AGENDA BILL. Beaverton City Council Beaverton, Oregon BUDGET IMPACT AMOUNT BUDGETED $0

Transcription

1 AGENDA BILL Beaverton City Council Beaverton, Oregon SUBJECT: Transportation System Investments: A Review of Needs, Forecasts, and Expenditure Options FOR AGENDA OF: BILL NO: Mayor's Approval: ~ W: DEPARTMENT OF ORIGIN: COD ~ DATE SUBMITTED: CLEARANCES: City Attorney Finance Engineerin Public Works Tran. Planning -+=-+-- PROCEEDING: WORK SESSION EXHIBITS: Staff Report BUDGET IMPACT EXPENDITURE REQUIRED $0 AMOUNT BUDGETED $0 APPROPRIATION REQUIRED $0 RECOMMENDED ACTION: City Council listens to the presentation. HISTORICAL PERSPECTIVE: In January 2016, the Beaverton City Council held a work session where staff presented high-level information about the City's historical transportation spending and revenue trends, and spending and revenue forecasts. Key points of the presentation are as follows: 1. Several of the City's transportation system needs have a dedicated revenue source, however. are substantially underfunded, including: road widening projects, pavement maintenance and street lighting. 2. Many of the City's transportation system needs lack a dedicated funding source and are underfunded, including: sidewalk gap infill, sidewalk ramp upgrades, traffic calming, pedestrian crossing enhancements, new traffic signals and upgrades, bikeway improvements, and safety improvement projects. Since the work session, the Oregon Legislature passed a statewide transportation funding package and the Washington County Board of Commissioners adopted a new vehicle registration fee - both of which will provide the City with additional transportation revenue. Despite the additional revenue, the City will continue to lack funds for needed pavement maintenance and transportation capital improvements. INFORMATION FOR CONSIDERATION: The attached staff report includes preliminary analysis in order to elicit feedback from City Council. City Council's feedback will provide high-level direction for staff to begin work on a draft five-year funding plan and draft five-year transportation capital improvement plan. Agenda Bill No: 18100

2 Beaverton 0 R E G 0 N STAFF REPORT #1: PRELIMINARY ANALYSIS TRANSPORTATION INVESTMENT ANALYSIS: PART II Prepared By: To: Project Team Mayor Doyle and City Council Date: April 16, 2018 Purpose: This report provides preliminary analysis to inform a future staff proposal for a five-year transportation funding and improvement plan. The intent of the proposal is to help City Council make an informed decision in regard to programming Beaverton's share of new state and county transportation revenue and possible adoption of new local transportation revenue tools. CONTENTS 1. EXECUTIVE SUMMARY BEAVERTON'S TRANSPORTATION REVENUE SHORTFALLS BEAVERTON'S SHARE OF NEW STATE AND COUNTY TRANSPORTATION REVENUE OPTIONS TO INCREASE TRANSPORTION REVENUE PRELIMINARY RECOMMENDATION List of Tables Table 1. Tentative Process Schedule... 5 Table 2. Estimate of Annual Average Transportation Needs and Shortfalls, (FYs )... 6 Table 3. Forecast of Beaverton's Share of New State and County (FYs )... 9 Table 4. Option 1: Focus on Maintenance (5 Year Outlook) Table 5. Option 2: Focus on Great Neighborhoods (5-Year Outlook) Table 6. Option 3: Focus on Traffic Improvements (5-Year Outlook) Table 7. Estimate of Possible Annual Local Fuel Tax Table 8. Possible Annual Local Street Fee Table 9. Metro Jurisdictions with Fuel Taxes, FY Table 10. Metro Cities with Residential Street Fees, FY Table 11. Example of Commercial Street Fee Methods Applied to Typical Uses in Beaverton Table 12. Privilege Tax Portion of Franchise Fee Reserve Table 13. Estimate of Possible Annual Transportation from a Millage Rate Increase*

3 ACKNOWLEDGMENTS Core Project Team Luke Pelz Dave Waffle Jim Brink Todd Juhasz Jabra Khasho Floyd Harrington Terry Priest Leigh Crabtree Garth Appanaitis (Project Manager) Senior Transportation Planner, Community Development Contact information: (503) or Assistant Finance Director, Finance Senior Project Engineer, Public Works - Capital Projects Principal Transportation Planner, Community Development - Transportation Planning City Transportation Engineer, Public Works - Transportation Engineering City Engineer, Public Works - Capital Projects Manager, Public Works - Operations Operations Manager, Community Development - Administration Transportation Engineer, DKS Associates Process Leadership Team Denny Doyle David Donaldson Patrick O'Claire Cheryl Twete Mayor Director, Public Works Director, Finance Director, Community Development City Council Cate Arnold Lacy Beaty Betty Bode Mark Fagin Mark San Soucie Council President Transportation Capital Improvement Advisory Committee The TCIP Advisory Committee is an ad hoc committee that advises staff on matters related to transportation capital investments. The Committee is comprised of volunteers from several boards and commissions. 002

