Molalla officials flag long-term funding gap for street resurfacing; work sessions planned

City staff told the budget committee the city will invest aggressively in street preservation in FY25–26 but that the proposed level of one-time investment is not sustainable without a dedicated revenue source.

Assistant City Manager/Community Development Director Matt Cortell outlined the street program: about $480,000 is budgeted for treatments (crack and slurry seal) and an additional $750,000 is budgeted under street capital for grind and inlays, for a combined program total of roughly $1,150,000. Cortell said the $480,000 targets preventive treatments to extend pavement life, while the $750,000 capital funding addresses streets that require full grind-and-inlay work.

Cortell told committee members the city’s current recurring investment (roughly $300,000 annually) plus this one-time funding will hold the pavement condition index steady for several years but will not improve system-wide condition. He explained the city uses a pavement-condition index and an analytical framework that accounts for underground utilities and coordinated timing (for example, replacing pipes and repaving concurrently) to maximize value.

To address the longer-term funding gap, Cortell said staff will initiate a series of work sessions beginning the 28th to evaluate options, including a small dedicated utility fee on bills or a local gas tax that would require voter approval. He previewed that staff will undertake community engagement before recommending specific mechanisms.

Next steps: the committee accepted the presentation and will consider staff recommendations from the upcoming work sessions when they are scheduled.