HomeMy WebLinkAbout12-15-2010CITY OF_
---00*" WASHINGTON
December 15, 2010
AGENDA
1. CALL TO ORDER - 9:00 A.M., COUNCIL CONFERENCE ROOM
II. CONSENT AGENDA
A. APPROVAL OF MINUTES FROM OCTOBER AND NOVEMBER MEETINGS
III. DISCUSSION AND INFORMATION
A. DEVELOP STRATEGY TO PROMOTE THE STREET MAINTENANCE UTILITY (Dowdy)
B. CURRENT PROJECTS STATUS UPDATE (Dowdy)
IV.ADJOURNMENT
CITY OF AUBURN
TRANSPORTATION, TRANSIT
AND TRAILS COMMITTEE
DRD/hb
November 201 0
• • • ~
r ~ n n n > > ~~~T~ ee a e a ce ~F ANINCT01~
' ' ' ~I I I E A proposed voter option for c~t~es
Basic questions and answers ~ State assistance is declining:TheTransportation
What is it? Improvement Board's ability to partner is reduced due
A street maintenance utility is just that, a utility. By law, utility to declining gas tax receipts- some of the TIB's programs
funds are required to be dedicated for the purposes of have been shelved, to the point that its executive
maintaining, repairing, and replacing a system that is used by director has predicted "corridor" grant funding will not
those who benefit from it. Most utilities work the same: if a be available for at least the next four years.Another
citizen or business benefits from the use of the utility, then potential resource, the Public Worl<s Assistance Account,
they pay for it. Usually the more they use the utility, the more was dried up in 2009 when the legislature redirected
they pay. For example, customers are charged by the amount $368 million in local government low-interest loan funds
of power or water they consume. to the state's general fund.The state is likely to take
similar action in the upcoming 201 I session. The street utility is being successfully used in other states
Funds collected from impact fees must address such as Oregon,and was previously used inWashington.The
capacity improvements, not maintenance: street maintenance utility option being prepared for the 201 I .
Once capacity improvements are made, they begin Legislature is designed to be constitutionally sound and fair -
to deteriorate.There is no dedicated street funding costing only a few dollars a month for homeowners.
mechanism to preserve this investment.
Why is a dedicated street maintenance utility ~ Maintaining and preserving streets is far more
funding option necessary? cost-effective than completely rebuilding them:
Cities are seeing more traditional sources of revenue either The transportation system is not unlike your house or
reduced or eliminated, and the economic downturn has your roof - it must be continuously maintained, operated,
made it difficult if not impossible for cities to use their and replaced as it ages to assure the continued use of
general funds to keep street maintenance and preservation the system to the level of service that residents and
funding alive. businesses expect and deserve.And maintenance and
Consider: repairs are cost effective -transportation engineers estimate it can cost as much as 15 times more to
City revenues are depleted: Unlike the state's completely rebuild and replace a roadway than it costs to
constitutionally protected gas tax, nearly three of every maintain and repair it.
four city transportation dollars rely on transfers from the The street maintenance utility ro osal is
p p city operating budget --which means competing against remised on fairness:Those who utilize, benefit from,
P other city services such as police and fire protection. and im act the street s stem are the ones who a for
P Y PY
In this economy, many cities simply do not have the the maintenance and u kee of that s stem. P P Y
resources to fund street maintenance.
Initiatives have stri ed traditional trans ortation What would a street maintenance utility be pp p
revenues:1-695, I-747, and I-776 stripped away revenue used for, and what do you use as the basis for
that cities used to maintain, operate, replace, and improve determining rates?
their transportation systems. AWC, joined by several individual cities, has designed a street
maintenance utility option that would be used for "curb-to-
curb," basic street maintenance and preservation.
continued
Association of Washington Cities • 1076 Franklin St SE • Olympia,WA 98501 • www.awcnet.org
With a street maintenance utility, the costs of a street system How are specific rates determined?
are more closely matched to how street users benefits from Rates apply to residents and businesses within a street utility
the system.A charge is based on how many trips a customer area or areas.They are based on household unit or type
uses in the system. In most cases, the trips charges are based (classification) of business and must be uniform for the same
on a trip generation manual developed by the Institute of class of person receiving transportation services or imposing
Transportation Engineers, and the trips factors are very burdens on the transportation system.Otherfactors are:
accurate. In addition, cities can tailor the trip factors for their
• The correlation between property uses and the community and be sure charges are apportioned fairly.
estimated number of automobile trips;
Can you give more specific details about how costs User location, i.e. proximity to arterial streets and
are determined and what is included? residential streets;
The cost per trip must be equal for all users or customer Incidental trips vs. destination trips;
classifications,and the fees generated must only be used Reductions or credits on residential properties to the
to fund the operation, maintenance, and replacement of extent of their occupancy by low-income senior citizens;
the existing transportation system.That would not include and
trails, new construction, or off street bike lanes. Under this Reductions to businesses entities, governmental entities,
proposal, it would include: or users served by private streets to the extent they are
providing for streets maintenance utility services and
• Pavement management and maintenance; based on a showing that the reduction or credit granted
• Signs and markings; is reasonably proportionate to the value contributedlcost
• On street non-motorized facilities; and avoided by the street maintenance utility.
• Traffic control and signalization.
continued Unlike general taxes and like utility rates from other utilities,
street utility charges are proportionate to the benefits or
burdens created by identified user classes.Again, unlike
general taxes and like utility rates, street maintenance utility
charges are dedicated solely to that purpose and cannot
be redirected for other city services. In this way,they are
similar to the 18th Amendment protections the State of
Washington provides to ensure dedicated funding of the
state transportation system.
Who would be allowed to implement the street
utility?
The street maintenance utility would be a voter approved
option for cities and would operate similarly to a municipal
power, water, sewer or solid waste utility service.To
initiate this process, a city would need to determine a
street maintenance utility is in the interest of public health
and safety.A city would also need to find that city streets
are failing to meet, or is in danger of no longer meeting,
established criteria for pavement ratings and other safety
standards.A city would also use an ordinance development
process for the street utility, which ensures input and
information from community groups and stakeholders.
Association of Washington Cities • 1076 Franklin St SE • Olympia,WA 98501 • www.awcnet.org
What if my business uses trip reduction measures What about citizen and business accountability?
such as vanpools or bus passes? Street utility charge funds are required to be used for
If adopted, the street maintenance utility would encourage transportation purposes only- they cannot be redirected
commute trip reduction measures.A business that to a city's operating budget.
demonstrates vanpooling, carpooling, or bus passes is eligible Appeals of rates or rate classifications are heard by an
for credits because they reduce trips and wear and tear on independent examiner.
the street system. An annual re ort indicatin ro ram status is re uired.
' P gP g q
Examples of monthly fees A street utility advisory board representing the user
From City of Corvallis, Oregon's Transportation Maintenance classifications must be included as part of the ordinance.
Fee The street utility charge will be identified as a line item as
part of a residential or business overall utility bill.
Type of property Trips Monthly
fee When could this be implemented?
Single family 9.6 $1.36 If adopted, the law would go into effect July 20 I I .Cities
Multi-family (8 units) 53 $7.53 would then be required to go through the public involvement
Office bld 21, 128 s ft 232 $4.87 and rate setting process, seeking input from stakeholders g( q )
from the various user groups, and gathering the necessary Small retail (23,500 sq ft) 532 $ I I.17
data to determine appropriate rates as part of the process of
Grocery store (48,000 sq ft) 2,569 $53.80 oin before the voters. g g
Large retail (I 32,000 sq ft} 3,962 $83.20
Hewlett-Packard 6 459 135.64 For questions or more information
Ashley Probart, Legislative & Policy Advocate
Are rates predictable? Can they be phased in? How ashleyp@awcnet.org
much are they? (360) 753-4137
Yes.Thisuoter-approved option requires rates to be phased
in over a four year period. Each city establishes its own rates.
For a typical urban city experiencing over 500,000 trips on
its system and experiencing a failing transportation system:
• Single family residence could expect $2 to $8 a month
(Oregon cities are about $4-$5 a month)
• Senior housing and multifamily housing ranges from 10%
to 70% of a single family residence.
• Industrial buildings could expect $ I 0 - $ 15 a month for
every 10,000 square feet.
• Restaurants, office buildings, and other commercial
building categories could expect rates of $ 15 to $35 per
month for every 10,000 square feet
• Shopping centers in Corvallis, Oregon, pay about $6
per month for every 10,000 square feet (which are
apportioned among the many businesses within the
shopping center).
Association of Washington Cities • 1076 Franklin St SE • Olympia,WA 98501 • www.awcnet.org
November 17, 2010
Prepared for Use by Association of Washington Cities
STREET MAINTENACE UTILITY TECHNICAL PAPER
Purpose:
The purpose of this paper is to present a model Street Maintenance Utility (SMU) Rate Schedule that
the Association of Washington Cities (AWC) can utilize to advocate for the authorization of the
proposed SMU legislation. This technical paper describes the methodology, formulas, rate structure
and recommended implementation process for use by other cities desiring to develop a local SMU.
The model SMU schedule is flexible and can be adapted for use by other cities with minimal
modifications. Development of this technical paper has been a cooperative effort among the staff of
a group of cities working with City of Auburn staff.
Background:
AWC is sponsoring proposed SMU legislation authorizing local agencies to form voter approved
public street utilities to cover the costs of street maintenance, operations and preservation. This
model SMU rate schedule is consistent with the draft SMU legislation HB-2618/SB-6616. The AWC
SMU legislation is based upon the legal theory that users of the street system should pay according
to the burden they place on the street system. Agencies forming SMU's would be required to set
utility rates equitably based on the number and impacts of trips generated by various land use types.
It is in the interest of all cities that choose to establish a SMU that rates be based upon the actual
financial needs to achieve a community's desired level of service for the street system. The
recommended process provides the latitude and gives deference to the local governments to
determine their individual maintenance goals. The proposed rate schedule and formula utilize
technical principles and data from publications by the Institute of Transportation Engineers (ITE),
Federal Highway Administration (FHWA), National Cooperative Highway Research Project
(NCHRP) and the Washington State Department of Transportation (WSDOT) Pavement Manual.
1
SMU Methodology
• Categories ~ Rate Classes: This rate schedule separates residential and non-residential uses
into two categories with eight total sub groups of rate classes. The Residential category
contains two sub-levels and the Non-Residential category contains six sub-levels. In each
category land uses are sorted into these rate sub-levels with other land uses of similar system
impacts to ensure equitable rate distribution. SMU rates for each sub-class are based on the
average impact score and the total number of units within each class as described in the
Impact Ratings and Base Rate Calculation sections. Differentiating between residential and
non residential uses is a logical structure that all agencies should consider in developing their
own programs. The number of subgroups within each category is a functional policy question
for each city and will be driven by the need to present an equitable rate structure that does not
become overly burdensome to implement. For example, a city that is almost exclusively a
residential community may only use one or two subgroups.
