REGIONAL TRANSPORTATION

FINANCE MEETING

October 30, 2002

7:00 p.m.

Lane County Fairgrounds

APPROVED 11/26/02

 

Commissioner Bill Dwyer presided with Ken Lanfear, City of Florence Public Works; Roger Bennett, Florence City Manager; Alan Burns, Florence City Mayor; David Renshaw, City of Junction City; Jack Harris, City of Coburg Public Works; Mike Hudson, Coburg City Administrator; Tamie Fitch, Springfield City Councilor; Sid Leiken, Springfield City Mayor; Mike Kelly, Springfield City Manager; Dan Brown, City of Springfield Public Works; Cindy Weeldreyer, Lane County Commissioner; Ollie Snowden, Lane County Public Works; Bill Van Vactor, Lane County Administrator; Peter Sorenson, Lane County Commissioner; Bobby Green, Lane County Commissioner; Kurt Corey, City of Eugene Public Works; Jim Carlson, Eugene City Manager; Tim Brooker, Veneta City Mayor;  Richard Meyers, Cottage Grove City Manager; Bob Sisson, City of Cottage Grove Public Works; Lindsey Haskell, Cottage Grove City Councilor; Marvin True, Creswell City Councilor; Jim Torrey, Eugene City Mayor; Don Hampton, Oakridge City Mayor, Melissa Zimmer, Recording Secretary.

 

1.  Call to Order.

 

Commissioner Bill Dwyer called the meeting to order.

 

2.  Welcome and Introductions.

 

Dwyer welcomed everyone.

 

3.  Objectives of the Meeting.

 

Dwyer explained the objective of the meeting is to see how they as a community could collectively work together to better the roads in all communities.  He noted some cities were contemplating different revenue measures on their own that might not produce enough revenue or might cause people to flee the jurisdictions.  He said to impose those types of revenues and a local gas tax in a city would not be as effective as others countywide.  He said certain cities were considering transportation user fees that are a tax on utility bills and collected through that mechanism.

 

Dwyer stated they need to figure out how to develop a strategy that is not regressive, that is fair and based on actual utilization of the roads.  He said he was willing to do this personally but wasn’t willing if cities were insisting on transportation utility fees that tax people on their utility bills, as there are people struggling to pay their utility bills and wouldn’t be fair to add this tax.  He asked that the tax be progressively related to the actual use of the roads.

 

4.  Overview of Need

 

Tom Schwetz, LCOG, stated if the Board was willing to pursue a countywide transportation finance measure, then they need to determine what the next steps might be. He stated in his memo (copy in file) the revenue need of the cities to maintain their road systems.  He noted the material for the cities of Eugene and Springfield had been laid out in the TransPlan, that each face a shortfall and are committed to finding a solution.  He added that part of the solution is looking at a countywide transportation measure.

 

5.  Overview of Upcoming Legislative Session.

 

Len Goodwin, City of Springfield Public Works, explained that what he had heard from most of the League of Oregon Cities sources is that there remains no clear solution to the last legislative effort to increase fuel taxes.  He added there was nothing that gives anyone the sense that those problems had been resolved and there had been any proposal that would come out of the state legislature.  He noted there was some indication that sources were looking for increases in fuel taxes as a tradeoff to eliminating the possibility of future local fuel taxes, but that was pure speculation.  He stated another issue of concern is a broadening effort to eliminate the possibility for local options with sources of revenue.  He added it was limiting local government’s ability to fund transportation systems needs with their own resources.  He said there was a general sense of a broad effort at the state legislative level by statewide industries to try to make it impossible for local governments to enact revenue measures that apply to their jurisdictions.  He said local government options run the risk of being foreclosed in the next session and at this point there is no clear indication that there is going to be any serious or successful attempt to craft a statewide transportation solution that would have any impact on  the operations, maintenance or preservation needs of cities.

 

6.  Estimated Revenue Yields.

 

Schwetz reported that the memo had information on vehicle registration fees and a fuel tax.  He said the memo outlined the authority and restrictions related to each and the estimated revenues were presented in the tables. (Copy in file.)  He said these tables were meant to illustrate the likely yields from each of the mechanisms.  He said that the fuel tax is distributed by population and parallels state gas tax distributions.  He added the motor vehicle registration tax lays out different scenarios based on percentages shared between the cities and County.  He explained the minimum taxes would be $5.00 per registration and $0.01 for the fuel tax.  He noted those approximate about one month of state gas tax revenue received by each city.

 

Van Vactor asked about the different methods of adoption of these measures and if they needed to go to the voters.

 

Schwetz explained that the Board of County Commissioners could enact the fuel tax, but the vehicle registration fee would need to be referred to the voters.

