12/04/1988 Meeting - Laserfiche WebLink

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e Ms. Bascom moved, seconded by Mr. Bennett, to adopt the resolution. Mr. Boles moved, seconded by Mr. Bennett, to amend Resolution Number 4155, adding the following to Section 3: "including public discussion of the impact of alternatives to drug prohibition." Answering Mr. Green's request for clarification, Mr. Boles said that alternatives could include legalization. The motion to amend carried, 4:3; with Councilors Bennett, Boles, Ehrman, and Green voting aye; and Councilors Bascom, Holmer, and Schue voting nay. Roll call vote; the amended motion carried unanimously, 7:0. V. PUBLIC HEARING: ORDINANCE CONCERNING BUSINESS PRIVILEGE TAX FOR NATURAL GAS SUPPLIERS City Manager Mike Gleason introduced the topic. Tony Mounts, Finance Division, reported that the ordinance before the council is the result of discussions with Northwest Natural Gas Company during the past six months. The City and Northwest Natural Gas have a 20-year franchise agreement with a e provision for renegotiation of the franchise rate at ten years. The proposal calls for the establishment of a four percent Business Privilege Tax applicable to lIany person engaged in or carrying on the business, occupation, or pursuit of a natural gas supplier or operating a natural gas distribution system within the corporate limits of the city. II The tax will be collected based on a percentage of the gross revenue derived from the sale of natural gas consumed within the city. During discussions, Northwest Natural Gas expressed concern about the impact of a rate adjustment on its other franchises throughout the state. Another concern arose from the fact that NNG competes directly with other suppliers of energy that do not operate under the same taxing constraints. The original proposed rate increase of two percent has been changed to a one percent increase, based on data on 35 large industrial customers of NNG that have the capacity to use either natural gas or oil. If those customers chose not to switch to oil, a two percent increase would provide $180,000 to the City. If all of them chose to switch, the City's revenue from the increase would be reduced to approximately $30,000. The Department of Energy has indicated that with large energy consumers, the difference between one and two percent may be enough to cause that economic decision. Mr. Mounts said that with the proposed taxis one percent increase, Northwest Natural Gas would in effect be paying a total of four percent (with three percent under the franchise and one percent under the business tax). This is comparable to the City's other franchise agreements. Adoption of the business privilege tax outside the franchise would alleviate potential e MINUTES--Eugene City Council December 4, 1989 Page 3