• Impact Ratings: Staff created an Impact Scoring system to rank the various land uses in each
category in order of increasing impact on the street system. Shown below, the impact scoring
formula uses the ITE Tri Generation Manual 8th Edition, FHWA's NCHRP S nthesis 298,
~ y
trip length adjustment factors and an Equivalent Single Axle Loading (ESAL) pavement
damage impact factor to determine each land. uses impact score. Weekday and weekend trip
rates were combined to establish more representative and equitable trip generation rates for
both passenger cars and heavy vehicles. Additionally, trip generation rates were factored for
each land use to account for primary versus pass-by trips. The Total Impact Score is the
sum of the individual passenger car and heavy vehicle impact scores for each land use it
represents. All land uses contain a heavy vehicle component in their impact score in order to
account for trash collection trucks, delivery trucks, service trucks and transit. This scoring
system is utilized to group the various land uses into the rate classes used to calculate an
individual property's burden.
Total Impact Score = T Pc x L x IFp~ + T Hv x L x IFHv
TpC =Trip Generation rate for passenger cars, ITE Trip Generation 8~ Edition
THV =Trip Generation rate for heavy vehicles, NCHRP Synthesis 298
L =Trip Length Adjustment Factor
IFpC =Impact factor, l for passenger cars,1450 for heavy vehicles
2
• Burden Calculation: While the draft legislation permits agencies to fund maintenance,
operations and preservation of the complete street system this draft rate schedule uses only
the costs associated with maintaining and preserving the existing pavement structure. Using
the City's pavement database, staff estimated the annual pavement maintenance burden for
restoring all city streets to a system average PCI of 70 would be $B.SM over the next 20
years. Each agency implementing a SMU will be responsible to determine their unique
program objectives, scope and funding needs.
• Base Rate Calculation: The annual per unit base rate is calculated separately for residential
and non-residential categories. For the residential category the base units are dwelling units
(du) and for non-residential category the base units are thousands of square feet (ks~. The
Level 1 Base Rate is a function of the categories .burden share, each sub-level's average
Total Impact Score and the total number of units in each sub class and category. Shown
below is the formula used for calculating. the Level 1 Base Rate for both the residential and
non-residential categories. The formula converts the higher level units from each category to
equivalent Level 1 units. The sum of the.. equivalent. Level 1 base units are then divided into
the burden share producing the Level 1 per unit Base Rate. Higher Rate Class sub level base
rates are calculated by factoring the Level 1..Base Rate by the ratio of that level's Average
Impact score to the Level 1 average Impact score. Total Burden distribution between
residential and non-residential categories under this draft rate structure is a policy question
that should be decided at the local agency level. For example, the City of Wilsonville,
Oregon uses a 50/50 split to distribute the burden in their SMU rate structure between
residential and non-residential customer classes. Two burden distribution options have been
provided based on City of Auburn land use and traffic data in the Burden distribution section
below.
BurdenShare
Base Rate = L2 ~3 • Ll ~S L2 ~S L3
Units + ~1 Units + ~1 Units IS IS
UnitsLl =Total # of units (du or ksf) for per sub level in Res. and Non-Res. Category
IS'I'2 =Average Total Impact Score for each sub level in Res & Non Res. Category Burden Share = Portion of burden allocated to each category. Res. vs Non-Res.
3
• Burden Distribution: Determining the burden distribution between the residential and non-
residential categories is a key policy question that should consider one or more of the
following factors; trip generation, pavement impact factors, physical infrastructure area and
estimated street utility burdens for the residential and non-residential categories. Two valid
options for burden distribution are as follows; Optionl: distributing the burden to each
category based on the estimated needs of the corresponding residential and non-residential
street networks and Option 2: applying proportional shares of the total' burden based on each
category's traffic generation. In Auburn the estimated annual street utility burden consists of
approximately 75%non-residential street needs and 25%0 .residential street needs. This option
is logical and easy to explain and data should be readily available or fairly simple for any
agency to estimate. Based on the City's Traffic..... Model the trips generated by Auburn land
uses are comprised of 61 %non-residential trips and 39% residential trips. These distribution
values are unique to Auburn and will vary by agency. Each agency implementing a SMU will
need to make the policy determination as to which distribution method is most equitable to
its citizens. Sample rates and fees for these two distribution.. ..options are described in the
following charts and tables. The distributions shown are per million dollars of estimated
burden.
o Option 1: Distribution of Estimated Total Burden by Corresponding Street
Class Needs (Per ~1 Million of Burden}
■ $250K for Residential Category (25% of Total SMU Burden), $750K for
Non-Residential Streets (75% of actual Total SMU Burden)
o Option 2: Distribution by Trip Generation Estimation (Per ~1 Million of
Burden}
■ $390K for Residential Category (39% of City trips generated), $610K for
Non-Residential Category (61 % of City trips generated)
4
SMU Option 1 Distribution Rate Schedule (Per $1 Million of Burden)
ITE Land Total Total Units Per Annual SMU Annual SMU
SMU Land Use Categories Use Code Unit of Measure Imp ~ct L T d Use Rate (Per ksf or Burden Sco a ypes du)
Non-Residential ksf 75% 750,000.00
Non-Residential Level I 30.9 2038 $ 1.76 $ 3,592.47 Nursing Home 620 ksf-beds 15.7 45
Assisted Living 254 ksf-beds 15.9 387
Es resso Stand NA ksf/site 17.7 34 Self Service Car Wash 947 ksf/stall 33.6 40
Church 560 ksf-GFA 34.2 250
Day Care Center 565 ksf-GFA 39.8 72 Automated Car Wash 948 ksf-GFA 40.2 10
JuniorlCommunity College 540 ksf-GFA 40.3 500
Hos ital 610 ksf-GFA 41.1 700 Non-Resdential'Levelll 75.3 1446 $ 4.29 $ 6,205.09'
Libra 590 ksf-GFA 62.:.5 5
Motel 320 ksf-rooms 67.4 30 Hotel 310 ksf-rooms 70.4 225
Elementary School 520 ksf-GFA 87.1 300
General Office 750 ksf-GFA 89.1 886 Non-Residential Level III 152.2 1970 $ 8.67 $ 17, 088.33
Auto Care Center 942 ksf-GFA 119.9 124
Free Standing Discount Store 813, 815, ksf-GFA 130.5 10 Furniture Store 890 ksf-GFA 141.4 50
S ecialt Retail Center 814 ksf-GFA 151.1 1000
HardwarelPaint Store 816 ksf-GFA 152.8 100 MiddlelJr Hi h School 522 ksf-GFA 137.5 200
Government Office 730 ksf-GFA 166.5 50
Drive-in Bank 912 ksf-GFA 181.8 36 High School 530 ksf-GFA 188.7 400
Non-Residential Level IV 319.6 923 $ 18.21 $ 16,809.97
Movie Theater 444, 445 ksf-GLA 213.6 200 Car Sales -New 841 ksf-GFA 234.8 370
Health Club 492, 493 ksf-GFA 278.1 50
Medical Office 720 ksf-GLA 287.8 148 Service Station 944 ksf-VFP 399.7 20
Su ermarket 850 ksf-GFA 398.9 100
Convenience Market 851 ksf-GFA 424.3 35 Non-Residential Level V 505.6 12320 $ 28.81 $ 354, 945.15
Industrial Park 130 ksf-GFA 452.9 2000
Warehouse 150 ksf-GFA 460.5 7500 General Aviation Airport 22 ksf/Based aircraft 501.1 275
Pharmacy w/drive through 881 ksf-GFA 514.0 4
Pharmacy no drive through 880 ksf-GFA 518.5 6 Service Station wlminimart 945 ksf-GFA 526.5 35
Mini-WarehouselStorage 151 ksf-GFA 526.6 500
Heavy Industry 120 ksf-GFA 544.9 2000 Non-Residential Level VI 1287.9 4788 $ 73.38 $ 351, 358.98
Light Industry 110 ksf-GFA 723.8 2400
Hi h Turnover Restaurant 932 ksf-GFA 781.5 50 Manufacturing 140 ksf-GFA 868.4 2200
Restaurant 931 ksf-GFA 1114.0 48
Fast Food Restaurant 934 ksf-GFA 2951.7 90
'Residential DU 25% 250,000.00 Residential-Level I 18.7 2554 $ 6.39 $ 16, 313.05
Senior Housing 251 dwellin unit 18.0 27
Mobile Home in MH Park 240 dwellin unit 19.5 2527 Residential-Level II 28.0 24482 $ 9.55 $ 233, 686.95...
