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

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Capital Local Option Levy Assessment of This tax would generate capital funding on a pay-as-you-go basis. The level of A@ Financial revenue generated would be static during the term of the levy (under a uniform amount Stability and levy) or could increase or decrease each year depending on the change in assessed value Political of the City (under a tax rate levy). Feasibility The property tax is an understandable and familiar funding mechanism to the voters (as opposed to a new form of user fee or taxes), making it politically feasible from that standpoint. The City’s local option levy proposals have been successful in recent years. There have been five City of Eugene local option levy proposals on the ballot from Eugene or Lane County since 1998, and all of those have been successful. Council members have expressed dissatisfaction with heavy reliance on limited term property tax levies to fund on-going services in recent years. As a result, the youth levy was not renewed when it expired in FY07, and the library levy was cut in half, with plans to not renew it when the levy expires in FY11. A capital local option levy to fund pavement preservation backlog would be different than a shorter-term local option levy to fund on-going services, however. A capital local option levy would be an appropriate funding mechanism for those capital projects, according to the City’s financial policies. Potential This tax would increase the cost of owning a home or business, and potentially increase Economic the cost of leasing or renting a home or business, if the property owner passes on the tax Impactsincrease. Consistency with Council has several financial policies stating that, to the extent possible, non-recurring Council Goals resources, such as a temporary property tax levy, should be used for non-recurring and Policiesexpenses, such as capital projects. Use of a capital local option levy to pay for a backlog of pavement preservation projects would be consistent with that policy. Other There is no comprehensive database of statistics on which jurisdictions use local option Jurisdiction levies or for what purposes. Fire districts seem to be the most frequent users of capital Experienceslocal option levies. On the November 2006 ballot, the Colton Fire District had a 10- year capital local option levy on the ballot for a rate of $1.25/$1000 of assessed value. The City of Cornelius also had a 10-year levy for police and fire equipment on the ballot, with a tax rate of $0.46/$1000 of assessed value. Both measures failed. 5