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14 110 <br /> On September 26, 2005, Council reviewed and discussed the financial status and fund forecast for <br /> Eugene's Road Fund. At that time, Council reviewed an illustrative list of program reductions and <br /> eliminations or funding shifts which would be required if a strategy of service reductions alone were <br /> employed to correct the structural deficiency between Road Fund revenues and expenditures and <br /> eliminate the $2 million projected annual deficit. Based on that discussion, the Council directed the City <br /> Manager to develop a FY07 Road Fund budget at the current service level and to bring back a proposal <br /> for a new revenue funding package which would not only address the projected ongoing operating deficit <br /> in street operations and maintenance but which would also generate additional revenue to be dedicated to <br /> the backlog of unfunded projects on the Pavement Preservation Program. <br /> At that same worksession, staff was directed to come back with a list of the new street - related projects <br /> included in the FY2006 -2011 Capital Improvement Program which were expected to be funded with <br /> money that could have otherwise been used for operations, maintenance and preservation of the street <br /> system. That information is being provided here as Attachment C. <br /> Financial and /or Resource Considerations <br /> Road Fund - The Road Fund accounts for operations and maintenance (O &M) of the city's street system. <br /> e Y . . <br /> permits. The majority of the Road Fund revenue comes from Eugene's share of the State Highway Trust <br /> Fund, which is derived from Oregon motor vehicle fuel taxes as well as state motor vehicle registration <br /> fees and weight -mile taxes. Revenue growth in the State Highway Trust Fund has been relatively flat <br /> since FY00, at which time the city was receiving about $6 million per year in allocations. The projected <br /> revenue for FY07 is $6,196,000, which represents only a 3% growth over the entire seven -year period. <br /> The second major source of revenue for this fund is the County /City Road Partnership Agreement that <br /> once contributed $2.5 million per year and more recently has been providing about $1.2 million in annual <br /> street maintenance funding to Eugene. The current agreement expires in FY07, and in January 2005 the <br /> Board of County Commissioners adopted a five -year Capital Improvement Plan which discontinues the <br /> Partnership payments to Lane County cities after FY07. Unless the Board reconsiders this action and <br /> approves continuation of the historic Partnership payments, Eugene would lose over $1 million in annual <br /> street maintenance funding beginning in FY08. Regardless of which strategy Council selects for <br /> generating new revenue dedicated to operations, maintenance and preservation of city streets, it is critical <br /> that council and the manager continue to pursue efforts to gain commitments for the continuation of the <br /> historic County /City Road Fund Partnership Agreement and funding. <br /> - - 1 111 •II 111 . • .. . ., • -. • <br /> - 7 <br /> 2 <br />