The City of Edmonds Finance Director, Roger Neumaier, recently updated readers on our financial performance for the first half of 2013 and also provided a look ahead for 2014. The picture has noticeably improved in several areas. Although we have not fully recovered from several years of financial strain there are many positive signs that a corner has been turned. This is good news for the city’s General Fund in particular. The outlook is unfortunately not as positive for the City’s Street Fund.

In a column prior to last year’s city budget adoption, I discussed the challenges facing the city’s street system. Edmonds has only two primary sources of revenue currently available for taking care of pavement, sidewalks, signals, and street lights. The first is the City’s share of state gas taxes. We expect to receive $650,000 next year from that source. The other is our local Transportation Benefit District (TBD) $20 license fee. That generates $640,000 annually. Neither of these revenue sources is growing and won’t grow in the future. That means we are living on a fixed income but our expenses continue to grow each year as the cost of labor, equipment, fuel, asphalt, paint, and other commodities continues to rise. This imbalance between our income and expenses is at a critical point. We will likely overspend our ongoing revenues by approximately $150,000 in 2013. This will consume almost all of the available beginning cash we had in the Street Fund at the start of the year. In 2014, we will not have money in our checkbook at the start of the year. Without additional funding, we will need to further reduce our efforts to maintain streets while pavement deterioration continues to accelerate. That is a very bad idea and one that will cost us much more in the long run. Let me provide an example.

Dayton Street between 5th and 6th is a street most Edmonds citizens have some familiarity with. It is in poor condition, having not been paved in over 30 years. It should have been paved at least 10 years ago. Because it wasn’t, it has continued to deteriorate to the point where it will now need to be rebuilt rather than just repaved. A 2-inch-thick grind and overlay (repaving) on this section of street would cost $148,000. To rebuild the pavement section on this one city block would cost approximately $450,000. Both of these figures are presented in current dollars so the real cost of delaying this work is over $300,000. That means we could have paved three similar streets instead of just one for the same investment had we done it at the right time. Not doing so is the financial equivalent of borrowing this money from your children and grandchildren. It is both unwise and unfair. Not only is it financially unwise but we have also been forced to drive around on a poor street instead of a well-maintained street for 10 years while losing that money.

What is the answer? If the answer were an easy one I am sure it would already be in place. It is a question of priorities. We need our street maintenance budget to be both adequate and sustainable. It is really the only sensible choice we can make. We need to identify approximately $1.8 million annually in new funding to accomplish that goal. Several new funding strategies will likely be needed. These could include, by way of example only, additional General Fund transfers, re-balancing current Real Estate Excise tax spending plans, working with other cities to successfully lobby the State legislature to authorize additional TBD revenue, a local levy lid lift, or a local $0.002 (One-fifth cent per dollar) sales tax dedicated to street maintenance, and other possible approaches. None of these options are fun to think about.

No one wants to pay more. But failing to address the problem head on will cost much more in the very near future.

— By Phil Williams
Public Works and Utilities Director