HomeMy WebLinkAboutTransportation Benefit District ReviewCITY AUDITOR 345 6 Street, Suite 600, Bremerton, WA 98337-1873 & Phone (360) 473-5369
May 9, 2014
Honorable Patty Lent, Mayor
Members of the City Council
The City Auditor has completed the attached report entitled Transportation Benefit
District Review. This project was scheduled on the 2014 work plan.
The Transportation Benefit District was created by the City Council in February 2009.
The city started receiving fees in July 2012. This report reviews the TBD from creation
through December 31, 2013. Three procedural items were noted that should be
addressed. It was also noted that very little time or available funds were spent on street
maintenance in 2013.
Sincerely,
Gary W. Nystul
cc: City Attorney
Director of Public Works & Utilities
Director of Financial Services
Purpose
Scope
TRANSPORTATION BENEFIT DISTRICT REVIEW
This is a review of the Transportation Benefit District to make an assessment of
compliance with state law, city ordinances, TBD charter and bylaws. It is
included in the 2014 work plan.
The review covered the period from the creation of the District in 2009 and
activity through December 31, 2013.
Statement of Auditing Standards
This performance audit was conducted in accordance with Generally Accepted
Government Auditing Standards, except section 3.82 which requires an external
peer review. Those standards require the auditor to plan and perform the audit to
obtain sufficient, appropriate evidence to provide a reasonable basis for findings
and conclusions based on audit objectives. The auditor believes that the evidence
obtained provides a reasonable basis for the findings and conclusions based on the
audit objectives.
Objectives
Review the creation, history and activity for compliance with state law and
city ordinances
Review budgets, revenue and expenditures
Note any opportunities for economy, efficiency or effectiveness
Summary of Results
■ Some minor compliance housekeeping issues need to be addressed
0 The 2013 budget anticipated more work than was actually performed
Background
A Transportation Benefit District is a quasi -municipal corporation and is an
independent taxing district. The state legislature, starting in 1987, allowed cities,
towns and counties to create this entity to fund transportation improvements. In
2007 the Legislature amended the statute to authorize the imposition of vehicle
fees and transportation impact fees without a public vote. Districts may, with
specific limitations such as voter approval, also impose sales and use taxes,
vehicle tolls or impact fees.
The legislature established the purposes of TBDs to be ... "acquiring,
constructing, improving, providing, and funding a transportation improvement
within the district that is consistent with any existing state, regional, or local
transportation plans and necessitated by existing or reasonably foreseeable
congestion levels." The law also provides ten criteria to be considered when
selecting transportation improvements.
In February 2009, the City of Bremerton created a Transportation Benefit District.
As provided in state law, the City Council is the governing board of the TBD.
However, since the TBD is a quasi -municipal corporation, it is an entity
independent of and separate from the City. The TBD has adopted a Charter and
Bylaws. The Board meetings and officers are separate from city council meetings
and city officers. The treasurer of the TBD is the City Financial Services
Director, the City Clerk serves as its secretary, and the City Attorney represents
the district.
In November 2009, the TBD submitted a proposal to the qualified electors of the
District to impose a $30 annual vehicle fee. The measure was defeated by a vote
of 2,353 in favor and 5,252 opposed. In December 2011, the District voted to
authorize a $20 vehicle license fee. As provided by law, collection of this fee
started six months later in June 2012.
The annual vehicle license fee is collected when the owner of a vehicle, who
resides in the city limits, obtains a new vehicle license or annual renewal. The
collected fees are forwarded by the State Department of Licensing to the State
Treasurer who transmits them monthly to the city.
The District started receiving fees from the state in July 2012. However, due to
the uncertainty of the revenue, it did not establish an expenditure budget for that
year.
2
TRANSPORTATION BENEFIT DISTRICT
SCHEDULE OF REVENUE AND EXPENSE
For the Years 2012 and 2013
Revenue Expense Balance
2012
Vehicle Fees $189,169
Interest 59
Total 189,227 0 $189,227
2013
Vehicle Fees 426,361
Interest 486
Maintenance 53,629
Total 426,847 53,629 373,218
Balance Forward to
2014 $562,446
FINDINGS AND RECOMMENDATIONS
1. COMPLIANCE
The formation of the district and its organization complies with state law.
