LYNNWOOD—Lynnwood City Council discussed renewing its Transportation Benefit District (TBD) sales tax, which will be used to fund some major transportation for the next 10 years if approved, at its Work Session on Monday, May 18.
The Lynnwood TBD receives 0.1% sales tax within the City, but this tax is set to expire March 31st, 2027. City staff are proposing council renew this tax for an additional 10 years.
This tax currently generates $3.2 million per year. The city’s street operations/maintenance, traffic signal team, traffic engineering, and capital projects heavily rely on this funding.
“Infrastructure is really cool but it’s also really expensive,” joked Public Works Director Jared Bond Monday before passing the presentation off to City Engineer David Mach.
Transportation Benefit Districts are a mechanism the state legislator created to allow cities, as transportation funding dried up from I695, to collect dollars from specific districts to fund their various transportation programs. The money collected from these districts is restricted to transportation projects only.
TBD taxes are nothing new in the City of Lynnwood. In 2011 the council approved a $20 vehicle tab fee and in 2017 it increased that fee from $20 to $40. Currently this TBD Vehicle Tab Fee generates $1.2 million per year.
In 2016, Lynnwood voters approved a proposition to increase sales tax by 0.1%, which went into effect on April 1, 2017. By law, the sales tax increase is limited to 10 years at a time.
In total Lynnwood receives $4,400,000 in TBD revenue a year. The bulk of this is from its 0.1% Sales Tax (by 73%).
Some teams in Lynnwood completely rely upon TBD dollars to keep afloat. The street crew, traffic signal team, and traffic engineer team, for example receive 22% of their funding from the TBD (about $750,000). The majority of its funding comes from the General Fund ($1.6 million).
But Capital Projects are also heavily reliant on TBD funds, funding approximately 25% ($3,650,000) of every major Capital Project in the City). Even though Capital Projects are mostly supported by grants, the large amount of TBD funds adds matching and, by extension bidding, power to securing these grants, Mach said Monday.
Just some examples of historic transportation projects in Lynnwood that were made possible by TBD funds include:
- 36th Avenue West (Maple to 164th Street)
- 196th Street Southwest (48th to 36th)
- Poplar Way Bridge
- Street pavement overlays/reconstruction
- 48th sidewalks (183rd to 180th)
- Concrete sidewalk curb ramp ADA upgrades
- Traffic signal rebuild/reconstruction (196th Scriber Lake Road, 196th/64th, and 196th/76th)
If council approves extending the TBD sales tax another 10 years, not only would this generate a projected $3.2 million annually, but it would also continue to provide the current level of service for street maintenance, traffic signal team, traffic engineers, and leverages city funds with grant funds (over under about $15 million a year) for large transportation projects, Mach said.
Though the current TBD doesn’t expire until next year, Public Works Director Jared Bond said City Staff is asking council to consider this ordinance now because the City is building its budget for the next two years and that it’s important to know where its transportation funding is coming from beforehand.
City Council will vote on whether or not to approve the ordinance at its upcoming Business Meeting on May 26. If approved the City of Lynnwood would then notify the Department of Revenue and the tax would go into effect on April 1, 2027.
Council has previously been briefed on the matter at its City Council Summit on February 21, at their meeting on March 16 regarding Transportation Projects, and more recently on their meeting on April 20 regarding Traffic Signals, Traffic Engineering, and Street Development.
During council comments Monday, Council President Nick Coelho asked what the backup plan would be for funding major transportation projects if council were to not approve the ordinance – especially considering the city is “already underfunding road maintenance.”
“To be honest we haven’t even talked about a backup plan yet. That’s why we started early,” said Mach. “But it’s likely going to require significant cuts.”
Council Vice President Derica Escamilla added that basically every major transportation project listed in the City’s six-year plan would not move forward, which Mach corrected isn’t entirely the case though programs like street maintenance crews may likely be cut.
City Staff will return to City Council next week with a drafted ordinance.
Author: Kienan Briscoe
