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HomeMy WebLinkAboutAgenda Report - January 20, 2016 Comments by Council Membersfurther explained that, for those with a metered water rate, the wastewater charge becomes a flat charge, but is computed for each customer based on winter water usage. The bill presented by Ms. Rabusin contains a flat water rate, which indicates that wastewater is not yet metered. Typically, water customers move from a flat to metered rate in January, and metered wastewater follows 6 to 18 months later on a July bill. Mr. Schwabauer added that this bill could have an inaccurate volumetric reading. E. Comments by the City Council Members on Non -Agenda Items Council Member Nakanishi commended the Lodi Community Foundation for its fund-raising efforts and explained that the Foundation is non-profit, i.e. funds are not received or controlled by the City, and contributes greatly toward the Hutchins Street Square. The Foundation has 34 funds, one of which is the Hutchins Street Square Foundation Endowment that received a $1.35 million donation. Council Member Johnson commented on a statement made by the City Manager at a previous meeting that it was a poor business practice to have employees cross trained on both sides of utility bill transactions because it creates a weakness in security. He recently visited the Finance Department, twice in the morning and twice in the afternoon, and witnessed significant customer lines. He requested that staff research ways to improve service by opening more transaction windows through reconfiguring staff or cross training employees in a manner that does not jeopardize the City. Mayor Chandler agreed with Council Member Johnson's suggestion. Mayor Pro Tempore Kuehne stated that customers recently informed him they had 45 -minute to one-hour wait times in line and he believed that was egregious on the City's part. He concurred with Council Member Johnson's suggestion and recommended moving staff from other duties to speed up the process for customers. Mayor Pro Tempore Kuehne reported that he was nominated Vice Chair of the Local Agency Formation Commission and that he is attending the League of California Cities New Mayors and Council Members Academy in Sacramento this week, at which the League discussed Proposition 63 that provides funding for the homeless and transitions for inmates back into the community. The bill has not yet passed, but the League is monitoring it closely. Also discussed at the Academy was the road fix for California and the Governor's decision to create a committee to review ways to fund roadways and infrastructure, such as increasing gas tax, vehicle license fee, fees for hybrid and electric vehicles, and potentially implementing a road charge. He stated California will likely see more information regarding the road charge in June or July. Mayor Pro Tempore Kuehne provided the City Manager with a copy of the publication entitled, "California Road Charge: Help Fix California's Roadways, One Mile at a Time" (filed). In response to the electric utility issue, City Manager Schwabauer reiterated that it is poor fiscal practice to have employees who set up utility bills to also receive payment because it could increase the chance of fraud. He stated that there may be other options, such as utilization of other Finance employees, and staff will review all possibilities. Mr. Schwabauer added that staff will bring forth a mid -year budget option to potentially add staff. Council Member Nakanishi expressed support for Council Member Johnson's suggestion, stating that the goal for wait time in the Finance Department should be 20 minutes at most. He stated he looked forward to receiving staffs suggestions. Mayor Chandler reported that he participated in the Breakthrough Project on Monday for Martin Luther King, Jr. Day, adding that Council Member Johnson also participated and Mayor Pro Tempore Kuehne took part in the panel discussion. He stated that he is attending the Northern California Power Agency Conference in Sacramento this week, at which he met with other community representatives who are making progress on their homelessness situation and he will bring those ideas to Lodi. 5 Cal'iforni'a Road Charge HELP FIX CA LI FO RN10.ROADINAYS? ONEM I LE ATA TIME. 7 •` � - • .xt Vis.. - •- tel+• : � � OUR ROADWAYS ARE DETERIORATING As Californians, our transportation system is facing a serious problem. Historically, annual investment in roadway maintenance and preservation hasn't kept pace with needs. Making the problem worse, the money collected to pay for roadway maintenance and repair has declined each year since 2007. Having less money to repair our roadways means that our transportation system will continue to get worse each year without funds to maintain them. WHY IS THIS HAPPENING? Aging Roadways - The majority of our major roadways are more than 40 years old and have reached or exceeded their design life. The older our aging roadway system gets, the more repairs it needs. Shrinking Funding - The base excise gas tax (currently a fixed 18 cents per gallon of gas sold) is the primary source of funding used to pay for road repairs. The base excise gas tax has not been raised in more than 20 years. Inflation has decreased the buying power of the gas tax by approximately 50 percent. In other words, 18 cents in 1994 is worth about 9 cents today. Increased Costs - Despite major efforts to reduce costs and increase efficiencies, the cost of maintaining and replacing our roadways continues to rise significantly. More Fuel -Efficient Vehicles - High fuel -efficiency cars, like hybrids and electric vehicles, are currently paying little or no base excise gas tax. They are contributing only a fraction to the overall cost of road repairs. Today, nine out of the top 15 hybrid markets in the U.S. are located in California. As a result, less gas is sold, which means less money is available to pay for road repairs and maintenance. VMT Growth HOW SERIOUS IS THE PROBLEM? A 2012 RAND Corporation publication states, "Transportation funding shortfalls will grow even more acute in the coming years as improved vehicle fuel economy and the adoption of alternative -fuel