 

Mike Hudson, Coburg City Administrator, explained an issue the City of Coburg has regarding the gas tax is that it isn’t fair and equitable by basing it on population.  He said in their community they have a tremendous volume of traffic driving down their roads, as it is a major refueling stop on I-5.   He said based on that, their city would be raising massive taxes on fuel but sending it back based on population, which did not seem fair and equitable.  He suggested a balance of equitability.

 

Dwyer asked if they had a mechanism for the equalization of the balance.

 

Hudson responded he had no specific proposal.  He said it had been discussed at the city manager’s meeting and the City of Coburg had been outspoken on the issue of population versus point of service.  He agreed that point of service was not the way to go, that there needed to be some other mechanism to create some fairness and equitability.

 

Schwetz noted the range of options might be anything from some type of base amount for the smaller cities to something incorporating more than just population distribution.

 

Dwyer concurred that there needed to be a mechanism to equalize the distribution.  He wanted to help everyone collectively.

 

Commissioner Bobby Green asked if they considered other local options and what was preventing the cities from doing it now versus waiting.

 

Schwetz said that the Cities of Eugene and Springfield needed to look for a package of revenues and that countywide measures could be an important part of that solution. He said the cities needed to solve their problems in some way.

 

Commissioner Peter Sorenson thought a person who owns a large vehicle that damages the road should pay higher fees than a person that owns a small utility pick up truck that does little damage to the road.  He wanted to know the progressivity of a tax that would allow for a recognition that certain vehicles do greater damage and therefore should pay a higher fee and other vehicles do lower damage, puts a lower impact on the transportation system, and therefore they should pay a lower fee.

 

Dwyer wasn’t sure if that was based on fact.  He said that larger vehicles buy gasoline and consume more so they pay more taxes.  He added it was more related on types of tires.  He said a 5,000-pound vehicle without studded tires does less damage than a Volkswagen with studded tires.

 

Schwetz stated there might be a regulatory authority issue that might make this moot.  He said that state law limits the ability to collect a weight mile tax to the state level, so counties and cities are not allowed to do so.

 

Marvin True, Creswell City Councilor, asked if they considered commercial and industrial vehicles being taxed.

 

Schwetz responded what they are discussing would deal with the operation and maintenance needs of cities on city streets.  He said that freeways are state highways and have state weight mile taxes that are supposed to be adjusted for large vehicles.

 

Brooker noted there were different options for division of the money. He said in looking at it with Veneta’s population and their share of the money, that amount of money would not meet their road needs so they would need to take other options.  He asked if there was an amount the County used to divide the money for the maintenance of their roads.

 

Dwyer responded there was no certain number.  He said the numbers were for illustrative purposes only to show what each segment would be.

 

7.  Discussion of Issues and Concerns.

 

Leiken said since 1999 the anticipated revenues from fuel taxes have been inadequate to support operations, maintenance and preservation.  He said that City of Springfield was prepared to solve their problems.  He said they don’t seek or do they expect some sort of bailout from the county or state.  He said Springfield had successfully managed its transportation system and funding.  He noted Springfield’s streets were currently in good condition and deferred maintenance is within reasonable bounds.  He said they shifted expenses to other funds, drew down the surplus they built in the 1990s and sought revenue solutions.  He noted it is clear that state revenues will not provide the solution for local government.  He said they are now at a crossroads.  He explained some options include cutting their services sharply by over one-third and maintaining preservation to slow the growth of their deferred maintenance backlog before the cost of street deterioration overwhelms them.  He said they could also cut their services less drastically and defer all preservation for one year and find a local solution immediately.  He thought Option 1 would reduce or eliminate services that their citizens believe are important and would still not create a long-time financial balance in their street fund.  He said that Option 2 was high risk because if they fail to obtain any revenues within the next year, their street fund will be bankrupt.  He explained that the Springfield City Council would set its course within the next few weeks.  He thought they should consider factors at the County level.  He noted that the revenues at the County level would be used as additional revenue they would seek locally.  He said the registration fee and gas tax should not be the only elements of the solution.  He noted that taking care of Springfield’s streets is Springfield’s responsibility and they are prepared to take the necessary steps to find the right mix of services and revenues.

 

Dwyer asked if the right mix was a transportation utility fee or something that would unilaterally be put on the voters without their consent or referring those concepts to the voters for approval.  He indicated he did not object to a transportation utility fee as long as the voters agree to it, but wouldn’t allow the work with progressive tax policies and helping those develop a countywide solution.  He said if Springfield wanted to do it, that was up to them.

 

Leiken said their discussion was centered on a fuel tax.  He said if the City Council were to vote on this without referring it to the voters, they discussed the fact that the gasoline dealers association may take it out as a referendum and let the voters decide.  He thought the citizens would oppose it because it is construed to be a tax.  With regard to the gas tax, he noted they discussed the issues and 85% of the gas stations are within the cities of Springfield and Eugene.  He stated that most drivers would fill up where it is convenient.

