Item B: Transportation System Maintenance Fee

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approve, modify or disallow a proposed fee or fee modification which it reviews. The ordinance also provides for customers or the City Manager to initiate an adjustment to a customer’s fee and sets out criteria for determining when an adjustment is appropriate. Methods for billing and collection of the fee would be established. All customers would receive annual notification of the TSMF rates and the proposed uses of revenues derived from the fee. A standard provision would be included to allow the City Manager to adopt rules and methodologies to carry out the provisions of the ordinance. Recommended Rate Methodology, Customer Categories, and Example Fees The proposed TSMF ordinance describes a general rate methodology and potential adjustment factors for the rates. The recommended TSMF methodology includes three components that together would make up the TSM fee: a variable trip-rate component, a flat base component and a flat administrative component. This is different from the prior methodology in the 2003 ordinance that based the entire fee on trip-rates. Each component of the TSMF rate model is associated with specific funding requirements and would have revenue targets identified as part of the annual budget adoption process. Staff has assumed these revenue targets for FY08 based on the identified capital pavement preservation backlog and projected annual operating shortfalls in the Road Operating Fund. Variable Trip-rate Component The first component of the recommended rate methodology, the variable trip-rate component, uses estimated trip generation to measure a customer’s impact on the transportation system. The revenue target for this component is $4.76 million in FY08, which assumes continuation of the City’s motor vehicle fuel tax at the $0.05 per gallon level. Revenue from this component would be used for capital pavement preservation projects since these projects relate directly to traffic usage. Measurement of trip generation is primarily based on the Institute of Transportation Engineers (ITE) Trip Generation manual with adjustments to estimated usage of the system allowed to recognize additional data related to trip generation or other factors influencing estimated system usage. This component will generate a variable fee, based on the average trip-rate for the customer category and the size of the customer’s premises (number of dwelling units, number of 1000’s square feet, or equivalent measure). Flat Base Component The second component is a flat base component based on the funding need for general, ongoing transportation system operation and maintenance. This component currently has an assumed revenue target of $1.5 million in FY08 to address the projected fund shortfalls for road operation and maintenance. This includes ongoing non-capital street and sidewalk maintenance, operation of traffic signals and streetlights, maintenance of street trees and medians, street striping, signage, and other activities whose costs are not primarily driven by impact of traffic. This component would be charged on a per-account or per-dwelling unit basis at a uniform rate for all payers. Flat Administrative Component The third and final component is a flat administrative component to recover the cost of administration of the TSMF. Assuming the TSMF billing is included on current city wastewater/stormwater billings (the least cost approach), the cost of program administration is estimated to be approximately $460,000 in FY08. To levy the variable trip-rate fee component the ordinance requires a minimum set of customer categories to provide a distinction between levels of estimated use of the transportation system by groups of system users with similar trip generation characteristics. The recommended TSMF methodology includes five separate residential and four non-residential customer property use categories. Residential categories are distinguished by type of residential units reflecting differing trip generating characteristics per dwelling unit. Non-residential categories include many different uses grouped within ranges of trip generation rates, with each group then assigned an average trip-rate per 1,000 square feet of building area or equivalent unit of measure. This approach provides a