CondolTownhouse 230 dwellin unit 26.6 2699
A artments 220 dwellin unit 27.7 7860 Single Family (Detached) 2 0 dwellin 29.7 13923
5
SMU Option 1 Distribution Sample Fees (Per $1 Million of Burden)
Rate Class Base Rate Annual Fee Monthly Fee
2,500 sq. ft. Day Non-Residential $1.76/ksf $4.40 $0.37
Care Center Level 1
15,000 sq. ft. Non-Residential $1.76/ksf $26.40 $2.20
Church Level 1
10,000 sq. ft. Non-Residential $4.29/ksf $42.90 $3.58
Office Level 2
65,000 sq. ft. Non-Residential $4.29/ksf $278.85 $2324
Elementary School Level 2
5,000 sq. ft. Bank Non-Residential $g,67/ksf $43.35 $3.61
with Drive thru Level 3
200,000 sq. ft. Non-Residential $g,67/ksf $1,734.00 $144.50
High School Level 3
35,000 sq. ft Non-Residential
Government Level3 $g•67/lcsf $303.45 $2529
Office
25,000 sq. ft. Non-Residential $18.21/ksf $455.25 $37.94
Health Club Leve14
10,000 sq. ft. Non-Residential $1821 /ltsf $182.10 $15.18
Doctors Office Level 4
150,000 sq ft. Non-Residential $2g gl/ksf $4,321.50 $360.13 Warehouse Level 5
Municipal Airport Non-Residential
*275 based Level 5 $28.81/ksf $7,922.75 $660.23
Aircraft
2,500 sq. ft. Fast Non-Residential $3.38/ksf $183.45 $1529
Food Restaurant Level 6
125,000 sq. ft. Non-Residential $3.38/ksf $9,172.50 $764.38
Manufacturing Level 6
Single Mobile Residential Level 1 $6.39 $6.39 $0.53
Home Unit
Apartment Residential Level 2 $9.55 $9.55 $0.80
*Assumes 1 ksf per based aircraft
6
SMU Option 2 Distribution Rate Schedule (Per $1 Million of Burden)
ITE Land Total Total Units Per Annual SMU
SMU Land Use Categories Use Code Unit of Measure Imp ~ct land Use Type Rate Annual SMU Burden Sco e
Non-Residential ksf 61% $ 610,000.00
IVon-Residential Level I 30.9 203$ $ 1.43 $ 2, 921.88 Nursin Home 620 ksf-beds 15.7 45
Assisted Livin 254 ksf-beds 15.9 387
Es resso Stand NA ksf/site 17.7 34 Self Service Car Wash 947 ksf/stall 33.6 40
Church 560 ksf-GFA 34.2 250
Day Care Center 565 ksf-GFA 39.8 72 Automated Car Wash 948 ksf-GFA 40.2 10
JuniorlCommunit Colle e 540 ksf-GFA 40.3 500
Hos ital 610 ksf-GFA 41.1 700 IUon-Residential Level II 75.3 1446 $ 3.49 $ 5, 046.80
Libra 590 ksf-GFA 62.5 5
Motel 320 ksf-rooms 67.4 30 Hotel 310 ksf-rooms 70.4 225
Elementa School 520 ksf-GFA 87.1 300
General Office 750 ksf-GFA 89.1 886 IUon-Residential Level III 152.2 1970 $ 7.06 $ 13, 898.51
Auto Care Center 942 ksf-GFA 119.9 124
Free Standin Discount Store 813, 815, ksf-GFA 130.5 10 Furniture Store 890 ksf-GFA 141.4 50
S ecialt Retail Center 814 ksf-GFA 151.1 1000
HardwarelPaint Store 816 ksf-GfA 152.8 100 MiddlelJr Hi h School 522 ksf-GFA 137.5 200
Government Office 730 ksf-GFA 166.5 50
Drive-in Bank 912 ksf-GFA 181.8 36 Hi h School 530 ksf-GFA 188.7 400
IUon-Residential Level IV 319.6 923 $ 14.81 $ 13,672.11
Movie Theater 444, 445 ksf-GLA 213.6 200 Car Sales -New 841 ksf-GFA 234.8 370
Health Club 492, 493 ksf-GFA :.278.1 50
Medical Office 720 ksf-GLA 287.8 148 Service Station 944 ksf-VFP 399.7 ; 20
Su ermarket 850 ksf-GFA 398.9 100
Convenience Market 851 ksf-GFA 424.3 35 IUon-Residential Level V 505.6 12320 $ 23.43 $ 288, 688.72
Industrial Park 130 ksf-GFA 452.9 2000
Warehouse 150 ksf-GFA 460.5 7500 General Aviation Air ort 22 ksf/Based aircraft 501.1 275
Pharmac w/drive throu h 881 ksf-GFA 514.0 4
Pharmac no drive throu h 880 ksf-GFA 518.5 6 Service Station w/minimart 945 ksf-GFA 526.5 35
Mini-WarehouselStora e 151 ksf-GFA 526.6 500
Hea Industr 120 ksf-GFA 544.9 2000 IUon-Residential Level VI 1287.9 4788 $ 59.69 $ 285, 771.97
Li ht Industr 110 ksf-GFA 723.8 2400
Hi h Turnover Restaurant 932 ksf-GFA 781.5 50 Manufacturin 140 ksf-GFA 868.4 2200
Restaurant 931 ksf-GFA 1114.0 48
Fast Food Restaurant ksf-GFA 2951.7 90
Residential DU 39% 390,000.00 Residential-Level I 18.7 2554 $ 9.96 $ 25, 448.35
Senior Housin 251 dwellin unit 18.0 27
Mobile Home in MH Park 240 dwellin unit 19.5 2527 Residential-Level II 28.0 24482 $ 14.89 $ 364, 551.65
CondolTownhouse 230 dwellin unit 26.6 2699
A artments 220 dwellin unit 27.7 7860 Single Family (Detached) 2 0 dwellin 29.7 13923
SMU Option 2 Distribution Sample Fees (Per $1 Million of Burden)
Rate Class Base Rate Annual Fee Monthly Fee
2,500 sq. ft. Day Non-Residential $1.43 $3.58 $.30
Care Center Level 1
15,000 sq. ft. Non-Residential $1.43 $21.45 $1.79
Church Level 1
10,000 sq. ft. Non-Residential $3.49 $34.90 $29.08
Office Level 2
65,000 sq. ft. Non-Residential $3.49 $226.85 $18.90
Elementary School Level 2
5,000 sq. ft. Bank Non-Residential $x.06 $35.30 $2.94
with Drive thru Level 3
200,000 sq. ft. Non-Residential $x,06 $1,412.00 $117.67
High School Level 3
35,000 sq. ft Non-Residential
Government Level 3 ~~•06 $247.10 $20.59
Office
25,000 sq. ft. Non-Residential $14.81 $370.25 $30.85
Health Club Leve14
10,000 sq. ft. Non-Residential $14.81 $148.10 $12.34
Doctors Office Leve14
150,000 sq ft. Non-Residential $23.43 $3,514.50 $292.88
Warehouse Level 5
Municipal Airport Non-Residential
*275 based Level 5 X23.43 $6,44325 $536.94
Aircraft
2,500 sq. ft. Fast Non-Residential $59.69 $149.23 $12.44
Food Restaurant Level 6
125,000 sq. ft. Non-Residential $59.69 $7,46125 $621.77
Manufacturing Level 6
Single Mobile Residential Level 1 $9.96 $9.96 $0.83
Home Unit
Apartment Residential Leve12 $14.89 $14.89 $1.24
*Assumes 1 ksf per based aircraft
8
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0
STREET MAINTENANCE UTILITY TECHNICAL PAPER
Street Maintenance Utility Rate Spreadsheet Definitions
Column 1: SMU Land Use Categories
This column separates the two land use categories (Residential &Non-Residential). Within each
category are the sublevels where the various SMU rates are calculated. The sublevels are
comprised of the various individual land use types represented in the city and are grouped
together by Total Impact Score ranges. The land use categories in this spreadsheet are based on
the ITE Trig Generation Manual, 8th Edition and are generally applicable to any local agency.
Land use categories may be added or deleted as needed by each agency implementing a SMU
consistent with the ITE Trip Generation Manual or as established by local traffic analysis.
Column 2: ITE Land Use Code
This column lists the land use code references from the ITE Trig Generation Manual, 8th Edition.
Column 3: Unit of Measure
The ITE Trig Generation Manual, 8th Edition expresses trip generation data in terms of specific
units of measure. This spreadsheet uses dwelling units (du) and thousands of square feet (ks~ as
units of measure for the Residential and Non-Residential categories respectively.
Column 4: Daily Car Trip Rate
Trip generation rates for each land use type are derived from the ITE Trip Generation Manual,
8th Edition. The rates are used to estimate the number of daily vehicle trips generated by a certain
land use type per unit of measure (du or ks~. The values in the model SMU schedule were
averaged to include weekday as well as weekend trip rates.
Column 5: Daily Truck Trip Rate
Truck Trip generation rates for each land use were derived from FHWA's NCHRP Synthesis 298
report. The rates are used to estimate the number of daily heavy vehicle trips generated by a
certain land use type per unit of measure. The values in the model SMU schedule were averaged
to include weekday as well as weekend trip rates.
Column 6: New Car Trip Rate Percentage
The New Trip Rate Percentage factor is a rate reduction applied to each land uses Daily Car Trip
Rate to capture only those trips that are primary to any particular land-use. This corrects for the
incidental "pass-by" trips that are not considered to cause an increased impact on the system.
New Trip rate factors are determined by using existing ITE data, other published national studies
or local traffic studies.
11
STREET MAINTENANCE UTILITY TECHNICAL PAPER
Street Maintenance Utility Rate Spreadsheet Definitions (Cont.)
Column New Daily Car Trip Rate
The New Daily Car Trip rate is the corrected Passenger Car Trip Generation Rate for each land
use type. This value is calculating by multiplying the Daily Car Trip Rate and the New Car Trip
Rate reduction factor.
Column 8: Average Trip Length
Another factor that determines traffic impacts is the length of the trip generated by a particular
land use. Land uses generate trips of different lengths. If a given trip length is shorter than the
average, then its relative traffic impacts on the street system will be lower than average.
Conversely, longer trips will impact a larger proportion of the transportation network. In order to
correct for these variables, the SMU methodology includes an adjustment factor, which is
calculated as the ratio between the trip length for a particular land use type and the "average" trip
length for the City. Trip length data about land use categories was estimated using limited
national survey results.
Column 9: Trip Length Adjustment
The average new trip length estimated for Auburn was 3.0 miles based upon the current and
expected mix inland use types within the study area. Land uses that generate average trip lengths
longer than the city's average will have an adjustment factor larger than one. Conversely, land
use that generates trip lengths shorter than the city's average will have an adjustment factor less
than one.
Column 10: Passenger Car Trip Impact Factor
The Passenger Car Trip Impact factor i used to estimate the impacts on the street pavement
system by each passenger car trip. The WSDOT Pavement Manual estimates damage done to
street pavement by various vehicles in terms of Equivalent Single Axle Loadings (ESAL). This
SMU spreadsheet uses an ESAL value of 1 for passenger cars.
Column 11: Heavy Vehicle (Truck) Trip Impact Factor
The Heavy Vehicle Trip Impact factor is used to estimate the impacts on the street pavement
system by each heavy vehicle trip. The WSDOT Pavement Manual estimates damage done to
street pavement by various vehicles in terms of Equivalent Single Axle Loadings (ESAL). This
SMU spreadsheet uses an average ESAL value of 1450 for heavy vehicles.
12
STREET MAINTENANCE UTILITY TECHNICAL PAPER
Street Maintenance Utility Rate Spreadsheet Definitions (Cont.)
Column 12: Passenger Car Impact Score
The Passenger Car Impact score is the product of the New Car Trip Rate, Trip Length
Adjustment factor and the Passenger Car Impact factor.
Column 13: Heavy Vehicle Impact Score
The Heavy Vehicle Impact score is the product of the Truck Trip Rate, Trip Length Adjustment
factor and the Heavy Vehicle Impact factor.
Column 14: Total Impact Score
This column lists the sum of each land uses' Passenger Car impact score and Heavy Vehicle
impact score. Total Impact score is used to sort the land use types into the various sublevel rate
groups. For example; the Non-Residential Level 1 sublevel consists of all land use types with
Total Impact scores between 0 and 50.
Column 15: Total Units per Land Use
This Column lists the total number of units, by unit of measure (du or ksf), for each land use
within the city. This data is used in the base rate calculation formula to distribute the burden
within each category.
