Item 3: PH on Ordinance Adopting Hazardous Substance User Fees

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Public Hearing: An Ordinance Adopting Hazardous Substance User Fees for the Fiscal Year Commencing July 1, 2007 Meeting Date: February 26, 2007 Agenda Item Number: 3 Department: Fire & Emergency Medical Services Staff Contact: Glen Potter www.eugene-or.gov 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 2007-2008, the Toxics Board is recommending a fee of $37.38 per FTE (full-time-equivalent employee) employed by participating businesses in 2006, up to a maximum of $2,000 as provided by state law. BACKGROUND Each year, beginning in 1998, the 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. Efforts to address this perceived inequity, both locally and before the State Legislature, have not been fruitful, and so the recommendation before the council at this time is to adopt a similar fee, similarly calculated, to those adopted in each of the past three years. Participating employers have reported a total of 6,432 FTE in 2006. The program’s FY08 revenue requirement is $102,947 (compared to $98,672 for FY07). After accounting for the cap, this has resulted in a recommended fee of $37.38 per FTE, up to the maximum of $2,000. Any company with more than 53 FTE would pay only the maximum. The recommended fee of $37.38 is somewhat higher than last year’s fee of $31.30 due in part to the inflationary budget increase, but due in greater part to a decline in the number of “billable” FTE (i.e., L:\CMO\2007 Council Agendas\M070226\S0702263.doc