Item C: Strategies for Transportation Funding

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Work Session: Strategies for Long-Term Financial Stability for Transportation System Operations, Maintenance, and Preservation Meeting Date: February 15, 2006 Agenda Item: C Department: Public Works Staff Contact: Kurt Corey www.eugene-or.gov Contact Telephone Number: 682-5241 ISSUE STATEMENT This work session provides an opportunity for the council to review and discuss potential revenue strategies to address not only the projected ongoing operating deficit in street operations and maintenance (O&M) but to also generate additional revenue to be dedicated to the backlog of unfunded projects in the Pavement Preservation Program. BACKGROUND In September 2001, the Citizen Budget Subcommittee on Transportation System Funding presented its “Final Recommendation on Transportation Funding Issues” which contained among its conclusions 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.” At that time, the Citizen Budget Subcommittee also presented its recommendation that the council implement a transportation funding package consisting of a combination local motor vehicle fuel tax and transportation system maintenance fee for the purpose of generating an additional $9 million annually to address the City’s critical transportation system funding needs, which included $8.5 million for the backlog of road preservation work plus an additional $425,000 for off-street bike paths. On December 9, 2002, the council approved an ordinance establishing a transportation system maintenance fee (TSMF). On January 27, 2003, a related transportation revenue measure, the local motor vehicle fuel tax (“fuel tax”), was approved by the council. On September 8, 2003, the council voted to repeal the TSMF ordinance, citing the recent repeal by Springfield City Council of that city’s TSMF and concerns about equity between the two cities, as well as concerns raised by the Eugene Chamber of Commerce about the structure and impact of the TSMF on Eugene businesses. At that time, the council also cited continued hope for collaborative solutions with partner agencies and with Lane County, in particular. On January 24, 2005, the council approved a two-cent increase to the city’s local motor vehicle fuel tax, which has allowed the City to continue to make progress on the backlog of pavement preservation projects in Eugene. This tax increase was approved with a sunset date of February 29, 2008, at which time the tax is scheduled to revert to $.03 per gallon. L:\CMO\2006 Council Agendas\M060215\S060215C.doc