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EUGENE CITY COUNCIL AGENDA ITEM SUMMARY Work Session: Transportation Funding for Pavement Preservation Meeting Date: October 27, 2004 Agenda Item Number: 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 and discuss two draft ordinances: 1) a proposed revision to Ordinance No. 20278, increasing the Business License Tax on Motor Vehicle Fuel Dealers by an additional 2 cents, to the 5-cent level; and 2) a proposed ordinance establishing transportation systems maintenance fees. Adoption of these two ordinances would enable the City to generate an additional $4.5 million annually to address critical pavement preservation needs. At the September 27 work session on this same topic, the council directed staff to bring back information on bonding alternatives for funding the backlog of pavement preservation projects. This work session will also provide an opportunity for the council to review and discuss those alternatives. BACKGROUND The Pavement Preservation Funding Need 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 and the transfer from Lane County of its new OTIA IH maintenance and preservation monies, has allowed the City to begin addressing the significant backlog of pavement preservation projects in Eugene. However, this backlog continues to grow and is projected to grow from the current level of nearly $94 million to a projected $180 million within the next decade. Additional funding is needed to reverse this trend and to do the repair work necessary to ensure the efficient and safe operation of the city's local transportation system. The new revenue generated by adoption of these two proposed ordinances, together with existing dedicated revenue sources, would provide approximately $9 million annually to address this high- priority funding need. This overall target revenue goal is consistent with the funding level recommended by the Citizen Budget Subcommittee on Transportation System Funding in its report to the council in October 2001. This funding level continues to be an appropriate target because it would allow the City to make effective progress in addressing the backlog of pavement preservation projects while also mitigating the disruption to the transportation system and the community due to the number of street projects going on in any one construction season. L:\CMO\2004 Council Agendas\M041027\S041027B.doc