Council reviews plan to create a dedicated 'roads' general fund with an $8.7 million reserve transfer

Anna Montoya, the city’s finance director, presented a proposal to reorganize transportation funding by creating a secondary 'roads' general fund. The intent is to consolidate road operations and maintenance revenues and expenses—including transportation sales tax, approximately $500,000 in property-tax allocation, MAG grants, and Class C funds—into a single fund to improve transparency while leaving new road construction funded through impact fees and capital project accounts.

Montoya said staff propose a one-time transfer of $8.7 million from the capital plan to provide beginning reserves for the new fund. She told the council that total road expenditures programmed for the coming year, excluding impact fees, are approximately $6.5 million and that the capital plan includes about $3.4 million in programmed road capital projects (overlays, crack sealing, micro-surface, improvements on 100 West and King Street, and portions of Water Road). Council members asked questions about the traffic study funding and project prioritization; staff added traffic study and consulting fees to the draft budget.

Council members confirmed that road staffing is currently funded through the General Fund and that the proposed structure would shift those operating costs into the dedicated roads fund for clearer accounting. Staff described the change as a reallocation intended to improve clarity and prepare for future funding options, not a net increase in road funding. The work session did not include action to adopt the fund; staff will return with more detail as the budget process continues.