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Home My WebLink AboutCOM 1084.000 1996-1998 0J ,I OF " Stephen K. Yamashiro "h/y Harry A. Takahashi Mayor Director S. K. Schutte ~rE •OF M~J1 Deputy (county of 'Wabuaii DEPARTMENT OF FINANCE 25 Aupuni Street, Room 118 • Hilo, Hawaii 96720-4252 (808) 961-8234 • Fax(808)961-8248 November 17, 1998 Honorable James Arakaki, Chairperson and Members of the County Council Hawaii County Council 25 Aupuni Street Hilo, Hawaii 96720 Re: Capital Budget Enclosed is a bill for an ordinance appropriating $2.5 million for Tea Projects (Federal Aid) and another $2.5 million for local road improvements. Funds for these projects shall be provided from the fuel tax increase pursuant to Resolution No. 192-97. Specific projects are enumerated in Exhibit A. If there are any questions, please do not hesitate to call the Department of Public Works. .1 Harry ATakah shi Director f Fin cc APPROVED: 0 hen amashiro ayor Enc. 9; 11 3y° Comm No. File No. ANC C - R.er. To: F ley. .kite- NOV 2 3 1998 Form B-52 7/18/91 DEPARTMENT OF FINANCE REQUEST FOR COUNCIL ACTION DEPARTMENT: PUBLIC WORKS - ENGINEERING DATE: Aug. 11, 1998 STAFF CONTACT: Galen M. Kuba PHONE: 961-8327 A. REQUEST: Allocation of first increment of fuel tax revenues established by Resolution 192-97 and 241-98. See attached "Revenue Appropriation Increment 1 1998-2000." B. BACKGROUND AND JUSTIFICATION (USE ADDITIONAL SHEETS AS NEEDED): See attached 111998-2008 Fuel Tax Allocation Program." SIGNED: DATE: D part ent Head E.,WP FileSTuel Tax\F[x B52-9800 Reapp.wpd(1) 1998-2008 FUEL TAX ALLOCATION PROGRAM BACKGROUND The original fuel tax program, established by Resolution 397-88, created a ten-year revenue stream that was to improve our highway system. The fuel taxes collected were allocated to each tax map district according to the formula: /(District's % Vehicle Weight Tay) + (District's % of Road Miles) 2 The County Council adjusted district allocations biennially to account for changes in road mileages and the amount of taxes collected. Specific projects and programs for each tax map district were approved through a separate appropriation ordinance. Although the formula intended to equitably distribute fuel tax revenues, it assumed that all districts had similar roads with similar facilities such as bridges and traffic signals. This is obviously not true. A 4-lane urban arterial street in South Hilo is not the same as a 1-lane rural road in Puna nor are our bridges and traffic signals equally distributed among the tax map districts. Because we lack sufficient data to account for these inequities, we propose to abandon the old formula and create a new allocation program. We believe the new program will not only make the best use of all our available resources, but it will have more flexibility to address each community's needs. ALLOCATION PROGRAM During the first seven years of the fuel tax program the Engineering Division designed and managed all fuel tax projects. In 1995, the Engineering Division began to use fuel tax revenues as our local matching share to obtain federal dollars under FHWA (Federal Highway Administration) ISTEA program. Simultaneously, we began to set aside a portion of the fuel tax revenue for "in-house" local road resurfacing by our Highway Maintenance and Traffic Safety Divisions. This new approach dramatically altered the effectiveness of the fuel tax program for the better. Table I summarizes and compares activities and expenditures for the seven-year period from 1988-1994 against the three-year period from 1995-1997. In three years, we resurfaced six more miles, brought in more than $8 million of federal aid and spent less fuel tax money than the first seven years of the fuel tax program. In addition, we still have more than $21 million worth of ISTEA projects in various stages of development. Based on our success with ISTEA and our "in-house"resurfacing program, we are proposing a new allocation program that will support and expand our current efforts. This new program will equally divide fuel tax revenues into two categories: (1) TEA (Transportation Equity Act of 1998, formerly ISTEA, also known as TEA21) Projects and (2) Local Road Improvements. Revenues directed to Local Roads will be distributed to tax map districts according to it's percentage of local streets. A graphical representation of this plan is shown in Figure 1. D:AData\WPNilenVPue19'ax\NewRxl. pd(8/11/98) Page] of 5 1988-1994 1995-1997 Difference % Change Fuel Taxes Expended 7,966,507 6,083,130 (1,883,377) -24% Federal Aid Received 1,683,836 8,381,827 6,697,991 398% Total (FTX + FA) 9,650,343 14,464,957 4,814,614 50% Traffic Signals Installed 1 5 4 400% Bridges & Other Work 5 9 4 80% Total Miles Resurfaced 52 58 6 13% Table 1 ANNUAL FUEL TAX REVENUES (100%) LOCAL ROAD TEA PROJECTS IMPROVEMENTS (50%) (50%) • Bridge Inspection, Repair Puna 24.60% and Replacement South Hilo 26.88% • Road Resurfacing, Repair North Hilo 3.87% and Improvements Hamakua..... 9.64% • Safety Improvements North Kohala.. 3.72% • New Construction South Kohala.. 