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WHO IS GETTING THE HANDOUT?

 

In the discussion of public and private roads, the argument by some is that those living on private roads are just looking for a handout.  This is a case of the kettle calling the pot black as those currently receiving the "handout" are those living on publicly maintained residential streets.  

 

The facts demonstrate that the average home on a publicly maintained residential street is receiving $450 a year in benefits over what they are paying in property and sales taxes plus garbage impact fees.

 

Conversely, the average home on a privately maintained street is paying $670 in taxes and fees while receiving no public benefits beyond what everyone in Orinda receives (maintenance of arterials and collectors).

 

If the private streets were publicly maintained, the cost to public street residents could be as low as $80 a year which would provide the private street owners a $300 benefit  to partially offset their $670 outlay.  They would still be paying more than they were receiving while the residents of publicly maintained streets would still be gaining a net benefit.

 

Following are the FACTS

 

First, what are these "public" and "private" streets?

 

The term "public" refers to who pays for the maintenance, not usage.  

 

There are three "classes" of roads in Orinda:

 

(1) "Common" roads, the Arterials and Collectors everyone uses including non-residents "passing through". There are 30 miles of these roads and about 1,300 private residences are on these roads.

 

(2) Publicly maintained residential streets.  These are streets used almost exclusively for paved access to private residences.  Access by residents of Orinda, their friends and service providers including emergency and utility services.  There are 64 miles of these streets with 4,200 private residences on them.  These streets can be further broken down into "through streets" and "non-through" streets.  The through streets, 35 miles with 1,900 homes, feed the non-through streets, but have lower volume than the Collectors.  The 29 miles of non-through streets, home to 2,300 Orinda families, include both cul-de-sacs and "loop" streets.  The cul-de-sacs, while open to the public, serve the residences on those streets almost exclusively.  While non-residents, both pedestrian and vehicle traffic, can access these streets, their use of and impact on the street (pavement) is de minimis.  The "loop" streets are cul-de-sacs with access at each end.  While they can act as through streets, they seldom do.  Again, the use of and impact by non-residents is de minimis.  

 

3) Privately maintained residential streets.  These streets provide the same function as publicly maintained residential streets: paved access to private residences.  Most are open to public access, some by decree (conditions of development set by the city).  A few restrict public access (no trespassing signage), but only one, Rich Acres, is known to be fully gated.  There are 1,560 homes on 29.5 miles of private streets.  Most of these streets, 26 miles, are cul-de-sacs or loops.  Only 12 of the 204 private streets are through streets.

 

Examples of loops includes Hacienda Cir. in north Orinda and Daryl Dr. in south Orinda.  The definition of a cul-de-sac is "flexible", but it is essentially a street with one way in and one way out.  Public Linda Vista and private El Patio are examples.  But what about the collection of streets that, in the aggregate, also have one way in and one way out?  An example are four streets fed by lower Mira Loma (public), branching into upper Mira Loma (private), Linda Vista (public) and El Patio (private).  In the aggregate, it is one cul-de-sac with one way in and one way out.  But it is by no means the largest example.  There is the Crestview "complex", Lost Valley, and Donald Dr. (off of Hall Dr.) to name three.  All examples of a combination of publicly and privately maintained streets into a single "closed" system with one way in and one way out.  The largest example being the entire Wilder development. 

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As the above chart show, 22% of Orinda families live on privately maintained streets and their properties account for 25% of Orinda property tax base (meaning they pay 25% of the ad valorem property taxes including those taxes repaying Orinda's road bonds).

 

Some have made the argument that those living on private roads don't "deserve" to have their roads publicly maintained because (a) they knew what they were getting into when they purchased their homes (the obligation to maintain their roads without public support), and (b) they bought their properties at a discount. 

 

They "may" have known the consequences (although many have said they did not and many others purchased their homes before road bonds, costing millions in property taxes to repay, were voted in), but they did not get a bargain for taking on that added responsibility. 

 

As the above charts shows, the average home on a private residential street is assessed at (worth) 25% more than the average home on a publicly maintained residential street.  Part of the reason may be that prior to the public street upgrades from the road bonds, the private streets were, in general, in much better condition than the public streets. 

 

BENEFIT / COST ANALYSIS

 

Below is an analysis of the price of the benefits received by the 4,200 families living on publicly maintained residential streets vs. what those families pay for them.

 

There are two benefits received by the residents living on publicly maintained residential streets:

 

1) The value of the bonds used to repair their streets (deferred maintenance). 

There were $45 million in bonds issued in 2014 and 2016.  The bond proceeds were used almost exclusively for deferred maintenance on publicly maintained residential streets.   It will cost, over 22 years, $66 million to repay these bonds.  $66 million benefiting 4,200 households spread across 22 years equates to a benefit of $720 per household per year.  

 

The argument (made at the time) that "we all use these streets", and therefore we should all pay to maintain them rings hollow (unless that applies to all streets, which it currently does not).  The people living on Arterials and Collectors and half of the people living on private streets, whose streets enter the public system directly onto an arterial or collector, hardly, if ever, use a publicly maintained residential street. 

 

The other half of those living on privately maintained streets do use the publicly maintained residential streets for access, but their impact is de minimis.  They comprise less than 20% of those using the publicly maintained residential streets and with garbage trucks servicing the homes on the publicly maintained residential streets being responsible for up to 90% of the total impact, means the private-street-resident impact could be as low as 2%.

 

2) The cost of ongoing maintenance for these 64 miles of streets, assuming $20,000 a mile for the 64 miles of streets results in a benefit of $1.28 million.  Spread across 4,200 families equates to another $306 annual benefit.

 

A total annual benefit of $ $1,026.

 

But since both the bond cost and the annual maintenance cost is spread across all of Orinda, the total cost to each of those 4,200 homes is only $572

 

This results in a net annual benefit of $454 per home.  It is those living on the public residential streets who are benefiting.

 

Who is paying this benefit?  Everyone else: the people living on the arterials and collectors, the people living on privately maintained streets, and anyone paying sales tax or garbage collection fees.  Those living on privately maintained streets pay the largest share, an average of $668 per year.

 

 

Publicly Maintaining Private Streets (converting them to public streets)

 

What would it cost for those living on publicly maintained streets to return the favor and agree to help pay to maintain the privately maintained streets?  For basic annual maintenance, the cost would be about $83 a year.  The residents of publicly maintained residential streets would still be netting $371 more in benefits than they are paying out.

 

Those living on privately maintained residential streets, who were paying $668 a year for the maintenance of the publicly maintained residential streets, would obtain a $294 annual maintenance benefit, but their net outlay would still be $374 a year more than they were receiving in benefitsThis is hardly a "handout".

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