Item B: Transportation System Maintenance Fee

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Work Session: Transportation System Maintenance Fee Meeting Date: July 24, 2006 Agenda Item Number: B Department: Public Works Staff Contact: Kurt Corey www.eugene-or.gov Contact Telephone Number: 682-5241 ISSUE STATEMENT The implementation of a 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 of needed repair work continues to grow. Additional funding is needed to reverse this trend and to do the repairs necessary to ensure the efficient and safe operation of the local transportation system. Additionally, the ongoing road operations and maintenance programs have experienced stagnant growth in funding from state revenues as well as the loss of historical county revenue sharing. As a result, the City’s Road Fund is projected to generate significant annual operating deficits beginning in FY08. This work session provides an opportunity for the council to discuss the potential implementation of a transportation system maintenance fee to address these unfunded needs in the City’s transportation service system. BACKGROUND In October 2001, the Citizen’s 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 December 9, 2002, the council approved an ordinance establishing a transportation system maintenance fee (TSMF). On January 27, 2003, a related transportation revenue measure, the local motor vehicle fuel tax (“fuel tax”), was approved by the council. On September 8, 2003, the council voted to repeal the TSMF ordinance, citing the recent repeal by Springfield City Council of that city’s TSMF and concerns about equity between the two cities, as well as concerns raised by the Eugene Chamber of Commerce about the structure and impact of the TSMF on Eugene businesses. The council also cited continued hope for collaborative solutions with partner agencies, with particular reference to upcoming discussions with the Lane Board of County Commissioners and other local officials. On September 26, 2005, the council reviewed and discussed the financial status and fund forecast for Eugene’s Road Fund. At that time, the council reviewed an illustrative list of program reductions and eliminations which would be required if a strategy of service reductions alone were employed to correct the structural deficiency between Road Fund revenues and expenditures and to eliminate the $2.0 L:\CMO\2006 Council Agendas\M060724\S060724B.doc