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

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In November 2007, the council held a work session on two potential transportation fee concepts, one of which was a parking-space-based street utility fee. The underlying premise of this fee is that a property with a relatively large number of parking spaces is associated with a higher use and benefit of the transportation system and would pay a relatively higher street utility fee for the upkeep and repair of that system. Both designs would require the compilation of total-system units (total trips, or total parking units), and the development of a rational basis for assigning each property a fair share of units. Unlike some Oregon cities which have implemented street maintenance fees, Eugene has no business licensing or business registry requirement, so it lacks an existing database or registry of Eugene businesses based on commercial category. Attachment A is a November 2007 memo which outlines some design considerations related to a parking-based street utility fee. Administrative Efficiency and Billing Issues The May 2007 Council Subcommittee report identified key criteria with which to evaluate revenue alternatives, two of which relate to administrative efficiency: ? “Efficiency and Cost-Effectiveness: The revenue sources included in the funding strategy should have low to moderate costs for administration, relative to the total revenue generated. ? Administrative Effort: The revenue sources included in the funding strategy should be practical to administer. There should be practical sources of tax-related or fee-related data, and the implementation and ongoing program management should not be overly complex.” New transportation utility fees would require an administrative infrastructure similar to that used for calculating and billing City stormwater and wastewater user fees. In order to meet the “efficiency” criteria, the City would administer the program in-house and optimally would contract with EWEB for billing and collections services, as initial analysis has concluded that developing a stand-alone City street fee billing and collection system would be cost prohibitive. The overall cost of program management, billing and collection would depend partly on the complexity of rate structures in the fee design. While EWEB is required under the City Charter to bill and collect for sewer fees, EWEB is not obligated to collect City street utility fees. Staff from the City and EWEB have had preliminary discussions about the concept of expanding the existing EWEB-City billing agreement to include collection for a new City street utility fee, but to-date the board has not indicated its support for such an agreement. The lack of an available, cost-effective billing and collection mechanism for a Eugene street fee presents a significant constraint to moving forward with the implementation of such a fee. In fact, staff research has revealed that, of the 22 Oregon cities which have adopted some sort of street maintenance fee, 20 of them have done so with the benefit of a City-owned and controlled municipal utility billing infrastructure. One city which lacked the billing infrastructure had been able to negotiate a billing agreement with the local water district, and one small city never returned staff’s calls. In summary, Eugene faces a unique but significant challenge among Oregon cities in that Eugene’s municipal utility billing system is within the control of a separately-elected board with a separate management structure, and the City cannot compel the board to bill this potential new City fee. Z:\CMO\2009 Council Agendas\M090715\S090715B.doc