4 1. EXECUTIVE SUMMARY Problem Statement In January 2016 the Beaverton City Council held a work session where staff presented the findings of Transportation Investment Analysis: Part I. The final report for Part I includes high-level information in regard to the City's historical transportation spending trends, spending forecasts, annual revenue shortfalls, and a summary of revenue tools used by other jurisdictions in the Portland metro area. Key findings of the report show that: 1. Several of the City's transportation system needs have a dedicated revenue source. however are substantially underfunded, including: road widening projects, pavement maintenance, and street lighting. 2. Many of the City's transportation system needs lack a dedicated funding source and are underfunded, including: sidewalk gap infill, sidewalk ramp upgrades, traffic calming, pedestrian crossing enhancements, new traffic signals and upgrades, bikeway improvements, and safety improvement projects. At a January 2016 Council work session staff received direction to develop a proposal to decrease the gap between future revenue and transportation system needs. Approach 1. Preliminary Analysis (Staff Report #1) Staff Report #1 includes: a. Near-term transportation revenue needs based on historical revenue and spending trends. b. Options for programming additional new state and county revenue for FY and the next four fiscal years. Options are provided to elicit discussion only. c. Options to close the funding gap after programming new state and county revenue. Options are provided to elicit discussion only. 2. Five-Year Funding Plan Framework (Staff Report #2) Staff Report #2 to include recommendations regarding: a. Transportation categories to fund (not specific projects). b. Funding levels for each category. c. Funding sources for each category, such as possible increases in existing fees, adoption of new fees, shifting of existing revenue, and or bond issuance. 3. Long-Term Transportation Capital Improvement Plan (Staff Report #3) After City Council approves a funding plan framework, staff will create a draft long-term (5-year) transportation capital improvement plan (2018 City Council Priority - Honorable Mention). The long-term TCIP will identify specific projects, include a detailed funding plan for each project, and describe a periodic evaluation and revision process. The TCIP process will include robust public engagement. int! 7j! 003

5 Preliminary Findings 1. Before accounting for new state and county revenue, between FYs Beaverton would have a combined transportation capital and paving revenue shortfall of approximately $9.4M annually on average. 2. The Oregon Department of Transportation and Washington County estimate that between FYs Beaverton will receive an additional state and county transportation tax and fee revenue of approximately $3.BM annually, on average. 3. With the new revenue the City's transportation revenue shortfall is reduced to approximately $5.6M annually, on average. 4. Without additional revenue construction costs and population growth are forecast to outpace the City's ability to pay for current and future transportation system needs. Preliminary Recommendation 1. Direction for the FY (see Table 1 for tentative process schedule) City Council to consider the information in this report and work session presentation, and respond to staff's recommendation to: a. Create a new Sidewalk Infill Fund (2018 City Council Priority). b. For the FY Capital Budget allocate a majority of Beaverton's share of new state and county revenue to maintenance (pavement overlays and ADA ramp upgrades), and funding to complete the Menlo Drive Sidewalk Improvement project. c. Begin work on a five-year funding plan framework and return to City Council with a draft report (staff report #2). Staff to conduct public opinion research and stakeholder engagement to help make an informed recommendation to the City Council. The tentative public engagement plan includes a statistically valid telephone survey, stakeholder focus groups, inter-departmental staff discussions, and consultation with the TCIP Advisory Committee. d. Begin work on a long-term (5-year) transportation capital improvement plan and return to City Council with a draft report (staff report #3). #I: 004

