Caution: Rough roads ahead for Kingman
KINGMAN – Council’s budget work session Tuesday covered a wide range of topics from general fund revenues and expenditures to capital projects, but perhaps of most import to the daily-commuting citizen was discussion of the poor condition of City streets, for which Council must now find revenue streams to maintain.
When the sales tax was increased by Council in August 2017, a decision ratified January 2018 following the Attorney General’s Office finding a violation of open meeting law, half of that 1 percent increase was set to be allocated for pavement preservation to the tune of around $3 million per year, which increased the budget for preservation to more than $4 million.
With that increase being repealed by Kingman voters in November’s general election, annual funding for pavement preservation drops back to what it had been in Kingman for more than a decade, $800,000. To put things in perspective, the ongoing Stockton Hill Road project expected to be completed this spring alone cost about $1.3 million, according to Streets Superintendent Jack Plaunty.
Plaunty said his department currently has a backlog of deferred maintenance in excess of $55 million. If that seems like a lot, it’s because Kingman’s streets are in less-than-stellar conditions, with many in poor or very poor condition. Those two categories encompass 60 percent of Kingman streets.
Plaunty explained City streets sit in the 25th percentile when compared with other cities utilizing the same street-mapping service as Kingman, which has a pavement condition index rating of 42. The average is 69, and that index runs from zero to 100. Raising that PCI rating by just 10 points would entail almost $53 million worth of work over the next decade, Plaunty said. The end goal for Plaunty would be to have the City’s PCI rating sit at 70.
But it’s not just the roads in poor condition that need attention.
“Taking a worst-first approach is about the worst direction we can go,” Plaunty told those in attendance at the work session. “We actually want to maintain our roads that are in good condition and keep them there.”
He likened the issue to properly maintaining vehicle oil levels. Regular oil changes mean more miles out of a vehicle, but failing to keep up with that maintenance could lead to a costly engine replacement.
“Will the roads function? They’ll function right up until they don’t,” Plaunty said. “Then it’s expensive.”
He said that every $1 spent to keep a good road in that condition precludes the City from having to spend $6 to $14 to rebuild it once it has deteriorated. Plaunty said a dual approach, addressing poor roads while at the same time maintaining roads in good condition, is necessary, but not possible with the current budget.
He said right now, the City isn’t even maintaining its already-low PCI of 42. The remaining service life as a network whole for City streets is less than 10 years. Plaunty’s department expects to defer many projects that were planned for Fiscal Year 2019 under the larger budget to next year.
City Manager Ron Foggin described a scenario Kingman could be faced with 10 years down the road if it remains without adequate streets funding. Without the necessary amount of funding, the City’s priority would be arterial roads, those with a significant amount of traffic. Without the resources to maintain those roads and residential streets, some of the latter could be reverted back to gravel.
“The downside of that is as soon as we start talking about gravel roads in residential areas, that is where we could ultimately be headed, and at the same time remembering that the value of your home and the property and investment you’ve made to your home goes along with the street out in front of your home,” Foggin said. “So it has far-reaching effects on the residential side …”
City staff didn’t just bring to the meeting problems faced by the City, they also provided potential revenue streams that could be utilized moving forward, the first of which is a property tax.
“If we were to adopt a relatively small property tax of $1.47, that would cost the property owner that had property in the city that is valued at $100,000 just under $150 a year,” Foggin explained. “It will generate $3 million.”
More than 50 percent of Arizona cities and towns have a primary property tax, according to the City. There are 59 that operate their own police and fire departments, and only 14 of those do not have a primary property tax. Kingman is one of those cities.
Another option is development investment fees. Those are fees paid by new construction both residential and commercial. Foggin summarized development investment fees by saying “growth pays for growth.”
Kingman implemented government DIFs in 2007, but got rid of them in 2012. Also in 2012, it eliminated water and wastewater DIFs implemented in 2006. While DIFs could help in other areas of the City budget, they would not assist the existing roads issue.
Councilman Ken Watkins inquired as to the downside of implementing DIFs.
“The downside is that the building community doesn’t like it,” Foggin said, also noting homes could become a bit more expensive.
Foggin also addressed stormwater fees that could be assessed to the City’s water customers. There are currently about 12,500 customers, and if each was assessed $2 per month, that would net the City $300,000 a year. A $5 fee would mean $750,000 for the City each year.
Lastly, the City could take another look at its sales tax rate, and perhaps more specifically, a food tax.