City of Cottage Grove

PreservingPreservingCottage Cottage Grove’sGrove’sStreetsStreets

The IssueThe Issue• The Problem:

Greater need for street preservation & maintenance than current revenues can support

• The Need/Goal:New, locally-controlled sources of revenue

• Proposed Revenue Sources:Local fuel tax

(Other Possible Sources)

We all benefit from our transportation system

Everyone Uses Everyone Uses It….It….

• Directly– As drivers, bicyclists, transit users, pedestrians

• Indirectly– To receive goods and services

Why Streets Why Streets MatterMatter• Streets are the circulatory system of the city

− critical to the health of the community

• When streets are not properly maintained we all pay− shipping− services− our cars− lost time − future street maintenance

• Increased driver costs: You pay more for tires, steering alignments… and more accidents!

Direct Cost to You:Consequences of deferred maintenance

• Estimated up to $320 a year per driver in increased costs*.

Why Streets Why Streets MatterMatter

*Data from T.R.I.P.’s 2002 report“Rough Ride in the City”.

Why Streets Why Streets DeteriorateDeteriorate

Age• Designed to last at least 20 years with proper maintenance

• UV rays, oxidation, temperature fluctuations & weather conditions

Use• Weight/movement of traffic• Studded tires

Early DeteriorationEarly Deterioration

• Raveling – roughening of surface

• Small cracks • Sealing individual cracks

• At 5 years – slurry seal entire surface

Moderate Moderate DeteriorationDeterioration

• Cracks extending deeper & further along surface – which means water starts to penetrate

• Rutting – (surface depression associated with tire placement) caused by shifting weight of vehicles

• Overlay reseals surface & adds structural strength

• Done every 10-15 years

• Overlay cost: $330,000/mile

Extensive Extensive DeteriorationDeterioration

• Base failure• Alligator Cracking• Potholes

• Reconstruction: the only option

• 5 times more expensive

• More disruptive

Temporary RepairsTemporary Repairs

• Thin lift overlays

• Pothole patching

Now, because of local budget constraints, many communities have been utilizing temporary repairs – putting off the kind of maintenance that should be done until the funds are available. Done for safety reasons these repairs last a couple of years or less. But these “Band-Aids” were never intended to be permanent solutions.

Taking Care of Streets = Like Taking Care of Your Car

Financial Financial PerspectivePerspective

Well maintained = safe & reliable

Street Street Maintenance /Maintenance /

Skip maintenance = big problems later

Pay Some Now ~ or Pay Lots More Later!

STREET CONDITION MILEAGE COST Sub-Standard 3.65 miles $ 390,632

Very Poor 1.47 miles $ 1,376,438

Poor 5.56 miles $ 775,845

Fair 15.61 miles $ 352,774

Total 26.29 miles 64% Fair/Very Poor

Street InventoryStreet Inventory

Q Street

West Main Street

East Main Street

Adams Street

R Street

Polk Street

Current cost to address deterioration:

$2.5 Million

...and rising every year

The Revenue The Revenue ProblemProblem

Current Street fund revenues are not enough to cover Cottage Grove’s street preservation &

maintenance needs

Street Fund Street Fund Revenue & Revenue &

ExpendituresExpenditures

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

1999 2000 2001 2002

Revenue ($ In)

Spending ($ Out)

Street Fund ActivitiesStreet Fund Activities2002-2003 Budget

Total Street Fund $1,179,123

ExpendituresStreet Maintenance $386,755Street Sweeping $56,107Street Improvements/Cap. $497,722

Non-Departmental $60,158Transfer Bike Path Fund $85,231Transfer to Debt Service $28,389Contingency/Ending Balance $64,761

