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

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Transportation Utility Fee An analysis of the legal aspects of a TUF done by the Lane Council of Governments in 1998 Legal Authority concludes that, in order to avoid being classified as an assessment, a TUF should be based upon and Restrictions actual use of the road system and not be enforced by a lien. The resulting on Use benefit should be defined in terms of the resident using maintained streets rather than an actual (continued) benefitto that property owner and the property itself. Revenue should be restricted to maintaining the street system rather than new improvements. All developed and occupied properties are normally subject to the fee. The recipient of the Incidence utility account billing is liable for payment; this is assumed to be the occupant or the (who pays?) representative of the occupant. Because the fee is billed to commercial and retail property, some of the costs of the fee will likely be recovered from the customers of those businesses. Many customers reside outside the city,but nevertheless would indirectly contribute to the costs of operation of the city?s transportationsystem in this manner. Because a TUF is based on the principles of proportionality and universality, the fee can be Fairness/Equity equitable in distributing the share of costs of the transportation system among all those who use Issues it according to an estimate of their share of use. If exclusions were granted to a group of property users then costs would be shifted and the equity of the fee would be compromised. A TUF is not usually described as progressive or regressive in itself because it is a utility fee and is not income-based. Charging a fee based in part upon the occupant?s income would likely violate the share-of-use basis of the TUF. However, inclusion of limited deferrals or discounts based on economic hardship might bring an element of progressivity to the fee structure while not violating its basis. Financially, TUFs are exceptionally stable because they are a fee for service targeted to raise a Assessment of specific net amount of revenue. Variations of actual from projected revenues are normally very Financial small. Stability and Political A city may adopt a TUF by council action or by placing it on a city ballot. Oregon cities with Feasibility TUFs have all implemented the fee structures by ordinance rather than by a vote, and typically adjust the target revenue and actual fee levels annually by resolution or administrative action. Development of the TUF methodologies by Oregon cities has often involved a range of community representatives; this has helped ensured public understanding and support of the TUF. Reports are that Oregon cities with TUFs have found it to be quite well accepted by their communities as a means to fund city transportation systems. Property uses generating heavy traffic will feel the greatest impact, proportionate to their use of Potential the transportation system. The actual fee to be paid will depend on the revenue to be raised and Economic the fee?s methodology. The level of the fee will likely not affect business activity, however., Impacts and should be considered in comparison to the potential economic effects of deterioration of the transportation system. No Oregoncity with a TUF has reported adverseeconomic consequences stemming from it. On the other hand, because net fee revenues are invested in the transportation system, economic activity is enhanced as the transportation is maintained and improved. It is likely that businesses will pass on some or all of their TUF costs to their customers, just as other business costs are normally passed on. In that many people from outside the city shop and work in Eugene, a TUF may indirectly increase their contribution to the cost of the transportation system. I16