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ORINDA’s PRIVATE ROAD PROBLEM

THERE IS A SOLUTION

 

One reason to address the private street "problem" is that it will enhance the general trust in government.

 

No one likes being taken advantage of.  Whether it is being taxed to repair roads "that everyone uses" (when it turns out that everyone does not use them); or vote in a new tax that will be used mainly for wildfire prevention and then use only 7% of funds-available for actual preventive measures (fuel reduction) and another 8% for "education" with no measure of its effectiveness; or sell a new school tax by understating by 50% the actual funding already received from the state and existing special taxes; or by paying MOFD $6 million more per year for the same services Lafayette is receiving from ConFire, money that could go to a serious wildfire prevention program so that Measure R money can be used exclusively for infrastructure, including maintaining all of Orinda's streets, not just three quarters of them.  All of these factors erodes the public trust in local government.

 

Focusing on the existing and past road taxes and fees and how they are deployed.

 

In 2012 Orindans voted for a half-cent sales tax to repair what were then the worst roads in the Bay Area.  The money was focused on the 64 miles of "public" residential streets. The City believed that existing funding, about $1 million per year, could address the maintenance, including deferred maintenance, of the 29 miles of arterials and collectors.  It ignored the 30 miles of "private" roads, home to 20% of Orinda's residents.  In 2024 voters approved a $20 million bond and in 2016 an additional $25 million bond.  By 2020 the City's "public" street were fully reconditioned and the City now had the best roads in the Bay Area.

 

Almost all of the 2012 sales tax and bond revenue went for deferred maintenance for the 64 miles of the Publicly Maintained Residential (PMR) streets.  The sales tax raised $9.5 million and the bonds will ultimately cost $66 million.  Who paid, and will pay (the bonds through 2038) these taxes?  Who benefited from the repairs?

 

Starting with who's who in Orinda.  There are approximately 7,000 households in Orinda, 4,200 (60%) are on PMR streets, 1,550 (22%) on privately maintained residential (Private) streets, and the remaining 1,250 (18%) on Orinda's arterials and collectors (A&C's).

 

Who benefited from the repairs on the PMR streets?  Obviously the 60% of Orinda living on them.  Not directly by the 18% living on A&C's, however, they are in an "all-for-one-and-one-for-all" pact with the 60% living on the PMR streets, so they all mutually benefit.

 

Then there are the 22% who live on Private streets.  These streets are the functional equivalent of the PMR streets, providing paved access to private residences for the residents and their service providers including ambulance, fire, police, garbage and other public utilities.  

 

Half of the Private street residents access their streets directly from arterials and collectors, using the PMR streets rarely, mostly to visit friends.  (Should they pay to visit a friend? Does the friend pay when the return visit is to the Private street?)  

 

The other half of the Private streets do use the PMR streets for access.  But they are "just passing through". 800 (16%) households vs. the 4,200 households living on the PMR streets.  Plus, it is the garbage/recycle trucks that service the homes on the PMR streets that create most of the wear-and-tear on the streets.  Those trucks do go on to service the adjacent Private streets, but they add no additional wear-and-tear on the PMR streets in the process.  The Private street household does benefit from a smooth ride on the PMR street, but only marginally.

 

Who pays?  For the sales tax, the payment is probably spread evenly across all households regardless of which street they live on.  2012's Measure L sales tax generated about $9.5 million over its 8-year term, approximately $1,400 per household.  The road bonds are going to end up costing $66 million by the time they are paid off.  They are repaid as part of the ad valorem property tax, based on assessed value.  While only 22% of Orinda's homes are on Private streets, they account for 25% of Orinda's property tax base.  Thus, they will pay 25% of the $66 million for the road bonds, $16.5 million; an additional $10,600 per household.  Those living on Private streets will end up paying an average of $12,000 each to pay for the deferred maintenance on PMR streets for which they receive virtually no benefit.

 

So, who does benefit?  Obviously, the 4,200 families living on the PMR streets (currently including all the members of the city council).  How much?  $18.5 million paid by Private street property owners, spread across the 4,200 residences on PMR streets, equates to $4,400 per household.  If instead of a sales tax and general fund road bonds, the money had been raised with a benefit assessment district, that would have been an additional cost to the residents of the PMR streets.  But the city chose to raise general taxes, passed by the majority for the benefit of the majority.

