Premier Resort Area Tax Could Pay for City Street Improvements

The committee created last summer to look at transportation infrastructure needs in Sturgeon Bay recently released a draft report and a series of recommendations for the city.

The eight-member committee was chaired by District 3 Alderman David Ward.

After eight meetings in which the committee gathered 17 comments from the public and five written submissions from the public, the Ad Hoc Committee on Funding for Local Street and Infrastructure came up with these recommendations:

  1. Consideration of heavy trucks causing damage to city streets that are not designed for heavy loads.

After considering a designated truck route or instituting a “load tax,” the committee recommended an ongoing program to contact trucking companies that deliver loads to local companies to inform them of desired truck routes in the city.

The report added that this option was chosen over a designated truck route because of enforcement costs and time, but added that if this approach does not work, consideration of a truck route may be warranted.

  1. With 67 miles of asphalt streets in the city and a current budget that replaces 1.2 miles of asphalt per year, that means street resurfacing occurs every 55 years. Streets will continue to decline unless funding is found to resurface roads on a more frequent schedule.

The committee considered doing nothing, or looking at a 35-year, 30-year and 25-year recycling period over a 10-year period. It recommended the city target the 25-year schedule, or a resurface rate of 2.7 miles of street per year, at an added annual cost to the city of $620,000, and it justified this expense by the concerns citizens have expressed about street conditions, and the importance of good road infrastructure for the city’s growing tourism business and economic development.

  1. Consideration of the $85,000 annual budget for road maintenance (such as slurry seal and crack filling) that extends road life.

The options included keeping it at the current level or increasing it. The committee opted for increasing the road maintenance budget to $185,000 annually for the next five years, at which point public works would evaluate to see if the spending level is still appropriate.

  1. Consideration of financing options. The committee determined that its recommendations will boost the city approximately $720,000 more per year.

The committee looked at 10 options, including a local motor vehicle registration tax (wheel tax), an override referendum to exceed state-imposed property tax levy limits, institute a Premier Resort Area Tax (PRAT, a sales tax on tourist-related items), assume debt such as through general obligation bonds, special assessments of property owners, special assessment bonds, seeking grants, instituting a load tax, budget reallocation and cutting city spending on sidewalk maintenance and replacement.

The committee recommended a combination of the Premier Resort Area Tax and debt issuance.

“The committee feels that streets are used by many people/businesses who are not city residents and therefore the cost of street resurfacing and maintenance should be shared,” the committee explained in rejecting some of the other proposals such as wheel tax and direct property assessments “because the burden of costs is largely on city residents.”

The committee pointed out that the communities of Lake Delton and Rhinelander have already instituted PRAT for their own street-related projects, and the report states that the State Department of Revenue estimated that a .5 percent PRAT in Sturgeon Bay would amount to approximately $800,000 annually.

The committee also recommended that the city “jump-start the street improvement program” by borrowing a limited amount of money at the current favorable rate of two-percent interest, with the principal and interest added on to local property taxes during the financing period.

If the city does not institute PRAT, the committee then recommended the city establish a local motor vehicle registration fee, an override referendum and issuance of short-term debt to raise the funds for needed road improvements.

“The committee strongly feels that something needs to be done to improve the condition of local roads,” the report sates. “The committee’s preference is to find a method of financing that shares the cost of burden with users, especially the tourist community. If that is not possible then we will need to consider the alternatives listed above.”

  1. Consideration of sidewalks and pedestrian/bicycle paths.

The committee recommended the city continue repairing sidewalks as needed with funding budgeted annually; dedicate a portion of new infrastructure revenue for expanding the city’s sidewalk system; include sidewalks along major commercial and heavily traveled streets; an expanded concept for pedestrian sidewalks, bike paths and trails by seeking grants to finance those projects.

The common council is expected to look into the report at a late November or early December meeting.

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