seeking community input on visible uses that demonstrate tangible benefits to residents.
No formal council action was taken during the briefing; Albrecht said staff would return with proposals if council wanted to prioritize particular programs for TBD funding.
