Municipalities Have Authority to Create Transportation Utilities

On June 16, 2020 the League issued a legal opinion (PDF) concluding that a municipality may rely on its broad statutory and/or constitutional home rule powers to create a transportation utility and charge property owners transportation utility fees. Alternatively, a municipality may charge property owners a street maintenance user fee under Wis. Stat. § 66.0627. Any fee must be reasonably related to the cost of the services provided. A transportation utility fee is most defensible against challenge if the basis for the fee is closely related to property occupants’ use of the local street network. Transportation utility fees with such a basis are accurately characterized as fees and not taxes. Such fees should be segregated and used only for street maintenance and other transportation services. To avoid needing to reduce the community’s property tax levy under § 66.0602(2m)(b) of the levy limit law, municipalities should avoid using transportation utility fee revenue to pay for snow plowing or street sweeping. The opinion (PDF)was also published in the September 2020 The Municipality.