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

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EXECUTIVE SUMMARY Eugene?s transportation system consists of local city streets and sidewalks, city collector and arterial streets and sidewalks, county and state highways,off-street bike paths, street and intersection lighting (signals and street lighting) and other supporting amenities designed to make the system both functional and compatible with neighborhoods. The Road Fund, which accounts for the planning, operation, maintenance and capital rehabilitation of the City?s portion of Eugene?s transportation system, lacks sufficient resources adequate to maintain the existing level of street transportation services or to prevent street surfaces from further deterioration. The fund?s financial difficulties are primarily due to decreasing revenues in the face of growing system service needs. Since 1996, county road fund transfers to Eugene?s Road Fund have decreased by 54%. During the same period, state gas tax receipts have fallen behind population growth in Eugene. As the Road Fund faces increasingly severe resource constraints, less critical operating activities have been reduced to shift funding to ongoing street operation and maintenance, creating a backlog of major street rehabilitation and reconstruction needs currently estimated at $53 million. Additionally, there is little or no funding available to respond to needs related to other components of the transportation system, such as the sidewalk system, off-street bicycle system, street lighting, traffic calming, nodal development and selective utility undergrounding,all of which are necessary not only to meet the expectations of the community but also to accomplish the goals of TransPlan, the comprehensive metropolitan area transportation plan. In July 2000, the City Council directedthe Budget Committee CitizenSubcommittee to study Eugene?s transportationfunding issues, including a review of City receipts from the county road fund, and to report back findings and recommendations to the Council. The subcommittee met a total of eight times between September 2000 and May 2001 in a series of public meetings, studying Eugene?s unmet transportation funding needs and deliberating possible new funding alternatives against a list of preestablished criteria. After careful study of the street system condition assessment and current cost estimates indicated by the PavementManagement System Report, dated March 2001, the subcommittee began to address the challenge of identifying a transportation funding strategy which would provide sustainable funding to ensure that the City of Eugene roadway and bike system at least falls no further behind in its condition and to improve that condition over time. In this process, the subcommittee also analyzed the six-year financial forecast for the transportation service system and reviewed other potential existing transportation funding sources and needs. This subcommittee concludes that significant additional funding from one or more new, City-controlled revenue sources is needed in the near future if we are to preserve the community?s investment in its transportation system infrastructure. We further conclude that the most critical capital funding need currently facing the City is its backlog of preservation work. In order to meet the goal of preserving Eugene?s transportation infrastructure, adequate funds also are required for operating and maintaining the system. Of the many funding alternatives studied by the subcommittee, the two which were deemed to most closely conform to the preestablished criteria, while also generating sufficient revenue to address the priority objectives of operation, maintenance and preservation of the transportation system, were a transportation utility fee and a small local motor vehicle fuel tax. The subcommittee further discussed potential restrictions on the amount of new revenue which could be allocated to address projected operating deficits in the Road Fund. No conclusion was reached on this issue. However, the City Manager and staff have committed to retaining an external consultant to conduct an independent review of the City?s transportation system operationand maintenance (O&M) 1