Council reviews Transportation Benefit District report as staff warns of rising construction costs
May 20, 2026 | Oak Harbor, Island County, Washington
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Oak Harbor — The City Council reviewed the Transportation Benefit District annual report and heard staff caution that construction inflation has driven up project costs, affecting what the city can accomplish with TBD funds.
Finance Manager Chas Webster said the TBD, established in 2018 and funded by a 0.2% sales tax approved by voters for 10 years, had an ending fund balance of about $3.3 million. Completed 2025 projects included asphalt overlays on Southwest Lopez Drive and Southwest Kirk Lane at a combined cost of roughly $528,000. Planned 2026 TBD-funded paving projects were estimated at about $578,000.
Webster and Public Works staff told the council that construction costs have risen steeply in recent years; the city’s own water-line work that cost roughly $200 per foot on one project was followed by a $300-per-foot job the next year. "Construction inflation has been astronomical," Webster said, adding that preservation (overlay) is far less expensive than full reconstruction and stressing the importance of preventive maintenance.
Councilmember Stuckey asked whether the city was accumulating a nest egg rather than spending, and staff said some funds are being reserved to leverage state grants and to prepare for larger reconstructions. Webster noted that the city has successfully competed for state preservation grants in recent years and is combining grant dollars with TBD funds to extend preservation work.
Council discussed policy tradeoffs: spread limited funds across more roads for preservation or concentrate dollars for selective reconstruction on high-need streets like Pioneer, which is expected to be significantly more expensive. Staff said council will see detailed budget and project recommendations in upcoming workshops.
What’s next: Staff will return with a detailed transportation capital plan and budget recommendations for 2027–28 that weigh preservation, reconstruction needs and available grant opportunities.
Finance Manager Chas Webster said the TBD, established in 2018 and funded by a 0.2% sales tax approved by voters for 10 years, had an ending fund balance of about $3.3 million. Completed 2025 projects included asphalt overlays on Southwest Lopez Drive and Southwest Kirk Lane at a combined cost of roughly $528,000. Planned 2026 TBD-funded paving projects were estimated at about $578,000.
Webster and Public Works staff told the council that construction costs have risen steeply in recent years; the city’s own water-line work that cost roughly $200 per foot on one project was followed by a $300-per-foot job the next year. "Construction inflation has been astronomical," Webster said, adding that preservation (overlay) is far less expensive than full reconstruction and stressing the importance of preventive maintenance.
Councilmember Stuckey asked whether the city was accumulating a nest egg rather than spending, and staff said some funds are being reserved to leverage state grants and to prepare for larger reconstructions. Webster noted that the city has successfully competed for state preservation grants in recent years and is combining grant dollars with TBD funds to extend preservation work.
Council discussed policy tradeoffs: spread limited funds across more roads for preservation or concentrate dollars for selective reconstruction on high-need streets like Pioneer, which is expected to be significantly more expensive. Staff said council will see detailed budget and project recommendations in upcoming workshops.
What’s next: Staff will return with a detailed transportation capital plan and budget recommendations for 2027–28 that weigh preservation, reconstruction needs and available grant opportunities.
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