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Tigard gas tax revenues sputter

City officials must decide how to make up shortfall on 99W/Greenburg/Main improvement project

TIGARD - The city's 3-cents-per-gallon gas tax went into effect April 1, 2007, to fund the overhaul of the Pacific Highway/Greenburg Road/Main Street intersection, but now it looks like the revenue projections will fall short.

The City Council approved the tax in December 2006 but delayed implementing it while gas station owners tried twice to put the issue on the ballot, failing to get enough signatures from registered voters both times.

The intersection improvements were expected to cost about $4.5 million, and city officials wanted to time the project to coincide with the Pacific Highway/Hall Boulevard improvement project funded by Washington County's MSTIP program.

The gas tax is scheduled to end once $5 million is raised or on Dec. 31, 2011, whichever comes first. However, the revenue coming in from the city's 14 gas stations is not as high as projected, according to City Engineer Gus Duenas.

'We have to work our way backward to figure out how much money is coming from each station, but it looks like it will be more like $3.5 million,' Duenas said. 'The length of the period to collect the tax would have to be extended to seven years or we would have to raise the tax to get the amount we were planning on.'

He said that the City Council would have to decide how to handle the situation 'in a way that is the least disruptive and the most palatable to people.'

When city officials hired Campbell DeLong Resources Inc. to conduct a survey of community attitudes in November, the question of how to handle the revenue shortfall was included.

'Among different scenarios to address the shortfall in gas tax revenue for the Highway 99/Greenburg Road improvements, most residents favor the city collecting sufficient funds to complete the project as currently planned,' the executive summary states.

'Just over one-third favor an extension of the tax past the current five-year limit, and about two in 10 support an increase in the tax so that the funds are raised within five years. Another one-third say the city should reduce the scope of the project rather than increase the funds to be collected.'

The city plans to sell bonds to pay for the project and pay back the money with the gas tax revenue.

'We can get the revenue bonds, but we need the revenue stream to pay for them,' Duenas said. 'In the meantime, we are working on the design for the project. (Because Pacific Highway is a state road) dealing with ODOT means a lot of back and forth.

'We are planning to take the design up to 50 percent completion, and then we will have a much better idea of how much it will take to complete the project, which should happen in the next few months.'

On Nov. 27, the City Council awarded a contract for design services to W and H Corporation. The $350,000 contract covers the first phase of the project design. The estimated cost of the entire contract for the full scope of the work is $724,000.

Washington County is in the process of designing the Pacific Highway/Hall Boulevard intersection, with construction set to begin in mid-2008.

'The capacity improvements to both intersections need to be constructed together to improve traffic flow and alleviate congestion in this area of Tigard,' Duenas told the council at the time it approved the design contract.

Gas station owners are not providing information to the city on how much gas they are selling, according to Duenas.

'One reason the collections are not quite what we thought is that people have choices,' he said. 'Drivers are not a captive audience, and they can purchase gas in other places if they want. We had anticipated that the revenue would be $70,000 to $80,000 a month, but it is more like $60,000.

'Once we have a better idea of the project costs, we can go to the council to figure out the next step. This is a case of the spigot being turned off before the bucket is full.'