LIST OF FIGURES
LIST OF TABLES
Many TUFs programs have similarities in the way that they assess TUFs, including differentiating between residential and nonresidential properties, using the ITE Trip Generation Manual to determine trips by property type, enforcement mechanisms, and a variety of exceptions. TUFs programs differ, however, in some small and large ways, based on the size of the municipality, cities' maintenance needs and goals, and other public policy considerations.
While the 10th ITE Trip Generation Manual recently issued a supplement,49 which includes data on trips taken by pedestrians and those on a bicycle, this data is new and there are few examples of it being used to calculate TUFs.
TUFs ordinances specify which types of properties must pay TUFs. Many municipalities hold that any property that creates transportation demand and therefore uses municipal roads and other transportation facilities, pays the TUFs, just as most properties that use water, trash, or other municipal services are required to pay for those services. This often means that public and nonprofit facilities, such as schools or religious institutions, are required to pay the TUFs. Municipalities have a series of exemptions, however, which are discussed in section 6.3.
The most common way that municipalities categorize TUFs properties is by residential and nonresidential (or commercial) categories. For example, Hillsboro, OR, has two residential categories and multiple nonresidential categories based on the estimated number of trips generated by 1,000 square feet of space. See appendix A for more details on this.
Other municipalities have fewer nonresidential categories. For example, Lake Oswego, OR, has just three, all based on square feet of gross floor area.50 Loveland, CO, has six nonresidential categories, all based on the acreage of the property.51
TUFs are set to charge owners a rate that reflects the cost they impose on the road system. This is often measured based on average weekday traffic or the number of trips that properties generate.
The primary source for estimating trips is by using the ITE Trip Generation Manual ("ITE Manual"). ITE is a professional membership association that develops technical standards and resources. It has produced several versions of the manual, based on survey data from thousands of studies primarily in the United States and Canada since the 1960s. Most of the data are collected at suburban locations at various times of the year under a variety of conditions, and are provided on a voluntary basis.52While the ITE Manual has benefited from input from numerous transportation professionals, including practitioners and academics, and has published 10 editions, it has some drawbacks:
It is a national survey that reports "average" parameters by property type. The actual trip generation may vary by geography, property type, season, and many other factors.
Its focus is primarily on motorized transportation and it lacks good data on transit and other non- motorized transportation facilities.53 However, they most recently issued a supplement,54 which includes data on trips taken by pedestrians and those on a bicycle.
It has a suburban orientation and, as such, has been criticized for not properly measuring urban area trip generation, infill projects, transit-oriented developments, or mixed-use developments.55
It takes time for new property uses, such as drive-through coffee shops, to be identified and surveyed, as Loveland, CO, found.56
Cities identify property types and then assign each type the respective ITE Manual trip average, such as average daily trips. For example, the ITE Manual estimates that a single-family residential property generates 10 trips per day. As explained on the Oregon City, OR, TUFs webpage, such trips may include the following:
Going to and returning from work (2 one-way trips).
Taking a child to school in the morning and returning to pick them up in the afternoon (4 one-way trips).
Driving children going to and from a friend's house (2 one-way trips).
A trip to and from shopping (2 one-way trips).
A trip to and from a family member's sporting event (2 one-way trips).
Local deliveries and service providers (U.S. Postal Service, FedEx, trash/recycling pick-up).
A trip to and from the doctor/pharmacy (2 one-way trips).
A trip to and from a restaurant of any type (2 one-way trips).
A trip to and from the recreation center or exercise facility (2 one-way trips).57
Using the ITE Manual, municipalities calculate the number of trips generated by their properties. They can then divide the annual street maintenance cost that will be covered by the TUFs program to derive a TUFs per trip as shown in the basic calculation:
(Municipa properties x Trips by property) = Total Municipal Trips
(Street maintenance budget by TUFs) / (Total municipal trips) = TUFs per trip
Loveland, CO, used this approach in developing its TUFs, called a "street maintenance fee," in 2000- 2001. As shown in table 4, Loveland set its street fee at a level to meet its then annual target revenue goal of $820,000. Using the ITE Manual and its own data, Loveland established daily trip generation by six TUFs categories: residential, industrial, high-traffic retail, retail, retail miscellaneous, and office/institution. The residential category unit of measurement was a dwelling unit, whereas all other categories use acreage. Other communities, such as Hillsboro, OR, use a combination of square feet and acres for nonresidential unit categories.
Based on Loveland's data:
Estimated the number of units in each property category (i.e., it calculated 20,000 residential units).
Then by multiplying the daily trip generation by the number of units, it derived the total daily trips for each category (i.e.,10 trips times 20,000 units equaled 200,000 total daily residential trips).
From there, it derived the total annual trips for each category by multiplying the daily trips by 365 days per year (i.e., it multiplied 200,000 total daily trips to derive 73,000,000 annual residential trips).
