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EUGENE CITY COUNCIL AGENDA ITEM SUMMARY Public Hearing and Possible Action: An Ordinance Adopting Hazardous Substance User Fees for the Fiscal Year Commencing July 1, 2005 Meeting Date: April 11, 2005 Agenda Item Number: 5 Department: Fire and Emergency Medical Services Staff Contact: Glen Potter www. cl. eugene, or. us Contact Telephone Number: 682-7118 ISSUE STATEMENT In accordance with provisions of the Eugene City Charter, the City's Toxics Right-to-Know Program is funded by fees assessed to local businesses that are hazardous substance users. For this year, to support the program for Fiscal Year 2005-2006, the Toxics Board is recommending a fee of $30.94 per FTE employed by participating businesses in 2004, up to a maximum of $2,000 as provided by state law. BACKGROUND Each year, beginning in 1998, Council has approved fees to support this program, first by resolution, and later, because of changes in state law, by ordinance. Throughout the life of this program, the City has always assessed fees on the basis of number of persons employed by the participating businesses. This is because the City is prohibited by state law from charging on the basis of quantity of chemicals used, and number employed is at least generally reflective of ability to pay and also bears a rough correlation to chemical quantities used. The methodology has been to poll the businesses at the beginning of each calendar year and ask them to calculate and report their FTE for the preceding calendar year, then divide the program's revenue requirement for the upcoming fiscal year by the total number of FTE reported, and bill accordingly, with payment due May 1 each year as provided by the Charter. In 2004, a state-imposed fee cap of $2,000 took effect, resulting in fee reductions for larger participating companies and fee increases for smaller ones. In approving 2004 fees recognizing the cap, Council asked the Toxics Board to bring back a remedy (since there was a notable disparity between the amount per FTE paid by smaller companies and that paid by larger ones). However, after considering possible remedies and holding a public hearing earlier this year, Council directed the Toxics Board to study the issue further, and requested an ordinance imposing 2005 fees calculated on the same basis as last year. Participating employers have reported a total of 6,692 FTE in 2004. The program's FY06 revenue requirement is $99,293. After accounting for the cap, this has resulted in a recommended fee of $30.94 per FTE, up to the maximum of $2,000. Any company with more than 64 FTE would pay only the maximum. There are 28 such companies out of 72 participating. However, it would not be correct to say that all 28 benefit from the cap; if there were no cap, about half of them would wind up paying less than $2,000. Before the state-imposed fee cap took effect, fees for this program were about $14 per FTE across the board. Without the cap, the recommended fee for this year would have been $14.84. $14.84 x 100 (for example) = $1,484. L:\CMO\2005 Council Agendas\M050411\S0504115.doc