Column 16: Annual Street Maintenance Utility Rate'
The various annual SMU rates are listed in this column and are applied to the land uses that
make up each of the various rate sub-levels to calculate those land uses SMU fee.
Column 17: Annual Street Maintenance Utility Burden
This column lists the total SMU burden, burden distribution between residential and non
residential categories and the burden distributions to each individual rate sub-level.
13
STREET MAINTENANCE UTILITY TECHNICAL PAPER
Street Maintenance Utility Development Process
Described below are the key steps a local agency would take to develop a SMU Rate Schedule
based on this methodology. The structure of the spreadsheet is flexible and can be adapted to fit
the specific land use category needs of any agency. Care should be taken to ensure the formulas
embedded in the spreadsheet maintain consistency as changes are being made.
STEP 1: Inventory Land Use Data
An inventory of the various types of land use types (residential and non-residential) within the
city limits including total units of each (du's and ksf s) will need to be completed in order to
populate Column's 1 and 15 in the SMU Schedule. Land use types not listed in the SMU
schedule can be added and those not used deleted. Possible sources to compile this data include
GIS resources, business licenses, B&0 Tax data, address surveys, etc. It is anticipated that field
verification surveys may be needed in certain situations. Once data collection is completed and
verified Column's 1 and 15 can be populated.
STEP 2: Assemble Traffic Data & Determine Heavy Vehicle Impact factor
Traffic data contained in Columns 6-9 can be used with confidence by jurisdictions of similar
size and population as Auburn. Otherwise, cities wishing to use local traffic data for determining
each local land use type's new car trip rate (Column 6) and average trip length (Column 8)
should consult a registered professional traffic engineer. Cities that have an existing capacity
impact fee in place will likely have this data readily available.
N= Once data in columns 4, 6 and 8 are filled Columns 7 & 9 will automatically
populate using embedded equations.
Determining the Heavy Vehicle Impact Factor is a local policy decision that will have a
significant impact on the distribution of the burden within each rate category. The heavy vehicle
impact factor used in this formula (Column 11) is 1450. The factor is based on physical impacts
to the pavement and should be related to a passenger car impact factor of one (Column l o).
N= Once the Heavy Vehicle Impact factor is determined and entered into the
spreadsheet the Impact Scores (Columns 12-14) will automatically be calculated by the
embedded formula.
14
STREET MAINTENANCE UTILITY TECHNICAL PAPER
STEP 3: Create Rate Class Groups
The process of creating the rate class groups begins with sorting the land uses types by their
Total Impact Score (Column 14) in increasing order. This can be completed quickly in the
Excel spreadsheet by using the Sort function under the Data menu. Once sorted, each City must
make a policy decision as to how many Rate Class sub groups to define and what Total Impact
Score ranges to use for each group. Too many rate classes increases the complexity of
implementing and billing while too few reduces the equitable distribution of the burden. The
model SMU uses six Rate Class sub groups for the non-residential category and two Rate Class
Sub groups for the Residential category. In the non-residential category the first three Rate Class
sub-groups Total Impact Score ranges are set at 0-50, 51-100 and 100-200 respectively. Once
the total number of Rate class sub groups and Total Impact Score ranges have been entered the
process of calculating the burden distribution and actual rates can begin.
STEP 4: Calculating SMU Rates
Before the final SMU rates for each Rate Class sub group can be calculated by the embedded
formula the Burden Calculation amount and the Burden Distribution split determinations from
the SMU Methodology section. Once determined these values are entered into the spreadsheet
for use by the Base Rate calculation formula. In each category the Base Rate calculation
formula is embedded in the Level 1 Rate Class row under Column 16. The formula references
the average Total Impact Score's (Column 14) and Total Units per land use type (Column 15)
from the header row of each Rate Class sub level. The formula automatically calculates the
Annual SMU Base Rate for the Level 1 Rate Class and displays it in that row under Column 16.
The higher Rate Class sub levels' Annual SMU rates are calculated by the embedded adjustment
factors in each sublevels header row under column 16. The Base Rate calculation formula
embedded in the model SMU spreadsheet is based on having six Rate Class sub levels in the
non-residential category and two Rate Class sub levels in the residential category. Any deviation
from the set number of Rate Class sub-levels will require the Base Rate formula and higher level
base rate adjustment factors to be amended consistent with the equation on page three. The SMU
Rate Schedule process is now complete and the rates are ready to be incorporated into the
Finance departments billing system for each individual land use type.
15
TUF Solutions for
Local Street Funding
A Survey on
Transportation Utility Fees
(TUFs)
League of Oregon Cities January 2008
ABLE OF ONTENTS
Background .............................................................1
Choosing the Right Option 2
Implementing a Transportation Utility Fee 3
Legal Challenges 4
Experiences from Oregon Cities 7
Map of Oregon Cities with Transportation Utility Fees 8
The Corvallis Experience 9
The La Grande Experience .............................................10
The Medford Experience 11
The Milwaukie Experience 12
The North Plains Experience 13
The Philomath Experience 14
The Tualatin Experience 15
Repealed Transportation Utility Fees 16
Appendices: Specific Information on City Transportation Utility Fees 17
Appendix A: General Information on Transportation Utility Fees 18
Appendix B: Voter Approval and Sunset Clauses 19
Appendix C: Fee Methodology and Rates 20
Appendix D: Use of Utility Fee Revenue 21
Appendix E: Administrative Officer 23
Appendix F: Users Charged & Rate Reductions 23
Appendix G: Fee Exemptions 24
Appendix H: Delinquent Bills 25
Appendix I: Fee Determination Appeal 26
Appendix J: Streets Eligible for TUF Funds 27
Appendix K: Street Lighting Utility Fee 27
Appendix L: Standard Ordinance Provisions 28
Appendix M: Other Ordinance Provisions 29
Appendix N: Transp. Utility Fee Revenue vs. State Highway Fund Share 30
Appendix 0: Sample Transp. Utility Fee Documents 31
For questions about this ~ F ~ _
report please contact:
~
Stephanie Foley o ~ ~~i Research Associate w ~ ~ ~ A ~ z
Lea ue of Ore on Cities
9 9 PO Box 928, Salem, OR 97308
(503} 588-6550
sfoley(a~orcities.org
AC KG RO U N D
Oregon cities are turning to new local revenue sources to help address the growing backlog of road
maintenance and preservation as state gas tax funds have failed to keep pace with transportation
costs. The streets in many cities have deteriorated past the point of maintenance, and now require
expensive reconstruction work.
Most cities rely on the state gas tax as the main source of street funding, but the state gas tax has not
increased since 1993, and the rising cost of materials and labor has diminished the purchasing power
of this revenue source. Furthermore, the limitations on property taxes imposed by Oregon voters
have depleted city general funds to the point where most cities cannot devote any property tax
revenue to street maintenance. Another LOC report provides greater detail about the municipal
transportation funding gap (see LOC's 2007 report, "City Streets: Investing in a Neglected Asset").
In the search for new revenue options to address the deficit caused by a stagnant gas tax, a number of
cities have chosen to implement local transportation utility fees (TUFs). Transportation utility fees
have many names: street user fee, road maintenance fee, etc. (see page 19). Regardless of the
terminology, the basic idea is the same: a fee is assessed on the utility bills of water/sewer customers,
and the revenue is designated for city transportation infrastructure projects.
According to a 1993 Institute of Transportation Engineers (ITE) Journal article, the use of
transportation utility fees as a means to supplement street maintenance funding began in the West.
Four of the first 10 cities in the nation to implement TUFs were Oregon cities. The popularity of
these fees grew for the following reasons:
1. New Revenue: Due to diminishing financial resources, and escalating costs, cities need more
revenue for streets.
2. Equity: TUFs charge the fee based on an estimated street usage calculation, not property value.
(Source: Ewing, Reid. "Transportation Utility Fees," ITE Journal (June 1993).
Currently, there are 19 cities in Oregon with transportation utility fees, and several more considering
this funding mechanism. Most of city TUFs have been adopted since 2000, which illustrates the
increasingly popularity of this funding source.
There are two common methods used in calculating a transportation utility fee: a flat fee, and the
more complicated trip generation methodology. Cities using trip generation establish different rates
for different categories of use. Most cities use the Institute of Transportation Engineers (ITE)
manual as a model for their trip generation methodology.
For many cities, transportation utility fees are a major source of revenue for street funds. The city of
Ashland collected almost $1 million from its transportation utility fee in 2006-07. About one-third
of Ashland's street fund revenue is attributable to the transportation utility fee. See Appendix N
(page 31) for more revenue information.
Despite the success of several Oregon cities, transportation utility fees have also brought some
controversy and political tension. The purpose of this study is to analyze the experiences of those
cities that have pursued transportation utility fees as a source of street funding.
Implementing Transportation Utility Fees -Page 1
HOOSING THE IGHT PTION
In order to develop a transportation funding solution, cities first analyze existing street conditions,
conduct a major street inventory and analysis, and then determine the overall maintenance need.
Several cities formed transportation funding committees and task forces. Transportation committees
are often comprised of both elected officials and private citizens, and the role of the committee is to
help the city analyze street inventory reports, prioritize proj ects based on the needs of the
community, and propose local funding options. For example, the city of Tigard established a
Transportation Financing Strategies Task Force, which proposed a street maintenance fee, and later a
three cent gas tax.
Many cities initiate an education effort to broaden the public's understanding of the deteriorating
condition of city streets, the benefits of preventative maintenance, and the need for new
transportation revenue. If the public understands the problem, they may be more open to the
solutions being considered.
Once cities have identified the severity of the transportation funding problem, they must then explore
various revenue options. To date, l9 cities have implemented transportation utility fees. The
benefits of TUFs depend on whether a city uses a flat fee or trip generation methodology.
The city of La Grande does not have a large influx of outside motorists, so residents are the primary
users, going to and from their homes, to work, and to other businesses. The city felt that a flat fee for
residential and non-residential users was the fairest way to charge customers for the use of city
streets. A flat fee is also very easy to administer. However, the city only collects about $200,000
annually, which is substantially lower than what would be collected using a trip generation
methodology. The business community, however, has had no complaints about La Grande's street
user fee.
By contrast, Medford has a substantial amount of street traffic coming from outside the city. Many
people living outside of Medford come into the city for work, shopping, etc. A trip generation
methodology allows the city to charge businesses for the extra traffic they generate. While trip
generation methodologies can be initially confusing to the public, and can be controversial with the
business community, Medford worked to educate the business community and the public at large,
and everyone accepted the resulting fee without controversy.
A transportation utility fee may not be the best solution for every community. A city considering a
transportation utility fee should evaluate whether or not this is the best mechanism to achieve desired
funding goals, and should assess the political environment of the community and the attitude of
citizens towards various fees and taxes.
