Traffic. Nearly everyone agrees that it’s a problem that will only get worse with time. But the question is: How will it be addressed and who will be paying for it?
During a three-hour Sedona City Council meeting on Wednesday, Sept. 13, a solution may have been found.
For the last 10 months the Fiscal Sustainability Work Group has been meeting once or twice a month to discuss just that — fiscal sustainability.
The meeting was for discussion only so no action was taken by council on the matter.
The committee, made up of Ronald Budnick, Kurt Gehlbach, Doris Granatowski, Lou Harper, Charlotte Hosseini, Sedona Fire District Fire Chief Kris Kazian, Holli Ploog and Sedona Economic Development Director Molly Spangler, covered several topics including fund balance, bonds and funding sources. But one topic jumped off the page more than the others.
The group unanimously voted to recommend the following to City Council:
Increase the city sales tax rate by 1 percent to be dedicated to the funding of transportation-related projects and the cost of additional personnel and project management to accelerate the completion of those projects.
Set a sunset on the tax increase of 10 years, or less if deemed appropriate.
Continue to fund other non-transportation-related projects with the current funding sources. They also recommended council adopt recommended changes to the current fund balance policy and debt policy.
“We have to generate revenue to do the projects we’ve identified to help us on the biggest thing we face every day — traffic,” Vice Mayor John Martinez said. “One percent I think is fair. The visitors are the ones who are really stressing the system. And they’re primarily the ones who will [be] paying for that.”
Options that were considered by the group to raise money for transportation needs but were eventually rejected included a primary or secondary property tax, an increased bed tax, food tax, residential rental tax and increased sales tax for specific categories. All were rejected because they either added more of a burden on residents than visitors or they did not generate enough funding needed to cover transportation improvement needs.
An increase to the sales tax rate only requires adoption by council via an ordinance. If this option is pursued, the group recommends that outreach meetings be held with the community to explain the reason for the increase.
If approved, the tax rate in the Yavapai County part of Sedona would increase to 10.35 percent while on the Coconino County side [Uptown] it would be 10.9 percent.
Based on recent figures, a half-percent tax increase would equate to $2.7 million with $1.8 coming from visitors and $900,000 from residents. And, a 1 percent hike would bring in $5.3 million, $3.5 million of which would come from visitors and $1.8 million from locals. A 1 percent increase would equate to about $15 in additional spending a month for the average resident.
It was pointed out that the percentage of the tax increase is just a suggestion. The council has the ability to approve a different percentage based on the amount of funding deemed needed.
The city is finishing up its year-long transportation study. In it, staff has identified nearly $63 million in potential traffic mitigation projects. It has been stated many times that some of these projects may never come to fruition but are placeholders that have been included in the budget over the next 10 years.
Even though city manager Justin Clifton has previously said that the city should anticipate paying most, if not all, of construction cost, there is the possibility of receiving grants or county and state funding to offset the costs.
“There are a number of challenges with a 10-year forecast for transportation planning,” Clifton said. “We would be aggressive in seeking other sources of funding but we ought to expect none. What we’ve seen around the state and country is individual projects funded occasionally but on the whole it’s done though dedicated taxes.”