Item 7: Ordinance on Wastewater and Stormwater Service

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Action: An Ordinance Concerning Wastewater and Stormwater Service and Amending Sections 6.411 and 6.421 of the Eugene Code, 1971 Meeting Date: April 27, 2009 Agenda Item: 7 Department: Public Works Staff Contact: Kurt Corey www.eugene-or.gov Contact Telephone Number: 682-8421 ISSUE STATEMENT This is an opportunity for the council to discuss and adopt 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 (O & M) 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. If the council adopts the ordinance amending the wastewater and stormwater code provisions tonight, 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. BACKGROUND On November 12, 2008, the City Manager provided the council with an update about the status of the Road Fund as well as his intended interim funding strategies to keep these critical City services funded for FY10 and beyond. At that meeting, individual councilors acknowledged that the Road Fund funding shortfalls could not be found in service reductions alone and that the need to find new sources of City revenue for transportation systems was great. On February 8, 2009, the council discussed two new potential revenue sources for preserving existing street O&M services - a right-of-way use fee (similar to a franchise fee) on City-owned utilities, and a transportation surcharge on solid waste (garbage) haulers. Councilors discussed the need for two different sets of funding strategies, with the first being a one-time, “stop gap” plan for fully funding these critical services in FY10. The second funding strategy set called for was in the form of a comprehensive “road map” for solving the City’s overall transportation funding problems in the long term. The council acknowledged that developing the longer-term solutions, including a potential Street Utility Fee and a potential Street Lighting Fee, would need to involve more public input and buy-in over the coming months. On April 8, 2009, the council discussed the City Manager’s proposed one-time funding strategy to maintain street O&M services through fiscal year 2010, which included as one of its elements a $500,000 transfer from existing reserves in City-owned wastewater and stormwater utilities, acknowledging that City utilities derive a direct benefit from the use of the road right-of-way but, unlike other utility Z:\CMO\2009 Council Agendas\M090427\S0904277.doc