Item B: FY14 Plan on Action - City Service Fee Proposal

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use if the City were to look at increasing revenues to fund services. These examinations have included the Meeting the Challenge Task Force, the Council Subcommittee on Human Service Funding, and two community surveys. These efforts have provided a basis for the current four- part Plan of Action, including the proposal for a monthly City Service Fee. The Meeting the Challenge Task Force (MTC) was a group of citizens convened in 2009 by the City Manager to talk about potential new revenue sources. MTC recommended an emphasis on economic development that would grow the tax base and provide long-term financial stability to the City. They recommended a restaurant tax as the top choice for a new revenue source, but also suggested consideration of two other funding mechanisms – a utility consumption tax or a city- wide monthly service fee. Additionally, MTC recommended that, in order to maintain the public’s trust, when new revenue is proposed for specific services and the revenue is not generated because it lacks public support, the services that would have been funded with that revenue should be scaled back or eliminated. In 2011, the Council Subcommittee on Human Service Funding was created, at the suggestion of the Budget Committee, to explore options for stabilizing human service funding needs in the community. The subcommittee started with the work of MTC and reviewed the recommended revenue options along with several other mechanisms. The subcommittee as a group recommended not pursuing a restaurant tax as it would not be politically feasible. They supported pursuing the other two items in the MTC report – a utility consumption tax or a monthly public service fee. Individual subcommittee members also mentioned other options that could be pursued. The two scientific surveys included questions about a preferred mechanism to fund important community services. Responses in both the July and November surveys indicated a preference for a monthly fee, as seen in the chart. July 2012 Survey Results As a result of this input over the past three years, the “Given a choice [of funding mechanisms], which alternative do you see as being the most City Manager has proposed a modest, monthly City appropriate?” Service Fee for consideration by council. This particular Monthly City Service Fee 28% funding mechanism has become popular with Oregon Restaurant Tax 20% municipalities in the years since Measure 50 was Personal Income Tax 13% enacted, and the ability of local governments to Utility Consumption Tax 11% Business License Fee 11% permanently increase property taxes was eliminated. Refused 17% Monthly city service fees (some called “utility fees”) have been adopted by Oregon local governments of various November 2012 Survey Results sizes and for a variety of purposes. Some examples are a “Given a choice … which alternative do you see police, fire & parks fee in Gresham, fees in Corvallis for as being the most appropriate?” sidewalk maintenance and urban forest management, a $10/Month City Service Fee 52% Property Tax Increase 28% fire protection fee in Jacksonville, and several others. Neither One 14% D/K or Refused 6% S:\CMO\2013 Council Agendas\M130114\S130114B.doc