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:, development and implementation of other elements of the package funding strategy, the City Manager is also recommending that tonight council take action to extend the local fuel tax sunset provision by three additional years, leaving the fuel tax at five cents per gallon until February 28, 2011. In the course of its work, the subcommittee learned that, in order to completely eliminate the pavement reconstruction backlog within the next 10 years, an estimated $27 million in pavement preservation funding would be needed per year. The subcommittee deemed this revenue taxget to be too aggressive and, instead, recommended additional annual funding of $13 million to $14 million, bringing total pavement preservation funding up to $18 million per year. While this additional funding would not eliminate the backlog within 10 years, it was projected that it would stabilize the cost-effective annual overlay program and begin to reduce the reconstruction backlog. The subcommittee recommended that the transportation funding package include a capital local option levy generating approximately $6 million net revenues annually to fund pavement capital preservation projects. Council subsequently decided to allocate another $0.5 million to the capital local option levy instead of allocating this amount to a solid waste collection surcharge. In addition, the subcommittee recommended and the council agreed that $350,000 of that amount should be allocated each year for bike and pedestrian path capital preservation. On December 10, 2007, council discussed a property tax approach to funding pavement capital preservation. Staff presented an approach using a short-term General Obligation ("GO") bond. Council directed the City Manager to "bring a proposal to a future council work session for a GO Bond measure to fund $81 million of pavement capital preservation projects over 10 years within an appropriate timeframe to place the question on the May 2008 ballot. The proposal should include ballot measure language that provides for both a list of high priority pavement capital preservation projects and appropriate flexibility for planning activities and changing pa~ement capital preservation project priorities." Restrictions on the Use of Bond Proceeds The focus of this council work session will be determining more specifically what to include in the resolution placing this measure on the ballot. The resolution,will become part of the materials included in the voters' pamphlet, and resolution language is the basis for the language contained in the ballot title (caption, question and summary). By state law, GO bond proceeds may only be used for capital purposes, not operations. For the transportation system, GO bond proceeds may be used for street construction, overlays and reconstruction. In addition to these statutory restrictions, spending from GO bonds will be limited by the language included in the measure presented to the voters. Measure language may be broad or may be narrower. Specific projects may be named in the measure language, but this is not legally required. In accordance with council direction, the resolution will include five principal azeas of restriction on the use of the bond proceeds: Pavement capital preservation treatments: The measure would allow overlay to or reconstruction of the driving surface of streets, as well as the preservation of existing integral elements such as curbs, gutters, sidewalks, on-street bike lanes, traffic signals, street lights, medians, and traffic calming devices. In all cases, these preservation efforts would be undertaken only to preserve existing