Council returns to rocky subject of road funding.

Byline: CITY BEAT/EUGENE By Edward Russo The Register-Guard

CORRECTION (ran 9/28/04): State and federal taxes add 45.4 cents to the price of a gallon of gas. A City Beat column in Sunday's paper listed an incorrect amount.

The politically tricky topic of paying for street repairs and maintenance is back on the agenda of the Eugene City Council.

During a Monday work session, councilors will hear from City Manager Dennis Taylor, who is recommending that the city increase its local gas tax by 2 cents a gallon and impose a special assessment for street repairs against home and business owners. Taylor's plan would raise $4.5 million to help deal with a growing backlog of street repair work, according to a staff report to councilors.

Given their history, the proposals are sure to ignite debate.

The City Council in 2002 approved an assessment against homes and businesses, which would have been based on the estimated number of vehicle trips each generates. The charge, called a "transportation system maintenance fee," would have cost households an estimated $2.90 a month and businesses between $20 and $1,150 a month.

But councilors repealed the assessment before it could begin, swayed by the threat of possible referenda and the action of the Springfield City Council, which balked at implementing its own version of the fees. Eugene didn't want to impose the fees if its neighbor didn't follow suit.

The fee was put on hold, but Eugene's councilors last year went ahead and approved a 3-cent-a-gallon gas tax. (The tax is in addition to state and federal taxes, which add more than 50 cents to the price of each gallon of gas.)

The city's tax, which began in August 2003, was assessed to gasoline distributors. The distributors passed it on to service station owners and, ultimately, to motorists.

So far, the tax is generating about $2 million annually. With other road funding, including systems development charges assessed to developers, the city since last year has been able to complete $3.5 million in street preservation projects.

What have Eugene residents thus far received for their money?

The new surfaces on parts of Cal Young, Gilham, Bertelsen and Echo Hollow roads and Willamette Street all were financed by the local gas tax.

But more money is needed, about $4.5 million annually. Otherwise, the backlog of street work, estimated at $94 million, "will continue to grow to nearly $180 million within the next decade," according to the city staff report to councilors.

Public works officials say it's much more cost effective to preserve streets by putting on new surfaces or sealing cracks than it is to wait until potholes appear. By the time potholes appear, officials say, the road bed under the street is damaged, which requires expensive reconstruction.

Still, increasing the gas tax and imposing an assessment against homes and businesses could be a tough sell.

Councilors have several options, such as backing an ordinance to increase the local gas tax 7 cents a gallon, bringing it to a dime a gallon. That could generate the $4.5 million. They also could revisit the controversial property-owner fee.

Taylor's preferred proposal is a combination of the two: increasing the fuel tax by 2 cents, "along with a more modest transportation system maintenance fee" to generate the $4.5 million, according to the staff report. The staff report did not specify how much the "more modest" fees would cost homeowners or business people.

And there is always the option to take no action at this time, the staff report noted.

But if Taylor gets his way, Monday's work session is the start of a renewed discussion. He is recommending that other work sessions and public hearings on the topic be held before the end of the year.

Edward Russo can be reached at 338-2359 or [e-mail].