Current Sources of Revenue

• State gas tax

• County revenue sharing

• Federal Urban Aid

*Property taxes are NOT used for ongoing maintenance of Cottage Grove’s streets

Financial Financial PerspectivePerspective

Street Fund Revenue Street Fund Revenue Sharing Sharing

to Cottage Groveto Cottage Grove

$0$50,000

$100,000$150,000$200,000$250,000$300,000$350,000$400,000

91-9

2

92-9

3

93-9

4

94-9

5

95-9

6

96-9

7

97-9

8

98-9

9

99-0

0

00-0

1

'01-

02

County Road Funds State Gas Tax Federal Gas Tax

• Main source of revenue

• Hasn’t increased since 1993

• Currently 24¢ per gallon

State Gas TaxState Gas Tax

*Cottage Grove receives less than 1 penny for every dollar of state gas tax

If people drive more, why hasn’t gas tax revenue increased?

State Gas TaxState Gas Tax

=gas consumption has remained flat over the years

more miles traveled + more fuel efficient cars

• Has declined in recent years.• Dependent on County Financial Health (creates uncertainty).• Some of County funding is subject to Congressional action (creates more uncertainty).

County Revenue County Revenue SharingSharing

Inadequate revenue + growing need = backlog of deteriorating streets

Financial Financial PerspectivePerspective

The Need/GoalThe Need/Goal

New, locally-controlled sources of revenue

Alternative Revenue Options:

Possible Revenue Possible Revenue SourcesSources

• Local motor fuel tax•Other possible local or County-wide

revenues

• Each penny of local gas tax generates about $42,000 a year.• Related to how much people drive on streets.

Local Fuel TaxLocal Fuel Tax

• Visitors/non-residents help pay for roads they use.• Like State Fuel Tax will be affected by fuel usage.

Local Fuel TaxLocal Fuel Tax

• Would pay $5.70/year in a local area fuel tax if one penny of local gas tax were added

An average area driver, whose car gets 21 miles to the gallon and drives an average of 12,000 miles a year uses 570 gallons of gas a year:

• All of this money would go to Cottage Grove

Other Cities With a Other Cities With a Local Fuel TaxLocal Fuel Tax

CITY Passage Date Rate 2002-03 Revenue

Eugene Jan. 2003 $.03/gallon $2,000,000

Pendleton 1999 $.02/gallon $64,000

Sandy Jan. 2003 $.01/gallon $100,000

Springfield 2003 $.03/gallon $750,000

Stanfield 1999 $.01/gallon $127,800

The Dalles 1986 $.03/gallon $300,693

Tillamook 1982 $.015/gallon $127,000

Woodburn 1989 $.01/gallon $107,000

Transportation Utility Fee

• More stable, long-term revenue solution.

• Not affected by fuel economy or new energy

sources.

• All users of the transportation system will pay

regardless of mode of transportation.

• Assessment is based on volume of use of the

transportation system.

Other Possible Other Possible RevenuesRevenues

Who Uses Transportation Utility Fees?

• La Grande – 1985• Ashland – 1986• Tualatin – 1990• Eagle Point – 1990• Medford – 1991• Phoenix – 1994• Wilsonville - 1997

• Talent – 2000• Hubbard – 2001• Sandy – 2002• Grants Pass – 2002

Other Possible Other Possible RevenuesRevenues

• Can only be imposed by a County and must be approved in a countywide vote.

• State Statute requires that at least 40% of the proceeds be shared with the incorporated cities.

• ORS limits the fee to no more than $15/year. • Would reflect the number of vehicles on the

road.• Revenue can only be used for street and road

purposes.

Countywide Vehicle Registration Fee

• Increased cost for bad streets = $320 a year

Individual CostIndividual Cost

• Cost of gas tax = $16.80/ year

oror

ConclusionConclusion

We need to create our own solutions to preserve area streets and control the

fate of our transportation system.

• Fuel Tax was implemented August 1, 2003

• August collections in Cottage Grove were $20,875*

• September collections in Cottage Grove were $23,747*

• Total implementation costs have been less than $4,000

• Estimates indicate possible annual collections of $237,000

*Before refunds and implementation costs

Where are we now?Where are we now?

Which will go directly to road improvement projects