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7 <br /> EUGENE CITY COUNCIL <br /> AGENDA ITEM SUMMARY - EUGENE <br /> Work Session: Road Fund Status and Service System Stabilization Strategies <br /> Meeting Date: September 26, 2005 Agenda Item: C <br /> Department: Public Works Staff Contact: Kurt Corey <br /> www.ci.eukene.or.us Contact Telephone Number: 682 -5241 <br /> ISSUE STATEMENT <br /> This work session provides an opportunity for council to review and discuss the financial status and <br /> forecast for Eugene's Road Fund and to provide advance input for development of a FY07 budget with <br /> the goal of achieving greater long -term financial stability for the operations and maintenance (O &M) <br /> component of the city's transportation service system. <br /> On the capital side of the program, the implementation of a 3- cent - per - gallon local motor vehicle fuel tax <br /> in August 2003 (raised to 5 cents in January 2005) has allowed the city to begin addressing the significant <br /> backlog of pavement preservation projects in Eugene. However, this backlog continues to grow, and <br /> additional funding is still needed to reverse this trend and to do the repair work necessary to ensure the <br /> efficient and safe operation of our local transportation system. At the same time, the on -going operations <br /> and maintenance activities for the city's road system have been hampered by growing problems related to <br /> a structural imbalance with historic funding sources for the city's Road Fund. <br /> BACKGROUND <br /> Previous Council Action and History <br /> In September 2001, the Citizen Budget Subcommittee on Transportation System Funding presented its <br /> Final Recommendation on Transportation Funding Issues which contained among its conclusions the <br /> assertion that "In the face of projected O &M shortfalls and service reductions beginning in FY03, <br /> ensuring adequate funding for the operation and maintenance activities of the City's transportation <br /> system is absolutely essential." Now, four years later, the most significant financial management <br /> challenge for this fund continues to be the ability to generate adequate, sustainable revenue to <br /> appropriately fund the O &M activities for Eugene's transportation system. <br /> Financial and /or Resource Considerations <br /> Revenue Trends and Financial Forecast <br /> The Road Fund accounts for operations and maintenance (O &M) of the city's street system. Resources <br /> are provided from Eugene's share of State Highway Trust Fund allocations, payments from Lane County <br /> under the County /City Road Partnership Agreement, direct allocations of state Oregon Transportation <br /> Improvement Act (OTIA III) monies, and other small miscellaneous grants, fees and permits. <br /> The majority of the Road Fund revenue comes from Eugene's share of the State Highway Trust Fund, <br /> which is derived from Oregon motor vehicle fuel taxes as well as state motor vehicle registration fees and <br /> weight -mile taxes. Revenue growth in the State Highway Trust Fund has been relatively flat since FY00, <br /> at which time the city was receiving about $6 million per year in allocations. The projected revenue for <br /> FY07 is $6,240,000, which represents only a 4% growth over the entire seven -year period. <br /> 1 <br />