Next, Loveland solved for the necessary fee per daily trip so that the expected annual revenue would equate to its target revenue of $820,000. It did this by dividing the total annual trips (199,085,987) by the target revenue ($820,000). When it did this. Loveland arrived at a cost of $0.004119 per trip.
To arrive at the monthly fee for each property category, Loveland multiplied the daily trip generation by the average number of days in a month by the cost of $0.004119 per trip (i.e., 10 trips per day times 30 times $0.004119 equals a $1.25 monthly fee for the residential category).
Table 4. Loveland, CO, street maintenance fee calculations.58
| Property Category | Daily Trip Generation | Basis of Measurement | Number of Units | Total Daily Trips | Total Annual Trips | Monthly Fee | Annual Revenue |
Residential |
10 | per dwelling unit |
20,000 | 200,000 |
73,000,000 |
$1.25 | $300,675 |
Industrial |
76 | per acre |
330 | 25,156 |
9,181,904 |
$9.55 | $37,819 |
| High-Traffic Retail | 1,634 | per acre |
48 | 78,408 |
28,618,920 |
$204.65 | $117,876 |
Retail |
272 | per acre |
300 | 81,675 |
29,811,375 |
$34.11 | $122,788 |
| Retail Miscellaneous | 174 | per acre |
48 | 8,352 |
3,048,480 |
$21.80 | $12,556 |
| Office/ Institution | 183 | per acre |
830 | 151,850 |
55,425,308 |
$22.92 | $228,287 |
Total |
199,085,987 |
$820,000 | |||||
Target Revenue |
$820,000 | ||||||
Cost per Daily Trip (Total Annual Trips/Target Revenue) |
$0.0041 |
It is not unusual for municipalities to conduct a "reality check" on the final TUFs rates and adjust once the initial TUFs are established. For example, a year after it instituted its TUFs, Loveland added another category, Retail Miscellaneous, which captures retail activities that generate substantially less traffic than the existing Retail category. They did this because some nonresidential entities felt that the TUFs they paid did not reflect the traffic that they generated. Other municipalities, such as Hillsboro, OR,59 have more nonresidential categories than Loveland to address this issue of TUFs fairness. Furthermore, some municipalities, such as Hillsboro, cap the fee charged for the two highest nonresidential fee categories,60 which the city admits slightly increases the monthly fees for the other nonresidential categories. Gas stations benefited from this cap, for example, which the city felt was acceptable since they are the source of the city's gas taxes.61 As discussed in section 6.3, many TUFs programs allow property owners to appeal their property's classification.
p. 5. https://www.hillsboro-oregon.gov/home/showdocument?id=990. Bailey, Tina, Hillsboro, OR interview, May 5, 2020.
The setting of TUFs could also be affected by the perception among payers of how their utility costs compare with those faced by other municipalities. In discussions with public officials overseeing TUFs programs, this did not come up as a material issue among residents or developers. Because TUFs are included in a property's utility bill, property owners focus less on the TUFs amount and more on the overall bill. Lake Oswego, OR, for example, publishes a comparison of its TUFs and other utility fees with those of neighboring cities in figure 5Error! Reference source not found., which shows that its TUFs are not a major driver of total utility costs, rather water and wastewater costs are.
Figure 5. Comparison of Lake Oswego TUFs and utility bills with neighboring cities.62
Another consideration in setting rates is to identify which types of properties–residential and nonresidential–use which types of roads and other transportation facilities. For example, Hillsboro assigned the costs of arterial, collector, and neighborhood route roadways to residential developed property (RDP) and nonresidential developed property (NDP) equally because both property types generate road maintenance needs relatively equally, as shown in table 5. The roads that are only used for nonresidential property purposes, such as local commercial, local industrial, commercial alley, and industrial alley roadways, are naturally allocated to the NDP category. Residential roads and alleys are naturally allocated to the RDP category.
Table 5. Hillsboro road assignment by TUF category.63
| Road Type | Residential Developed Property (RDP) | Nonresidential Developed Property (NDP) |
| Arterial, collector, and neighborhood route roadways | 50% | 50% |
| Local commercial, local industrial, commercial alley, and industrial alley roadways | 0% | 100% |
Local residential and residential alleys |
100% | 0% |
Hillsboro sets the budget based on total system need and then collects funds based on the three road types. It then allocates these budgets between RDP and NDP as needs arise and over time in the approximate proportions noted in table 5. For example, the RDP budget is the sum of 50 percent of the "arterial, collector, and neighborhood route roadways" road type maintenance costs and 100 percent of the "local residential and residential alleys" road type maintenance costs. To set the residential TUFs, Hillsboro uses ITE data for single-family and multifamily units. The March 1, 2020, rates of $9.11 for single-family units and $8.20 for multifamily units reflect the higher number of trips for single-family units.64
For nonresidential rates, the TUFs for NDP categories is based on the ITE Manual derived distribution of traffic volumes of the seven NDP groups, described in appendix A. NDP rate calculations are as follows and are described further in table 6:
For NDP groups 1 through 6 (based on square footage), Hillsboro charges $8.20, plus the property's square footage divided by 1,000 times the respective rate code for the group. Hillsboro does this to create a price floor of $8.20, which is the lowest residential rate, as they originally found that some businesses were only being charged TUFs of $1, and this did not appear to be equitable compared with the residential fee.65
For NDP group 7 (e.g., gas stations), Hillsboro charges the lower residential rate, or $8.20, plus the number of units (i.e., vehicle fueling positions) times the trip rate. Then this product (subject to a maximum of 1,500) is multiplied by the TUFs trip rate plus the lowest residential rate.
