Spending plan for $20 vehicle license fee passes out of committee

After several meetings and some cordial debate (seriously), this morning the City Council’s Transportation and Utilities Committee settled its differences and passed out of committee a spending plan for its newly-imposed additional $20 vehicle license fee.

You may recall that last fall during the 2021 budget process, Councilmembers Pedersen and Herbold proposed the increased fee, along with a plan to devote all of the revenues toward closing the gap on bridge maintenance funding. Even putting aside the substantial amount of backlog in bridge maintenance, the city should be spending somewhere between $34 million and $100 million in annual maintenance for its $3 billion in bridge infrastructure; historically, spending has been closer to $6 million, and through great effort it was bumped up to about $12 million this year — still well short of the need.

But not all Councilmembers were on board with that plan, and a majority instead chose to send SDOT off to consult with stakeholders and propose a spending plan. It did so last month, with the $3.6 million of revenues this year and $7.2 million estimated in future years spread across a variety of maintenance efforts that are difficult to attract grant funding for, as well as some investments in the city’s Vision Zero program: bike lanes, sidewalks, and other infrastructure improvements.

Councilmembers Pedersen and Herbold countered with a proposal that would use the $3.6 million in 2021 as SDOT had proposed, but would anticipate using future revenues as debt service on a $100 million bond to front-load projects. They asked SDOT to come back with a list of $100 million in projects, with $75 million devoted to bridge maintenance and $25 million to other uses such as the ones in SDOT’s original proposed spending plan. That proposal gained the support of Councilmembers Lewis, Juarez, and Gonzalez as well.

Today Councilmember Strauss, who was absent from the last meeting, brought his own compromise. He raised an issue with his colleagues’ proposal to issue a $100 million in bonds now: there may not be $100 million of shovel-ready projects ready to go now, or even in the next year. His amendment follows the same general parameters, asking SDOT to write a list of $100 million worth of transportation projects, with $75 million devoted to bridge maintenance; but he also asked the department to identify the schedule for each project “to inform when bond issuance would be necessary.”  That would allow bonds to be issued in stages, perhaps eventually using the entire $7.2 million in annual revenues for debt service, but in the early years freeing up fund to be used for other projects in SDOT’s original proposal.

Strauss’s amendment was adopted unanimously, and the committee passed the amended bill out of committee. It now goes before the full Council for final vote — perhaps as soon as this coming Monday, though Pedersen suggested that it might take longer.

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