Item B: Ordinance Concerning Solid Waste Administrative Powers

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calculating the annual Hauler License Fee; it will be considered a “pass-through” expense, similar to the county disposal fees. The annual license fee pays for a city permit which allows the haulers to conduct business in a regulated, closed environment, includes minimum rates set by the City that provide an established rate of return, and provides the privilege of a five-year rolling license. The license fee also pays for city program costs related to solid waste and recycling initiatives. The transportation surcharge is a right-of-way fee that helps compensate for the use and upkeep of city streets. What is the potential financial impact on our local public schools, and what options are available to the city to reduce or eliminate that impact? Concern has been expressed about the financial impact of the proposed surcharge on local school districts which are struggling with financial challenges of their own. The City has no control over the amount of the surcharge which the haulers decide to pass through to particular categories of garbage customers, but assuming the haulers do pass along the 5% surcharge, 4J School District would pay an estimated $1,100 more per month in increased garbage fees, and hauler testimony has indicated that Bethel School District would pay approximately $450 more per month in increased fees. The primary concern is that a possible effect of the new surcharge would be to reduce available funding for delivery of K-12 education services in the city. While it is critical that the community address transportation funding needs, K-12 educational services are also of vital importance. The council may wish to consider a mechanism to offset or mitigate impacts of the proposed surcharge to school districts while at the same time preserving the integrity of the garbage hauler surcharge as a legally defensible funding source. Council may wish to direct the City Manager to develop options to offset or reduce the impact of the surcharge on schools using another funding source. Assuming haulers do pass through the surcharge to customers, establishing a funding source that would wholly offset school transportation surcharge impacts is estimated to require around $19,000 annually. This special appropriation could be established in the FY10 Supplemental Budget #1. If the council wishes to consider taking such action, the following motion could be made only after the ordinance is adopted. Potential Amendment 1: I move to direct the city manager to bring back options in FY10 Supplemental Budget #1 for funding a Solid Waste Hauler Surcharge offset to reduce or eliminate the impact of the 5% transportation surcharge on public school districts in Eugene. The Eugene Budget Committee recommended that if the City were to receive any extra road funding from the state or other sources in the year 2010 budget cycle, then that money should be used first to offset these fees in order to rescind the surcharge. How is the City Manager responding to that recommendation? The solid waste hauler surcharge is intended to fill an estimated $900,000 gap in the city’s Road Fund budget for the upcoming year. The Manager does not anticipate receiving any significant amount of road operating revenue from the state or other sources in FY10 beyond the amounts already included in the proposed FY10 budget. If the state increases the state gas tax under a proposal currently being considered by the Legislature, it is unlikely that any additional revenue would flow to the City of Eugene in FY10 due to provisions in the state transportation bill that hold the gas tax increase in abeyance until the state has gone through two consecutive quarters of economic growth, or January 2011, whichever comes first. Federal transportation funding sources, including stimulus funding, typically are tied to specific capital projects and cannot be used for operations and maintenance. City staff continue to talk with Lane County staff about potential regional solutions, but it is highly unlikely that any regional solution could be identified, implemented and begin to generate revenue in FY10. If a substantial amount of unanticipated flexible road funding revenue were to be received in FY10, the City Manager would inform the City Council of the unanticipated revenue and request direction from the Council as to how those funds should be applied and what further action should be taken. 4