HomeMy WebLinkAbout2022-20 - Ordinance eliminating the $20 vehicle licensing fee imposed by the East Wenatchee Transportation Benefit District - 8/16/2022City of East Wenatchee Ordinance 2022-20
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1.Alternate format.
1.1. Para leer este documento en otro formato alternativo (español, Braille,
leer en voz alta, etc.), comuníquese con el secretario de la ciudad al
alternatformat@eastwenatcheewa.gov, al (509) 884-9515 o al 711 (TTY).
1.2. To read this document in an alternate format (Spanish, Braille, read
aloud, etc.), please contact the City Clerk at
alternateformat@eastwenatcheewa.gov, at (509) 884-9515, or at 711
(TTY).
2.Recitals.
2.1. The City of East Wenatchee (“City”) is a non-charter code city, duly
incorporated and operating under the laws of the State of Washington.
3.Authority.
3.1. RCW 35A.11.020 and RCW 35A.12.190 authorize the City Council to
adopt ordinances of all kinds to regulate its municipal affairs and
appropriate to the good government of the City.
3.2. East Wenatchee Municipal Code Section 4.42.030 sets forth the City
Council as the governing board of the Transportation District and
authorizes the City Council to exercise all statutory powers set forth in
RCW Chapter 36.73.
4.Purpose. The purpose of this ordinance is to rescind the $20 vehicle fee
imposed by the East Wenatchee Transportation Benefit District.
THE CITY COUNCIL OF THE CITY OF EAST WENATCHEE DO ORDAIN AS
FOLLOWS:
5.Amendments. The City Council hereby rescinds the $20 vehicle fee imposed by
the East Wenatchee Transportation Benefit District.
6.Findings of Fact. The City Council adopts as its findings of fact the recitals
set forth above.
City of East Wenatchee, Washington
Ordinance No. 2022-20
An Ordinance of the City of East Wenatchee rescinding the $20 vehicle
licensing fee imposed by the East Wenatchee Transportation Benefit
District.
Una Ordenanza de la Ciudad de East Wenatchee revocando la tarifa de
licencia de vehículos de $20.00, por el Distrito de Transporte de
East Wenatchee que contiene una cláusula de separación y
establece una fecha de vigencia.
East Wenatchee
Workshop Agenda Bill
To: Mayor Crawford and Council
From/Presenter: Garren Melton, Public Works Manager
Subject: Transportation Benefit District: Comparing Car Tabs to a 0.1% Sales Tax
to Fund Future Road Improvements in East Wenatchee
Date: June 16, 2022
Introduction:
In 2019 Washington State voters passed Initiative 976 (I-976), which limited the annual license
fee for vehicles under 10,000lbs to $30. 68% of Douglas County voters supported I-976 in the
November 2019 election. In February of 2020 the Washington State Supreme Court ruled that I-
976 was unconstitutional and struck it down.
After the results of I-976 were seen, alternative funding sources for the City’s Transportation
Benefit District (TBD) have been evaluated. The TBD is currently funded by a $20 car tab fee on
every vehicle registered within City limits. Annually this fund collects approximately $260,000,
which is used solely on pavement preservation related projects. This memo will give a brief
update on TBD funding needs, analyze the impact of eliminating car tabs fees, explore the
impact that a 0.1% sales tax would have on the TBD funding, and compare costs to citizens of
East Wenatchee under each program.
Pavement Management Funding Needs:
The City’s pavement management plan is currently under development. Once completed the
pavement management plan will provide a more precise estimate for pavement preservation
funding needs. Until then, the City of Wenatchee’s plan can be used to help develop a rough
estimate of funding needs due to the cities having a similar proportion of arterials, collectors, and
local access roads. As seen in Figure 1 below, to maintain a citywide pavement condition of 69,
the City of East Wenatchee will need to invest roughly 1.9 million dollars into roadway
preservation per year. A more precise figure will be available when the City’s pavement
management plan is completed this fall.
City of
Exhibit B
The longer the City waits to appropriately fund pavement preservation, the more deferred
maintenance costs will compound. Similar to changing the oil in your car, it is much more cost
effective to perform regular roadway maintenance rather than waiting for roads to fail.
Figure 1
The City’s current street preservation funding is shown in Table 1. In this 5-year period a 0.1%
sales tax would have brought in an additional $819,000 in revenue for pavement preservation.
Street Preservation Revenue
Sources 2018 2019 2020 2021 2022
TBD (Car Tabs) $ 254,100 $ 257,000 $ 260,000 $ 263,000 $ 266,000
TBD (0.1% Sales Tax) $ 398,000 $ 411,000 $ 408,000 $ 486,000 $ 416,000
Street Fund $ 150,000 $ 150,000 $ 150,000 $ 150,000 $ 150,000
Grants (Pavement Portions Only) $ 560,000 $ - $ 350,000
$1,200,000 $ 600,000
Total Revenue - Car Tabs $ 964,100 $ 407,000 $ 760,000
$1,613,000
$1,016,000
Total Revenue - 0.1% Sales Tax
$1,108,000 $ 561,000 $ 908,000
$1,836,000
$1,166,000
Table 1
Under the current funding program, the City is relying on receiving approximately 1.5 million
dollars per year from pavement preservation grants to maintain its roadways at their current
level. This 1.5 million dollar goal has not been achieved in any of the past 5 years that were
analyzed. The 0.1% sales tax model is expected to bring in an additional $150,000 per year for
the TBD.
