Olympia may raise vehicle license tab renewal fees

Olympia is considering raising the vehicle license tab renewal fees to generate more money for road repairs and maintenance.

Now, the city imposes a $20 renewal fee for vehicles registered in Olympia. These fees have helped pay for asphalt overlay and paving projects on State Avenue, Boulevard Road, Harrison Avenue and more.

However, officials are concerned about the long-term upkeep of Olympia streets, especially in the downtown core.

The Olympia Transportation Benefit District board met Tuesday to approve its 2016 budget and discuss the financial outlook for the city’s road system.

The district, also known as a TBD, was established in 2008 as an independent taxing authority within city limits. About $4 million total has been collected since the TBD took effect, with all the money designated solely for transportation improvements. The TBD board consists of all seven Olympia City Council members who act independently from their council roles.

The board has the authority to increase the license renewal fees up to $40 without voter approval. This would raise an additional $750,000 a year, doubling the amount available for roads, according to the city. After two years, the board can increase the fees to $50, also without voter approval.

Another option for the board is to ask voters to raise the fee as high as $100. The board can also ask voters to increase the sales tax up to 0.2 percent, just like Tumwater did in 2015.

Streets are rated on a scale of zero to 100 based on factors such as cracked pavement and potholes. City public works director Rich Hoey told the board Tuesday that at the end of 2014, the average rating for streets across the city was 75 out of 100. He said there was a $48 million backlog to fix all streets in poor condition, which includes any streets rated 49 or lower.

If the TBD maintains the current level of funding, the rating will drop to 59 in 20 years, and the maintenance backlog will grow to $85 million, Hoey said.

An additional $1 million a year would lead to a rating of 63 and a backlog of $56 million in 20 years. Ultimately, the TBD needs an extra $4 million a year to maintain the current rating and address all backlogs, Hoey said.

Hoey noted that asphalt overlay and chip sealing — a cheaper alternative to resurfacing — are meant for roads in good or fair condition. The city estimates a cost of $100,000 for one lane mile of chip sealing compared to one-fourth of a mile of paving.

However, the cheaper repairs cannot be done on roads in poor condition, he said, because of the extensive grinding, labor and regulations that come with those repairs.

“It’s a lot more expensive for us to rehabilitate those pavements once they reach that condition,” he said.

The TBD board agreed to hold a public hearing March 22 on raising the license tab fees. The district can begin collecting the extra revenue six months after the board passes a resolution for higher fees.

Jane Kirkemo, the city’s finance director, suggested that the board impose any new fees starting with the 2017 calendar year.

The district had been collecting an average of $677,000 a year, but the number spiked to $744,330 in 2015. Kirkemo attributed the increase to the city’s recent annexations of unincorporated areas.

This story was originally published January 26, 2016 at 10:58 PM with the headline "Olympia may raise vehicle license tab renewal fees."