6 Table 1. Tentative Process Schedule Tasks Approximate Date Phase 1 (Preliminary Analysis) a. Research and data analysis June November 2017 b. Prepare draft Staff Report #1 : Preliminary Analysis December 2017 C. Mayor and City Council 1: 1 meetings February 2018 d. City Council work session May 1, 2018 Phase 2 (Five-Year Funding Plan Framework) a. Conduct public opinion research and stakeholder engagement (telephone survey, stakeholder focus group interviews, interdepartmental staff May July 2018 discussions, and consultation with the TCIP Advisory Committee) b. Draft Staff Report #2 : 5-Year Funding Plan Framework August 2018 c. Mayor and City Council 1: 1 meetings September 2018 d. TCIP Advisory Committee review of Staff Report #2 September 2018 e. City Council work session November 2018 f. City Council adoption of funding plan framework January 2019 Phase 3 (Long-Term Transportation Capital Improvement Plan (TCIP) a. Public engagement (open houses, online surveys, etc.) February April 2019 b. Draft Staff Report #3: Long-Term (5-Year) TCIP April 2019 c. TCIP Advisory Committee review of Staff Report #3 April 2019 d. Mayor and City Council 1: 1 meetings May 2019 e. City Council work session May 2019 f. City Council adoption of the long-term (5-year) TCIP June2019 Stoff Report # l: Preliminary Analysis 0 0 5

7 2. BEAVERTON'S TRANSPORTATION REVENUE SHORTFALLS (5-Year Outlook) Table 2 shows Beaverton's transportation needs and an estimate of annual revenue shortfall for each category. Se e t h e notes section. f or assumptions. an d d ata sources. Table 2. Estimate of Annual Average Transportation Needs and Shortfalls, (FYs ) (Beaverton Owned Roads) Expenditure Existing ($) Dedicated Category Need 1 (based on Shortfall ($) historical annual ($) average) Source Currently Underfunded or Unfunded Maintenance Paving 2 3,600,000 1,900,000 1,700,000 x x Sidewalk ramp upgrades 3 1,500,000-1,500,000 x Street light conversion 4 300, ,000 x x Great Neighborhoods Subtotal 5,400,000 1,900,000 3,500,000 Sidewalk infill 5 1,700, ,000 1,500,000 x Bike lane infi11s (not associated with a road 650, ,000 x x widening project) Traffic calming7 55,000-55,000 x Enhanced crossings 8 150, ,000 x Street light infills 150, ,000 x Subtotal 2,705, ,000 2,505,000 Traffic Improvement (Technology Upgrades) Traffic signal upgrades , ,000 x New traffic signals at unsignalized intersections 10 1,450,000-1,450,000 x Subtotal 2,300,000-2,300,000 Traffic Improvement (Road Widening) New vehicle turn lanes and travel lanes (with new 3,700,000 2,600,000 1,100,000 x x sidewalk and bike lanes) 11 Total 14,105,000 4,700,000 9,405,000 New state and county revenue (five-year annual average) 3,800,000 Total Average Annual Shortfall $ 5,605,000 Staff Report # l: Preliminary Analysis 0 0 6

8 Notes: 1. All spending targets are based on a five-year outlook (FYs 18-21) with a % annual increase in construction costs. (Source for construction cost increase: Washington County Resolution and Order 17-40). Numbers are approximate for discussion purposes. 2. Source: Pavement Management Analysis Report, IMS Infrastructure Management Services, March The report recommends that Beaverton adopt a policy which will raise the existing PCI to greater than or equal to 70 and control the growth of the backlog, keeping it less than or equal to 5%. The recommended annual budget of $3.6M (accounting for inflation) would raise the average network PCI to a 77 and maintain the backlog at 1%. Between the annual average expenditure has been approximately $1.9M/year. Paving is currently funded by the Street Fund which is supported by state and county taxes and fees. 3. Source: City of Beaverton, Agenda Bill Bid Award for Sidewalk Curb Ramp Retrofit Project, January 3, To complete conversion of existing street lights to light-emitting diode (LED) lights will cost approximately $1.3M. (Source: City of Beaverton Public Works Department, from Nyssa Rivera dated December 8, 2017). 5. To ensure that all city-owned roads have sidewalk will cost approximately $13M at $600/lineal foot. After accounting for MSTIP 3e funding, the total shortfall is $11 M in current dollars. This estimate is for City owned arterial, collector and neighborhood route roads that currently have no sidewalk on either side of the road. The estimate assumes sidewalk construction on one side of the road only, including planter strip, street lights, rightof-way, storm water drainage, and street trees. (Source: City of Beaverton Transportation Planning Division). An annual revenue stream of approximately $1.5M would allow for the City to have two sidewalk infill projects ongoing simultaneously, between the years , with current staffing levels. However, two projects per year will be difficult to sustain over a 6-10 year period with existing staffing levels. Between the years the City spent an annual average of approximately $200,000 on sidewalk infill projects. (Source: City of Beaverton. Moving Beaverton Forward: A Report on Transportation Spending Trends & Options for the Future The City of Beaverton Transportation System Plan (TSP) identifies a total of approximately $9.85M in needed high priority bicycle facility improvements that are not associated with a road widening project. To implement these projects by 2035, the TSP forecast horizon, the City would need to spend approximately $650,000 on average annually between 2018 and (Source: City of Beaverton 2010 Transportation System Plan). 7. This program was previously funded by a public safety bond measure. The fund is now depleted. 8. The 2018 Beaverton Active Transportation Plan indicates 10 high priority enhanced crossing projects on Beaverton owned roads at a total cost of approximately $500,000, and 50 medium priority projects at a total cost of approximately $4.25M. Enhanced crossings typically include a pedestrian median refuge island, warning signs, and high intensity flashing yellow lights. (Source: I '"' 007

