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

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Transportation Utility Fee To administer such a TUF, the city will need an estimated six FTE in the first year to set up and Estimated implementthe program. Once the TUF is up and operating, staffing can be reduced to an Revenue Yield, estimated 2.5 FTE. In addition, EWEB will need to be paid an estimated $0.35 per account per Administration month for billing costs. With these assumptions,total TUF administrative costs are estimated to and Enforcement be about $685,000 for the first year, and about $407,000 per year thereafter (in current year Costs (continued) dollars). A more detailed estimate of administrative costs will be done if the TUF is moved forward for council consideration. Net revenues from a $10 million gross TUF would be about $9.6 million under these assumptions. An incorporated city may adopt a TUF under its home-rule authority and powers granted in the Legal Authority City Charter. No specific authorization by statute is necessary. To avoid being classified as a and Restrictions tax or a special assessment and thus found invalid, a TUF must be carefully structured. Not on Use only should the methodology of the fee be a concern, but also the procedures for its application. The city attorney has reviewed the TUF and has advised as follows. A TUF based on an estimate of trip-generation based on property use is accepted by the ! Oregon courts. This is demonstrated in the 1990's case when Medford?s TUF was unsuccessfully challenged based on the different rates Medford charges for various property uses. The ITE was and is still the basis for Trip Generation Manual Medford?s rates. At the Circuit Court leveland Court of Appeals level, the Courts agreed with Medford?s argument that rates based on the ITE are a valid basis Manual for distinguishing between different categories of use. The ITE has been tested Manual in litigation and been accepted by courts all over the country. A TUF is not a tax upon property and therefore is not subject to Measure 5 or Measure ! 50 limitations. Rather, it is a fee imposed upon occupancy. InRoseburg School District v. City of Roseburg, 316 OR 374 (1993), the Oregon Supreme Court held that the Roseburg storm drainage utility fee was not a tax on property because it was imposed on occupants of property and not against property as a direct consequence of ownership of property. Vacant property should not be subject to the TUF. Courtswill probably regard a TUF as a fee so long as the amount of the fee is tied to ! the fee-payer?s use of the transportation system, for instance based on the ITE Manual, and the revenue is used to support the city?s transportation system. It is an open question as to whether the University of Oregon would be subject to the ! TUF. An 1987 Attorney General?s opinion said that the Southern Oregon State College was exempt from Ashland?s TUF under the general immunity of state property from taxes.However, under the subsequentRoseburg decision, the reasoning of the Attorney General?s Opinion concerning SOSC?s immunityis in question. (In fact, Southern Oregon University now pays the TUF to the City of Ashland). TUF proceeds should not be used for capital improvementsthat are otherwise funded ! by SDC?s, because that would undermine the basis for the SDC calculations. For similar reasons, TUF revenue should not be used for projects that are financed through special assessments. Since a TUF is not a tax on property, delinquent accounts should not automatically ! become a lien on property. Enforcement can be achieved as with other utility fees, through shut off of the water utility. I15