This week’s number: $33 million

The city’s streets could need $33 million in repairs over the next five years, but a key funding source for the work will dry up by the end of the decade.

That has city leaders considering options including increasing the sales tax to generate more revenue.

Of the $1.5 million the city plans to spend on streets this year, $1 million comes from the city’s two tax increment financing districts. TIF districts allow the city to divert property tax money into a special account that is used to rehabilitate blighted areas.

However, one of the city’s TIF districts expires in 2018, while the other will expire in 2020, meaning the only source of funding left will be the local gas tax.

The above account is incorrect and incomplete. Let me count the ways.

#1: Taking care of streets is about more than repair and #2: No, the local fuel tax is not the only source of funds.

There are two budget line items for streets: “Street Improvements – Maintenance” (8632) and “Street Construction or Reconstruction” (8633). And it is true that the local gas tax goes toward maintenance via the Capital Projects Fund, and the city budgeted $325,000 for the last fiscal year and $300,000 for this one.

However, it is also a fact that DeKalb’s Motor Fuel Tax Fund, which is funded by the state fuel taxes and grants, contains both line items. For FY2014, the city budgeted $100,000 for maintenance and $535,000 for (re)construction; and for the current year, it has chosen only to fund construction, and only at $400,000. Local plus state fuel taxes allocated are $700,000 — significantly more than what the Chronicle has indicated.

I say “chosen” to fund construction at that level because the Motor Fuel Tax Fund will enjoy a surplus of nearly $453,000 at the end of the fiscal year. If streets need so much more than what we’ve previously allocated, why is there a planned surplus in this fund?

Also:

  • DeKalb sends about $250,000 of its local motor fuel tax to the Public Safety Building Fund instead of streets.
  • There is nothing stopping the city council from deciding to transfer money from the General Fund to Capital Projects, as it has in the past, if the streets program is suffering crisis.
  • This looks more like a prioritizing problem than one of shortage.

    #3: TIF doesn’t pay for what you think it pays for.

    Here’s what TIF District 2 — with revenues around $2 million per year — has actually paid out for street construction/reconstruction despite budgeting $100,000 for the purpose most years:

    2008: 0
    2009: $160,000
    2010: $446
    2011: $0
    2012: $0
    2013: $0

    But suddenly TIF 2 is so important for funding street construction that they’ve budgeted $500,000 for it?

    And there’s nothing for improvements/maintenance shown for these years — there’s not even a line item dedicated to it in the TIF 2 budgets.

    What’s been happening instead is DeKalb has been accumulating money to build their shiny new city hall. The fund balance for TIF 2 is hovering around $7 million.

    Again: priorities.

    Central Area TIF (TIF 1) has both line items and its budgeted $500,000 aligns more closely with actual expenditures. The most important thing to know is that, until FY2014 when the talk about the expiring districts became earnest, both TIFs together spent $500,000 or more only twice in the eight years preceding and never came close to the million being budgeted now.

    Why?

    #4: We should be talking about the General Fund.

    The expiration of the TIF districts doesn’t just mean loss of a funding source for streets. For FY2015, both TIFs together will contribute $1.4 million to the General Fund through administrative fees and so-called surpluses. The city was unable to balance the current GF budget and if not for TIF, the deficit would be $2 million. And the city has raises in pay and other expenses coming that are sure to exceed our stagnant revenue growth.

    It’s pretty scary math.

    And the Financial Advisory Committee is slated to tackle it. Next meeting is August 20 and it should be interesting.