Implementing Transportation Utility Fees -Page 2
MPLEMENTING A RANSP. TILITY EE
In 2007, the League of Oregon Cities informally surveyed each of the cities currently collecting a
transportation utility fee. There are unique experiences for each of the cities, but there are many
similarities as well.
Below is a list of actions taken by the cities surveyed. Please note that these are experiences from a
select number of cities. A city considering a transportation utility fee must evaluate the political
environment of their community, and the city's need for transportation funding. For more
information on specific city experiences, see page 9.
• Outside Data and Information: Some cities hired private consultants to collect data, varying
from an assessment of the street network, a market analysis of a gas tax, or a public opinion poll
on transportation funding options. These outside resources provide the council with hard data on
the condition of city streets and the various funding options.
• Present the Problem and Propose Solutions: Most cities began with a broad discussion about
the condition of city streets and the various street funding options. Many cities worked to inform
the public of the deteriorating condition of local streets, the cost benefits of preventative
maintenance, and the need for new transportation revenue. With the help of public input, these
cities eventually proposed transportation utility fees as a local funding tool.
• Proposal Comes from aCommittee/Board: Several cities found that the City Council and the
public were more responsive to a transportation utility fee if the proposal comes from a
committee that has citizen members. For example, Tigard has a Transportation Financing
Strategies Task Force, and it proposed a street maintenance fee, and later a three cent gas tax.
• Accountability and Credibility: The city has to have a good track record of using money
efficiently and appropriately. The Philomath City Council decided that street maintenance had
become a greater need than funding for city's parks. The city implemented a road maintenance
fee, and chose not to seek renewal of a popular voter-approved, parks local option tax. This
decision showed the public that the council can appropriately prioritize services, and direct
limited resources towards the city's most pressing needs.
• Public Education: Many of the cities that successfully implemented transportation utility fees
engaged in public information campaigns. Beyond the standard public hearings, many cities
hosted town hall meetings, did presentations to civic groups, and published newsletter articles
and fliers. Education is also important if a city chooses to use a trip generation methodology.
Tualatin heard complaints from the business community, as well as a group of senior citizens.
The city did a presentation at a local Chamber of Commerce meeting, explaining the science of
trip generation, informing businesses of what each user would pay, and showing the fee was
equitable across the various groups. The city also did a presentation at the senior center,
explaining that residential users pay a $1.42 flat fee.
• Negotiate with Opponents: Despite a major public education effort, there may still be strong
opponents. For many cities, it is the business community. If possible, work to educate these
Implementing Transportation Utility Fees -Page 3
groups specifically, and negotiate if necessary. Some cities have made compromises with local
businesses in order to gain support for local funding. Milwaukee capped its street maintenance
fee at $250 per month, which was a major reduction for the city's large businesses.
• Have an Implementation Plan in Place: Many of the cities had the fee rates set and the
collection process in place before approving the enabling ordinance. This helps create a smooth
implementation process. Corvallis passed its transportation maintenance fee in September, 2005,
but did not develop the implementation process until after the ordinance was adopted. The city
began collecting the fee in July, 2006. By that time, many of the residents had forgotten about
this fee, and were confused by the increase on their utility bill.
Maintaining Community Support
Even if a transportation utility fee is implemented without much opposition, that does not mean that
controversy will not arise later. Furthermore, if a city wants to raise an existing fee, community
support will once again be needed. Here are methods used by cities to maintain public support:
• Maintain Accountability and Credibility: Once a city has passed a transportation utility fee to
collect revenue for street projects, the city must use the revenue efficiently and for the purpose
for which it was raised. Four years after Wilsonville implemented its road maintenance user fee,
the Road Maintenance Task Force concluded that for the upcoming 5-year period, the project
goals could be achieved with a 10 percent reduction in the utility fee.
• Show the Public Results: In order to illustrate the success of transportation utility fees, many
cities make an effort to show the public the positive results of the fee revenue. Several cities post
signs at TUF-funded proj ect sites, advertising the use of fee revenue, and many publish proj ect
lists and progress reports in newsletters and online. Seeing the improvements to city streets can
help preserve public support for this local funding source.
EGAL HALLENGES
Disclaimer: Any city considering a transportation utility fee should consult with their city attorney regarding legal issues and relevant statutory requirements.
Before implementing a new ordinance, it is necessary to consider what legal issues may arise.
Following are some issues that should be considered when creating a transportation utility fee.
What is a City's Authority to Implement a Transportation Utility Fee?
An Oregon city may implement a TUF pursuant to several different types of authority, the broadest of
which is home rule authority. City home rule authority is derived from the Oregon Constitution and
very broad in nature. With home rule authority, Oregon cities do not need any enabling state statutes
or other grants of authority to carry out the functions listed in a city charter. This is true unless federal,
state, or city legislation expressly preempts a city from certain functions. Cities considering
transportation utility fees should consult with their city attorneys, and review the city charter.
Implementing Transportation Utility Fees -Page 4
Is a TUF a Fee or a Property Tax Limited by Measure 5?
Oregon courts have heard arguments on the "fee vs. tax" debate, and have repeatedly ruled that TUFs
are fees, not property taxes, and therefore not subject to Measure 5 tax limitations.
In Oregon, a property "tax"is defined as:
1) Any charge imposed by a governmental unit;
2) Upon a property owner;
3) As a direct consequence of their ownership of that property; and
4) Does not include any incurred charges and assessments for local improvements.
(Oregon Constitution, Article XI, Section 11b and ORS 310.140(1)).
There have been no legal challenges to transportation utility fees in several years. This precedent has
been further strengthened by court decisions on other utility surcharges, such as the ruling of Knapp
v. City of Jacksonville, l 8 OTR 22 (2004), which upheld Jacksonville's public safety fee.
However, courts have discussed when a user fee can constitute a property tax. These cases dealt
with storm drainage user fees and would be used by a court in any TUF analysis. See Roseburg
School District v. City of Roseburg, 316 Or. 374 (1993), for more information.
Any `fee vs. tax' analysis must look to the above definition of a "property tax" and apply a simple
two-pronged test:
1) Is the charge in question imposed on users of a system or on property owners as a direct
consequence of ownership? To be valid, the charge must be imposed on users and not owners.
2) Does the ordinance authorize the city to possess or take some other ownership interest in the
property? A city's authority to possess or take ownership interests in a property may increase the
likelihood of the TUF being classified as a tax subject to Measure 5.
In addressing the two-prongs above, cities should consider the following issues when considering the
Measure 5 implications of TUFs:
• What trig eg rs payment of the TUF? Does the obligation to pay the fee arise when streets are used
or upon some other criteria, such as the size or type of improvements on the property? To avoid
being classified as a property tax, TUFs must be triggered by the occupant's use of streets.
• How is the TUF calculated? Look to the trip generation formula to decide whether an occupant's
use of the streets actually triggers payment. If other criteria are used and those criteria don't relate
directly to street use, the ordinance could be classified as a tax.
• Who pays the TUF? Does the responsibility to pay rest with the occupant/user of the property or
with the owner? For example, in the Rosebur case, the storm drainage utility fees were imposed
on the people responsible for paying water utility charges and not on the owners of the property.
The storm drainage utility fee was upheld as a fee.
Implementing Transportation Utility Fees -Page 5
• Has the city complied with procedural requirements? ORS 305.583 (9) requires a city to provide a
public notice of the classification of a TUF as a fee not subject to the limits of Measure 5. It would
also be wise for the city to make findings on the record regarding the purpose, validity, and
methodology of the TUF as a fee.
• How does the city address enforcement of the TUF? Courts have stated that ordinance provisions
which allow a city to take possession or attach a lien against a property maybe an indication that
the fee is a tax on property and subject to Measure 5 limitations. Some cities have chosen to use
water shut-offs as an enforcement technique. Cities should contact their city attorneys regarding
the risks of using liens to enforce TUFs.
Are There Legal Limitations on the Use of Funds?
Existing law places no express restrictions on the use of TUF funds, other than the restrictions that
normally apply to the use of government funds. However, many cities place self-imposed
restrictions or parameters on the use of these funds.
There are some legal and policy arguments that fees should be used in a targeted, narrow manner
which relates to the reason for assessing the fees. The law regarding this concept is not concrete and
remains untested. In terms of fiscal accountability, cities would be wise to use the fees for a purpose
related to the activity for which the fee is charged.
Implementing Transportation Utility Fees -Page 6
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Implementing Transportation Utility Fees -Page 8
ITY OF ORVALLIS
TRANSPORTATION UTILITY FEE QUICK FACTS
Population: 53,900 Fee Title: Transp. Maintenance Fee
Date Passed: 2005 Fee Methodology: Res. -Flat Fee;
Com. -Trip Generation
TUF Revenue `06-07: $408,000
TUF Revenue Projects: Street
TUF as % of Street Fund: 12% reconstruction and overlays.
The Corvallis Experience
In 1993, Corvallis was in a good position to provide adequate street funding -including pavement
maintenance - at an average rating of 85 out of 100. The city had the following funding sources:
• System development charges (SDCs) to provide extra capacity;
• Development requirements to provide adequate street and sidewalk infrastructure;
• State gas tax share that kept up with inflation; and
• A property tax levy devoted to the street fund that was growing with assessed values.
However, since 1993, the purchasing power of state highway fund revenues has decreased due to
inflation. Measure 50 (1997) reduced property tax revenue, forcing the city to prioritize services.
Eventually the city stopped using any general fund revenue for streets, and furthermore transferred
the property tax levy revenues to the general fund. At the same time revenues declined, the burden
on the street fund increased, with a third of street lighting costs moving from the general fund to the
street fund.
In response to the declining street fund revenues, the city formed a task force to look at current
transportation funding resources and assess the funding need. The task force came up with two
funding options: a vehicle registration fee and a transportation maintenance fee. After Benton
County voters turned down a county vehicle registration fee, the council decided to move forward
with a transportation maintenance fee. The city worked to inform the public about the state of city
streets, and the need for additional investments. The city conducted over 20 presentations to
business and community groups, such as Kiwanis and Rotary, in order to make their case.
The city also made concessions in the transportation maintenance fee ordinance to alleviate some of
the concerns from the public and local business community. The fee is structured so that 75 percent
of the revenue comes from residential users. In addition, the ordinance will sunset in 2011.
The transportation maintenance fee generates over $400,000 per year and the revenue is dedicated to
specific pavement maintenance projects. Almost 50 percent of Corvallis' locally raised street fund
revenue comes from the transportation maintenance fee, which has helped the city bridge part of the
street funding gap.
