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Waupun reconsiders transportation utility: User fee could help cover street repairs

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Waupun facility tour (copy)

Waupun Fire Chief BJ DeMaa, right, provides comments on needs while members of the city council tour the department's building last July. Capital needs are in part behind the possibility of establishing a transportation utility to cover ever-rising street repair costs.

WAUPUN – Formation of a transportation utility took another spin around the block Tuesday night at the Waupun Committee of the Whole meeting at City Hall.

Such a proposal could help remedy a shortage of funds for street repairs. There is currently a 60-year replacement schedule for city roads. Roads are expected to have a life expectancy of 25 years, according to City Administrator/Director of Economic Development Kathy Schlieve.

In early 2021, the council authorized the study of a transportation utility in the city. Ehlers and raSmith were hired to complete the work. Consultants presented a detailed look into what that utility might do on Sept. 28, 2021. John Cameron of Ehlers was a presenter.

Cameron equated the city’s transportation network to a utility, such as a water, sewer or storm water utility. Funds gathered through monthly charges pay for operational costs and repairs, as well as capital projects (street replacement).

Fees are based on trip generation, which translates into an estimated usage of the city street system. High volume users such as drive-through businesses pay more than someone without a vehicle, although they would be expected to contribute as well.

“A trip is considered as any time a car enters of leaves a driveway,” said Cameron. “The formula is as accurate as possible, based on the traffic generated by and for each user.”

Rates are reportedly cost-based and equitable, and are set to reach and meet the full revenue requirements of the city. For the sake of planning and discussion, those requirements were estimated at $1 million a year. That figure may be too high, although Mayor Julie Nickel indicated that is not unrealistic. An alternative figure has not been proposed.

If the utility is not pursued, the city will have to continue to borrow money for large projects and to use the tax levy to fund mill and overlay (resurfacing) projects. With a host of capital needs pending, however, hard choices will have to be made. Urgent work is also needed at the Public Safety Building, the Senior Center and City Hall. Capital Improvement projects nearing $40 million have been identified – five or six times the city’s borrowing capacity.

Recent surveys of city streets showed dire needs, although a portion Madison Street was completed last year and will hopefully be completed this year.

Alderman Jason Westphal questioned whether utility charges might prevent businesses from opening, or force existing ones to close.

Schlieve indicated that such a charge would shift the burden of street repairs away from homeowners, making it more equitable for all.

“We are a very affordable place to do business,” said Schlieve. “The utility charge is based on usage. Our taxing capacity is never going to be sufficient to meet the myriad demands in our community. Are people going to love it? No. But at some point we need to take steps to maintain the assets we have in this city, and that includes our roads.”

Corrections properties, a major area employer, do not contribute to road repair costs. The Transportation Utility would remedy that problem.

“We’re always going to have a road problem,” said Mayor Julie Nickel to a question of whether the utility should have an ending date.

On Tuesday local business people attended online, concerned about the ramifications of enacting such a fee structure.

At the time the utility was discussed, the council also examined what would happen if nothing was done.

“We did say back in July (of 2021), ‘Well, what happens if we do nothing and continue down the borrowing strategy?’” said Schlieve. “So every time we did present it we did say that every time we borrow that’s really raising taxes. Debt has to be paid back. Debt service is paid annually for the amounts that we’re borrowing. For every million that we borrow that’s a tax increase of about 1.8 percent. Either way there’s an impact to property tax payers.”

Debt capacity also has limits.

“If we did nothing, 70 percent of our borrowing capacity is still within allowable limits, however all of the other capital needs that we discussed over the course of the last year, including facilities and public safety, likely would get no resources,” Schlieve said. “We may even be challenged on the economic development front.”

Schlieve told the council, “We’re going to need direction from you. A public outreach campaign to inform residents of the change would need to be pursued.”

The issue will be discussed at future meetings.

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