Budget impacts - Funding challenges

Strategic Plan for Road Services - Summary

Road Services' revenue growth has not kept pace with the costs of doing business, including increases in the costs of labor and benefits, materials and equipment. Factors contributing to the funding problem include the elimination of the Local Option Vehicle License fee seven years ago, the subsequent voter-approved initiative that limited property tax growth to one percent (meaning it would not necessarily keep pace with inflation), exhaustion of levy capacity, the steady decline in gas-tax revenues, and the decrease in federal and state grant funding available for helping to fund the division’s Capital Improvement Program (CIP).

Declining revenues have led Road Services to focus the CIP on safety, preservation and mobility in recent years rather than adding capacity to the road system. The magnitude of the funding loss is creating a very large and growing backlog of unaddressed preservation and maintenance needs.

In the Strategic Plan for Road Services (SPRS), the division estimated that it would need $240 million annually for optimal management of the post-annexation system begining in 2015. This amount includes the costs of completing the backlog of road projects, of meeting new transportation system needs, and of adopting a lifecycle management approach, which the Road Operational Master Plan Phase I recommended to minimize the lifetime costs of road system assets.

The division estimated that under its current funding structure, only $102 million would be available annually beginning in 2015—$138 million less than is needed for optimal management and enhancement of the road system. That level of additional funding is unlikely to be forthcoming. Road Services leadership has established in priority order the following goals:

Goal: What we deliver

In priority order: Current funding is not sufficient to attain all of the goals. Available funding will be dedicated to the most important areas.

Goal: How we deliver

This set of goals is less dependent on funding, and they are all given equal importance.

Road Services must take action in several areas:

• Continue to seek efficiencies
• Ensure the agency is right-sized
• Update facilities master plan
• Pursue new funding

The division is currently in the process of developing an implementation plan to address the needs, priorities and necessary actions outlined in the SPRS. The implementation plan will be completed and presented to the King County Council in spring 2011.