Implementing Transportation Utility Fees -Page 9
ITY OF A RAN DE
TRANSPORTATION UTILITY FEE QUICK FACTS
Population: 12,540 Fee Title: Street User Fee
Date Passed: 1985 Fee Methodology: Flat Fee
TUF Revenue `06-07: $200,000 TUF Revenue Projects: Major street projects; maintenance, preservation, reconstruction.
TUF as % of Street Fund: 23%
The La Grande Experience
Since 1986, La Grande has collected a street user fee, which raises about $200,000 per year. The city
has used this revenue to match state and federal grants, which allows the city to complete more
projects.
La Grande's street user fee was passed by the City Council with little opposition or controversy.
There was a public input process during council meetings, and the city also held neighborhood
meetings. Using "before and after" pictures from street projects funded by bonds, the city illustrated
the benefit of adequate funding for needed street projects.
La Grande structured its street user fee as a flat fee for all users -residential and commercial.
Currently, the rate is $4 per month, per water meter. The city determined that most of the traffic in
La Grande is local, so the fee was designed to charge city residents for their use of streets. ~Uhile
this formula limits the amount of revenue the city will receive from commercial users, it was more
palatable to the local business community, which made for a smooth implementation of the fee.
To promote the city's progress using street-user-fee dollars, the city posts signs atuser-fee-funded
project sites, and periodically publishes a list of completed and upcoming projects in the city
newsletter.
La Grande generates a list of needed street projects using a pavement management system called the
S.O.S. system. A citizen street maintenance committee then prioritizes this project list based on the
needs of the community and funding resources available.
It is the city's policy that street user fee funds be used only for major street improvements, such as
reconstruction and overlays. The general guideline is that the project must becurb-to-curb, and at
least one block. Although La Grande has generated local street fund revenue and has successfully
completed several needed street projects, the unmet funding need keeps growing.
Implementing Transportation Utility Fees -Page 10
ITYOF EDFORD
TRANSPORTATION UTILITY FEE QUICK FACTS
Population: 73,960 Fee Title: Street Utility Fee
Date Passed: 1991 Fee Methodology: Trip Generation
TUF Revenue `06-07: $4,807,000 TUF Revenue Projects: Pavement maintenance; street improvements/reconstruction.
TUF as % of Street Fund: 38%
The Medford Experience
It took Medford four years to implement a street utility fee. The fee was developed by the appointed
Street Finance Committee, whose members included one councilor, two developers, two small
business owners, a retiree, and a college professor. The committee examined various financing
options including bonds, a local gas tax, utility excise taxes, but ultimately settled on the idea of a
user fee to fund the maintenance of the city streets.
The council then held a series of hearings and meetings over the next two years in which they made
many modifications to the fee methodology before adopting the ordinance in 1991. Prior to adoption
of the ordinance, other meetings were held and presentations were made to the Transportation
Committee of the Medford/Jackson County Chamber of Commerce. One request from this group
was the addition of a clause in the ordinance indicating that no more than five percent of the annual
street utility fee revenues could be used for general administration.
Several months prior to the street utility fee going into effect, the need for additional street funding
received a great deal of media attention. The city also mailed fliers to every water utility customer,
explaining what a street utility fee was and how it would be spent.
In 1996, the city formed a Transportation Funding Committee (TFC) to find ways to fund the
backlog of needed improvements to arterial and collector streets. The committee drafted a list of 17
top priority street projects and meets annually to review the progress of these projects. Fees have
increased more than once at the recommendation of the TFC in order to keep up with increasing
project costs.
Medford's street utility fee has allowed the city to improve many of its streets and maintain them at a
"good" condition. However, the city still does not have enough funding to maintain its pavement at
the level which is most cost-effective and at the lowest pavement life-cycle cost.
Implementing Transportation Utility Fees -Page 11
ITY OF ILWAUKIE
TRANSPORTATION UTILITY FEE QUICK FACTS
Population: 20,835 Fee Title: Street Surface Maint. Fee
Date Passed: 2006 Fee Methodology: Trip Generation
TUF Revenue `06-07: NIA - TUF Revenue Projects: Pavement
($500,000 projected for 2007-08) preservation and maintenance.
The Milwaukie Experience
In 2006, Milwaukie enacted a new street maintenance fee, which was part of a funding package the
city assembled with the support of its budget committee and a citizen utility advisory committee.
The city had considered street funding options in the past, but never implemented any new revenue
sources. The city's latest street funding proposal began in 2004. A private inspection found that the
condition of city streets was rapidly deteriorating and passing the point at which effective
maintenance and preservation could prevent the need for reconstruction.
The City Council set goals for and requested the development of a Street Surface Maintenance
Program by resolution in July, 2006. This resolution called for the development of a plan to improve
and properly maintain Milwaukie's streets. It also called for the development of new, local revenue
sources in order to fulfill the goals of the Street Surface Maintenance Program.
While considering various funding options, the city worked to get public input and involvement.
The resulting proposal included three new funding sources: atrip-based street maintenance fee; a two
cent gas tax; and a 1.5 percent privilege tax on Portland General Electric.
The city worked hard to educate the community about the need for street funding, and the benefits of
this street funding proposal. The city negotiated with large, local businesses, and the final
compromise was a $250 cap on the street maintenance fee.
The City Council enacted the street maintenance fee and the privilege tax in 2006. The two cent gas
tax was passed later in April, 2007. After the city's diligent work to educate the public, and its
willingness to negotiate and compromise, the city now has a funding package that will allow the city
to adequately improve and maintain its city streets.
Implementing Transportation Utility Fees -Page 12
ITYOF ORTH LAINS
TRANSPORTATION UTILITY FEE QUICK FACTS
Population: 1,755 Fee Title: Transp. Utility Fee
Date Passed: 2003 Fee Methodology: Res. -Flat Fee.
Com. - Number of Trucks
TUF Revenue `06-07: $20,500
TUF Revenue Projects: Cracksealing;
TUF as % of Street Fund: 15% patching; potholes; save for bigger projects.
The North Plains Experience
North Plains' transportation utility fee (TUF) was originally adopted in 2004 as a local revenue tool
for funding street maintenance and preservation. The two main goals of the city's plan for a smooth
implementation were: first, to keep the fee low; and second, to put atwo-year sunset clause on the
ordinance.
By comparison, North Plains' TUF rate is low -The city charges 90 cents per month for residential
users and a fee per truck rate for non-residential users. There are few major commercial or
industrial users, so most of the small businesses pay the residential rate. The highest commercial bill
is only $16.
North Plains' street fund consists of revenue from the state highway fund, Washington County's gas
tax, "major streets transportation improvement program" (MSTIP) funds, and traffic impact fees, as
well as the city's own transportation utility fee revenue. With the declining purchasing power of the
state highway fund, the street fund cannot adequately finance street maintenance and preservation.
The revenue raised by the transportation utility fee has allowed the city to complete needed street
projects, which would not have happened without this local revenue source.
The low fees, however, mean limited TUF revenue for the city. The TUF raises around $20,000 per
year, which does not go far with current escalating construction costs. The city must save the TUF
revenues for several years in order to fund any maj or maintenance proj ect. However, due to
declining revenues in the general fund, which pays for police services and city administration, the
street fund is the only local resource for street maintenance, so every bit helps.
The original TUF ordinance had a sunset date of 2006. The council approved the ordinance again,
with another two-year sunset. The city feels the sunset clause gives the public a periodic opportunity
to comment on the fee, and it gives the city a chance to evaluate the program. The next sunset will
be in 2008, and the city hopes to renew its transportation utility fee, so the city can work to complete
more needed street projects.
Implementing Transportation Utility Fees -Page 13
ITY OF HILOMATH
TRANSPORTATION UTILITY FEE QUICK FACTS
Population: 4,460 Fee Title: Road Maintenance Fee
Date Passed: 2003 Fee Methodology: Res. -Flat Fee
Com. -Trip Generation
TUF Revenue `06-07: $51,000 TUF Revenue Projects: Street preservation
TUF as % of Street Fund: 25% & maintenance - 75% residential.
The Philomath Experience
The Philomath City Council passed a road maintenance fee in 2003. Since its implementation, the
pavement condition index has shown that there are fewer streets in the fair to poor range.
While the ordinance was under consideration, the city made efforts to educate the public and the
business community about the declining condition of the street system, and in street funding. The
city used newsletters and other public forums to help gain support.
The council wanted to keep the street utility fee under $2 per month for single family residences.
The original fee was set at $1.90 for residential users, and recently was raised to $2. Non-residential
users are charged based on a trip generation formula. There are few large commercial or industrial
users in Philomath, so the highest commercial bill is around $70.
While considering this new road maintenance fee, the council was also considering renewing a
popular voter-approved, parks local option tax. The council decided that street maintenance had
become a greater need than funding for city's parks, and chose not to seek renewal of the levy. This
decision showed the public that the city can appropriately prioritize services, and direct limited
resources towards the city's most pressing needs.
Philomath designates 100 percent of road maintenance fee dollars to pavement projects. The
revenue cannot be used for sidewalks, street lighting, or even fee administration costs.
After the passage of the ordinance, the city notified everyone of when the fee would be appearing on
their bill. Few complaints were received once the city began collecting the fee.
The road maintenance fee has been in effect for several years, but the city still works hard to keep the
public is informed. The annual road-maintenance-fee-funded projects are spread around the city so
that all citizen realize the benefit of the fee revenue. The city also posts signs at proj ect sites, and
publishes projects lists in the newsletter. These continued efforts have helped maintain community
support for this local funding source, and have allowed Philomath to continue in its efforts to
improve and maintain city streets.
Implementing Transportation Utility Fees -Page 14
ITY OF UALATIN
TRANSPORTATION UTILITY FEE QUICK FACTS
Population: 25,650 Fee Title: Road Utility Fee
Date Passed: 1990 Fee Methodology: Trip Generation
TUF Revenue `06-07: $600,000 TUF Revenue Projects: Street slurry seals,
overlays, reconstruction, 1/7 for streetlighting.
TUF as % of Street Fund: 15%
The Tualatin Experience
Tualatin's road utility fee was originally passed in 1990. Since then, this funding tool has assisted
the city in better managing its street network, and positive community support has led to the
expansion of the program into additional surcharges for street trees and sidewalks.
The planning phase of the road utility fee lasted about a year and a half from start to finish. In 1989,
the city hired a consultant to analyze the funding needs of the city, and explore new revenue sources.
The consultant determined that an additional $350,000 per year was needed to fund street
maintenance activities, and formed a list of 14 different funding options. The City Council
ultimately decided on a combined road and street lighting utility fee. Under the current formula,
one-seventh of the revenue goes to street lighting expenses, the rest goes to road projects.
