Item B: Update on Street and Lighting Fee Development

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Establish a non-residential rate structure. Consider using either an account flat fee or a ? nonresidential unit basis (e.g. per premise address at a site). Attachment C provides further discussion and rationale for these recommendations. Administrative Efficiency and Billing Issues The May 2007 subcommittee report identified key criteria with which to evaluate revenue alternatives, two of which relate to administrative efficiency: “Efficiency and Cost-Effectiveness: The revenue sources included in the funding strategy should have low to moderate costs for administration, relative to the total revenue generated. Administrative Effort: The revenue sources included in the funding strategy should be practical to administer. There should be practical sources of tax-related or fee-related data, and the implementation and ongoing program management should not be overly complex.” New transportation utility fees will require an administrative infrastructure similar to that used for stormwater and wastewater user fees. The City’s current utility administration unit would provide customer service, account management, and staff support for the annual fee-setting process. The City would contract for billing and collections, as is done now with EWEB for stormwater and wastewater fees. Administrative and contractual billing costs have not yet been determined but will depend significantly on the complexity of the fee structure and 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. While EWEB is required under the City charter to bill and collect for sewer fees, EWEB is not obligated to collect transportation utility fees. Until recently, the board had directed EWEB staff to avoid investing any resources to analyze the feasibility, costs and benefits of including transportation fees on the EWEB bill. However, after a recent change in a board position, EWEB and City staff members were able to have an initial meeting earlier this month to begin to discuss possibilities. Staff agreed to continue discussions to identify issues of concern and options to resolve these issues. Assuming the board remains supportive, we will continue to collaborate with EWEB staff to find efficient and effective ways to implement the council policy direction. If feasible, fees should be structured to enable billing in conjunction with existing EWEB billing and collection systems. Timing In order to move forward with the package of transportation funding elements, preparation of draft ordinances outlining fee structures and rates should be completed within the next several months. Timing of implementation of the fees will depend on further council direction and resulting requirements for rate structures and fee methodologies. RELATED CITY POLICIES The council’s goals for 2007 include “Transportation Initiative: Develop mechanisms to adequately fund our transportation system for cars, trucks, bikes and pedestrians including maintenance and preservation and capital re-construction.” F:\CMO\2007 Council Agendas\M071121\S071121B.doc