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<br />On January 22, 2007, the .City Council directed the formation of a Council Subcommittee o'I Transportation
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<br />Funding, comprised of four councilors, to study transportation funding options and to bring; back within three
<br />months a recommendarion for a solution meeting certain specific criteria to adequately fund the ; ~
<br />transportation system: At that same meeting, the council directed the City 1Vlanager to proc~eed with a~public
<br />hearing on proposed amendments to City Code which would increase the Business License I ax'on Motor
<br />Vehicle Fuel Dealers by three cents per gallon to the eight-cent level and repeal the sunset provision on the
<br />two-cent fitel tax rate increase enacted in 2005. Those code a.mendments were approved by the council on "
<br />May 29, 2007, and subsequently submitted to but not approved by the voters in November ~ 007: ,
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<br />The proposal to continue the local motor vehicle fuel tax at the five-cent per gallon level is an iritegralfj
<br />component in a package strategy recommended by the council subcommittee to adequately ~and equitably
<br />fund Eugene's transportation system for a variety of users. The package of proposed solu~io a also in~! ludes
<br />a b o n d l e v y f o r c a p rt a l s tr e e t r e p a i r s, a s t r e e t u s e r f e e b as e d o n p a r k i n g s p a c e s, an d a s tr e e an, t
<br />~ bike/pedestrian path lighting fee. To ensure continuation of a reliable fuel tax revenue stre ~am to' supp ~i rt
<br />ongoing street operations, maintenance, and preservation while the implementation efforts continue on the
<br />other elements of the funding package, the City Manager recommends that the council repe~al the suns~et
<br />provision enacted in 2005, which would otherwise cause the tax rate to revert to the tl~ree-cent level as of
<br />February 29., 2008. The proposed revisions to the Eugene Code to ,enact repeal of the sunseil provisiori~ are set
<br />i out in Attachment A, the proposed ordinance. ' ~I
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<br />Funding Needs; Legal Analyses and Implementation Issues ~ I ~
<br />Repealing the sunset provision would effectively continue collection of the local motor vehicle fuel tax ("gas
<br />. tax") at the five=cent per gallon level, tliereby preserving nearly $1.4 million in current revenue collec ~t~ions to •.
<br />be used for the operations, maintenance and preservation,of the existing street system. I' ~~
<br />Capital Pavement Preservation Needs - The current 5-cent gas tax has allowed tlie city to c Implete ne !i ly
<br />$16:5 million in street.preservation project work since 2003, with additional contracts in progress. This past.
<br />year, more than 17.41ane miles of slurry seal projects and 20.5 lane miles of rehabilitation projects were
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<br />completed, including the overlay of portions of T 8th Avenue, Chambers Street and Bailey Hill Road. ~
<br />Projects planned for 2008 include portions of East 13th Avenue, Barger Drive, Chambers S i eet and
<br />Roosevelt Boulevard.
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<br />In spite of these accomplishments, the backlog of needed repair work continues to grow in the. face of rapidly
<br />rising construction costs and insufficient revenues. In late 2001, the City was facing an esti~mated $67~
<br />million backlog in pavement preservatiori work. By spring of 2007 the estimated cost of.tliat backlog'~had
<br />grown to nearly $170 million and, with no new funding, was projected to grow to $282 mill~ion within~~the
<br />next 10 years. With the impending loss of 40% of the current fuel tax proceeds, the growth ~in tli'e backlog of
<br />. street repairs would accelerate even more rapidly. ~ ' "
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<br />Legal Uses of Revenue - The restrictions on the use of local fuel tax revenues for street systiem operati ~ ns;
<br />~ maintenance an d preserva tion is provi de d in Eugene Ci ty Co de 3. 4 8 9 ( 2): " T he ne t revenue ls ha l l be use d
<br />~ only for the reconstruction, repair, maintenance, operation and preservation of Gity-owned roads and streets
<br />within the city, roads and streets for which the City is contractually or legally obligated to o~perate and~I
<br />maintain, or roads and; streets for which the City has accepted responsibility under intergov ~ernmental ~i
<br />, agreement. No revenue shall be used for capacity-enhancmg street improvements." Use ofplocal motor
<br />vehicle fuel taxes is also limited by the Oregon Constitution (Article IX, Section 3a), which states that~ .
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<br />~ . F:\CM0~2008 Council Agendasuvf080114~S08i 1146.doc
<br />; • ' City Council Agenda page 102 ' ~' i
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