vehicles will reduce federal and state fuel tax revenues by billions of dollars per year." Because these trends will continue, now is the best time to begin studying alternative funding mechanisms before it is too late. According to the 2015 Ten -Year State Highway Operation and Protection Program Plan, Caltrans will need approx- imately $80 billion over the next ten years to address current and future needs of the state highway system—a projected funding shortfall of nearly $57 billion in available revenue. WHAT IS THE GOAL OF AN IDEAL FUNDING SOURCE An ideal funding source for roadway maintenance would be equitable (fair to everyone), sustainable (reliable and stable over time), and support future innovation. California's reliance on the gas tax is clearly unsustainable. WHAT ARE SOME FUNDING OPTIONS? Increase the Gas Tax: Increasing the state gas tax is simple, and the option is certainly available. Could it be done? Yes, it could be done in the short term, but attempts to raise the gas tax have been unsuccessful for more than 20 years. Could it raise enough money? Yes, a significant increase could generate the needed short-term funding, but as more fuel-efficient and electric vehicles use the roads, this option would not raise the necessary funding without frequent increases. Due to the widening differences in contributions by vehicles of varying fuel economies, this option would also place more burden of funding our road maintenance and repair on those driving less fuel-efficient cars. ©Increase the Vehicle License Fee (VLF) or the Vehicle Registration Fee (VRF): By law, the VLF and VRF are dedicated to specific activities. The VLF pays for local government services. The VRF pays for motorist services such as the CHP and the DMV. Currently, no VLF or VRF funds are available for maintenance or preservation of our roadways. Could it be done? Yes, but it would likely be very publicly and politically unpopular. California voters have repeatedly turned this option down at the polls. Also, a VLF or VRF increase doesn't account for actual road usage. A motorist who drives 2,000 miles per year pays the same amount as someone who drives 20,000 miles per year. Could it raise enough money? Yes, but the increase would need to be set quite high (perhaps double its current fee level), and new legislation would need to be created to redirect a portion of the funding to road repairs and maintenance. ©Tolling: Tolls are user fees charged to drivers who choose to drive in special express lanes or on dedicated toll roads. Could it be done? Not on a broad scale. Federal law restricts tolling on existing roads and would certainly be unpopular. Land for new toll facilities is scarce. California has several dedicated toll roads and tolled express lanes in metropolitan areas. Senate Bill (SB) 194 signed into law in October 2015 expands the potential for toll facilities in California, however tolling is predominately viewed as a method for increasing efficiency of the system and not as a revenue generating option. The revenues generated by these facilities support maintenance, operations and in some cases, debt payments of those facilities. Could it raise enough money? No. Tolls can help build, finance and maintain new and existing toll roads, but they won't generate enough money to pay for the rest of the transportation system. Road Charge (RC): A Road Charge is a "user pays" funding concept where drivers pay for maintenance and upkeep of the State roadway network based on how much they drive. This is much like water, electricity and other utilities. The more you use, the more you pay. In the case of RC, drivers pay for their roadway usage based on distance they drive on public roads. This method appears to be equitable as it charges based on road usage, regardless of the type and fuel efficiency of the vehicle driven. Could it be done? Yes. After 12 years of study and two pilot programs, the state of Oregon passed legislation in 2013 to begin transitioning from the gas tax to a RC model. Although a California RC model would likely have some differences from what Oregon has done, it is feasible. Could it raise enough money? Yes, provided the rates are set adequately and that there is an automatic indexing mechanism to adjust the rates as needed to keep pace with inflation and increasing road repairs and maintenance costs. WHAT'S HAPPENING AT THE FEDERAL LEVEL? In December, Congress passed and the President signed into law the Fixing America's Surface Transportation (FAST) Act. It is the first long-term authorization since 2005's SAFETEA-LU, which expired in 2009. In the FAST Act, Congress recognized the need to explore a user fee model (road charge) as an option to maintain the long-term solvency of the Federal Highway Trust Fund. The enactment of the FAST Act created a five-year, $95 million grant program which is eligible to a state or group of states to test the design, acceptance, and implementation of a future road charge alternative revenue mechanism. WHAT ARE OTHER STATES DOING? California is not alone. At least 22 other states are struggling with shortfalls in their transportation funding, which is due primarily to an over -reliance on the gas tax Other states that have studied an RC model, such as Oregon, Washington and Nevada are finding that RC has the potential to deliver reliable, long-term funding that is also fair. IS CALIFORNIA GOING TO IMPLEMENT RC? At this point, no decisions have been made, other than to conduct a Demonstration Program to study the feasibility of RC as a potential source of equitable and sustainable funding for maintaining and preserving our roadway system. On September 29, 2014, Governor Brown signed SB 1077 into law. Under the requirements of SB 1077, the California Transportation Commission (CTC) formed a RC Technical Advisory Committee (TAC). The TAC reviewed alternatives and developed recommendations on the design and evaluation criteria for a RC Demon- stration Program, presenting them to the Secretary of the State Transportation Agency (CaISTA) in December 2015. Based on the recommendations of the TAC, by July 1, 2016, CaISTA will implement a Demonstration Program to identify and evaluate issues related