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

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Transportation System Funding Project Overview of Individual Funding Options Transportation Utility Fee The basic concept underlying the Transportation Utility Fee (TUF) is that the comprehensive Brief Description transportation infrastructure is a utility system that delivers services to all users of developed of Funding real property throughout the city. This is similar to the concept of the city?s wastewater and Option stormwater utilityservices. Use of a utility systemincurs a real cost. Accordingly, a fee is charged to recover the user?s share of overall cost of the system. The total annual cost of the transportation utility service is measured by the city?s budget for administration, operation, maintenance, minor improvement, preservation, modernization and reconstruction costs of all elements of the transportation system. The transportation system?s annualcost to be funded by the TUF is prorated among system users according to an estimate of their share of their use of the system. A methodology that may include a number of factors sets the actual fee levels for each propertyuse category. All revenue from a TUF must go to pay the costs of the existing transportation system and should not be used for expansion of transportation system capacity. SDCs and assessments remain the primary sources of funding for capacity expansion. A TUF is not based on the ownership or value of property and is not a property tax. The fee is not related to fuel sales or operation of a vehicle, so the revenue from a TUF is not restricted as a gas tax would be; it can be used for all elements of the transportation system. A TUF is also not an special property assessment because it is not based on unique benefit to a particular assessed property. A Transportation Utility Fee is proportionate to the estimated fee-payer?sshare of use of the system. According to this principle of proportionality, a greater share of use of the transportation system results in a higher fee, while a lower share of use results in a lower fee. For example, under this principle of proportionality, commercial activity generating heavy use of the transportation system will pay a higher fee than households, which generate much lighter use. An estimate is made of share of system use based upon the statistical data in a standard guide, the Institute of Transportation Engineer?s, depending on how property Trip Generation Manual is used. The fee formula can be further tailored, if necessary, to assure proportionality under local conditions. Undeveloped or unused property, which does not generate use of the transportation system, should not be not subject to the fee. A second principle of a TUF is that it is universal . Since all developedproperty in the city benefits from use of the transportation system, all residents, organizations and businesses occupying that property should pay their proportionate share of the costs of the transportation system?s operation and upkeep. Some municipalities permit deferral or discount of the fee for demonstrated economic hardship. However, no blanket exemptions for particular classes of property should be permitted, just as no property class is exempt from paying wastewater or stormwater utility fees. I13