Item B: Road Fund Status - Laserfiche WebLink

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? Urban Forestry Fee – In June 2005, the City of Medford, Oregon, established a 31-cent per unit monthly utility fee to pay for the maintenance of roadside landscaping. This fee is expected to generate approximately $122,000 per year to help offset the city’s costs of street tree maintenance and right-of-way beautification projects. Eugene could explore the possibility of implementing a similar fee to help offset the cost of its street trees program which, even at the current nominal service level, uses over $800,000 per year in Road Fund resources. ? Franchise Fees on City and Other Utilities – The City has made a significant investment in the road right-of-way over the years and has historically charged a variety of utility providers for the use of those rights-of-way. Franchise fees, business license fees and contributions-in-lieu of taxes (CILT) currently go into the City’s General Fund and are used to support general municipal services. Other Oregon cities, such as Salem, have for a number of years charged franchise fees for municipal-owned sewer and water utilities using of the public right–of-way. Recently, the City of Bend implemented a 3% franchise fee on all sewer and water bills to help fund a shortfall in the transportation budget. The fee is expected to generate $640,000 annually for this purpose and will cost the average ratepayer in Bend an additional $2.88 per month. In addition to franchise fees on city utilities, the council could explore the feasibility of increasing existing franchise fees or implementing new franchise fees or business license taxes on other categories of utility providers. ? Support from General City Revenue – The council could designate a portion of City unrestricted revenue generated from the use of the right-of-way as a transfer to the Road Fund for the purpose of funding street operations and maintenance activities. Alternately, the council could consider transferring specific programs which are now supported by dedicated Road Fund dollars to the General Fund or other appropriate fund, such as Stormwater. One candidate program under this strategy would be the Street Tree program, with an estimated net FY06 cost of $808,000 and 8.8 FTE. This program was transferred from the General Fund to the Road Fund in the early 1990s in an effort to reduce budgetary pressure on the General Fund service system. However, it may now be appropriate to consider returning the financial obligation for certain street tree activities back to the General Fund or Stormwater Fund. ? Transportation System Maintenance Fee (TSMF) - This funding option was recommended by the Citizen’s Subcommittee on Transportation System Funding and was implemented by City Council ordinance but later repealed. While the council most recently has discussed this fee as a dedicated funding source for the Pavement Preservation Program, a portion of the revenue generated from a TSMF could be directed by policy to fund street O&M activities. The concept behind this fee is that the city’s transportation infrastructure is a utility system, not unlike the stormwater utility system, which delivers transportation service to all users of developed real property throughout the city. Under this concept, a monthly fee is charged to each user to recover their attributed share of the overall system cost, including operations and maintenance activities. If so directed, staff would bring back more comprehensive analysis of these revenue strategies or any other fund stabilization strategies which the council may wish to further consider. L:\CMO\2005 Council Agendas\M050926\S050926B.doc