to the potential implementation of a RC program in California. CaISTA will report on the results of the Demonstration Program to the CTC and Legislature prior to June 30, 2017. Average Annual Cost of Select Items 0 7Taxes Cel#"Piione'$'#iD hligh-speed Internet $1 080Coffee $853 G $31❑ The amount the average California driver pays to support maintenance and repair of our roadways is significantly less than what they spend for other necessities. Sign Up To Accept Your Volunteer formal KEY QUESTIONS ABOUT RC How does the California RC pilot work? The California RC pilot is a field trial of road charging concepts. Volunteers throughout California will test various road charging methods to identify and evaluate issues related to the potential implementation of a RC program and to assess the potential for mileage -based revenue collection for California's roads and highways as an alternative to the gas tax system. At a minimum, the pilot will: Analyze alternative means of collecting road usage data, including manual alternatives that do not rely on electronic vehicle location data. 2. Collect a minimum amount of personal information including location tracking information, necessary to implement the road charge program. 3. Ensure that processes for collecting, managing, storing, transmitting, and destroying data are in place to protect the integrity of the data and safeguard the privacy of drivers. Will the pilot cost volunteers money? No, there will be no out of pocket costs required for pilot participants. In fact, the pilot will not actually collect fees from participants, but will give participants the choice of submitting a simulated payment via mail or a secure website for testing purposes. Does RC require a location -based device in every car? No, a location -based device is not required for RC. California is studying a number of ways to measure distance travelled without location -based technology, ranging from flat annual fees to manual odometer reading to automated reporting of distance only (without vehicle location information). Choose How You Report Your Miles Choose Your Reporting Technology Select Your Account Manager What about privacy? Ur!ue! I Tell Us What YouThink SB 1077 specifically requires that privacy implications are taken into account, especially with regard to location data. Privacy issues were addressed through the TAC process and privacy protections will be incorporated in the pilot. How will the RC be tested during the pilot? The pilot will give participants several options for reporting mileage, including several which do not require technology in the vehicle and one which does not require any mileage reporting. These options include: • Time permit: Similar to a vehicle registration fee, the participant purchases unlimited road use for a specific period of time. • Mileage permit: The participant pre -pays to drive a certain number of miles. • Odometer charge: The participant pays a fee per mile based on periodic odometer readings. • Automated mileage reporting: In -vehicle equipment reports mileage traveled to a third party account manager which invoices the participant. The equip- ment also provides an option of allowing for reporting of general location data so the participant is credited for travel out-of-state or on private roads. Technology options recommended by the TAC for this option include in -vehicle telematics, smartphone apps, and plug-in devices for the vehicle's OBD -II data port How can I volunteer for the pilot program? Signing up for pilot is easy. Our website will step you through the volunteer sign-up process at www.CalifomiaRoadChargePilot.com. AW -qN 0107A Aegm rafbww .N The pilot should offer drivers a choice in account managers. v Out-of-state vehicles should be included in the pilot and simulate payment for driving on D California roads. o The pilot should test an open system design. 4-1 N The pilot should test the interoperability of California's system with that of other states. a, The pilot should include individuals, households, businesses, and at least one government O agency. 06 76 U The pilot should include a cross-section of at least 5,000 vehicles that are reflective of the .E fleet currently using California's road network. t The pilot should offer methods to exempt miles driven on private road or out of state. U The pilot should feature specific governance, accountability, and legal protection approaches for protecting privacy. o_ The pilot should test ten data security features: Authentication, Authorization, Encryption, i Q-1 U Data Modification Notification, Data Masking, Data Storage, Data Transmittal, Data N Destruction, General IT Network Security, and Third Party Data Security System Verification. +, c v The pilot should check for anomalies in mileage reporting; such as ensuring mileage permits E and odometer readings are current, and reviewing electronic logs of the automated distance o measurement operational concepts. C: LU Income equity implications of a road charge - Once the road charge pilot project yields data � about the types of vehicles owned, mileage driven and opinions held by the participants, more in-depth analysis should be conducted on impacts on lower-income persons. The TAC -ro recommends this issue be taken up in any future phase of road charge policy development v work. E Potential differential impacts on urban vs. rural residents - The TAC recommends that U this issue be carefully monitored during the pilot, and that impacts of the road charge ai on rural drivers when compared with their urban counterparts should be assessed. The Cts recommended composition of the volunteer pool reflects this concern and oversamples 0Jrural participants to ensure sufficient data is available to fully assess the impacts of the road N charge on rural drivers. Payment Simulation Options for the Pilot - TAC recommends the simulation of payments be a tested during the pilot utilizing online and mail payment options, studying the administrative costs of each. v 4- Rate Setting for the Pilot - The TAC recommends that in order to adequately assess the O ability to invoice based on per -mile rates, a revenue neutral rate should be developed for the pilot program.