6.55% • Enhancement Projects N. Kona 11.24% S. Kona 4.84"/ Kau 8.66% Figure 1 TEA Projects: Funds in this category will be spent on those TEA projects that appear on the Statewide Transportation Improvement Program (STIP). The STIP is an FHWA mandated expenditure plan developed by the Hawaii State Department of Transportation (HDOT). Qualifying projects, statewide, can receive federal aid at a one (County) to four (federal) ratio and certain safety improvements such a traffic signal installations may not require any County funds for construction. D:AData\WP Files\Fuel Tax\New Ftx2.wpd(8/11/98) Page 2 of 5 TEA projects may include- • Bridge inspection, repair and replacement. • Road resurfacing, repair and improvement of FHWA approved County roads. • Highway safety improvements, including guardrail and traffic signal installations. • Construction of new major collectors or arterial highways. • HDOT transportation enhancement projects. HDOT currently requires all TEA projects to be managed by the Engineering Division. Except for bridges and transportation enhancement projects, TEA money can only be spent on roads that has received an FHWA functional classification of major collector or higher. Major collectors typically provide land access and traffic circulation within and between population centers (neighborhoods), commercial and industrial areas. They also serve as the primary link to and from arterial highways. Because bridges are an essential element to any road system, Congress has given them special priority. Any bridge that has been properly inventoried and accepted by HDOT, on any County road regardless of functional classification, can qualify for funding. Further, approximately 2.25% of the TEA funds received by the State must be spent on County bridges that are on minor collectors and local streets. Miles of County roads having a functional classification of at least a major collector and the number of HDOT inventoried bridges in each tax map districts are shown on Table 2. TAX MAP FHWA ROADS HDOT BRIDGES DISTRICT Miles Percent Amount Percent Puna 15.6 8.76 4 3.25 South Hilo 93.2 52.30 51 41.46 North Hilo 0.7 039 8 6.50 Hamakua 1.1 0.62 39 31.71 South Kohala 24.9 13.97 1 0.81 North Kohala 0.0 0.00 9 7.32 North Kona 38.3 21.49 8 6.51 South Kona 4.4 2.47 0 0.00 Kau 0.0 0.00 3 2.44 TOTAL 178.2 100.00 123 100.00 Table 2 D:\Data\WP Files\Fuel Tax\New Ftx2.wpd(8/11/98) Page 3 of 5 Transportation enhancement projects must have a benefit or direct relationship to the State's transportation system. There are ten categories of potentially eligible activities under this program. These include: 1) Facilities for pedestrians and bicycles, 2) Acquisition of scenic easements and scenic or historic sites, 3) Scenic or historic highway program, 4) Landscaping, 5) Historic preservation, 6) Rehabilitation and operation of historic transportation facilities, 7) Preservation of abandoned railroad corridors, 8) Control and removal of outdoor advertising, 9) Archaeological planning and research, and 10) Mitigation of water pollution caused by highway runoff. Although it seems unfair to have no district distribution, this proposal does addresses many of the inequities in our present formula-based allocation plan. Funds will only be spent on our major road system and bridges. These projects generally have large scale impacts affecting a region or several communities or are critical to a community's safety, welfare or even its continued existence. Although projects in this category are very expensive, based on a 1 : 4 TEA funding ratio, we hope to finance or program more than $5-million in construction projects and services annually. By eliminating district distributions, we also give ourselves the flexibility and opportunity to pursue major construction projects that have been beyond our financial capabilities. Local Road Improvements: Funds in this category will be distributed among the tax map districts according to each district's percent of miles of local streets. Projects will be prioritized and constructed by Highway Maintenance and Traffic Safety Divisions. Percentages will be recalculated biennially to accommodate newly dedicated roads, abandonments and any other changes in mileage. 1998 mileage percentages for Local Roads are shown on Table 3. TAX MAP ALL ROADS FHWA ROADS LOCAL ROADS DISTRICT Miles Percent Miles Percent Miles Percent Puna 185.8 21.35 15.6 8.76 170.2 24.60 South Hilo 279.2 32.09 93.2 52.30 186.0 26.88 North Hilo 27.5 3.16 0.7 0.39 26.8 3.87 Hamakua 67.8 7.79 1.1 0.62 66.7 9.64 North Kohala 25.8 2.96 0.0 0.00 25.8 3.72 South Kohala 70.2 8.07 24.9 13.97 45.3 6.55 North Kona 116.0 13.34 38.3 21.49 77.7 11.24 South Kona 37.9 4.35 4.4 2.47 33.5 4.84 Kau 59.9 6.89 0.0 0.00 59.9 8.66 TOTAL 869.9 100.00 178.2 100.00 691.7 100.00 Table 3 D:\Dala\WP Piles\Fuel Tax\New Ftx2.wpd(8/11/98) Page 4 of 5 OTHER CONSIDERATIONS 1. Although consultant services, project advertising and staff per diem and travel have been recognized as valid fuel tax expenditures for a project, it is not being identified as a specific work category and will not receive a specific allotment. This type of work is viewed as a project development cost and may therefore be funded by the project or program. 1 Revenues shall be expended according to an appropriation ordinance. The ordinance shall include updated percentages of local streets in each tax map district. An appropriation ordinance shall be submitted to the County Council biennially. 3. The current practice of establishing allocation percentages by County Council resolution will be discontinued. 4. A fuel tax project or programs may receive funds from multiple sources including federal aid, State and County C.I.P. appropriations and regular fuel tax revenues. 5. Should actual revenues be less than or greater than budget amounts, the shortage or excess amount shall be allotted according to the distribution plan found in the originating appropriation ordinance. If deemed necessary, a new appropriation ordinance designating new projects shall be submitted to the County Council. 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