Item B: Strategies for Long-Term Transportation Needs

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ATTACHMENT D Transportation System Funding Project Overview of Individual }.~unding Options Brief Description of Funding Option - j T:'1e basic concept underlying the Transportation UtilitY Fee (TUF') is that the comprehensive transportation infrastmcture is a utility system that delivers services to all users of developed real property throughout the city. This is similar to the concept ofthe city's wastewater and stormwater utility services. Use of a utility system incurs a real cost. Accordingly, a fee is charged to recover the user's share of overall cost of the system. The total annual cost of the transportation utility service is measured by the city's budget for administration, operation, maintenance, minor improvement, preservation, modernization and reconstruction costs of all elements of the transportation system. The transportation system's ann.ual cost to be funded by the TUF is prorated among system users according to an estimate of their share of their use of the system. A methodology that may include a nlllnber of factors sets the actual fee levels for each property use categor.:,v. All revenue from a Th'F must go to pay the costs of the existing transport.ation system and should not be used for expansion of transportation system capac ity, SDCs and assessments remain. the primary sources of funding for capacity expansion. A TtJF is not based on the O\vnership or value of property and is not a property ta.x.. The fee is not related to fuel sales or operation of a vehicle, so the revenue from a TUI' is not restricted as a gas tax would be; it can be used for all elements of the transpormtion system, A Th'F is also not an special property assessment because it is not based on unique benefit to a particular assessed property. A Transportation Utility Fee is prQPfltT.ooa1e to the estimated fee-payer's share of use of the system. According to this principle ofproportiona1ity, a greater share of use of the transportation system results in a higher fee, while a lower share of use results in a lower fee. For example, under this principle of proportionality, corr..mercial acti'vity generating heavy use of the transportation system will pay a higher fee than households, which generate much lighter use. An estimate is made of share of system use based upon the statistical data in a standard guide, the Institute of Transportation Engineer's Trip Generation Afanuat~ depending on how property is used. The fee formula can be further tailored, if necessary, to assure proportionality under local conditions. Undeveloped or unused property, which does not generate use of the transportation system, should not be not subject to the fee. A second principle of a TUF' is that it is uni'lJ~rsa1. Since all developed property in the city benefits from use of the transpor:.ation system, all residents, organizations and businesses occupying 1.'1at property should pay t:'1eir proportionate share of the costs of the transportation system's operation and upkeep. Some municipalities permit deferral or discount of the fee tor demonstrated economic hardship. However, no blanket exemptions for particular classes of property should be permitted, just as no property class is exempt from paying wastewater or stormwater utility fees. Il3