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-- e conflicts with other franchises held by Northwest Natural Gas and would result in a minimal loss of customers. Mr. Mounts noted that it would be possible to broaden the franchise in the future to include other energy suppliers operating in the same competitive market. The business privilege tax being proposed would become effective December 1, 1989. At Ms. Schue's request, Mr. Mounts clarified that the proposal was to adopt a four percent business privilege tax that allows a credit for fees paid under a franchise. By establishing the primacy of the franchise payment, the City would not relinquish its right to establish and maintain a franchise. Mr. Boles noted the City's loss of a potential $90,000 revenue increase if the proposed tax is adopted (with that increase based on the assumption that no customers switch to other sources as a result of the City's adopting a five percent rate increase). He suggested that the City would be taking a policy position that a privilege tax is an appropriate mechanism for raising revenue in conjunction with entities doing business in the city. Mayor Miller opened the public hearing. Randy Prince, PO Box 927, asked whether the proposed tax would recover the costs of regulating the supplier and whether it would result in increased costs to the rate-payers. He said that business privilege taxes could be e justified if they further City goals (such as conservation and promotion of the use of alternative fuels) and allow a reduction of property taxes. Tom Berry, 220 Northwest 2nd Avenue, Portland, spoke on behalf of Northwest Natural Gas which he said considered the proposal an equitable solution. He pointed out that heat is unlike other utilities because of the competition among suppliers. The increase would be reflected as a line item on customersl bills and if it was too high it could result in loss of customers. There being no additional requests to speak, Mayor Miller closed the public hearing. Ms. Bascom commended those responsible for negotiating what she considered a fair and reasonable compromise. To Mr. Boles request for clarification, Mr. Berry said that while his company has traditionally resisted any taxation increase, this one appeared to be fai r. CB 4183--An ordinance establishing a Business Privilege Tax for natural gas suppliers; adding Sections 3.600, 3.605, 3.610, 3.615, 3.620, and 3.625 to the Eugene Code, 1971; and declaring an emergency. Ms. Bascom moved, seconded by Mr. Bennett, that the bill, with unanimous consent of the council, be read the second time by e MINUTES--Eugene City Council December 4, 1989 Page 4