City staff laid the groundwork for this fee by talking with local businesses and educating the public
on the need for increased street funding. Many difficult questions were asked of the city and by the
city. If good answers were not found, the city went back and worked on changes to the fee structure.
The city's proposed methodology: 75 percent of the revenue would come from non-residential
users. The business community was concerned about this, so city officials made a presentation at a
Chamber of Commerce meeting. The city explained the fee formula, and gave examples of the
estimated bills for various businesses. This helped the business community see that the fee was
structured to account for different types of businesses, and their impact on streets. The Chamber of
Commerce decided to publish the city's road utility fee materials, but remained neutral on the issue
and gave no endorsement. There was no business opposition to the fee at the public hearings.
The city held similar meetings throughout the community and published many newsletter articles
on the proposed fee. A small group of senior citizens came to a public hearing concerned that this
fee would drastically increase utility bills. The mayor and staff made a presentation at the senior
center to address these concerns and clarify that residential users would pay only $1.42 per month.
Due to the overwhelming success of the road fee, the city implemented two new surcharges, one
for sidewalks, the other for street trees. The city has been successful in expanding the utility fee
program because the city has established credibility in the use of these funds. Citizens and
businesses see the results, and appreciate the improvements to the community.
Implementing Transportation Utility Fees -Page 15
REPEALED TRANSPORTATION UTILITY FEES
Note: This is not a comprehensive list. Other TUFs in these categories may not be listed.
Transportation Utility Fees Repealed by City Councils
Eugene: In 2001, Eugene was struggling with a backlog of pavement preservation projects. The
city convened a citizen committee to explore street funding options. The committee's proposal
included a three cent gas tax and a transportation system maintenance fee (TSMF). The City
Council approved the TSMF in late 2002, and the gas tax in early 2003.
Despite public outreach efforts, there was considerable resistance to the TSMF, and petitions were
circulating to refer the ordinance. In September, 2003, the council repealed the ordinance. The
three cent gas tax, however, was implemented without much opposition.
The city may revisit the idea of a transportation system maintenance fee. In 2006, due to
continuing growth in the maintenance backlog and the potential loss of county revenue sharing
through the Secure Rural Schools Act, a council sub-committee was formed to once again look at
transportation funding. In 2007, the council put together afive-part funding proposal that included
a transportation system maintenance fee.
Springfield: As early as 2000, Springfield's long-term financial planning for its street fund
indicated that the city would face severe funding challenges for street infrastructure. After a long
term analysis of street funding options, the City Council adopted a transportation system
maintenance fee (TSMF) in February, 2003, quickly followed by the passage of a three cent local
fuel tax.
The TSMF was sharply criticized, and a petition campaign collected sufficient signatures to refer
the fee to the voters. At that point the City Council chose to repeal the TSMF. The local gas tax
was successfully implemented.
Although the gas tax has brought in new revenue to the street fund, the repeal of the TSMF, and
continued escalation in the cost of construction materials has created concerns that the city's
revenues will be inadequate to maintain the current level of service past 2009. As a result, staff are
now beginning to explore funding alternatives for council consideration later this year.
Transportation Utility Fees Repealed by Voters
Sandy: In 2002, after several voter-defeated local tax measures, the Sandy City Council passed a
street maintenance fee as a source of revenue for the street fund. This fee was also controversial
with the public and was referred to the voters by petition in September, 2002. The city decided to
place a gas tax on the same ballot, in order to give the voters options. With only a voters'
pamphlet statement in support of the gas tax, 65 percent of the voters approved the gas tax, while
75 percent rejected the street maintenance fee.
Implementing Transportation Utility Fees -Page 16
APPENDICES
SPECIFIC INFORMATION ON
OREGON CITY
TRANSPORTATION UTILITY FEES
APPENDIXA
General Information on Transportation Utility Fees ~
Cit 2006 Fee Title Ordinance & Passage Y Population Code # Date
Ashland 21,430 Transportation Utility Fee Code 4.26 1989
Bay City 1,195 Street Maint. & Repair Fee Ord. 602 2003
Clatskanie 1,675 Street Utility Fee Res. 2001-43 1999
Corvallis 53,900 Transportation Maint. Fee Code 3.05 2005
Dufur 630 Street Maintenance Fee Ord. 318 2001
Eagle Point 8,340 Transportation Utility Fee Ord . 11-78 1999
Grants Pass 30,930 Transportation Utility Fee Code 8.60 2001
Hubbard 2,960 Transportation Utility Fee Code 13.45 2001
La Grande 12,540 Street User Fee Ord. 2708 1985
Lake Oswego 36,350 Street Maintenance Fee Code Chap. 37 2003
Medford 73,960 Street Utility Fee Code 4.75 1991
Milwaukie 20,835 Street Maintenance Fee Code 3.25 2006
North Plains 1,755 Transportation Utility Fee Code 2.20 2003
Philomath 4,460 Road Maintenance Fee Code 14.20 2003
Phoenix 4,740 Transportation Utility Fee Code 13.28 1994
Talent 6,415 Transportation Utility Fee Ord. 678 2000
Tigard 46,300 Street Maintenance Fee Code 15.20 2003
Tualatin 25,650 Road Utility Fee Code 3-4 1990
Wilsonville 16,885 Road Maintenance User Fee Ord. 484 1997
1. To view the city ordinances, visit www.orcities.org (A-Z Index - "T" for Transportation Utility Fee). Not all ordinances are available online.
Implementing Transportation Utility Fees -Page 18
APPENDIX B
Transp. Utility Fee Ordinances -Voter Approval & Sunset Clauses ,
City Voter Approval Sunset Clause
Ashland No No
Bay City No No
Clatskanie No No
Corvallis No 2011
Dufur No No
Eagle Point No No
Grants Pass No No
Hubbard No No
La Grande No No
Lake Oswego No No
Medford No No
Milwaukie No No
North Plains No 2008
Philomath No No
Phoenix No No
Talent No No
Tigard No No
Tualatin No No
Wilsonville No No
1. To view city ordinances, visit www.orcities.org (A-Z Index - "T" for Transportation
Utility Fee).
Implementing Transportation Utility Fees -Page 19
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Implementing Local Gas Taxes -Page 21
APPENDIX D (continued)
Transp. Utility Fee Ordinances -Use of Revenues Specifically Listed
Notes:
1. "Maintenance" includes patching, crack-sealing, coating, overlays.
2. Corvallis: Up to $20,000 may be used for administration. Of the remaining revenue, 37.5
percent is used for arterial and collector street overlays, and 62.5 percent for improvements
to Western and Walnut Boulevards.
3. Grants Pass: Transportation utility fee revenue is also used to fund traffic projects such
as signal maintenance and traffic calming.
4. Lake Oswego: "Street System" also includes curbs, paths, bridges. Revenue may also
fund engineering work.
5. Medford: No more than 5 percent can be transferred for general city purposes for
equitable share of the cost of accounting, management, and government.
6. Milwaukie: Revenue is used for the city's Street Surface Maintenance Program, which
covers maintenance and preservation work.
North Plains: May also fund planning and design workfortransportation projects.
8. Philomath: All revenues collected are used to contract for overlays of existing improved
street sections. Revenue is distributed 75 percent for residential streets; 25 percent for non-
residential (same as fee revenue collection).
9. Phoenix: Revenue may be used for sidewalks, street sweeping, curbs and gutters,
striping, signals, signs, street trees, illumination. In 2006, the council dedicated 21 percent
of transportation utility fee revenues for a new "Highway 99 Maintenance Fee."
10. Talent: Revenue may be used for sidewalks, street sweeping, curbs and gutters,
striping, signals, signs, street trees, illumination, and transit facilities.
11. Tigard: Engineering design, construction management, project advertisements are al
considered "street maintenance." Projects using street maintenance fee revenue are
confined to maintenance, repair and reconstruction of existing streets - no new construction.
12. Tualatin: Revenue is distributed 1l7 to street lighting, 6/7 to street maintenance. Street trees, sidewalks, and landscape enhancements are covered under an additional utility fee.
13. Wilsonville: Revenue is distributed 50 percent to residential and 50 percent to non-
residential (same as fee revenue collection).
Implementing Transportation Utility Fees -Page 22
APPENDIX E
Transp. Utility Fee Ordinances -Administrative Officer
City Administrative Officer
Grants Pass City Manager
Medford Public Works Director
Milwaukie Engineering (primary); Comm. Dev. Dir.; Pub. Works; Finance (Directors)
Talent City Manager
Tigard City Engineer (primary); Finance Director.
Tualatin City Engineer (primary); Finance Director; Operations Director
Wilsonville Public Works Director; Finance Director; Community Dev. Director
Note: Ashland, Bay City, Clatskanie, Corvallis, Dufur, Eagle Point, Hubbard, La Grande, Lake Oswego,
North Plains, Philomath, and Phoenix did not designate an "administrative officer" in a specific section of
the ordinances/resolutions.
APPENDIX F
Transp. Utility Fee Ordinances -Rate Reductions
City Rate Reductions
Ashland Low income senior citizens (same as other utilities)
May be available to non-residential properties where the premises
Corvallis have developed and implemented a transp. demand management
program that has been approved by the city.
Petition to adjust rates. If approved - 50 percent reduction for 12 mos. Grants Pass
or until vehicle is registered.
Hubbard Low income senior citizens (same as other utilities)
La Grande Low income senior citizens (over 65) - 50% reduction.
Waived for low income, residential customers. City will reduce Milwaukie
rates if countylstate/federal funding is adopted.
Phoenix Low income senior citizens (same as other utilities)
Wilsonville Home businesses charged as residential users.
Note: Bay City, Clatskanie, Dufur, Eagle Point, Lake Oswego, Medford, North Plains, Philomath, Tigard, and Tualatin did not have specific language regarding rate reductions, however
there may be language in
the billing rules of other utilities, which would apply to transportation utility fees.
Implementing Transportation Utility Fees -Page 23
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Implementing Transportation Utility Fees -Page 24
APPENDIX H
Transp. Utility Fee Ordinances -Delinquent Bills
FUND DISTRIBUTION
Most of the cities state that if insufficient funds are collected from a utility bill to cover all of the
utility funds (water, sewer, etc.), the amount for the transportation utility fee is paid first to the
street fund.
A few cities do not pay the street fund first, however. Corvallis covers any penalty fees, then
credits the street fund. Phoenix and Talent proportionally allocate money to each utility fund.
Tigard also does a proportionate allocation, but after interest and penalty fees have been paid.
LATE FEES
A few cities did reference late fees in the ordinance. Bay City charges a 5 percent late fee to
delinquent bills. La Grande levies a 9 percent interest rate to delinquent bills, and will also
collect court costs and attorney fees if a decision is found in favor of the city. Grants Pass sets
an interest rate for delinquent bills by resolution.