It is common for TUFs to be phased in over time. For example, Oregon City, OR, phased in its TUFs program over a 5-year period from 2008 to 2013.66 Lake Oswego, however, phased in its TUFs fee only for nonresidential users over a 1-year period; residential users paid the new fees immediately.67 Municipalities may also have a backlog of maintenance and seek to incorporate those in the TUFs calculation. As with phasing in the TUFs rates, municipalities may want to eliminate the street maintenance backlog over time (e.g., a period of 5 or 10 years). Hillsboro decided to address its
$9 million backlog over a decade, layering in the backlog costs into the TUFs alongside ongoing needs.68
Table 6. Hillsboro NDP calculations.69
| Group | Calculation |
|---|---|
Groups 1-6 |
Nonresidential Category 6 Example: Fast-Food Restaurant With Drive-Through Window, 3,000 square feet TUF Nonresidential Category Charge Square footage / 1,000 x Rate (TUF Code - 934) 3,000 / 1,000 x 37.50 = $112.50 TUF nonresidential base charge + TUF nonresidential category charge $8.20 + $112.50 = $120.70 (Monthly TUF Charge) |
Group 7 |
Nonresidential Category 7: Gas Station With 12 Fueling Positions, No Grocery or Car Wash TUF Nonresidential Category Charge Vehicle fueling positions x Trip rate (TUF Code - 944) 12 x 168.56 = 2,022.72 trips Trips (maximum 1,500) x TUF rate per trip 1,500 x $0.06 = $90.00 (TUF Nonresidential Category Charge) TUF nonresidential base charge + TUF nonresidential category charge $8.20 + $90.00 = $98.20 (Monthly TUF Charge) |
Most cities set TUFs based on the number of trips. In a 2016 survey, 25 of 36 cities with TUFs based their fees on trip generation estimates, as shown above.70 However, there are some alternative methods based on parking spots and service units.
The City of Tigard, OR, charges one TUFs rate for residential units and a TUFs rate for nonresidential based on the number of zoned parking spots allowed for the property.71 One of the criticisms of this calculation is that while parking spots are a reasonable proxy for the level of traffic generated by a business, distortions could occur with those properties that have many infrequently used spots, such as a stadium that is used once a week in comparison to a big box retail store with fewer spots but daily traffic.72
The City of Sherwood, OR, calculates its residential TUFs as one fee per residential unit or $2.07. Its nonresidential TUFs is based on an equivalent surface unit (ESU), which is 2,640 square feet. One ESU is the same value as the residential unit value of $2.07.73 This approach has benefits in being simple and easy to understand. The challenges are that it may be overly simplified, and some nonresidential owners may feel that the fee does not accurately reflect the impact of their business on the road system.
Highland, UT, imposes TUFs of $18.50 on all utility bills, regardless of property type. This is a very simple approach that has been applied to a small, mostly residential suburb.74
Arlington, TX, used to have a street maintenance fee, collected through the utility bill. In 2002, Arlington voters changed this to a street maintenance sales tax.75 A sales tax is distinct from a fee and does not link properties and street use as closely. Arlington is home to several large sports venues, including for professional football and hockey, two theme parks, and a large mall, which provides an opportunity to generate a large amount of sales tax revenue.
Payment of TUFs are generally the primary responsibility of the property owner. For properties where the owner and user of the property are the same–such as a single-family residence or a business that owns its property–this does not present an issue. For properties where there are more than one user, such as a multifamily residence, municipalities generally prefer to bill whoever receives the utility bill. So, if the owner of a multifamily residence receives the utility bill and then passes those costs onto individual apartments, the owner is still liable for the TUFs if a tenant does not pay. In some municipalities, the TUFs bill–and the utility bill–are sent to the tenant, who may cover those costs under the terms of their lease. One TUFs observer, Reid Ewing, believes that TUFs should be billed to tenants, where possible, since this strengthens the argument that TUFs are a fee and not a tax. This was a factor in the Fort Collins, CO, State of Colorado Supreme Court case, one of the State rulings in favor of TUFs that is described in more detail in chapter 0 (section 7.2).76 Regardless of these provisions, in most TUFs ordinances, if the TUFs are not paid, then the municipality holds the property owner responsible and takes action against them, as discussed in section 0.
