Thursday, June 13, 2024

With depleting funds, WMPO explores alternatives to fill $7B gap in transpo plan

The Wilmington Urban Area Metropolitan Planning Organization reviewed some alternative funding sources for future transportation projects at its Wednesday meeting. (Port City Daily/Amy Passaretti Willis)

WILMINGTON — The Wilmington Urban Area Metropolitan Planning Organization reviewed some alternative funding sources for future transportation projects at its Wednesday meeting.

READ MORE: NCDOT ranks CF Memorial Bridge in top 10 for funding, Hampstead signaling top-earner

Kristina Whitfield, a transportation engineer with Kimley-Horn, presented alternative ideas to generate local funding in the Wilmington metro area to supplement dwindling state funding and competitive federal dollars. 

Whitfield said the WMPO does a good job of leveraging non-traditional funding sources, which presents well to the feds, but MPOs may become more reliant on these options in the future. 

“Our traditional revenue streams are tied to assumptions and trends that are quickly becoming obsolete,” Whitfield said. 

For example, with the rise of electric vehicles and increased fuel efficiency, available dollars through the gas tax are decreasing. As an additional hurdle, the state has the 12th highest gas tax, but the second-largest state highway system, so tax dollars are stretched thinner than other states. 

According to Whitfield, there is an anticipated $7 billion gap in funding and project costs in the WMPO’s 2045 Metropolitan Transportation Plan. Projects in the plan include the Kerr Avenue extension, 23rd Street widening, and the Snow’s Cut bridge replacement.

Plus, there are benefits to using alternative funding sources, such as having more control to better serve local priorities. 

The first alternative options presented were a local sales tax, which New Hanover County has already passed; in part, it could be dedicated for transportation needs. Another was a special tax for only transit. Both would need referendum majorities to be instituted. 

“A lot of times the ability to pass that is very much tied to voter sentiment about current economic conditions,” Whitfield said. 

New Hanover County tried to pass a quarter-cent sales tax increase in 2022 to funnel millions into public transportation, as well as enhance trails and create more bike and pedestrian needs. It failed with 42,003 votes in favor and 47,439 against. 

Municipalities could also implement higher vehicle registration fees to support transit, along with complimentary facilities such as sidewalks and bike lanes. However, Whitfield noted this has been unsuccessful when attempted in the Cape Fear region.

In that same vein, the motor vehicle license tax can be utilized for infrastructure improvements. Up to $5 can be used for any lawful public purpose, $5 for transit, and the rest for public streets that are not state-owned. Increasing the vehicle license fee is something the City of Wilmington is already exploring in its FY2025 budget. 

The WMPO’s members could also benefit from a vehicle rental tax, with money to be used in the county where the rental occurred. This turns out to be a beneficial option for tourism destinations — a popular choice among members of the WMPO’s Metropolitan Transportation Plan Advisory Committee, charged with making recommendations for the 25-year regional transportation plans. 

Whitfield said the committee did not look favorable on a bicycle registration fee. 

“The MTPC has requested that we not explore this going into the future, just because of really high administrative costs that may be expected for it, as well as the inverse effect that it may have on encouraging bicycle ridership in the Wilmington area,” Whitfield said. 

Though currently off the table in North Carolina, Whitfield did present the option of transportation impact fees. These are one-time capital charges imposed on developers by municipalities to help fund the capital cost of the additional public services, infrastructure, or transportation facilities necessitated by, and attributable to, new development. 

Additionally, municipalities can create transportation improvement bonds and general obligation bonds, both of which require voter approval. Revenue bonds — paid back by user-generated revenues — are another option, though they are more vulnerable to economic downturns. 

The WMPO could also leverage public-private partnerships, though those often have to be accompanied with a project-specific revenue source, such as tax-increment financing or tolling.

Tax-increment financing invests in improvements in a more “blighted” part of town and diverts the funds gleaned from that area toward transit. 

“What you’re banking on is that as an area improves, the property taxes go up, and instead of raising the rates, you just essentially take in the delta between the improved value stock, stock that away, and you can make public infrastructure improvements with it,” Whitfield said. 

She noted the method hasn’t taken off in North Carolina as it has elsewhere in the nation, despite its approval in the 2000s. Other states, such as Georgia, foster a thriving program.

One of the options was all-too familiar for WMPO board members: tolling. Though self-sustaining, tolling is heavily regulated at the state level and the turnpike authority can only take on a set number of projects each year. 

“So for a project to make it to this level, it takes quite a few steps to kind of get even considered to use one of their projects that are allocated,” Whitfield said. 

The Cape Fear Memorial Bridge replacement project scored high enough to receive state funding when presented with a toll, to cover funding gaps left behind after state funding and federal grants. It’s currently estimated at $120 million if the NCDOT is awarded the three grants it applied for.

Port City Daily asked WMPO Executive Director Mike Kozlosky if WMPO could use any of the other alternative options to offset costs of the CFMB, estimated to come in at $440 million. 

“The MPO would have to look at the specific alternative funding sources to determine the applicability and any restrictions,” Kozlosky wrote in an email. “The WMPO Board has supported looking at all potential funding options for the replacement of the Cape Fear Memorial Bridge.” 

WMPO board chair and Wrightsville Beach Alderman Hank Miller and WMPO member and Carolina Beach Mayor Lynn Barbee both reaffirmed the commitment to exploring all options to PCD on Friday. 

Vice chairman and Wilmington council member Luke Waddell said he didn’t know if any of the options would be applicable to the bridge. 

“My understanding from that presentation was more of looking into the future for other projects,” Waddell said.

He said, unfortunately, there didn’t seem to be other options besides a toll in the event the project does not score enough grant funding. This is why he forewarned and voted against submitting a toll component with the CFMB submission to NCDOT. 

“I really hope I’m wrong and I’ll be happy to say, ‘Hey, I was wrong and they got it,’” Waddell said. “I know there are a lot of people that are working really hard to get this, get these grants, and I appreciate it. It’s just, you have to kind of start planning about whatever that delta is going to be.” 

A glimmer of hope, though, is that the more grants the CFMB project receives, the more doors open up to grant opportunities, Waddell said. 

As far as other projects, Whitfield’s team is working through the MPTC’s feedback on alternative methods to determine which sources it will create financial forecasts for. It will, ultimately, be presented for WMPO approval.


Tips or comments? Email journalist Brenna Flanagan at brenna@localdailymedia.com.

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