Urban Transportation Districts
What is an Urban Transportation District?
Urban Transportation Districts in Montana are created to "supply transportation services and facilities to district residents and other persons." A UTD is structured similar to a Special Improvement District (SID) with bonds backed by local government issued to cover the cost of a proposed transportation improvement. Revenue to pay for the bonds is raised through assessments against property owners in the designated district.
Urban transportation districts serve the function of creating a steady funding source for local governments to finance a variety of transportation system improvements. The district could fund, for example, a specific highway improvement that spans more than one locality. One significant advantage of the UTD is the capability to bring several municipalities and counties together in funding and operating a transit system. Examples of successful urban transportation districts in Montana such as Great Falls Transit and Missoula (Mountain Line) prove that financing districts can provide a transit service that has a broader local-regional scope.
Who can implement it?
Section 7-14-201 of the Montana Code provides counties the authority to establish Urban Transportation Districts (UTDs), provided that residents within the proposed district vote in favor of the measure. Like SIDs and Rural Special Improvement Districts (RSID), the UTD has the flexibility to extend across city and county boundaries.
The district is administered by an Urban Transportation District transportation board, which is responsible for all of its operations, including planning and budgeting transportation investments. Local governments may levy taxes and issue bonds to fund the proposed improvements. Establishment of the UTD Board is initiated through a petition to the relevant County Commission(s) by at least 20 percent of the registered voters within the proposed district. The locality(ies) conduct a public hearing and establish the makeup of the Board's membership (including its status as an elected or appointed body).
What are the keys to success and potential pitfalls?
Establish Logical District Boundaries: Urban transportation districts (UTDs) should have boundaries that are logical and easily communicated to property owners and registered electors within the proposed district because their formation is subject to voter approval. UTD boundaries need to avoid the creation of "holes" or areas where the district would not have operational or maintenance responsibilities. Special assessment districts like UTDs can only be used to finance facilities that provide benefits to the district. Therefore if the district is intended to finance facilities that result in community-wide benefits, the district must be established to include the entire jurisdiction (city or county).
Identify and Communicate Transportation Needs: Developing a comprehensive understanding of the travel patterns, mobility needs, and existing services and facilities is essential to establishing the purpose and need for creating a UTD. Proponents of UTDs need to convey this information to local decision makers and those within the district to help ensure its successful formation and future operation.
Coordinate with Stakeholders and Potential Transportation Partners: Coordination efforts can help foster innovative solutions to meeting the demand for transportation services within the UTD. Local governments, transit operators, city and county transportation and human services agencies, health care providers, economic development agencies, large employers, and others are all potential transportation partners. Understanding their needs is essential to providing efficient and effective transportation services and facilities. Ongoing coordination efforts can help gauge the overall effectiveness of activities by the district and help to identify changing transportation needs.
Revenue Considerations: The primary method of collecting revenue within the transportation district is through a tax levied upon all property within the district sufficient to operate the district and meet the amount of funding requested by the district board. Once in place, the revenue collection process occurs through annual tax assessments to property owners. A transportation district may borrow money by issuing general obligation and/or revenue bonds to provide funds for the district. However, Montana code states the amount of bonds issued to provide funds for the district and outstanding at any time may not exceed 1.51% of the total assessed value of taxable property within the district.
Where has this strategy been applied?
Examples in Montana
Examples outside of Montana
The terminology "urban transportation district" may be fairly unique to Montana; however there are several similar types of districts outside of Montana:
How can I get started?
The creation of an urban transportation district is initiated by a petition of at least 20 percent of the registered voters within the proposed district. A formal public hearing must be held after which the creation of the district is put to a vote. The county commissioners determine whether a special election is necessary, or if a vote can take place at the next general election.
Where can I get more information?