Sunday, September 22, 2019
Home Government Officials squabble over gas tax funding 

Officials squabble over gas tax funding 

The Williams City Council meeting last week was reminiscent of a Colusa County Transportation Commission meeting when Councilman Roberto Mendoza channeled the spirit of ousted former Mayor Chuck Bergson, only to draw the ire of the city administrator and nearly come to blows with a county official. 

The argument was an old one: state funding formulas for road improvements aren’t fair to Williams, and, according to Mendoza, no one seems to be doing anything about it now that Bergson is off the council. 

“The biggest problem in Williams is that we had someone who was always talking about the roads and they (the voters) shut him off and we don’t have anybody here that is talking about the roads,” Mendoza said. 

Ironically, Mendoza’s statement was made following a discussion about road improvement funding, when City Engineer Trin Campos reported that Williams will receive just $230,637 this year from Senate Bill 1 and the Highway Users Tax Account for road repairs, despite Williams generating up to 10 times that amount as a major traffic hub where the bulk of gas taxes are generated. 

“It’s gone up a little bit and we will continue to see it rise a little bit every year. That’s the good news,” Campos said. “On the other side, it takes a lot to maintain and rehabilitate roads, which we have been doing over the last few years. That $230,000 doesn’t go too far, but it does help.” 

Williams gets a formulated amount of revenue from the sale of gas, officials said, irrespective of Bergson being on the City Council, based on the way the state divvies up transportation revenue. 

“We’ve made the point many times,” said City Administrator Frank Kennedy, dismissing Mendoza’s notion that nobody cares or talks about the roads. “It’s returned to us based on population, not where the taxes are generated, which is the root of the problem and why we don’t get the money.” 

Kennedy assured Mendoza that city staff does and will continue to talk about the roads. They will also leverage what funding they do have for additional funding, look at other funding options, and make the city’s case for State Transportation Improvement Program funding before the Colusa County Transportation Commission, who ultimately decide where STIP money goes, Kennedy said. 

Where the discussion turned argumentative was on the options Williams has to improve their roads. 

Both Kennedy and City Attorney Ann Siprelle recommended a .5-to-1-cent sales tax increase, which would need voter approval, while Mendoza recommended the city borrow the money from a bank, which would not need voter approval, but would be far more costly to taxpayers over time. 

“Nobody wants to do that but we need money,” said Mendoza, adding that it was Bergson’s idea. “When I needed money, I didn’t have $100,000 to buy a house, I borrowed the money because I wanted it. That is what we need to do – borrow the money to fix our roads. That is the solution.” 

City officials, including Councilman John Troughton, argued the foolishness of such a plan. 

Troughton pointed out that the taxpayers would pay $5 million to repay each $2 million they borrowed, and that payments of $250,000 a year would “eat up every bit” of annual revenue the city receives from the state for road maintenance.

“We would be on the hook for that for 20 years,” Troughton said. “When you borrow money, you just put off the inevitable. Someone will be sitting (on the council) five, 10, 15 years from now dealing with you borrowing money.”

Troughton added the city certainly couldn’t and shouldn’t borrow $25 million – the current estimated price tag for a complete overhaul of city streets. 

When Mendoza argued that interest is paid on a house, Kennedy pointed out that a house would likely still exist and would be worth more than its financed cost by the end of the loan, while new roads, which typically have a 10-to-15-year life span, would be gone and need replacing long before they were paid for. 

“At the end of 20 years, that road is worth nothing,” Kennedy said. “And secondly, in the following 19 years (from taking out the loan), you can do absolutely no maintenance on the roads because of the debt service.” 

Kennedy said that while Williams would never independently have enough money to fully repair or replace roads without outside money, the city can only wait for when funding for big projects is available from the state.

“Staff, this city council, and previous city councils have explored the financing issue extensively, and, quite frankly, we don’t think (a bank loan) is the best way to go because we would be mortgaging the future of all roads to pay for a little bit now,” Kennedy said.  

When Mendoza could not push Bergson’s agenda further, he blamed Colusa County for always “shutting down” the city’s request for funding, and accused the county of not pressing the state for a bigger share of the gas taxes, which angered Supervisor Kent Boes, who was in attendance. 

“The last time we had funding, you got Marguerite Street,” Boes said. “The last time we had funding, you guys got it. So don’t tell me the Transportation Commission isn’t doing anything.” 

Boes said the State Legislature has determined that all communities are entitled to revenue generated by motorists who pay taxes at the pump on the gas consumed throughout the state, regardless of where the gas stations are located, and not just the cities that have a lot of gas distribution and want all the revenue they generate. 

“There are very few other cities in the region – in this state – that are similar to Williams,” Boes said. “If you tried to do that, you would lose a lot of friends.”

Boes recommended the city continue to just borrow money from its own enterprise funds, such as the sewer fund, so that when repaid with interest, the city – not a commercial bank – reaps the financial benefit. 

When the discussion became more argumentative, Siprelle shut it down and directed the council to finish the business at hand, which was to accept Campos’ report and approve the project list for SB 1 funds. 

The list includes a $1.2 million rehabilitation of Seventh Street, an $820,000 pavement repair on the frontage road, and a $698,000 pavement repair on Husted Road, among others. ■

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