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BA .LINE/SERVICE LEVEL CHANGE-BEQUEST Date: December 8. 2009 Department: Public Works Department Contact: Becky Carlson Check one: X Baseline Adjustment Service Level Change 1. User Code # 8900 Revenues Fund(s): - oa +und 4222-42103(new account). $(1,845,000) Expenditures Fund(s): 131 -Road Fund 9991-98000 $ 1,845,000 Net $: -0- FTE: -0- 2. Decision Package Title and Brief Description: New City Surcharge on Garbage Haulers Dedicated to Road O&M Funding - The City Manager has indicated intention to develop the FY10 Road Fund. budget based on funding assumptions to include one or more proposed new revenues dedicated to funding road operations and maintenance activities in order to close the projected FY10 funding gap of nearly $3 million and keep the fund solvent in FY10 and beyond. The second of these two proposed new revenue sources is a 10% transportation surcharge assessed on solid waste haulers to better reflect the impact their activities impose on the street system as a result of heavy vehicles running on most every city street at least once a week. The upper end of the estimated yield .range for this new surcharge at the 10% level is $1.845 million for FY10. Additional Explanation for Internal Purposes- The transportation surcharge on haulers is currently being proposed as a flat percentage. of subject hauler fee revenue and would vary in amount by account,, based on the frequency of collection service and the customer category. At the proposed 10% level, the transportation surcharge is estimated to raise up to $1.845 million in additional annual revenue, and a residential customer with weekly 32-gallon service would see an increase in their monthly garbage fees of approximately $1.97 per month. Note: This new-fee proposal results in no new spending authority for Road Fund and no change in the level of service. It is simply helps fill a significant funding gap in maintaining current service levels. 3. Is this aone-time expenditure request? _ N/A 4. Justification of request; consequences if denied; impact on other funds: This proposal is consistent with the City Manager's intentions as expressed to the City Council on November 12, 2008. Without new revenues of approximately $3 million which can be practically and realistically implemented by July 1, 2009, the city's Road Fund will immediately need to begin to implement a strategy of severe service reductions to correct the structural deficiency which threatens to send the fund into insolvency sometime in the fall of 2009. There would be no: impact on other funds as a result of this new proposed revenue. 5. Specific Council goal/action priority related to this request, if any: This budget strategy is a key component in achieving the outcomes- identified in the City Council's Transportation Initiative, which is to "Develop mechanisms to adequately fund our transportation system for cars, trucks, bikes and pedestrians including maintenance and preservation and capital reconstruction." 6. Service category and specific service profile strategy related to the request: Transportation Services -Strategy 1: Prioritize operations and maintenance services and match service