ENFORCEMENTAND FEE RECOVERY
Several cities have provisions regarding the enforcement of the utility fee ordinance, and
recovery of delinquent bills. Recovery procedures include collections and termination of utility
service (waterlsewer). Several ordinances also state that the city has the authority to use any
means available under lawto collect delinquentfees.
Grants Pass has an extensive section on the recovery of unpaid fees, and Wilsonville has a
thorough enforcement provision.
Under the enforcement provisions, several cities also grant city employees access to premises
for inspection, repair or enforcement of the transportation utility fee ordinance. Tualatin and
Corvallis have inspection provisions granting the administrative officer the authority to inspect
premises, but only in order to determine the property's fee designation.
LANDLORD VS. TENANT
Several cities mention that collection and enforcement procedures are the same as forthe
other utilities, orthe finance department in general. This may mean that regulations regarding
landlords and tenants may exist in another document, and would apply to the transportation
utility fee.
A few ordinances speak specifically to the issue of responsible parties. The ordinances of Bay
City, Milwaukie, North Plains, Talent and Tualatin state that if the "responsible party" (or
tenant) does not pay, the property owner is ultimately responsible forthe delinquent bill. Bay
City, North Plains, and Tualatin specifically mention a lien on property if the owner does not
cover a delinquent bill.
Implementing Transportation Utility Fees -Page 25
APPENDIX I
Transp. Utility Fee Ordinances -Appeal of Fee Determination
All the cities have an appeal procedure regarding transportation utility fee calculations,
except Clatskanie, Dufur, and La Grande.
Most of the ordinances have an appeal process including the following steps:
1. A user can petition the council, in writing, for a hearing on a review of a fee
determination.
2. Within a certain number of days (30 - 60), the council reviews the findings of fact,
and makes a decision.
3. The notice of the decision is given to the user in writing.
Furthermore, many of the ordinances state the council's decision is the final order, and
only allow one appeal, unless the classification of the property changes. A few cities
charge a fee for an appeal petition, but the fee is refunded if the fee determination is
reversed.
In Corvallis and North Plains, the appeal of the city engineer's fee designation goes to the
city manager, not the council. The decision of the city manager is final.
Grants Pass' ordinance states that the burden of proof is on the petitioner. It also
requires the petitioner to keep paying the fee while the appeal is under review.
In Wilsonville, the appeal is first filed with the Community Development Director, who
evaluates the merits of the appeal. The director shall make a decision and file a report
within 90 days. The director's decision can be further appealed to the City Council.
Tigard's appeal process is similar to Wilsonville in that the appeal goes first to the
Engineer, whose decision can also be appealed to the council. Furthermore, the Tigard
City Council can choose to form a subcommittee to review the appeal.
In Phoenix's ordinance, the first step after a fee determination appeal is to have the Public
Works director conduct a 24-hour traffic count at the premises. If the petition is still
unsatisfied with the fee determination, they can appeal to the city council.
Implementing Transportation Utility Fees -Page 26
APPENDIX)
Transp. Utility Fee Ordinances -Streets Eligible for TUF Funds
Ordinances from Ashland, Bay City, Eagle Point, Grants Pass, Hubbard, La Grande, Medford,
Phoenix and Talent have language establishing which streets would be eligible for projects
funded by transportation utility fee revenue.
The City shall maintain all accepted local streets within city owned land, city rights-of way, and city
easements and maintain other accepted local streets within or adjacent to the city. Such local streets specifically exclude private streets and streets not yet accepted by the city for
maintenance. (Section
4.26.040, Ashland Municipal Code)
Grants Pass' ordinance also states that publicly accepted streets within the Urban Growth
boundary are eligible for project funding through TUF revenue. The ordinance also specifically
excludes state highways, along with private streets.
Under the "Benefited Streets" section of La Grande's ordinance, unpaved roads will not be
paved using street user fee revenue, unless the council finds it is in the "public interest."
By ordinance, Grants Pass and Medford establish the streets that will benefit from TUF
revenue by developing and implementing a maintenance plan.
APPENDIX K
Transp. Utility Fee Ordinances -Street Lighting
A few of the cities allow transportation utility fee revenue to be used on street lighting.
Talent and Phoenix list "illumination" in the list of eligible transportation facilities.
Tualatin designates 1/7 of the road utility fee revenue for street lighting.
A few cities adopted utility fees specifically and exclusively for street lighting.
Here are the rates: (this is not a comprehensive list)
City Street Lighting Utility Fee Rate (monthly)
$2.25lmeter -residential; $3.50/meter -high
Cascade Locks density residential; $7lmeter -commercial and
public agencies.
Cornelius $2 per utility account
Klamath Falls $2 per utility account
Nyssa $2.50 per utility account
Toledo $5 per water account
Implementing Transportation Utility Fees -Page 27
APPENDIX L
Transp. Utility Fee Ordinances -Standard Ordinance Provisions
PURPOSE STATEMENT
Many of the ordinances have a "declaration of purpose," which broadly describes the need for
the fee, and the approved use of the funds. Each purpose statement is worded differently, but
below is a sample from Grants Pass' ordinance:
The City Council hereby finds, determines and declares the necessity of providing for the
continued operation, maintenance and upgrading of the city's streets and other transportation-
related facilities as a Comprehensive Transportation Utility. There is hereby created a
Transportation Utility Fund (the Fund) for the purpose of undertaking such activities as are necessary in order that streets and other transportation-related facilities maybe properly
operated, maintained and upgraded; and that the health, safety and welfare of the City and its
inhabitants and visitors maybe safeguarded. (Section 8.60.040; Grants Pass City Code)
USE OF FUNDS LANGUAGE
As stated in Appendix D, there are specific uses designated for transportation utility fee
revenue. Several cities have other language in ordinances regarding the use of revenues:
It shall not be necessary that the operations, administration and maintenance expenditures
from the street fund specifically relate to any particular property from which the fees for said
purposes were collected. (Section 13.45.030, Hubbard City Code)
The fees paid and collected by virtue of this ordinance shall not be used for general or other
governmental proprietary purposes of the city....... (Section 4.757, Medford City Code)
ORDINANCE REVISION AND REVIEW
Most of the ordinances state that the transportation utility fee ordinances can be revised by the
council from time to time by resolution or ordinance.
Philomath's ordinance (passed in 2003) stated that the city could not raise the rate until June
2005. During the second year of the program, and every year thereafter, the public works
committee reviews the road maintenance billing rates.
Grants Pass' ordinance requires the council to review the TUF rates every 5 years.
Wilsonville could not raise the TUF rates for the first 3 years. There is to be a review the 4th
year of every 5-year maintenance cycle.
A review of Tigard's ordinance (passed in 2003) was required 3 years after its passage, and
rates were reestablished based on an annual average cost of the 5 year maintenance plan.
The ordinance also stated that the city would take into account additional revenues received if
additional state funding became available.
La Grande's ordinance declared that a public hearing was required to make changes to the
street user fee. The city is required to give 10 days notice of the hearing.
Phoenix transportation utility fee rates automatically increases annually according to the CPI.
Implementing Transportation Utility Fees -Page 28
APPENDIX M
Transp. Utility Fee Ordinances -Other Provisions
NEW DEVELOPMENT
utility fee. For Corvallis, Grants Pass, Medford and Tigard, that is the moment with which the
developed property is hooked up to the waterlsewer utility. In Phoenix, the developed property must start paying upon completion, or occupancy -whichever comes first. In Talent,
the property starts being assessed the transportation utility fee after the water meter is
installed.
CHANGE IN CLASSIFICATION
Under Corvallis' ordinance, if the use of a property changes so that the fee increases or
decreases, the responsible party is required to notify the city within 30 days. If the responsible
party fails to notify the city, and the change would result in a lowerfee, no refund is given. If
the change would result in a higherfee, the city calculates the amount owed to the city.
NOT A PROPERTY TAX
Bay City, Grants Pass, Philomath, Phoenix, Talent and Wilsonville all state in the
transportation utility fee ordinances that this fee is not a property tax, and are not subject to
the property tax limitation underArticle XI, Section 11(b) of the Oregon Constitution.
In section 8.60.020 of Grants Pass' city code, the city even stipulates an argument as to why
the fee is not a tax.
COLLECT NO MORE THAN NEEDED
Talent and Phoenix specifically state in their ordinances that "transportation utility fees shall
not be imposed in amounts greater than that which is necessary, in the judgment of the city
council......" (Talent Ordinance #678, Section 3)
MIXED USES
Some cities address the issue of fee designation for mixed use properties. Tualatin has a
specific provision stating that, except under certain circumstances, "no road utility bill will be
apportioned among mixed uses or related property or combinations of mixed uses and related
properties." (Tualatin Municipal Code 3-4-140)
Implementing Transportation Utility Fees -Page 29
APPENDIX N
Transp. Utility Fee Ordinances - TUF Revenue vs. Highway Fund
2006-07 Revenue
Clty Transp. Utility Fee State Highway Fund
Ashland $970,123 $989,809
Bay City $49,000 $55,335
Clatskanie $28,000 $78,059
Corvallis $408,000 $2,505,620
Dufur Not Available $29,003
Eagle Point $125, 000 $371, 787
Grants Pass $738, 000 $1, 360, 688
Hubbard Not Available $135,996
La Grande $200,000 $587,232
Lake Oswego $1,136, 000 $1, 695, 937
Medford $4,807,000 $3,403,847
Milwaukie N/A ~ $971,128
North Plains $20,500 $81,011
Philomath $51,000 $207,504
Phoenix $69,000 $219,982
Talent $91,000 $296,486
Tigard $1,165,000 $2,149,401
Tualatin $600,000 $1,196,614
Wilsonville $583,000 $783,851
1. Collections began July 1, 2007. Milwaukie estimates $575,000 for FY 2007-08.
Implementing Transportation Utility Fees -Page 30
APPENDIXO
Transportation Utility Fees -Sample Documents
Several sample documents are available on LOC's web site to assist cities who are
interested in implementing transportation utility fees.
The League of Oregon Cities' web site address is: www.orcities.orq
Click on the A-Z Index, "T"for "Transportation Utility Fee."
Documents located on this web page include:
• Ordinances
• Administrative Documents
• Public Information Materials • Press Releases
• Transportation Funding Committee Information
For additional resources on transportation funding and public information efforts, visit
the following pages on LOC's web site:
• Transportation Funding (A-Z Index - "T")
• Gas Tax, Local (A-Z I ndex - "G")
Please note that these are sample documents only. Cities must consult legal counsel
regarding the use of these items and potential conflicts with state and city laws.
Implementing Transportation Utility Fees -Page 31