City staff told the Spokane Valley City Council on March 4 that an apparent Department of Licensing (DOL) estimating error reduced the city’s expected Transportation Benefit District (TBD) license-fee revenue and will leave the street-maintenance fund with a recurring shortfall.

Chelsea, a finance staff member, said staff originally used a DOL estimate of 140,676 vehicles to calculate TBD fee revenue and budgeted roughly $2.7 million annually. After collections began in mid-2024, staff observed receipts were much lower and asked DOL for clarification. DOL replied it had experienced a systemwide glitch that duplicated counts; the corrected estimate for Spokane Valley is about 90,895 vehicles.

That revision reduces the city’s expected recurring TBD license-fee revenue by about $986,000, a 35-percent drop from the initial estimate. The TBD fund transfers into the city’s street fund to pay for crack‑sealing, pothole repairs, winter maintenance, bridge work and right-of-way upkeep; staff said the 2025 recurring gap in that fund is about $738,000 after accounting for existing balances.

John Holman, the city manager, told the council that while there is sufficient fund balance to cover the shortfall for 2024 and 2025, ongoing shortfalls are not sustainable and will require council discussion about service levels, alternative revenues or long-term adjustments. “That’s a million dollars that’s gonna impact street maintenance,” Holman said.

Council members raised the option of eliminating the TBD fee entirely, but staff cautioned that doing so would reduce street-service funding sharply and could require trimming right-of-way or pavement-preservation programs. The TBD and its license fee were adopted in late 2023; staff said the city will need to decide how to address the revenue gap ahead of 2026 budget planning.