Mill Creek council votes 6–1 to form Transportation Benefit District to shore up streets fund

The Mill Creek City Council voted 6–1 on Nov. 25 to establish a Transportation Benefit District intended to create a dedicated revenue stream for street maintenance and operations.

Staff said the streets fund has run a structural deficit since 2020 and that the general fund currently subsidizes roughly 1.5 full-time equivalents and transfers of about $300,000 per biennium (about $150,000 per year). Laurel, a city staff presenter, told the council the city counts about 14,730 vehicles and estimated roughly 1,000 electric vehicles in the fleet, and explained that declining motor-vehicle fuel tax and multimodal shared revenues have strained the streets budget. “We’re looking at just under $300,000, which is roughly what we need, and that would decrease the general fund subsidy almost completely,” Laurel said during the presentation.

The ordinance the council adopted creates a TBD that would use vehicle-license fees and other tools allowed under state law to fund transportation improvements, maintenance and operations. Staff described a staged vehicle-fee approach: an initial $20 fee is needed to enable later increases (staff described a $40 level coming after a 24‑month period and up to $50 with voter approval for higher amounts). Staff said those increases, if implemented as modeled, would eliminate the need for the current general-fund subsidy by about 2028 under the presentation’s assumptions.

Council discussion was split. Council member Cavallari said he originally supported TBDs as an alternative to broader taxes but opposed forming one now given recent local tax increases, calling it a “pile on” and warning of a “slippery slope” if the city continues to layer new fees on residents. “I won’t support it on that basis,” Cavallari said. Other council members said previous decisions left the city with limited options and described the TBD as a targeted way to preserve roads and sidewalks while spreading costs across all vehicle owners. The motion passed 6–1.

Council then directed staff to prepare a follow-up ordinance allowing the city to assume the TBD powers (so the city council can act as the TBD board), schedule the required second public hearing and draft legislation to set vehicle-license fees; that direction passed 7–0. Staff and the city attorney explained the multistep statutory process and said the city must publicize the TBD and then adopt fees after the second hearing and notifications to the Department of Licensing, with collections expected to begin in July after implementation steps are complete.

The council’s action tonight establishes the TBD framework; final fee levels and an effective date will be set after the additional public hearing and subsequent ordinance votes. The council also requested additional financial-policy discussions to reduce the risk of future automatic increases and asked staff to provide historical transfer information showing how long and how often the general fund has subsidized the streets fund.