Spokane City Councilman Al French says he and others plan to lobby the upcoming Legislature to modify state statutes so that cities such as Spokane can create what are known as "street utilities" to fund both maintenance and construction of city roads.

If such law changes are made this session, French says the city of Spokane could decide to put a measure on the ballot as early as next fall asking voters to approve the creation of a street utility here.

Street utilities are similar to other municipal utilities that provide such services as water and sewer. A street utility would charge residents and businesses here a fee that would pay for maintenance and operation of the road system, as well as street-related capital improvement projects, French says.

Spokane currently spends about $23 million a year on roads, but only about $6 million of that is spent on maintenance. The rest goes toward such things as street cleaning and plowing, traffic signals, lighting, and parking enforcement. French contends that another $8 million is needed each year to keep up with maintenance work, and that the city should be spending an additional about $12 million a year to work on a backlog of capital repair and construction projects.

Voters here approved a 10-year, $117 million street-bond measure in 2004 to address the capital work, and French envisions folding that work into the street utility, eliminating the need to sell additional bonds for the remainder of that program and precluding the need to ask voters for another round of bonds in 2014.

Just how much a street utility would cost residents and businesses hasn't been determined, but French says one possible scenario would call for homeowners to pay about $13 a month. Rates would be based on a combination of a base rate plus a "trip" rate based on the impact the payer has on the streets. For instance, a supermarket might pay as much as $2,000 a month total due to the number of vehicle trips on streets it creates.

Rich Hadley, president and CEO of Greater Spokane Incorporated, says "the jury is still out" as far as whether GSI would endorse a street utility.

Hadley had said in 2002, the last time efforts were made to create a street utility here, that some businesses faced "significant" fees under the proposed rate schedule, and now says that this time around, a lot of discussion must occur about how the fees would be assessed.

"I think there are any number of views" on the proposed fee schedule French has been presenting to GSI and others, "depending on what kind of business you're in," he says.

Though GSI isn't supporting the idea yet, Hadley commends French for working hard to communicate the street utility concept, in particular the fee schedule.

"There have definitely been some attempts to make the assessment schedule understandable," Hadley says. Overall, "I think it's still a work in progress."

City spokeswoman Marlene Feist says Mayor Mary Verner generally supports the street utility concept, but believes it needs further vetting.

In a comment e-mailed to the Journal, Verner says, "The community needs a better understanding of the fundamental principles of a street utility, how it differs from a tax, and how the universal application of this fee will impact customers who currently aren't subject to property taxes."

French has been meeting with groups across the state to build support for legislative changes that would allow for a street utility here and elsewhere.

Some of the changes he's proposing would address constitutional deficiencies in the current law found by the state Supreme Court, after the law was challenged in court in the 1990s by Seattle residential property owners. Among those are changes to the formula used to calculate the fees. He also is seeking changes that would require street utilities to be approved by voters, something French says business leaders have asked for.

He predicts that there's a "50-50 chance" the Legislature will approve the changes this year, noting that the measure would be revenue neutral for the state, but acknowledging that legislators this session will be focusing mostly on the state budget deficit.

French says it also might be too ambitious for the city to get a ballot measure approved by voters this fall if the Legislature makes the needed changes, and that proponents of the idea will need to look at how the economy is faring after the session before deciding whether to pursue a fall 2009 vote.

If city voters were to approve a measure next fall, a street utility could be created as soon as 2010, he says.

"For me, there is a sense of urgency for getting something in place," French says.

He says Spokane is falling further behind in street repair work because it hasn't dedicated enough money to street maintenance. The costs, he says, grow exponentially because as roads deteriorate further, they become more costly to repair. In 2003, French says, the city's street reconstruction backlog was about $200 million, but now it's estimated at about $400 million.

The street bond voters approved five years ago has helped the city address capital needs, but until the city dedicates more money to maintenance, the backlog will continue to grow, he contends.

French estimates that if a street utility were formed here, its annual budget would be about $42.6 million. That would include the about $22.6 million being spent now out of the general fund, plus another about $8 million toward repair and $12 million for capital projects to chip away at the backlog. The capital allocation would essentially replace what is being spent currently through the street bond, he says.

The increased funding would come from the fees charged to residents and businesses here. Those fees would raise about $35 million a year, and would be supplemented by about $7 million from other revenue sources the city relies upon for its street department, French says.

He says that if a street utility were created here, he would call for a substantial reduction in the city's utility tax to offset the reduction in general-fund spending the city would see as a result of the new funding mechanism. With that move, French contends, the net cost to residents would be more in the range of $7 to $8 a month, and fees to businesses also would be proportionately lower.

Overall, businesses and other organizations—including government entities—would pay about 64 percent of the overall street utility fees, and residents would pay the rest.

French argues that a street utility would be far less expensive for taxpayers than meeting current and future needs with funding alternatives such as general obligation bonds or a local gas tax.