Item B - Transportation Funding - Laserfiche WebLink

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Previous Council Action and History_ In October 2001, the Citizen Budget Subcommittee on Transportation System Funding presented its recommendation that the council implement a transportation funding package consisting of a combination local motor vehicle fuel tax and transportation system maintenance fee for the purpose of generating an additional $9 million annually to address the City's critical transportation system funding needs. On December 9, 2002, the council approved an ordinance establishing a transportation system maintenance fee (TSMF). On January 27, 2003, a related transportation revenue measure, the local motor vehicle fuel tax ("fuel tax"), was approved by the council. On September 8, 2003, the council voted to repeal the TSMF ordinance, citing the recent repeal by Springfield City Council of that city's TSMF and concerns about equity between the two cities, as well as concerns raised by the Eugene Chamber of Commerce about the structure and impact of the TSMF on Eugene businesses. At that time, the council also cited continued hope for collaborative solutions with partner agencies and with Lane County, in particular. On September 27, 2004, the council reviewed the progress to date on pavement preservation program funding efforts, heard updates on cooperative efforts with partner agencies, and discussed the potential implementation of additional funding options, as well as a potential increase in the level of the existing local fuel tax. At that meeting, the council directed staff to bring back draft ordinances increasing the local motor vehicle fuel tax by an additional 2 cents (to 5 cents-per-gallon) and establishing a transportation system maintenance fee. The council also requested at that time that staff bring back information on possible bonding options for funding pavement preservation needs. Proposed Revisions to Ordinance No. 20278 Based on that direction from council, staff is returning with proposed revisions to Ordinance No. 20278, which are outlined in Attachment A. The first of the proposed revisions would increase the level of the business license tax on dealers of motor vehicle fuel within the city limits by an additional 2 cents, resulting in an increase from 3 cents-per-gallon to the 5-cent level. Additionally, at the suggestion of the City's Tax Administrator (the Oregon Department of Transportation Fuels Tax Group), staff is proposing two housekeeping amendments to the ordinance. The first proposed amendment addresses the issue of the interest rate to be charged on delinquent tax payments (i.e., equivalent to 12% per annum) and is consistent with the ORS language applicable to the State motor vehicle fuel tax. The second proposed housekeeping amendment would add language to clarify the intent and practice around granting refunds to purchasers who pay the City's tax for fuel that will not ultimately be used in on- street motor vehicles. This proposed change also helps maintain consistency between the administration of the City fuel tax and the State tax. Our discussions with the Fuels Tax Group in Salem suggest that a minimum of 30-60 days would be required for implementation of the higher level of taxation in order to give adequate notice to the dealers and to make appropriate modifications to the reporting forms and instructions. Proposed Ordinance Establishing Transportation System Maintenance Fees Based on City Council direction at the September 27 work session, staff is returning with a draft ordinance establishing transportation system maintenance fees, included as Attachment C. This ordinance is identical to the ordinance adopted by the council in late 2002 and later repealed in 2003. As with the previous ordinance, this proposed ordinance provides a general rate methodology but does not stipulate rates for specific customer categories. L:\CMO\2004 Council Agendas\M041027\S041027B.doc