9 9. Within Beaverton about half of all high severity pedestrian crashes occurred in the dark at locations without street lighting. An annual expenditure target of approximately $100,000 is a placeholder and would provide some funding to begin work on streetlight infill. Staff is currently working on a total cost estimate to complete street light infill where deficient. (Source: City of Beaverton, Agenda Bill Transportation Safety Study Findings, May 2, 2017). 10. The City of Beaverton TSP identifies a total cost of approximately $22M (in 2016 dollars) for Beaverton's share to complete installation of needed new signals and approximately $12.5M for adaptive signal system upgrades through Adaptive traffic control is a traffic management strategy in which traffic signal timing changes, or adapts, based on actual traffic demand. This is accomplished using an adaptive traffic control system consisting of both hardware and software. Technology upgrades could also include related safety enhancements such as reflective back plates, emergency assistance lights, and pavement markings. (Source: City of Beaverton 2010 Transportation System Plan). 11. The City of Beaverton TSP identifies a remainder of approximately $56M, or $3.3M/year on average (not accounting for inflation), of "high priority" motor vehicle improvements that the City desires to construct through 2035 (this excludes the planned MSTIP 3e projects). The TSP identifies an additional $335M in other transportation capital improvement needs for city-owned roads. Based on recent trends the City has been spending approximately $2.6M/year on average for improvements on Beaverton owned roads ( ), which includes revenue from the general fund, transportation development tax, the Major Streets Improvement Program, and state and county taxes and fees. (Source: City of Beaverton. Moving Beaverton Forward: A Report on Transportation Spending Trends & Options for the Future

10 3. BEAVERTON'S SHARE OF NEW STATE AND COUNTY TRANSPORTATION REVENUE New Forecasts State Transportation Funding Package In July 2017 the Oregon Legislature approved a major transportation tax and spending bill that is expected to raise approximately $3.8 billion in new tax and fee revenue statewide over the next seven years 2. The tax and fee increases include: A 10-cent increase in the state gas tax over the next seven years. It starts with a 4-cent increase effective January 1, 2018, followed by 2-cent increases every two years until A $13 increase in vehicle title and registration fees effective January 1, In both 2020 and 2022, there will be another round of increases ($5 and $2 respectively), with high-efficiency and electric cars starting to pay more in vehicle fees than other cars. A new statewide payroll tax of 0.1 percent paid by employees to fund transit districts around the state. A new tax of 0.5 percent on the sale of new cars, motorhomes, motorbikes, and snowmobiles. A new $15 surcharge on the sales of adult bikes over $200. Washington County Vehicle Registration Fee On September 20, 2016 the Washington County Board of Commissioners adopted an ordinance establishing a $30 vehicle registration fee (VRF) for passenger vehicles 3. The state Department of Motor Vehicles will collect the County VRF, in conjunction with state registration fees, starting July 1, The VRF will generate an estimated $13.5 million in total revenue in the first year. This revenue will be split 60/40 between the County ($8.1 million) and the cities within the County ($5.4 million). The cities' portion will be divided based on population. Table 3. Forecast of Beaverton's Share of New State and County (FYs ) Source FY FY ($) ($) Annual Average FY ($) State Transportation Package (House Bill 2017) 1,401,800 3,043,500 2,000,385 Washington County Vehicle Reg istration Fee 1,590,000 3,450,000 2,410,000 TOTAL 2,991,800 6,493,500 4,410,385 Sources: 1. Washington County, OR, WCCC Transportation Advisory Committee meeting packet, October 25, The Register-Guard, "Oregon House passes $3.8 billion transportation tax and spending bill", July 6, Washington County, OR, co. washinqton. or. us/lut /TransportationF und ing/2016-veh icle-registration-fee.cfm Staff Report # 1: Preliminary Analysis 009

