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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Work Session: Road Fund Status and FY10 Budget Strategy Meeting Date: November 12, 2008 Agenda Item: A Department: Public Works Staff Contact: Kurt Corey www.eugene-or.gov Contact Telephone Number: 682-5241 ISSUE STATEMENT There has been much discussion in recent months about the City’s capital street repair program and the need for additional funding for the current backlog of needed major repairs. This work session will focus on another category of key transportation service provided to the community—the operation and maintenance (O&M) of street and traffic infrastructure. These are the services which keep the streetlights lit, the street signs and signals in good working order, the potholes and cracks patched, the alternative modes efforts energized, and much more. These services are paid for through the City’s Road Operations Fund, which has experienced a 15% decrease in revenue over the last five years while expenditures have increased by 23% in that same period, despite a major organizational restructuring which resulted in efficiencies and over $1.0 million in budget savings in FY04 and FY05. Recent operating deficits have drawn down the fund balance close to zero, and without new revenue, the fund will be unable to support roughly one-third of current City street services in FY10. The options for keeping the Road Fund solvent are clear—stop providing some of those traditional street services in order to live within the available resources and/or look for new ways to fund the services we decide to keep. This session will provide the council with information about the financial status of the Road Fund as well as the City Manager’s intended interim funding strategies to keep these critical City services funded for FY10 and beyond. BACKGROUND Previous Council Action and History In September 2001, the Citizen Budget Subcommittee on Transportation System Funding presented its Final Recommendation on Transportation Funding Issues which contained the assertion that “In the face of projected O&M shortfalls and service reductions beginning in FY03, ensuring adequate funding for the operation and maintenance activities of the City’s transportation system is absolutely essential.” In January 2007, the City Council formed a council subcommittee to study transportation funding options and bring back a recommendation. On May 23, 2007, the Council Subcommittee on Transportation Funding Solutions presented their report which stated that the first priority use of new revenue generated Operating and maintaining the existing transportation system from this initiative should be “, including on-street and off-street bike and pedestrian pathways.” At that meeting, the council approved a general course of action that was intended to lead to the implementation of a variety of strategies, including a capital local levy, a street utility fee based on parking, a street and bike path lighting fee, and an increase to the current local motor vehicle fuel tax. Z:\CMO\2008 Council Agendas\M081112\S081112A.doc