 

Jim Torrey, Eugene City Mayor, explained that a few months ago the Eugene City Council voted on whether they should proceed with a transportation utility fee.  He noted it was a 4-4 vote and he voted against the TUF.  He said the issue wasn’t going to go away, that they would have to deal with a $90 million backlog that would be getting bigger.  He wanted to see what the City of Eugene could do with Lane County as a partner for a gas tax.  He said there are some strong lobby positions to take away local control of transportation dollars.  He asked if they were going to be successful in the legislature.  He didn’t see any other option.  He noted if they were voting tonight, he would be an affirmative vote on the transportation utility fee because he hadn’t seen an alternative that takes care of the $90 million shortfall.  He added that none of the legislative bodies are willing to give them the money to maintain the roads they currently have.  He stated the County had done an excellent job of maintaining their roadbeds.  He said they want to do everything they can to get as much money they can from a county-wide measure to reduce the amount they are going to have to ask their citizens for in the form of either a gas tax or a transportation utility fee.  He noted the gas tax is dealing with people who are using the roads the most.  He added there are other people who take benefits from roads who don’t drive them that much.  He said the City through their Budget Committee had come to the conclusion that this is their number one operational priority.  He hoped that everyone could work together to do something with registration that would come off the top and they wouldn’t have to apply as much gas tax or transportation utility fee.  He believed if they didn’t implement this that the legislature would preclude future implementation of a transportation utility fee.

 

Sorenson requested the previous votes for local gasoline taxes.  He said Lane County did not do that but other counties in Oregon did.  He thought most were defeated.  He said before he was willing to put more time into this, he wanted to get more information on those issues.  He asked that information be gathered that shows how recently various gas tax measures took place and how much they were trying raise.  He wanted more information on the vitality of Lane County voters interested in gas taxes.  He said a few years ago the citizens of Lane County voted in the statewide gas tax election.  He stated he personally put a ballot measure statement in the Oregon voters’ pamphlet pointing out that one of the organizations, the AAA, was opposing the measure.  He opposed the measure because of the disparate increase in the tax on Oregon drivers and the small increase on commercial trucks.  His asked what the vote was in Lane County and if there is some type of guidance in terms of citizen willingness to support a gas tax increase.   He asked if this was good for the environment, and if it was a way to achieve the other goals of TransPlan such as vehicle miles reduction.  With regard to equity, Sorenson was interested in knowing if any of the proposals had been tested for equity.  He asked for information that would explain whether or not this would affect low-income people.  He was interested in pursuing this topic after he receives these materials.

 

Brooker reported that Veneta’s road funds are dwindling and the road fund is in the worst shape it had been in years.  He said finding the revenue they need to continue operation of the roads is imperative to them.  He said the options that had been discussed by the County are attractive.  He said there had been discussion about a gas tax and equitable share for smaller communities.  He noted that the money in the plan is not enough to fund all of their road maintenance.  He said they would still need to find funding solutions.  He was concerned about implementing any additional tax or fee or increase in the registration fee without sending it to the vote of the people.

 

Kevin Urban, Oakridge, explained their resources were dwindling and they were relying on their utilities to keep parks and libraries open.  He noted that Oakridge is in need of dollars to access further capital.  He said Lane County road projects could make a significant improvement in the short term.

 

Donald Hampton, Oakridge City Mayor, wanted to see both issues presented to the voters to let them decide.

 

Lindsey Haskell, Cottage Grove City Councilor, stated Cottage Grove was not in favor of a TUF.  He thought it needed to be a partnership among everyone.  He wanted a countywide approach to pursue additional local revenues of fuel taxes.  He thought this could be an equitable package, with everyone working together.

 

With regard to the City of Creswell, True reported that Creswell was no different than any smaller community.  He said they have received revenue from the County that have helped them with projects, but this doesn’t take care of deteriorating streets.  He thought a partnership would be best for everyone.

 

Roger Bennett, Florence City Manager, reported that the Florence street system was in better shape than the street fund.  He noted that they had completed some streets and there had been excellent partnership with County funds in leveraging other available funds.  He said it was a difficult solution to come to a combination of funds for local and County roads.  He said that Florence couldn’t solve the problem by itself.

 

David Renshaw, City of Junction City, reported Junction City is the same as other small cities.  He stated they have no property tax revenue.  He said they had received funding from Lane County.    He said they had been rapidly running out of money and that any partnership that they could come up with would be a great help.

 

With regard to Coburg, Hudson said they were fortunate as they don’t have the tremendous amount of deferred maintenance.  He said they are faced with horrendous traffic for a small town.  He said they would be happy to partner with the other agencies and do what they could to assist other cities.  He added that Lane County Public Works had been very helpful.

