Agenda

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ARF- 5435

2. A.

Work Session

Meeting Date:	04/30/2019
Submitted For:	Homero Vela
Submitted By:	Shannon Boyer, Executive Administrative Asst.
Department:	Public Works

Information

Request/Subject

Presentation and discussion regarding HURF(Highway User Revenue Funds), Vehicle License Tax (VLT), Half-Cent Transportation Excise Tax revenues, and the associated funding formulas as well as expenditures trends associated with road maintenance.

Background Information

In recent years revenues streams that support road maintenance have shown modest increases. But in the long term, since 2008, the annual total for the three sources of funding for road maintenance has decreased 19%. At the same time labor cost and material cost have increased. The objective of this presentation is to review the funding distribution formulas and offer a perspective of the revenue streams trends and the road maintenance expenditure requirements.

Evaluation

The County has three sources of funding for road maintenance: HURF, VLT, and Half-Cent Transportation Excise Tax. Starting in 2009, the state legislators diverted HURF funds to the Department of Public Safety (DPS). As much as $200 million in 2012, and $100 million as recently as 2018, have been diverted away from road maintenance on a state-wide basis. Even though fund diversion was diminished to $15.5 million in the current fiscal year, the current HURF funding for Gila County is only at 2008 levels.

Between 1995 and 2014, Gila County received 100% of the revenues generated by the Half-Cent Transportation Excise Tax. The excise tax was extended in 2015 and since then the funds are distributed to six towns and Gila County. Gila County receives approximately 50% of the funds generated by the Half-Cent Transportation Excise Tax.

VLT funding has decreased 1% since 2008, versus a cumulative inflation rate for the same time period exceeding 20%.

The 2014 Gila County Transportation Study funded by Planning Assistance for Rural Counties (PARA) and a recent independent assessment by the Arizona Association of County Engineers (AACE Feb 2018 draft) compared revenues versus required expenditures and determined that Gila County had a multi-million dollar annual revenue shortfall.

Conclusion

Recently the County Supervisors Association of Arizona (CSA) recommended to the state legislators a phased-in increase on motor fuel and use fuel taxes indexed to inflation, but the legislation failed to pass. Given that fact, the County has limited abilities to change the revenue stream our focus should be on the expenditure side.

Recommendation

The Public Works team recommends that the Board of Supervisors offer input, commitment and support to the Public Works team to review all aspects of the County's current processes to make sure we are utilizing our funding in the most efficient manner possible.

Suggested Motion

Information/Discussion of Gila County's current sources of revenue for road maintenance. (Homero Vela)

Attachments
Gila County - Consolidated Roads Presentation