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KITTITAS COUNTY <br />DEPARTMENT OF PUBLIC WORKS <br />PUBLIC WORKS — BOARD OF COUNTY COMMISSIONERS <br />2024 STUDY SESSION STAFF REPORT <br />STUDY SESSION DATE: April 8, 2024 <br />TOPIC: Road Fund Levy Update <br />ACTION REQUESTED: None <br />LEAD STAFF: <br />Mark R. Cook <br />RECOMMENDATION: <br />Continue supporting CONSOR's outreach effort. <br />BRIEFING SUMMARY: <br />• Levy rate impacts from three years of inflation are currently being evaluated. <br />• A strategy for managing inflation and historic road fund diversion impacts is <br />being formulated. <br />BACKGROUND: <br />For the past several months, Public Works' (PW) outreach consultant CONSOR has been <br />implementing their 2024 contract outreach plan. Initial outreach efforts are complete <br />(results are attached as EXHIBIT 1). Efforts now shift to two (2) in -person focus group <br />meetings (one in upper county and one in lower county) scheduled for April 13th, 2024. <br />DISCUSSION: <br />Inflationary impacts resulting from 2021 — 2023 total 16.8 percent (Western States CPI). <br />The Ten -Year Transportation Plan (TAMP) utilizes an annual inflation rate of two (2) <br />percent. Using 2024 assessed values and the certified Road Levy, capturing the <br />inflationary impact results in an estimated 2025 levy rate of $1.82 per $1,000 of assessed <br />value. This represents an increase of ($1.82 — $0.77 = $1.05) beyond 2024 levels. It <br />seems unlikely that county rate payers will approve this increase. This rate scenario will <br />be vetted at focus group meetings scheduled for later this month. The net result on a <br />$400,000 home in 2025 is $420 more (2025) in road tax than 2024. <br />An alternative approach is to try and capture one-half (1/2) of what is needed now and <br />reassess the Road Fund in five years. The impact to the levy rate in 2025 is estimated at <br />being $1.29 per $1,000 of assessed value. This represents an increase of $0.52 per <br />$1,000 of assessed value beyond 2024 levels. This rate scenario will also be tested at <br />focus group meetings later this month. A financial forecast is attached as EXHIBIT 2. <br />The net result on a $400,000 home is $208 more (2025) in road tax than 2024. <br />Page 1 of 4 <br />Public Works "Work Session Staff Report", 2023 <br />