Item B: Funding Strategies for Transportation System Operations, Maintenance, and Preservation

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Work Session: Funding Strategies for Transportation System Operations, Maintenance, and Preservation Meeting Date: January 22, 2007 Agenda Item: B Department: Public Works Staff Contact: Kurt Corey www.eugene-or.gov Contact Telephone Number: 682-5241 ISSUE STATEMENT Eugene lacks adequate funding to operate, maintain, and preserve its local transportation system. This lack is manifested in a current backlog of more than $100 million in pavement preservation projects and a projected FY08 operating deficit of nearly $1.5 million for operation and maintenance activities in the Road Fund. This work session provides an opportunity for the council to consider additional or modified funding alternatives in a strategy to provide stable and adequate funding to operate, maintain, and preserve the city’s transportation system. Funding options presented here for consideration include a property tax levy, an increase to the current local motor vehicle fuel tax, a transportation system maintenance fee and a commuter tax. BACKGROUND Previous Council Action and History On September 26, 2005, the council reviewed and discussed the financial status and fund forecast for Eugene’s Road Fund. Based on that discussion, the council directed the City Manager to develop a FY07 Road Fund budget at the current service level and to bring back a proposal for a new revenue funding package which would not only address the projected ongoing operating deficit in street operations and maintenance but would also generate additional revenue to be dedicated to the backlog of unfunded projects in the pavement preservation program. On February 27, 2006, the council reviewed and discussed a number of potential revenue strategies to address unmet transportation system funding needs. At that session, the council directed the City Manager to bring back a proposal for reestablishing the previously repealed transportation system maintenance fee (TSMF) to address not only the projected ongoing operating deficits in Road Fund street operations and maintenance, but also to generate additional revenue to address the remaining annual funding gaps in the pavement and off-street bike path preservation programs. On November 27, 2006, the council considered adoption of an ordinance establishing a transportation system maintenance fee (TSMF) for the purpose of generating revenue to meet the operational, maintenance and preservation needs of the transportation system. At that meeting, the council voted to postpone action on adoption of the proposed ordinance and, instead, directed the City Manager to L:\CMO\2007 Council Agendas\M070122\S070122B.doc