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EUGENE CITY COUNCIL AGENDA ITEM SUMMARY Work Session: Transportation Funding for Pavement Preservation Meeting Date: January 19, 2005 Agenda Item: B Department: Public Works Staff Contact: Kurt Corey www. cl. eugene, or. us Contact Telephone Number: 682-5241 ISSUE STATEMENT This work session provides an opportunity for the council to review the progress on pavement preservation program funding efforts, hear updates on cooperative efforts with partner agencies, and discuss potential revisions to Ordinance No. 29278, the Business License Tax on Motor Vehicle Fuel Dealers. The implementation of a 3-cent-per-gallon local motor vehicle fuel tax in August 2003, together with the reimbursement component of the transportation systems development charge, has allowed the City to begin addressing the significant backlog of pavement preservation projects in Eugene. However, this backlog continues to grow. Additional funding is needed to reverse this trend and to do the repair work necessary to ensure the efficient and safe operation of our local transportation system. BACKGROUND Previous Council Action and History In October 2001, the Citizen Budget Subcommittee on Transportation System Funding presented its recommendation that the council implement a transportation funding package consisting of a combination local motor vehicle fuel tax and transportation system maintenance fee for the purpose of generating an additional $9 million annually to address the City's critical transportation system funding needs. On January 27, 2003, the council approved the local motor vehicle fuel tax at the 3-cent level. On September 27, 2004, the council reviewed the progress to date on pavement preservation program funding efforts, heard updates on cooperative efforts with partner agencies, and discussed the potential implementation of additional funding options, as well as a potential increase in the level of the existing local fuel tax. At that meeting, the council directed staff to bring back draft ordinances increasing the local motor vehicle fuel tax by an additional 2 cents (to 5 cents-per-gallon) and establishing a transportation system maintenance fee. The council also requested at that time that staff bring back information on possible bonding options for funding pavement preservation needs. On October 27, 2004, the council reviewed and discussed the two draft ordinances and also reviewed bonding alternatives for funding the backlog of pavement preservation projects. At that meeting, the council directed that the amendments to the fuel tax code be moved forward to public hearing with no amount specified on the level of tax at this time. The council further determined by majority vote to discontinue efforts to establish a transportation system maintenance fee. A public hearing on December 6, 2004, provided additional public input on the proposed changes to the motor vehicle fuel tax. L:\CMO\2005 Council Agendas\M050119\S050119B.doc