11 Options for Expenditure of New (5-Year Outlook) See Table 2 for the specific type of improvements included in each category. A few options are shown in this section to elicit discussion. Staff could create additional variations based on City Council direction. 0 'Pion f 1 F OCUS on M rnn. t enance Table 4. Option 1: Focus on Maintenance (5-Year Outlook) Possible allocation of new state and county revenue Category Current Annual Shortfall ($) FY FY FY FY FY ($) ($) ($) ($) ($) Additional Needed Maintenance 3,500,000 2,700,000 3,100,000 3,300,000 3,500,000 3,700,000 Great Neighborhoods 2,505, , , , , ,000 x Traffic Improvement (Technology upgrades) Traffic Improvement (Road widening) 2,300, x 1, 100, x TOTAL 9,405,000 3,000,000 3,400,000 3,800,000 4,200,000 4,600,000 POSITIVES (+) 1. An additional $2.8M dedicated to the Maintenance category could ensure adequate and sustainable funding for both paving and sidewalk ramp upgrades into the foreseeable future. 2. Would achieve the recommendation from the 2017 Pavement Management Analysis Report to raise the average network pavement condition index (PCI) score to a 77 and maintain the backlog at 1 %. 3. The City could begin setting aside funding for arterial paving projects. Arterial paving projects could be completed without foregoing pavement maintenance for other lower classification roads. 4. A portion of the revenue could be used towards the Great Neighborhoods category, which currently does not have a dedicated funding source. The additional revenue for the five-year period could fully fund one sidewalk project and partially fund one project. For FY an allocation of $300,000 would complete the Menlo Drive sidewalk project. NEGATIVES(-) 1. In order to decrease funding gaps additional funding would be needed to fully fund the Great Neighborhoods and Traffic Improvement categories. 2. Traffic improvement is a typical concern raised by the community. Without additional funding there will continue to be a backlog of needed traffic improvement projects. Additionally, traffic improvement construction costs are on the rise and are outpacing inflation. Based on historical trends a project constructed in FY will cost approximately double in FY One new additional full time equivalent position in the Public Works Operations Division would likely be necessary at a total approximate annual cost of $100,000. Staff Report # 1: Preliminary Analysis 01 0

12 0 ip f ion 2 F OCUS on G rea t N e1q. hb or h oo d s Category Table 5. Option 2: Focus on Great Neighborhoods (5-Year Outlook) Current Annual Shortfall ($) Possible allocation of new state and county revenue FY FY FY FY FY ($) ($) ($) ($) ($) Additional Needed Maintenance 3,500, , , ,000 1,200,000 1,600,000 x Great Neighborhoods 2,505,000 2,450,000 2,550,000 2,550,000 2,550,000 2,550,000 Traffic Improvement (Technology upgrades) Traffic Improvement (Road widening) 2,300, , , , , ,000 x 1,100, x TOTAL 9,405,000 3,000,000 3,400,000 3,800,000 4,200,000 4,600,000 POSITIVES(+) 1. Completion of an Active Transportation Plan was a 2017 City Council priority. For several years sidewalk infill improvements have been identified as a top priority for the City Council and Capital Improvement Program (CIP). 2. Would allow for several sidewalk projects to be delivered simultaneously. Provides a dedicated and reliable funding source for sidewalk infill, traffic calming, pedestrian crossings, and street light infill. 3. A portion could be used for paving. Maintenance may be a good candidate for a new local gas tax or other fee. Research shows that gas taxes are supported when funding is used for maintenance. (Source: MT/ Report WP 12-77, What Do Americans Think About Federal Tax Options to Support Public Transit, Highways, and Local Streets and Roads? Results from Year Eight of a National Survey. NEGATIVES(-) 1. The paving budget would continue to fail to meet the minimum expenditure requirements to keep a PCI of 77 and backlogs at 1 %. Arterial paving projects would result in maintenance backlogs for collectors, neighborhood routes, and local roads. 2. Sidewalk ramp upgrades would continue to lack a dedicated funding source. 3. Traffic improvement is a typical concern raised by the community. Without additional funding there will continue to be a backlog of needed traffic improvement projects identified in the City's Transportation System Plan. Additionally, traffic improvement construction costs are on the rise and are outpacing inflation. Based on historical trends a project constructed in FY would cost approximately double in FY In order to reduce funding gaps additional funding would still be needed to fully fund the Maintenance and Traffic Improvement categories. ~, 5. Two new additional full time equivalent positions will likely be necessary at a total approximate annual cost of ~ >- - $200,000. Staff Report # 1 : Preliminary Analysis 0 11

