1. Street Maintenance Funding Issues City Council Workshop April 1, 2013

2. Funding Issues Limited resources over the last decade or more have created a backlog of maintenance needs Limited resources over the last decade or more have created a backlog of maintenance needs Street maintenance funds have often been prioritized for street sections that carry more traffic or are related to a utility project Street maintenance funds have often been prioritized for street sections that carry more traffic or are related to a utility project Since 2002, 60% of streets have deteriorated from Very Good/Good condition to Fair/Poor Since 2002, 60% of streets have deteriorated from Very Good/Good condition to Fair/Poor

3. Current Funding Sources State Motor Vehicle Fund Revenue Sharing – 52% of proposed 2013/14 revenues State Motor Vehicle Fund Revenue Sharing – 52% of proposed 2013/14 revenues Local 3-cent gas tax – 28% of proposed 2013/14 revenues Local 3-cent gas tax – 28% of proposed 2013/14 revenues Implemented in 1984 at $0.02/gallon Implemented in 1984 at $0.02/gallon Raised in 1986 to $0.03/gallon Raised in 1986 to $0.03/gallon Water/Sewer transfers – 18% of proposed 2013/14 revenues Water/Sewer transfers – 18% of proposed 2013/14 revenues

4. Funding Issues Street Fund revenues have increased significantly in recent years – 2013/14 projected to be up 27% over 2009/10 Street Fund revenues have increased significantly in recent years – 2013/14 projected to be up 27% over 2009/10 Primarily due to increased State Shared Revenues (+$270,000) from 2009 Transportation Bill Primarily due to increased State Shared Revenues (+$270,000) from 2009 Transportation Bill About 11% increase (+$45,000) from local 3- cent gas tax, three additional service stations About 11% increase (+$45,000) from local 3- cent gas tax, three additional service stations About 20% increase (+$50,000) from Water/Sewer fund transfers About 20% increase (+$50,000) from Water/Sewer fund transfers

5. Funding Issues Some street maintenance costs have increased faster than revenues Some street maintenance costs have increased faster than revenues Asphalt costs have increased 120% since 2007; 255% since 1986 Asphalt costs have increased 120% since 2007; 255% since 1986 Crack seal material has increased in price 32% since 2007; 256% since 1986 Crack seal material has increased in price 32% since 2007; 256% since 1986 Cold mix asphalt patch material has increased in price 107% since 2007 Cold mix asphalt patch material has increased in price 107% since 2007 Fuel costs have increased 65% since 2007; 276% since 1986 Fuel costs have increased 65% since 2007; 276% since 1986

6. Planned 2013/14 Street Maintenance Projects Dry Hollow Road, 9 th to 19 th – chip seal Dry Hollow Road, 9 th to 19 th – chip seal 2002 condition rating – Very Good/Good 2002 condition rating – Very Good/Good 2013 condition rating – Fair 2013 condition rating – Fair Proposed budget - $82,000 Proposed budget - $82,000 2nd & Webber, intersection – profile/pave 2nd & Webber, intersection – profile/pave 2002 condition rating – Very Good/Good 2002 condition rating – Very Good/Good 2013 condition rating – Poor 2013 condition rating – Poor Proposed budget - $148,950 Proposed budget - $148,950

7. Planned 2013/14 Street Maintenance Projects Mt Hood St, 10 th to 23 rd – chip seal Mt Hood St, 10 th to 23 rd – chip seal 2002 condition rating – Very Good/Good 2002 condition rating – Very Good/Good 2013 condition rating – Fair 2013 condition rating – Fair Proposed budget - $86,000 Proposed budget - $86,000 Bridge St, 14 th to 18 th – profile/pave Bridge St, 14 th to 18 th – profile/pave 2002 condition rating – Very Poor/Fair/Good 2002 condition rating – Very Poor/Fair/Good 2013 condition rating – Fair/Poor/Very Poor 2013 condition rating – Fair/Poor/Very Poor Proposed budget - $70,000 Proposed budget - $70,000

8. Potential New Revenue Sources NW Natural Gas franchise fee: currently $87,000 goes to General Fund. If it was dedicated to Street Fund due to their adverse impacts on street systems, lost revenue would need to be replaced for General Fund or General Fund would need to be decreased by same amount. NW Natural Gas franchise fee: currently $87,000 goes to General Fund. If it was dedicated to Street Fund due to their adverse impacts on street systems, lost revenue would need to be replaced for General Fund or General Fund would need to be decreased by same amount.

9. Potential New Revenue Sources Dedicated funding for streetlights: street light expenses are proposed to be $90,953 for 2013/14. We could either transfer from General Fund like some cities do, or operate street lighting as a utility and add it on utility bill like was done for storm water. If transferred from General Fund, would need to either replace lost revenue or decrease General Fund. Dedicated funding for streetlights: street light expenses are proposed to be $90,953 for 2013/14. We could either transfer from General Fund like some cities do, or operate street lighting as a utility and add it on utility bill like was done for storm water. If transferred from General Fund, would need to either replace lost revenue or decrease General Fund.

10. Potential New Revenue Sources Implement a Telecom Tax: several cities have adopted or are considering a Telecom Tax that could replace the revenues lost from the General Fund in either of the first two options listed above. We’ve estimated that a 7% Telecom Tax would raise about $180,000/year. Implement a Telecom Tax: several cities have adopted or are considering a Telecom Tax that could replace the revenues lost from the General Fund in either of the first two options listed above. We’ve estimated that a 7% Telecom Tax would raise about $180,000/year.

11. Potential New Revenue Sources NWC PUD franchise fee: the current PUD franchise fee is 3% where most cities tax local utilities 5%. Each ½% raises approximately $115,000. This could replace the revenue lost by the General Fund if Natural Gas fees were dedicated to the Street Fund. If PUD fee is increased, we should consider raising the 3% that our Water/Sewer utilities pay; each ½% increase would raise an additional $47,000. Recently adopted Water and Sewer rate schedules assumed 3% transfers to Street Fund. NWC PUD franchise fee: the current PUD franchise fee is 3% where most cities tax local utilities 5%. Each ½% raises approximately $115,000. This could replace the revenue lost by the General Fund if Natural Gas fees were dedicated to the Street Fund. If PUD fee is increased, we should consider raising the 3% that our Water/Sewer utilities pay; each ½% increase would raise an additional $47,000. Recently adopted Water and Sewer rate schedules assumed 3% transfers to Street Fund.

12. Potential New Revenue Sources Chenowith Water PUD franchise fee: City could charge the Chenowith Water PUD a franchise fee for services rendered over City rights-of-way. Under the same concept, the City Water Fund is charged 3%. A franchise fee of 3% would raise approximately $28,000/year. Chenowith Water PUD franchise fee: City could charge the Chenowith Water PUD a franchise fee for services rendered over City rights-of-way. Under the same concept, the City Water Fund is charged 3%. A franchise fee of 3% would raise approximately $28,000/year.

13. Potential New Revenue Sources Local 3-cent Gas Tax: the City’s local gas tax raises about $150,000 per cent of tax for Street Fund operations. The current rate of 3 cents/gallon was set in the mid- 1980s and has not been changed. The Oregon 2009 Transportation Bill prevents the City from increasing its local gas tax rate until after 2014. However, at that time, local gas tax increases could be considered. Local 3-cent Gas Tax: the City’s local gas tax raises about $150,000 per cent of tax for Street Fund operations. The current rate of 3 cents/gallon was set in the mid- 1980s and has not been changed. The Oregon 2009 Transportation Bill prevents the City from increasing its local gas tax rate until after 2014. However, at that time, local gas tax increases could be considered.

14. Questions/Discussion