Exhibit B
Impact to an average family in East Wenatchee:
To compare Car Tabs to a 0.1% Sales Tax model the average cost per household under both
funding mechanisms is shown below:
Car Tabs:
Total Housing Units in the City of East Wenatchee - 5,4891
Total 2021 Revenue from Car Tabs - $263,175
Car Tab cost per household = 𝐶𝑎𝑟 𝑇𝑎𝑎 𝑅𝑑𝑢𝑑𝑙𝑢𝑑
𝑁𝑢𝑙𝑎𝑑𝑟 𝑙𝑑 𝐻𝑙𝑢𝑟𝑑ℎ𝑙𝑙𝑑𝑟 = $263,175
5489 𝐻𝑙𝑢𝑟𝑑ℎ𝑙𝑙𝑑𝑟 = $47.95 per Household
0.1% Sales Tax:
It is important to note that opting for a 0.1% sales tax increase will only apply to purchases made
within the City of East Wenatchee. It is also important to note that not all items are sales tax
eligible. Notable exempt purchases include most groceries, prescription drugs, utilities, gasoline,
and real estate.
Sales tax generally applies to tangible personal property, and the sale of services.2 Common sales
tax eligible purchases include repair, installation and maintenance services, restaurants, and
household goods such as furniture, appliances, jewelry, clothes, and cars.
Median Household income in 98802 zip code - $71,0933
Estimated total annual sales tax eligible purchases per household in East Wenatchee - $7,000
Estimated 0.1% Sales Tax cost per household = Sales Tax eligible purchases x 0.1% (.001)
=>$7,000 ∗0.001 = $7.00 per Household
It should also be noted that $7,000 ($583 per month) is likely much more than most households
spend on sales tax eligible goods within the City of East Wenatchee. Estimates from the IRS
Sales Tax Deduction Calculator estimate a family making $71,000 in East Wenatchee may take a
$1,215 sales tax deduction. At that number the average household would pay only $1.22 per year
towards this 0.1% sales tax.
1 Office of Financial Management, 2021 Housing Units, November 2021
2 Department of Revenue, Retail Sales Tax
3 Census Bureau, S1901 Income in the past 12 months (in 2020 inflation adjusted dollars),
Exhibit B
Conclusion:
Replacing the $20 car tab fee with a 0.1% sales tax would save the average household in East
Wenatchee $40.85 per year. To clarify savings based on the number of vehicles a household
registers see Table 2:
Number of Vehicles
Registered per Year
Annual
Savings
1 $ 13.00
2 $ 33.00
3 $ 53.00
4 $ 73.00
Table 2
The main benefit of replacing car tabs with a 0.1% sales tax is that it shifts the burden of
maintaining City streets from the people who live inside of the City to everyone that uses City
Streets to reach the City’s commercial hubs.
The legislature has also updated the law around passing a sales tax to fund a TBD. As of July 1,
2022, the TBD governing body (City Council) may pass up to a 0.1% sales tax. TBDs are
permitted to collect an additional 0.1% (0.2% total) with voter approval.
Exhibit B
Grant Rd
5th St NE
3rd St NEN Baker AveEastmont Ave8th St NE
SR 28S R 2 8 5
4th St SESunset Hwy11th S t N E
N Lyle AveN Keller Ave19th St NE
15th St NE
N Grover Ave9th S t N E
Va
ll
e
y
Ma
ll Pk
wy
N Kentucky Ave10th St NE
Tedford St SE
12th St NE
N Iowa AveS Mary AveN June AveGlen S t NE
R
ock Island R
d
Pace DrSR 28 BypassRi
ver
vi
ew Dr N Kansas AveS Kentucky AveS Jarvis AveN Ashland AveSand C
anyon R
d
1st St SECount
r
y Cl
ub Dr
3rd St SE
Briarwood Ter
Simon St
Daniels Dr
Holly LnN Jackson Ave7th S t N E
S Houston Ave2nd St SEN Astor CtSode n St SEN Georgia AveS Iowa AveB
riar
w
o
o
d
D
r
2nd S t N E
13th St NE
N Deni
s CtKenroy TerN Al
v
i
n
Ct
Bel Air Dr
19th St NW
1 s t P l S EN Grover PlN Mary AveStoneridge DrN Gale Pl14th St NEN Anne Ave15th St Pl
10th Pl NE
20th St NE
Hillside Dr
Manowar LnN Lander CtN Fairmont Ave6th S t N E
A m y C t
12th Pl NE
M anhattan D rS Lee CtN Gale AveN Minor AveN Aurora AveS
M
ary L
n
Te r r a c e D r
18th St NE
Vista View Pl
L i n d e n P lN Hale AveMo
u
ntjo
y
S
q
10th St NE
S Iowa AveN Iowa Ave1st St SE
3rd St SEN Kansas AveThis map is intended for general purposes only. The City of East Wenatchee makes no representation as to the accuracy or current condition of the data shown on this map.
2014 - 2020 Completed TBD Preservation Projects.
0 0.5 10.25 Miles Fairview PlOverlay Year
2014
2016
2017
2018
2019
2020
City Limit