13 01p f ton 3 F OCUS on T, ra ff tc I mprovemen t s Category Table 6. Option 3: Focus on Traffic Improvements (5-Year Outlook) Current Annual Shortfall ($) Possible allocation of new state and county revenue FY FY FY FY FY ($) ($) ($) ($) ($) Additional Needed Maintenance 3,500, x Great Neighborhoods 2,505, x Traffic Improvement (Technology upgrades) Traffic Improvement (Road widening) 2,300,000 2,300,000 2,300,000 2,300,000 2,300,000 2,300,000 1, 100, ,000 1, 100,000 1,500,000 1,900,000 2,300,000 TOTAL 9,405,000 3,000,000 3,400,000 3,800,000 4,200,000 4,600,000 POSITIVES ( + 1. Traffic congestion is consistently identified by the community as an issue of concern. Improving Mobility is one of five goals of the Community Vision Action Plan. (Source: 2. Traffic improvement projects improve economic development, access to jobs and services, and safety. 3. The City's TSP currently includes numerous and costly unfunded traffic improvement projects. Option 3 would help to fulfill the City's TSP goal to complete high-priority improvements by 2035, and make progress towards completion of the $335M in other needed transportation improvements on Beaverton owned roads. 4. The City could start to make progress towards bicycle facility improvements. Currently the City is unable to afford bike improvements because they are relatively high cost due to needed right-of-way acquisition and are typically associated with a road widening project. 5. The City could pursue more federal and state grants, which have relatively high match requirements. 6. The Great Neighborhood category may be a good candidate for a new street fee. As an example, the City of Milwaukie, OR recently passed a community supported street fee with a focus on neighborhood safety improvements. (Source: Safe Access for Everyone Maintenance may be a good candidate for a new gas tax or other fee. Future local public opinion research will provide insight regarding local community support. NEGATIVES(-) 1. The paving budget would continue to fail to meet the minimum expenditure requ irements to keep a PCI of 77 and backlogs at 1 %. Arterial paving projects may result in maintenance backlogs for collectors, neighborhood routes, and local roads. 2. Sidewalk ramp upgrades and street light conversions would continue to lack a dedicated funding source. 3. Two new additional full time equivalent positions will likely be necessary at a total approximate annual cost of $200,000. Staff Report # l : Preliminary Analysis 0 12

14 4. OPTIONS TO INCREASE TRANSPORTION REVENUE The following section demonstrates how a new local revenue tools, and or increases to existing revenue sources, could help to close the funding gaps identified in Section 3. Possible New Local Fuel Tax One option to increase the City's transportation revenue would be for gas stations to pay a tax on fuel sales. ODOT estimates that in the year 2016, approximately 57,327,250 gallons of gasoline and 2,174,148 gallons of diesel fuel were sold within the City of Beaverton. As an example, with a $0.01 per gallon fuel tax the City of Beaverton could generate $573,272 of annual revenue from gasoline sales and up to $21, 7 41 of annual revenue from diesel fuel sales.* ODOT administration fees currently run about 0.3 percent. Based on the rates used by other cities in Oregon ($ $0.10 per gallon), the annual revenue from fuel tax could range between $595,013 and $5,950, 130 (See Table 7). POSITIVES(+) 1. Collects fees from a broad user base, not just residents.* 2. Decreases driving and pollution. 3. Fuel prices are currently low. NEGATIVES(-) 1. Increases fuel prices. 2. generated from this fee is not as high as other fees. 3. Impacts both fuel station businesses and the general public. 4. depends on volume of fuel sales and is less predictable than a street fee. 5. Requires voter approval (HB2001). Table 7. Estimate of Possible Annual Local Fuel Tax Rate (cents per gallon) $0.01 $0.02 $0.03 $0.04 $0.05 $0.06 Gasoline Tax Diesel Tax Annual ($) ($) Total($) 573,272 21, ,013 1, 146,544 43,482 1,190,026 1,719,816 65,223 1,785,039 2,293,088 86,964 2,380,052 2,866, ,705 2,975,065 3,439, ,446 3,570,078 Notes: * Estimates based on Oregon Fuels Tax System, ODOT Staff, February 17, Diesel fuel is not taxed until it is place into the fuel tank of a motor vehicle so this estimate represents the maximum gallons of diesel fuel sold within the City of Beaverton in ** In 2015, approximately 58,000 people commuted to Beaverton, and approximately 35,000 commuted out of Beaverton. About 8,500 people were both employed.and lived within city limits. Source: US Census. $0.07 $0.08 $0.09 $0.10 4,012, , 187 4,165,091 4,586, ,928 4,760,104 5, 159, ,669 5,355,117 5,732, ,410 5,950,130 Staff Report # l : Preliminary Analysis 0 1 3

