CC Minutes - 07/24/06 Work Session

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B. WORK SESSION: Transportation System Maintenance Fee City Manager Taylor introduced Public Works Director Kurt Corey to discuss the challenge of pavement preservation. Mr. Corey provided a brief overview of the issue and stated that five years ago a $67 million backlog of pavement preservation projects was identified and a Budget Subcommittee recommended a new $9 million annual revenue source to address the issue. Subsequently, the council adopted a $0.03 per gallon and $0.02 per gallon local option gas tax. Mr. Corey said despite those efforts and progress made in pavement preservation, the backlog was now approximately $100 million and revenue estimates were short by about $5 million per year for the forecast period. He said operations and maintenance would also experience an approximately $1.5 million shortfall through the forecast period and, consistent with the council’s direction, would be included as part of a transportation system maintenance fee (TSMF). Mr. Corey said the proposed ordinance included in the agenda packet was similar but not identical to a previous ordinance adopted and then repealed in 2003. He said the proposed ordinance had been expanded to identify the use of some portion of the revenues for operations and maintenance and, in addition, the types and numbers of property classifications had been revised and a modified rate methodology broke rates into three components. Mr. Corey said that rates took into account updated information from the International Transportation Engineer Trip Generation Manual and an updated review of pass-by trip calculations. The revised rate methodology more closely mimicked the structure used for wastewater and stormwater fees in terms of its component parts. The variable trip rate component was proposed as a revenue means for capital preserva- tion as there was a reasonable scientific nexus between vehicle trips and pavement deterioration. He said the flat-based rate component was recommended as a means for filling the operations and maintenance gap; projects in that category were not particularly driven by the volume of vehicle traffic and were perhaps more relevant to a per account or per dwelling basis. He said the final component in the proposal was a flat administrative account. Mr. Corey said the proposed rate methodology provided the City an opportunity to manage an account for pavement preservation dollars separately from other operations and maintenance costs and the trip-based and per account rates were intuitively more equitable in terms of the fairness of the charges. He referred to sample monthly fees included in the agenda packet that were offered, with the caveat they were estimates and based on a number of assumptions, which were enumerated in his memorandum of July 24, 2006. He said the next steps included moving ahead with the public communications plan over the next three months and holding a public hearing to obtain formal public input in October 2006. Mayor Piercy asked if there was a response from schools to the education category. Mr. Corey replied that establishing the category for education was a direct response to discussions with the University of Oregon where it became extremely difficult to rationalize a monthly fee based on the types and sizes of buildings and uses; a per student basis was more understandable and easier to administer. He said rate collection could also take into account that public schools were not in session in the summer. Mr. Kelly referred to a statement in the agenda packet that an additional $6 million per year would stabilize the preservation backlog but noted $4.75 million was budgeted. Mr. Corey said the $6 million figure MINUTES—Eugene City Council July 24, 2006 Page 6 Work Session