Item 4: Ordinance on Wastewater and Stormwater

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Public Hearing: An Ordinance Concerning Wastewater and Stormwater Service and Amending Sections 6.411 and 6.421 of the Eugene Code, 1971 Meeting Date: April 20, 2009 Agenda Item: 4 Department: Public Works Staff Contact: Kurt Corey www.eugene-or.gov Contact Telephone Number: 682-8421 ISSUE STATEMENT Tonight’s public hearing is for the purpose of gathering community input on a proposed ordinance amending sections of the Eugene City Code dealing with Wastewater and Stormwater Service. The proposed amendments would allow the use of certain stormwater and wastewater utility fund resources for road operations, maintenance, repair, preservation and reconstruction. More specifically, the ordinance would authorize a one-time transfer of $500,000 from existing wastewater and stormwater utility fund reserves to be used to continue to deliver street operations and maintenance services in the upcoming fiscal year beginning July 1, 2009. Approval of this one-time transfer from City-owned utilities would impose no ongoing obligation on utility ratepayers. The council would have the opportunity to take final action on the ordinance at the April 27 meeting. If the council approves the ordinance amending the wastewater and stormwater code provisions at that time, the FY10 Budget would move forward for council adoption in June with provision for the one-time $500,000 transfer to the City’s Road Operations Fund from the City utility funds. Eugene lacks adequate funding to maintain current service levels for street operations and maintenance (O&M) activities in the upcoming FY10. These are the critical street and traffic infrastructure services which keep the streetlights lit, the street signs and signals in good working order, the potholes and cracks patched, the alternative modes goals on track, and more. These services are paid from 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 period, despite an organizational restructuring in FY04 and FY05 which resulted in service reductions, efficiencies and over $1.0 million in annual budget savings. Ongoing operating deficits are projected to deplete the fund balance to zero by late 2009. Without new revenue, the fund will be unable to support roughly one-third of current City street O&M services after June 30, 2009. In previous work sessions, the council has weighed the two available options for keeping the Road Fund solvent—to either stop providing the traditional number of street services in order to live within the available resources and/or look to for new ways to fund the services we decide to keep. The City Manager is moving forward his FY10 Budget to preserve existing street O&M services through a combination of cost reductions and realignments as well as options for using both existing and potential new revenue sources to preserve critical services. One of the existing revenue sources which the council has been discussing for stabilizing the City’s street service system in FY10 is a one-time $500,000 contribution from the existing fund reserves in the City’s local wastewater and stormwater utility funds. Z:\CMO\2009 Council Agendas\M090420\S0904204.DOC