Item B: Ordinance Concerning Solid Waste Administrative Powers

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BACKGROUND Previous Council Action and History Eugene lacks adequate funding to maintain current service levels for street operations and maintenance (O&M) activities in 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. The critical nature of the shortfall in funding for Road Fund operations and maintenance became evident last fall, when projections showed that with no new revenues the Road Fund was expected to generate a $2.6 million annual operating deficit in the current fiscal year (FY09), and that without deliberate action, the fund would deplete all available fund resources and become insolvent sometime in late 2009. In response to this projection, the City Manager presented several options to the City Council in a work session on November 12, 2008. At that meeting, 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 the need for two different sets of funding strategies: a one- time, “stop gap” plan for fully funding critical Road Fund services in FY10, and a comprehensive “road map” for solving the City’s overall transportation funding problems in the long term. At that meeting, interest was expressed in a garbage hauler surcharge, but at a level lower than the proposed 10%. 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. This strategy included a new 5% transportation surcharge on solid waste hauler collection revenue and amendments to the Eugene City Code to expand the allowed uses of stormwater and wastewater user fees for road-related purposes to allow a one-time transfer of $500,000 from existing City stormwater and wastewater fund reserves to the Road Fund for FY10. On April 20, the council held public hearings on the two proposals. Eleven speakers testified on the proposed solid waste surcharge and one speaker spoke regarding the use of stormwater and wastewater funds. Through this community input and subsequent council and Budget Committee discussions, a number of questions and concerns were raised regarding the proposed solid waste hauler surcharge. Attachment A represents the City staff response to those questions and concerns. On April 27, the council unanimously approved the ordinance changes allowing the use of stormwater and wastewater funds for Road Fund purposes and authorizing a one-time transfer of $500,000 from the utilities to the Road Fund. At the same time, the council voted 5-3 not to adopt the proposed solid waste surcharge ordinance. As indicated above, the council asked the Budget Committee to provide recommendations to the council and City Manager on whether to enact a solid waste hauler surcharge to balance the Road Fund budget in FY10. Z:\CMO\2009 Council Agendas\M090610\S090610B.doc