49 Trip and Parking Generation. Trip Generation Manual, 10th Edition Supplement.
50 City of Lake Oswego, OR. Ordinance, Article 37.04. https://www.codepublishing.com/OR/LakeOswego/?LakeOswego37/LakeOswego37.html
51 City of Loveland, CO. Street Maintenance Fees. https://www.cityofloveland.org/services/public-works/streets
52 Tripi, Eric J. Basics of ITE Trip Generation and Its Role in Calculating Transportation Impact Fees. 2011 Growth and Infrastructure Consortium, October 27, 2011. http://growthandinfrastructure.org/proceedings/2011_proceedings/tripi_tripgen.pdf
53 Clifton, Kelly J., Kristina M. Currans, & Christopher D. Muhs. 2015. Adjusting ITE's Trip Generation Handbook for Urban Context. The Journal of Transport and Land Use, 8(1), 5-6. https://ppms.trec.pdx.edu/media/project_files/Adjusting_trip_gen_urban.pdf
54 Trip and Parking Generation. Trip Generation Manual, 10th Edition Supplement.
55 Clifton, Kelly J., et al., pp. 5-6.
56 Klockeman, Dave, City of Loveland, CO, interview, June 30, 2020.
57 City of Oregon City, OR. Transportation Utility Fees. https://www.orcity.org/publicworks/transporation-utility-fee
58 City of Loveland, CO. Resolution adopting a new schedule of Street Maintenance Fees pursuant to section 16.42.040 of the Loveland Municipal Code, September 18, 2001.
59 Hillsboro, OR. Transportation Utility Fee. www.hillsboro-oregon.gov/TUF
60 Ibid.
61 Ad Hoc Committee on Transportation Finance. April 2008. City of Hillsboro: Report to the Transportation Committee, Proposed Hillsboro Transportation Utility.
62 City of Lake Oswego, OR. January 1, 2020. Master Fees and Charges, 2020, p. 6. https://www.ci.oswego.or.us/sites/default/files/fileattachments/2020%20Master%20Fees%20Booklet_Final.pdf
63 City of Hillsboro, OR. Hillsboro Municipal Code, Subchapter 3.32 Transportation Utility Fee. http://qcode.us/codes/hillsboro/view.php?topic=3-3_32
64 Ibid. http://qcode.us/codes/hillsboro/view.php?topic=3&frames=on
65 Bailey, Tina, City of Hillsboro interview, May 5, 2020.
66 City of Oregon City, OR. City Code of Ordinances, Chapter 13.0 Transportation Utility Fees, as of 5/06/2020. https://library.municode.com/or/oregon_city/codes/code_of_ordinances?nodeId=TIT13PUSE_CH13.30TRUTFE
67 City of Lake Oswego, OR. November 4, 2003. Agenda Summary Report, Resolution 03- 89. A Resolution of the Lake Oswego City Council Establishing Street Maintenance Fee Rates.
68 Ad Hoc Committee on Transportation Finance. April 2008. City of Hillsboro: Report to the Transportation Committee, Proposed Hillsboro Transportation Utility.
p. 4. https://www.hillsboro-oregon.gov/home/showdocument?id=990
69 Hillsboro, OR. City of Hillsboro - Transportation Utility Fee (TUF) Rates Effective March 1, 2020. https://www.hillsboro- oregon.gov/home/showdocument?id=24222
70 Voulgaris, Carole Turley. 2016. A TUF Sell: Transportation Utility Fees as User Fees for Local Roads and Streets. Public Works Management & Policy, 21(4), 312. doi: 10.1177/1087724X16629961.
71 City of Tigard, OR. Street Maintenance Fee. https://www.tigard-or.gov/city_hall/street_maintenance_fee.php
72 Voulgaris, p. 315.
73 City of Sherwood, OR. Current Service Rates. https://www.sherwoodoregon.gov/utilitybilling/page/current-service-rates
74 City of Highland, UT. Transportation Utility Fund Background Information. https://www.highlandcity.org/399/Transportation-Utility-Fund
75 City of Arlington, TX. February 13,
2018. Staff Report: Ordinance Ordering May 5, 2018 Special Election for
Reauthorization of the Street Maintenance Sales Tax. https://legistarweb-production.s3.amazonaws.com/uploads/attachment/pdf/145986/Street_Maint_Tax_SR
01.30.18_.pdf
76 Ewing, Reid. 1993. Transportation Utility Fees. Research Record, No. 1395, p. 21. http://onlinepubs.trb.org/Onlinepubs/trr/1993/1395/1395.pdf#page=23