 

Is that all "water under the bridge"?  No, the beat goes on.  It costs about $20,000 a mile to maintain these "best in the Bay Area" streets; $1.3 million per year for the PMR streets.  Money is fungible but effectively it comes from the Measure R sales tax and the garbage impact fees which we all pay.  22% ($286,00 a year) is from Private street residents ($185 per household) but the 4,200 residents living on PMR streets receive all of the benefits ($70 each).

 

This amount, both by those paying and those benefiting, is inconsequential for homes with the highest median income ($250,000) for a small town in America.   But it rubs the payers wrong that they are forced to subsidize their neighbors, but their neighbors don't seem obliged to return the favor.

 

The fact of the matter is, most people understand "it" is happening, but have no idea of the magnitude of the "injustice".  The people on the Private streets feel like second class citizens and the people on the PMR streets and the A&C's are told their neighbors are looking for a "handout", not realizing that they are the ones benefiting from their neighbors' "largess".

 

Is there a solution?  To date, the council has been advised that the problem is so huge that it cannot be solved.  Is this true?

 

First of all, what has been done cannot be undone.  The Measure L sales tax has been collected and spent and cannot be given back.  The road bonds have to be paid back as defined by all Orinda property owners.  The Private street residents cannot be returned the $10,000 they have and will be paying for the next 15 years.  But can they receive the same public service the majority of Orinda receives, a service that Measure R defined as an essential service?  Where will the money come from?

 

There are two levels of service required (three including storm drains). One is deferred maintenance and the second is ongoing maintenance.

 

Deferred maintenance is an unknown quantity because the 30 miles of Private streets have never been surveyed.  It is also unknown because for a street to be publicly maintained it needs to be open for public use.  Not all Private streets may wish to open their streets to the public.  Currently, there is only one street, Rich Acres, which is actually gated.  There are several with "no trespassing" (or equivalent) signs, which might be removed if the City offered to pay for maintenance in return for public access (they could still post "not a through street" which would discourage most traffic as 95% of private streets are cul-de-sacs, the same number as PMR streets).  There is also the question: "What is deferred maintenance?"  In the 2016 Road and Drainage Repairs Plan the CIOC suggested, and the Council approved, that a PCI of 50 was a perfectly good street, especially a low-speed-limit residential street, from a user's perspective.  However, it may be more cost effective, in the long run, to maintain streets at a higher level, possibly and "average" PCI of 85 (which would imply streets varying from 70 to 100).  If a street had a PCI of 70 does it have "deferred maintenance" or will it's upgrading be part of the $20,000 per year ongoing cost?  How about a PCI of 60 or even 50?  Will it all "average out"?  And if it turns out that only a small number of Private streets that wish to be considered public have considerable deferred maintenance, should that be the City's responsibility (and cause the breakdown of discussions for all Private streets) or should it be the street's "owner's" responsibility, seeing as most Private streets have responsibly maintained themselves?  Could the City assist these under-maintained streets by setting up a benefit assessment district so that the street could fund deferred maintenance and then pay for it over time, while then receiving public ongoing maintenance?

 

Ongoing maintenance is about $20,000 a mile; $600,000 a year if all 30 miles of Private streets agreed to provide public access in return for public maintenance.  Where would this come from?  Measure R is generating about $4 million a year, most of which is going to infrastructure.  This could be used to "pay back" the Private street residents for the $10,000 they each have been obligated to pay for the PMR street reconditioning.  $600,000 is only 15% of $4 million, less than the Private street residents, 22% of Orinda, are "contributing". 

 

However, there are other resources that would be coming in as roads were publicly maintained.  The County's return-to-source revenue is about $500,000 annually.  Half of that is based on miles of public street, about $2,500 a mile.  30 more miles of public street would generate $75,000.  The garbage impact fee is also based on miles of public street.  It is currently $1.2 million a year ($13,000 a mile) but is projected to decrease to $700,000 ($7,500 a mile).  That would mean an additional $10,000 a mile; half the cost.   This would reduce the amount coming from Measure R to $300,000, even if all 30 miles of private streets "converted".

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