Item B: FY14 Plan on Action - City Service Fee Proposal

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The basic features of the new City Service Fee proposed by the City Manager are:  A modest monthly fee that would be capped at $10 per month per fee payer.  The fee will be paid by residences and businesses in Eugene. It will be a flat fee for all fee payers.  The fee will be administered in the most effective and efficient means possible. That may mean that the Eugene Water & Electric Board (EWEB) acts as billing and collection agent, or that the City uses another method for billing and collection.  The fee design will be simple, in order to keep costs for billing and collecting as low as possible.  The fee should include appropriate measures to ensure accountability and transparency for the community and fee payers.  The fee should be placed on the May 2013 ballot for voter approval. Key Questions: The City Manager has proposed a City Service Fee that would be a maximum of $10 per month and be designed to avoid further cutbacks in services. At this work session, the council will consider several key components of the City Service Fee and provide input to staff as the ordinance is drafted. Key questions are: 1.What services should be funded through a new City Service Fee? 2.What types of assurances should be built into the fee ordinance for accountability and transparency? 3.Should the fee incorporate assistance for limited income individuals and families? In putting together a proposal for the council to consider on a City Service Fee, surveys completed in July and November 2012 provide information that has helped to shape the recommendation. Services Funded Through New Fee: As discussed in the four-part plan, the City Service Fee is needed to help close the budget gap and maintain services at their current level. Survey results indicate the community is willing to pay a modest monthly service fee (up to $10 per month) to maintain the present quality of life. An important factor when choosing which services to fund with the new fee is ensuring that the fee is used only for maintenance of current services or to avoid further cutbacks. When asked, after some explanation of the City’s financial situation, whether they would prefer cutbacks in services to avoid new taxes or fees, or to pay a modest fee to maintain services, respondents preferred to maintain services even if it meant paying a modest fee – 58 percent in July and 61 percent in November preferred to avoid further service cutbacks. In July, community members were asked if they wanted to maintain present services (39 percent), restore services to three years ago (34 percent), or increase services (18 percent) with a new monthly fee. Survey results also provide information about how the community would rank services that should receive a high priority for funding. In July, respondents were asked to rank four service areas that could be funded through a new fee. In the November survey, respondents were asked S:\CMO\2013 Council Agendas\M130114\S130114B.doc