Lakeland at Crossroads on Road Funding as Traffic Angst Grows

Lakeland strategic planning 2022

Millage rate increase? A sales-tax hike that must be approved in a referendum? Increasing impact fees, or changing how they are used? A bond? Better coordination with regional organizations to get more bang for leveraged dollars?

All are on tap as the city of Lakeland ponders a congested traffic grid addled by at least $200 million in unfunded road projects, costly jurisdictional complexities, state law that allows little discretion and the pressing reality that more cars, people, homes and businesses are coming regardless if roads are ready or not.

Raising money for roads was the dominant theme Wednesday morning during the Lakeland City Commission’s annual two-day strategic planning session at the RP Funding Center in downtown Lakeland.

City commissioners at Wednesday’s strategic planning session. From left, Stephanie Madden, Mayor Bill Mutz, Sara Roberts McCarley.

Of course, there’s nothing new about Lakeland’s shortfall in transportation funding but what is new — or, at least, what is mounting in ambient urgency — is furor over increasing traffic across the rapidly growing area directed at city commissioners and officials.

And that upswell in traffic angst may make what was politically untenable not long ago potentially palatable now.

“Millage (increase) or referendum?” asked Commissioner Sara Roberts McCarley.

Polk County voters shot down a 2014 sales tax measure for roads and transit.

But that was then, McCarley said, and this is now. Lakeland voters “might have more buy-in than eight years ago,” she said.

Sara Roberts McCarley at Wednesday’s strategic planning session

The 2014 sales tax proposal was poorly coordinated and did not make its case with “the private sector,” she said. Next time, “do it upfront” and “get them on board,” she said.

Lakeland Manager of Engineering Ryan Lazenby suggested the city “come up with two or three priority projects” and a “catchy name” for “some type of initiative” to “show the voters and the business community that we are serious.”

But good luck, he said. “Across Central Florida, those type of initiatives have failed. Folks do not want to pay more,” Lazenby said.

That’s the problem, Mayor Bill Mutz said. “We like to work with other people’s money” — federal, state, regional county — but unless local taxpayers reach “into their wallet to help correct some of the problems,” the road network will never get much more than “lip service,” he said.

Amid “all the nuances of the many facets of need,” Mutz said, “traffic is the No. 1 issue of importance. We cannot continue to talk about it as everybody else funding (projects). Look at yourself for a portion of that triage funding.”

A sales tax referendum and other options to boost road funding need to be studied to avoid “a millage increase to that end” that “nobody wants,” he said.

Finding ways to plug the gap between planned and funded projects has been a constant theme in previous annual strategy sessions and all along, the meter has been running.

Lakeland Transportation & Development Review Manager Charles Barmby said what was a $160 million gap several years ago is “north of $200 million” today.

Chuck Barmby, left, is the city’s transportation and development review manager. Ryan Lazenby, right, is the city’s manager of engineering.

Lazenby explained the primary sources of city road funding is property taxes, impact fees paid by developers and through allocations from, and projects undertaken by, the federal and state governments.

“The state has its work program, the county has its work program and the city has a transportation fund” with 51% comprised of gas taxes and much of the remainder from impact fees, he said. 

The city uses that money to either fully fund road projects or to leverage in tandem with contributions from federal, state and county agencies, as well as regional planning organizations such as the Polk Transportation Planning Organization.

Among issues with the funding formula is gas tax revenues are flatlining as cars become more fuel efficient and electric vehicles more common, Lazenby said.

“The city is heavily dependent on fuel tax revenues, which are maxed out,” he said. “The growth in the city is outpacing fuel tax revenues. We expect (gas tax revenues) to peak and start declining this decade.”

Fuel-tax funded road projects “was great coming out off the horse-and-buggy era,” Barmby said, noting transportation revenue mechanisms need to be modernized but doing so is among challenges “beyond the city’s control.”

“We need help from Tallahassee and from Washington,” he said. “We really need Tallahassee to help.”

State laws adopted in the wake of the 2007-08 housing recession limit local government discretion in dealing with development proposals. Among 2011 prohibitions is denying new development because existing roads are inadequate and requiring developers pay for improvements to upgrade existing deficiencies.

Voters should “really get mad and say this is not working” the next time they vote for state legislators, Bramby said.

McCarley said she recently fielded a complaint from a state senator about traffic on South Florida Avenue, which is a state highway. “I said, ’So what are you going to do about it? It’s your road,” she said.

Lakeland Finance Director Mike Brossart said the city “can finance debt” for a bond issue with “pay as you go” fuel tax and impact fees revenues. 

Brossart said issuing a bond is not always the best solution if the city wanted to quickly raise money for a project. “Direct borrowing” from local banks can be “less expensive” because “we don’t need the rating agencies’” review for a municipal bond issue.

Bonds are for large-scale projects “planned planned well in advance,” he said.

A less-dramatic course in finding more bang for the city’s transportation buck could be building flexibilities into new development transportation impact fees to encourage builders to contribute to off-site improvements.

Lazenby said the city’s impact fee structure was last refashioned in 2019 and could be reviewed again. “Maybe start at a higher level” in upfront fees “but with a lot more flexibility” to encourage “retail uses with internal capture,” such as the recently approved development agreement with Forestar.

Last year, he said, the city collected $5.9 million in impact fees with about 14% — $235,000 — available to handle road pressure from new development. Right now, 65% of the city’s total road budget is spent on maintaining the existing system. Without revenue boosts, that will soon be about 80%, he said.

Lazenby said with better coordination with the county and Polk County TPO, not to mention the state’s Department of Transportation, “the city can make small investments to get (unfunded projects) closer to shovel ready,” which the state favors when approving projects.

One way the city could leverage its money for state money is to handle all the upfront permitting such as “the right-of-way phase” to make it an “attractive project for (state) funding,” he said.

Barmby said 2019 studies recommended the city increase its impact fees while providing incentives for high-wage industries. 

The “only uses being charged full impact fees are warehouses,” he said. “The next update, we need to get closer to 100%” because doing so “signals to the state we will have more funding available for shovel-ready projects” to “push the DOT along.”

Exactly, McCarley said, more upfront money is needed.

“That’s my point — skin in the game,” she said. ”Budget wise, have to have the money to show we have skin in the game.”