15 Possible New Local Street Fee Another option would be for the City to charge a monthly fee to residences and or businesses through utility billing. Residential rates are typically a flat rate per unit. Commercials fees are typically based on square footage, number of trips, parking spaces, or a flat monthly fee. Using the range of rates from cities within the Portland Metro region, Table 8 shows the possible annual revenue for the City of Beaverton from both residential and commercial street utility fees. Table 8. Possible Annual Local Street Fee Total Monthly Monthly Total Annual Total Annual Street Fee Rate Rate Unit Unit Category Type (Low) (High) (High) Estimatet (Low) ($) ($) Residential: 23, 150 Total number of single family units ,738 3,611,400 Single Family ($) ($) Residential: Multi-Family 20,330 Total number of multi-family units , 112 2,900,685 Commercial*** 100,000 Total PM peak hour trips 0.69* ** 828,000 ** Notes: t : Source American Community Survey Estimates, US Census. Includes planned units for South Cooper Mountain. *This is the rate per PM peak hour trip. Example: A typical fast food restaurant (5,000 square feet) generates about 160 trips in the PM peak hour. At a rate of $0.69 per PM peak trip, depending on the methodology, the monthly street fee charge could be approximately $ for a typical fast food restaurant. The low rate shown in Table 8 ($0.69) is from the City of West Linn. **Most communities with commercial street fees have adopted policies that cap the total monthly charges for businesses, regardless of rate (e.g., $250/mo, $920/mo). Examples of other commercial methodologies applied to Beaverton are shown in Table 11. As a local example, in FY the City of Hillsboro generated approximately $1,824,000 from a commercial street fee (Source: City of Hillsboro FY Budget). *** Source: City business license database POSITIVES(+) 1. Flexibility in administrative complexity. 2. Predictable and stable revenue. 3. Can specify revenue purpose for support (e.g., maintenance, sidewalk infill, street lighting replacement or infill, etc.). 4. Generally preferred public option. NEGATIVES(-) 1. Fee collected from only City residents and businesses. City visitors do not contribute. 2. Weak relationship to individual use consumption. 3. Tradeoffs to select the commercial fee type: a. Flat fee - simple, but may not be equitable. b. Trip rates - adds administrative complexity. Note: tiered trip rate options balance tradeoff. Staff Report # 1: Preliminary Analysis 014

16 Metro Cities with Fuel Taxes and Street Fees Eight jurisdictions in the Portland metro area have adopted local fuel taxes with rates ranging from $0.01/gallon to $0.1 O/gallon. All programs are administered by ODOT with the exception of the City of Cornelius. Eight cities in the Portland metro area have adopted local street fees that are collected through monthly utility bills. All residential street fee rates are based on a per unit basis. Commercial street fee rates are based on building floor area, vehicle trips, or number of on-site parking stalls. As a local example of funding potential, the City of Hillsboro's total street fee revenue was $3, 780, 100 for FY (the City of Hillsboro allocates 60% of the revenue to paving and 40% to pedestrian improvements). Table 9. Metro Jurisdictions with Fuel Taxes, FY 2017 Jurisdiction Tax Rate Per Gallon ($) Washington County 0.01 City of Milwaukie 0.02 City of Troutdale 0.02 City of Canby 0.02 City of Tigard 0.02 City of Cornelius 0.02 Multnomah County 0.03 City of Portland 0.10 Table 10. Metro Cities with Residential Street Fees, FY 2017 City Monthly Monthly Residential Residential Rate Per Single Rate Per Multi- Family Unit ($)* Family Unit ($)* Sherwood Tigard** Hillsboro Wilsonville Milwaukie Lake Oswego West Linn Oregon City *Does not includes street light fees. **The River Terrace master plan area has an additional $5.00 surcharge per unit or equivalent dwelling unit. Staff Report # 1: Preliminary Analysis 0 1 ' 5.

