Item B: Update on Street and Lighting Fee Development

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While potential uses of street utility fee revenues are broad, the subcommittee identified priorities for use of revenues to include: 1)Operating and maintaining the existing transportation system, including on-street and off- street bike and pedestrian pathways; 2)Fully funding the annual pavement preservation overlay program, to avoid more streets falling into the more expensive reconstruction project category; 3)Beginning to buy down the backlog of reconstruction street projects at a reasonable level and time frame; 4)Acknowledging the importance of alternative modes of transportation by including funding for a reasonable amount of enhancements and extensions to bike and pedestrian facilities, including preserving and expanding the sidewalk system and expanding the local on-and off- street bicycle system; and 5)Respond to priority funding needs related to other components of the transportation system, specifically neighborhood traffic calming projects (total annual funding of $150,000 recommended from street utility fee). Staff recommends using these priorities as guidance in developing draft ordinance provisions related to use of funds being dedicated to the operation, maintenance, preservation and repair of the transportation system. Council may direct a different net annual revenue target or use of revenues depending on the outcome of efforts to implement other funding package elements. Staff has evaluated estimated example rates and fees contained in this memorandum based on the previous council-specified revenue target. Billing and Collections As reflected in discussion of other fee implementation factors, a street utility fee based on parking has the potential for relative simplicity or significant complexity and administrative costs. Administrative and contractual billing costs have not yet been determined but will depend significantly on the complexity of the fee structure and its billing requirements. When establishing new fees, a key consideration is that administrative and billing costs tend to increase in proportion to complexity of rate and fee structures. At a minimum, a new street utility fee will require an administrative infrastructure similar to that currently used for stormwater and wastewater user fees. Under this configuration City staff would provide customer service, account management, and staff support for the annual fee setting process and the city would contract for billing and collections, as is done now with EWEB. A multi-layered, variable fee, especially one which requires a new unit of measurement, would require more resources (City and EWEB) to develop and implement than a simpler fee. The trade off between complexity needed to achieve policy objectives and the simplicity needed to minimize administrative costs is a common element in city fee setting. Assuming the Board remains supportive, we will continue to collaborate with EWEB staff to find efficient and effective ways to implement council policy direction. If, during the development of the administrative infrastructure, we identify significant barriers to implementing a specific policy B,SUF P57 ATTACHMENT TREET TILITY EE AGE OF