However, a review of the charter, bylaws and ordinances discloses three minor
issues that should be addressed.
A. Section 2.04 of the Charter requires that a disclaimer, substantially in the
form as listed, be posted in a prominent place accessible to the public in the
District's principal office. It further requires that this disclaimer be printed
or stamped on all contracts, bond and other documents that evidence or
create any obligation which, by its terms, is not payable from a special or
limited source of funds.
Recommendation: This disclaimer should be posted as required.
B. Section 6.05 of the Charter requires the Board to develop a material change
policy to address major plan changes that affect project delivery or the
ability to finance the adopted plan.
Recommendation: A material change policy should be adopted.
3
C. Section 5.2 of the Bylaws requires the principal office and mailing address
of the TBD to be located as specified by resolution.
Recommendation: A resolution should be passed to establish the
principal office and mailing address.
2. PERFORMANCE
No budget was adopted for work in 2012 because of the uncertainty of the amount
and timing of the receipt of revenue the first year. Although not specifically stated
as crack sealing, $300,000 was budgeted for 48 street segment repair projects in
2013. The actual total expenditures in 2013 were $53,629 for 761.5 hours of work
performed by public works staff over 18 days on 15 different street segments. The
amount includes the cost of labor, materials and equipment.
Recommendation:
The TBD was created to provide funding for much needed street repairs and
maintenance. It does not seem reasonable for so little time and effort to
have been expended in 2013 when there is a clear need for crack sealing
and other street maintenance. There is no shortage of streets to maintain.
Management should ensure there are sufficient resources and planning to
implement the annual budget.
11
May 6th, 2014
Gary Nystul
City Auditor
345 Sixth Street, Suite 600
Bremerton, WA 98337
RE: Response to April 14, 2014 draft audit report, Transportation Benefit District
Dear Mr. Nystul,
The following is our response to the findings and recommendations of this draft audit report:
1. Compliance
a. Disclaimer
The disclaimer has been posted on the 6th floor of the Norm Dicks Government Center, outside
of the City Council office.
2014.
b. Material Change Policy
This policy has been drafted and will be brought forward to the TBD for approval on May 21,
c. Specify TBD principal office and mailing address by resolution.
Staff will take appropriate action to resolve this issue.
2. Performance
The draft audit report recommended that TBD management ensure there are "sufficient
resources and planning" to implement the annual budget. For 2013 (and again for 2014), the TBD
essentially "contracted" with the City of Bremerton to implement the work plan. For the 2013 work
program, the City's public works department initially estimated it would require $300,000 to implement
a crack sealing program, which would accomplish maintenance on a specific list of street segments. The
experience gained in 2013 demonstrated that this work was less expensive than originally anticipated;
further, weather and available manhours made it more difficult than expected to complete the entire
planned program in-house. In addition, City forces accomplished street maintenance work on arterial
streets not originally listed because of a more efficient approach of performing crack sealing and
replacement of raised pavement markers at the same time. The Department's proposed work plan for
Public Works & Utilities 1100 Oyster Bay Ave. N., Bremerton, WA 98312 * Phone (360) 473-5315 * Fax (360) 473-5018
2014 incorporates those lessons learned. The crack sealing program will be increased; in addition,
contract maintenance will be performed. This contract maintenance includes large area
grind/patch/overlay on various street segments; slurry seal/fog seal on various street segments, and
street traffic markings. This work is scalable to enable expenditure of the 2014 programmed budget.
Z� /2/6�
Chal A. Martin, P.E.
Director
C: Mayor Lent
Finance Director Cathy Johnson
City Attorney Roger Lubovich
City Engineer Tom Knuckey
TBD President Dino Davis
Public Works & Utilities 1 100 Oyster Bay Ave. N., Bremerton, WA 98312 * Phone (360) 473-5315 * Fax (360) 473-5018