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

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The following table shows the relative contribution of each of these sources to the City?s transportation service system budget in FY01. State Highway Trust Fund$5.94 million Lane County Road Fund Transfers$1.24 million STP Funding$0.50 million Other Revenue$0.46 million Total Current Funding Sources$8.14 million The City?s Road Fund has been affected by a number of factors over the past several years: Oregon?s gas tax has not increased since 1991, with little prospect that the 2001 C Legislature will enact a statewide gasoline tax increase or other significant transportation revenue measure. The City?s street tree program was transferred from the General Fund to the Road Fund C in the mid-1990's.Since then, the scope of the program has grown, and in FY01, Road Fund expenditures in the Urban Forestry service category were approximately $820,000. The number of miles of road network has increased significantly due to new C development. Inflation rates for materials, supplies and services have exceeded revenue growth. C County Road Fund annual transfers to the City?s Road Fund have decreased over the past C four years, from $2.7 million in FY96 to less than $1.25 million in FY01. A one-year extension has been signed for FY02; however, future transfer payments are uncertain. State and federal grants, including STP funds, carry many requirements, including C prohibitions on spending these types of revenues on operation and maintenance.Most grants have additional limitations on how the moneys can be spent. Based on financial forecasting, even if the current level of transfer payments from Lane County?s Road Fund is maintained, Operation and maintenance service reductions will be required as early as FY04 if new revenues are not found. Public Works over the past several years has actively identified and initiated efficiencies. However, additional steps were necessary. Road Fund services and positions were cut in FY01, and Road Fund capital expenditures have been virtually eliminated from the proposed FY02 budget. Despite these efforts, Road Fund reserves continue to be depleted. Additional information is provided in Appendix D, Transportation Service System Forecast, March 2001. TransPlan has identified a significant shortfall in local operation, maintenance and preservation, and there is direction in the current draft of the Plan to develop a locally controlledsourceof revenue that is equitably tied to all users of the transportation system. The TransPlan draft recommends these revenues be used to address operation, maintenance and preservation needs. Because of projected deficits in the Road Fund, Eugene has not included any funds for capital preservation of roads in the FY02-07 Capital ImprovementProgram (CIP). Effects of Additional Funding Beginning with the $53 million current preservation backlog identified in the pavement management system?s baseline analysis, a projection was run assuming no treatment over the next 10 years. That analysis shows that, with no further treatment, unmet preservation needs will have grown to more than $250 million by 2011. Based on early subcommittee discussions, an analysis was prepared which illustrates the outcome of an annual investment of $8.5 million ($5.3 million to address the backlog and another $3.2 million for ongoing needs ) in preservation. In this scenario, the backlog is brought down to 9