Item B: Transportation System Maintenance Fee

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This proposed ordinance is similar in many ways to the 2003 ordinance which was adopted and then later repealed. It would establish a TSMF to be paid by all customers having possession or control of premises in the city. The fee would be used to fund operation, maintenance and preservation of the existing transportation system, including funding to reduce the backlog of needed street repairs. The ordinance would restrict the use of revenues to the prescribed purposes and would prohibit the use of revenues for capacity-enhancing street improvements. The rate methodology recommended by staff includes three components: 1) a variable trip-rate component which uses estimated trip generation to measure a customer’s impact on the transportation system; 2) a flat base rate component; and 3) a flat administrative fee component. The methodology includes five residential and four non-residential customer property use categories. The current estimated monthly fees for three typical use categories range from $5.22 for a single-family home and $19.95 for a general office building measuring 12,000 square feet up to $824.75 per month for a supermarket measuring 40,000 square feet. More specific details and additional sample fees are included in the memo provided as Attachment A. Finally, Attachment B is a Transportation Funding/Pavement Preservation Public Outreach and Involvement Plan outlining the goals and strategies for a public outreach and education effort, as well as the proposed key messages and audiences, along with a tactical implementation schedule for this communication effort. RELATED COUNCIL GOALS AND POLICIES The council’s Vision and Goals Statement with respect to Fair, Stable and Adequate Financial Resources reaffirms its commitment to “a local government whose ongoing financial resources are based on a fair and equitable system of taxation and other revenue sources and are adequate to maintain and deliver municipal services.” The 2001-2002 City Council Work Plan Item 1 under this goal called for an effort to “Identify and implement funding sources (including possible reallocation of existing sources) for operation, maintenance and preservation of the transportation system.” It was based on this charge that the Citizen’s Subcommittee on Transportation System Funding began meeting in September 2000 to study this issue and develop a report and recommendation. Additionally, the City’s Financial Management Goals and Policy, A.4, states that the City’s municipal service priority Level 2 (second only to the preservation of the public safety system) is to “maintain and replace the City’s fixed assets, which includes… infrastructure…so as to optimize their life.” COUNCIL OPTIONS Option 1: The council can direct the City Manager to schedule a public hearing on a proposed ordinance to establish a transportation maintenance fee, which would generate an approximate net $5.0 million for FY08 pavement preservation funding and $1.5 million for annual road operations funding needs. Option 2: The council can direct the City Manager to modify the proposed ordinance prior to scheduling a public hearing. Option 3: The council can choose to take no action at this time with regard to the need for additional pavement preservation and road operations funding. L:\CMO\2006 Council Agendas\M060724\S060724B.doc