 

Commissioner Cindy Weeldreyer commented that the gas tax had not kept up with the rate of inflation and that additional resources are needed.  She thought doing this collectively throughout Lane County was the best way to go to generate additional resources.  She noted the current way of maintaining the road system with the money they have will require a different source into the future.  She said it was far less expensive to do routine maintenance than it is to have to do a capital project because roads were let go for too long.  She believed if they presented this to the citizens of Lane County and expressed the need and show they are doing the best job they can with the money that is given, that the citizens would recognize that and they could move forward.

 

Green hoped that everyone could come together on this matter.  He asked why there wasn’t a mechanism to help pay and maintain bicycle lanes.  He said timing was important and he believed that now was not the time.  He noted that Lane County was constantly asking the voters for money.  He said if they honestly have a partnership, then they should try to formulate the best possible strategies.  He was uncomfortable with the vehicle registration fee.  He said this shouldn’t be rushed.  He said they should put something together around the state gas tax.  He said that Lane County would need partners.  He wanted to keep the option open to continue to discuss this matter and not rush into anything.

 

Sorenson said they worked on the TransPlan for many years and there were references where that policy met those objectives.  He said when contemplating a large revenue picture, they should look for other indicators for help for the community.  He thought the Oregon benchmarks that apply to transportation funding were worth noting.  He was interested in continuing to work on this.

 

Torrey explained there would be a road users task force regarding efficiency in vehicles and the lack of dollars generated as a result of the legislation.  He noted geographical areas in the State of Oregon would index it.  He stated the least costly area is in eastern Oregon where there is the most snow, but the least amount of damage to roads.  He said that Brookings had the next least impact.  He added the areas of Portland and Willamette Valley were most impacted.  He wasn’t sure it would pass, as the big issue is whether AOC or LOC gets Lane County’s share of the fees of tires sold.  He said Lane County has to make sure it gets its money out of that to fix the roads that are not state funded.  He said they need to get the answers to all of those questions.

 

Dwyer reiterated that there is a collective effort to work together.  He heard that some people perceived real threats of preemption in the legislation regarding local taxes.  He said they need to get together and squash any attempt to pre-empt the local government’s ability to levy taxes with consent of the governor.  He stated they have to work on timing.  He said some cities wanted a transportation utility fee and they need to work to make things more equitable.  He suggested continuing to work and refine the options so if they are going to have a tax, that it go before the voters at a time when there is not a double majority.  He thought anytime they could develop a revenue source that could help stabilize the funding, that the people of Lane County would be the winners.  He said they should work collectively to defeat any preemption attempts.  He added they needed to work on Sorenson’s questions to formulate something that is fair and beneficial to all people throughout Lane County.  He said they need to take a unified approach as it applies to registration and gas taxes and work on a distribution and mechanism to decide on the amount and how it is to be distributed.

 

Torrey stated he thinks Lane County might be successful because the state is throwing out a three-cent gas tax to be divided 50% to ODOT, 30% to the counties and 20% to the cities.  He said that would be a gas tax they hadn’t had for a long time.   His concern for the City of Eugene is even if they got the taxes, they still have a backlog and they are going to have to find a way to fix it.  He wanted to know if the state were to give Lane County a guaranteed three-cent gas tax divided by the cities and counties. if they were willing not to implement a local tax.  He noted not many gas taxes pass.  He noted the gasoline dealers were proposing the gas tax limitation and the large corporations like Wal-Mart and Safeway were opposing the transportation user fee.

 

Dwyer said there needs to be some progressive mechanism to deal with people on reduced or fixed incomes.  He said if that component is added, a lot of his objections would go away.  He wanted Lane County to take control of its own destiny and work collectively.  He added what the state would do would be a bonus but he did not want to rely on that money.  He said if they are to take care of the roads and needs of Lane County, that it would have to be done with self-reliance.

 

8.  Review Meeting Objectives.

 

Schwetz explained there was general interest to pursue this further but not right now.

 

9.  Wrap-Up/Next Steps.

 

Schwetz stated that there were several pieces of information proposed.  He said a summary of the meeting will be sent out to everyone.

 

Van Vactor added the commissioners wanted to work with the partners with a work plan with other cities.

 

Schwetz acknowledged that a work plan would be developed.

 

Sorenson recalled the questions he asked should be a precursor to any activity they undertake.  He said the reason is that a lot of that information might resolve itself by the information that had already been prepared and shared with the cities.  He said the cities of Eugene and Springfield had done a tremendous amount of work on the issue, and he didn’t want to set a motion in process that implies that they want to pursue these revenue sources or taxes at this time.  He wanted to set in motion a dialogue of information that had already been proposed.  He suggested step one would be to get more knowledge and once everyone is up to speed, then it would be the time to have a work group of the cities and the Board of Commissioners.

 

There being no further business, Commissioner Dwyer adjourned the meeting at 8:40 p.m.

 

 

Melissa Zimmer

Recording Secretary