City agrees to $15 million in gas tax for freeway

Carson City transportation officials have agreed to pay the state $15 million in gas taxes for completion of a freeway through town, but some said the payment was a form of extortion.

If the city contributed the money, the Nevada Department of Transportation promised to "make every effort" to finish the freeway by 2010.

City officials said the contribution would keep the freeway on NDOT's priority list. Transportation commissioners decided to go ahead and pay the money and not risk stirring the pot.

"I wasn't in favor of the nickel (gas tax instituted in April 1997) and I'm not in favor of it now," said Commissioner Mike Zola. "It's extortion. But this is not the time to start playing games."

If the city backed out of the payment, the state could remove items the city requested to include in the project, said City Development Services Director Andrew Burnham.

Commissioner Richard Staub said the city needs to do what it can to get the freeway done.

"I think the tax has become somewhat opaque," Staub said, adding gas is still cheaper in the city than bordering counties. "We need this freeway. We've needed it for three or four years now. Now, we're going to get it. This freeway needs to get done."

Commissioners, however, said Thursday they wanted stronger wording by the state to ensure completion. The state added wording in the agreement that allowed wiggle room for completion and bidding deadlines.

"It leaves enough gray area in there," Staub said. "I think we're uncomfortable with that."

City staff was directed take the wording out of the contract before it is forwarded to NDOT for state board approval. If it is rejected by the state, the contract will return to the city commission.

In the contract, the city also agrees to accept ownership of Carson Street from Arrowhead Drive to Fairview and eventually to Highway 50. NDOT estimates it costs as much as $900,000 a year to maintain the street.

Former Mayor Marv Teixeira said the city should seek a more level playing field in the agreement. As mayor during the freeway plan for the first half of construction, Teixeira agreed to the 5 cents-per-gallon tax to contribute $19 million for the first phase.

"I'm the guy who offered up the nickel, because I had to," Teixeira said. "We had to have a uniform to play."

The agreement set a new precedent for the state to seek payments from other jurisdictions for freeway projects, he said. Then, the state also decided to charge the city interest on the contribution.

"Enough is enough," Teixeira aid. "Anyway you look at it, this is a losing deal for us."

In the new agreement, the city would contribute $15 million through a 5 cents-per-gallon gas tax to the second phase of the freeway. It is a continuation of the 5-cent gas tax being charged currently.

As part of the deal, the state will forgive the city's interest payments on the first half (a savings of $4 million). The city would also keep three years of tax funds (about $5.1 million) to pay for other projects, like widening Fairview Drive.

In 2012, the city would be able to keep 2 cents per gallon of the tax to pay for needed projects, giving the city about $700,000 a year.

The total freeway project is estimated to cost $265 million.

Contact Jill Lufrano at jlufrano@nevadaappeal.com or 881-1217.