Item B: Comprehensive Transportation Funding Solutions and a Street Utility Fee

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? In June 2009, the council considered but voted not to adopt a surcharge on solid waste fee collections to generate resources for street operations and maintenance services. Financial Considerations Fiscal Year 2009-2010 With recent council actions to identify short-term resources as a “stop-gap funding solution” for FY10, the council was able to adopt a balanced annual budget for the FY10 Road Operations Fund, although $900,000 of the enhanced pothole repair budget had to be tapped to accomplish this, and the projected fund balance at the end of FY10 is far lower than the targeted two-months’ operating expenditures. The FY10 pavement preservation capital program will receive the remaining estimated $1.4 million revenue from the local fuels tax, along with $6.5 million from the street repair bond, and $3.0 million in one-time federal stimulus funding for pavement preservation projects. However, the City still lacks adequate ongoing funding for major street repair projects, and the backlog of needed street repairs has grown to over $170 million. The Council Committee on Transportation Funding Solution recommended an annual revenue target of $7.5-$9.0 million to fully fund the annual overlay program and another $9.0- $11.0 million per year to begin to make significant progress on the backlog of needed street reconstruction projects. Fiscal Year 2010-2011 Prior to the passage of the state transportation bill, the annual deficit for street operation and maintenance services in the Road Fund was projected to exceed $3.0 million in FY11, growing to over $4.0 million by FY13. However, with the new state transportation bill, the City could eventually expect to receive $2.0- $3.0 million in additional state highway funding each year. Together with the ability to charge right-of- way use fees on City utilities, Eugene may, for the first time in many years, have the ability to stabilize funding for street operations services such as street lighting and signals, street signage and striping, and pothole patching and crack sealing. However, the City still lacks adequate funding for major street repair projects, and the backlog of needed street repairs has grown to over $170 million. While the five-year street repair bond approved by Eugene voters last fall will fund 32 projects that will repair an estimated 70 lane-miles of streets and three miles of off-street bike and pedestrian paths, the City still has not resolved its long-term street repair funding problem. Development and implementation of a street utility fee could be one more component in a package strategy endorsed by the council to ensure a stable, locally-controlled revenue stream to allow the City to continue to make progress on that $170 million backlog of needed street repairs. The next sections outline the main design elements and implementation challenges for a street utility fee in Eugene and also suggest next possible steps, should the council decide today to move forward with development of this fee concept. Design Options The two principal high-level design options which the council has explored over the past several years are trip-generation basisparking-unit basis the and the . In December 2002, the council adopted a trip- generation based street utility fee. A property which generates a relatively high share of trips would pay a higher fee than a property which generates a relatively low share of trips. In September 2003, the council voted to repeal the ordinance adopting that fee in the face of opposition by both the Lane County Commissioners and the Eugene business community. Z:\CMO\2009 Council Agendas\M090715\S090715B.doc