17 Table 11 shows estimates of possible annual revenue for typical land uses in Beaverton based on the City of Sherwood's and City of Hillsboro's commercial street utility fee rates and methods. Table 11. Example of Commercial Street Fee Methods Applied to Typical Uses in Beaverton City of Sherwood Method City of Hillsboro Method Land Use Building Area (square feet) Estimate of Monthly Charges ($) Industrial 179, Church 20, Medical/Dental Office 25, Grocery Store 41, Fast Food with Drive Though 2, The commercial rate methodology for each community varies based on several factors and is generally not directly comparable as a single universal rate. The methodology for each community generally considers factors such as: 1. Units for calculation (generally trips or floor area) 2. Derived rates based on group or type of use 3. Minimum rate, flat rate by group, exemptions, or maximum fees Due to these variations and complexities, resulting fees for specific uses can be compared but a universal rate for broad comparison generally cannot be estimated. Staff Report # l: Preliminary Analysis Oi 6

18 Privilege Tax Portion of Franchise Fee The City of Beaverton's net right-of-way fee revenue for FY was about $8,000,000, or about 14% of the total general fund budget. Up to approximately $1,400,000 of the total revenue could be available for transportation capital and or maintenance (See Table 12). Table 12. Privilege Tax Portion of Franchise Fee Reserve FY Budget Estimate Annual Reserve Set Aside($) Carryover from FY ,899,035 PGE portion 1,161,000 NW Natural portion 475,000 Subtotal Annual Set Aside $ 3,535,035 Proposed Use of Reserved Franchise Fees Transfer of Debt Service Fund for Public Safety Bond 230,000 Transfer to Library Fund for Contingency Reserves 700,000 Subtotal Uses $ 930,000 Suggested Reserve Level 1,225,000 Amount Available for Use $ 1,380,035 *Source: City of Beaverton Finance Department l:\finance\budget\general Budget Files\Franchise Fee Privilege Tax Set Aside and Uses Property Taxes Every $0.01 increase in property tax within the City of Beaverton generates approximately $93,000 in revenue. Currently the City of Beaverton's millage rate can increase up to an additional $0.45 per/$1,000 of assessed property value. Table 13 shows possible transportation revenue from an increase in the millage rate. Table 13. Estimate of Possible Annual Transportation from a Millage Rate Increase* Possible Millage Rate Increase ($) Estimate of Possible Annual ($) , , , , ,000 *Source: City of Beaverton Finance Department Staff Report # 1: Preliminary Analysis Oi 7

19 Municipal Bond Generally municipal bonds are used to finance public projects such as roads, schools, public safety infrastructure, waste management, infrastructure repair, etc. The benefit of a municipal bond is that the community has assurance that the funds will be used for a specific purpose, the City can complete a greater number of projects in less time, and the City can create a predictable longterm infrastructure funding plan. A municipal bond would need a dedicated funding source for repayment, such as Transportation Development Tax revenue and or other local revenue options described in this report. As a local example, the Milwaukie City Council recently authorized $21,000,000 in bonds to fund neighborhood safety improvements, capital improvement projects, and pavement maintenance projects between 2019 and The bonds will fund the first of three, three-year phases that will create 28 miles of sidewalk, four miles of bike lanes, and about 900 ADA ramps over the next ten years (Source: City of Milwaukie, City Newsletter-April 2018). 5. PRELIMINARY RECOMMENDATION 1. Direction for the FY (see Table 1 for tentative process schedule) City Council to consider the information in this report and work session presentation, and respond to staff's recommendation to: a. Create a new Sidewalk Infill Construction Fund (2018 City Council Priority- Top Ten). b. For the FY Capital Budget allocate a majority of Beaverton's share of new state and county revenue to maintenance (pavement overlays and ADA ramp upgrades), and to complete the Menlo Drive Sidewalk Improvement project. c. Begin work on a 5-year funding plan framework and return to City Council with a draft report (staff report #2). Draft report to recommend: i. Transportation categories to fund (not specific projects). ii. iii. Funding levels for each category. Funding sources for each category. Possible increases in existing fees, adoption of new fees, shifting of existing revenue, and or bonding. Staff to conduct public opinion research and stakeholder engagement to help make an informed recommendation to the City Council. The tentative public engagement plan includes a statistically valid telephone survey, stakeholder focus groups, inter-departmental staff discussions, and consultation with the TCIP Advisory Committee. d. Begin work on a long-term (5-year) transportation capital improvement plan and return to City Council with a draft report in FY (staff report #3). The TCIP will include a robust public engagement process, including advisement from the TCIP Advisory Committee. Staff Report # l: Preliminary Analysis 018