Item 7 - Trans.Fund.for Pavmnt - Laserfiche WebLink

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On January 19, 2005, the council, including the newly-installed mayor and councilors, once again had an opportunity to review and discuss the progress on pavement preservation funding efforts and to discuss the manager's recommendation for code amendments related to the MVFT. Proposed Revisions to the Eugene Code Increasing the Level of the Business License Tax - The proposed revisions to the Eugene Code concerning motor vehicle fuel tax are outlined in Attachment A. The first of the proposed revisions would increase the level of the business license tax on motor vehicle fuel dealers by an amount yet to be specified by council. Staff estimates that a two-cent increase in the level of the MVFT would generate an additional $1.45 million per year in Eugene for pavement preservation projects. Providing for Partial Refunds on Certain Sales of Bulk Diesel Fuel - Staff is also proposing adoption of an amendment, similar to Springfield' s, granting partial tax refunds to holders of weight receipts (i.e., those paying state weight-mile taxes) on motor vehicle fuel purchased in bulk for distribution at the holder's own fueling facility within the city limits. A number of local companies in Eugene also have bulk diesel fuel facilities servicing their own fleets within the Eugene city limits. Some of these companies have compiled data to support their assertion that the majority of the miles driven by their diesel-fueled fleets are not driven on Eugene streets. As was the situation in Springfield, this results in a disproportionate tax burden to these companies. Like the bulk fuelers in Springfield, these local business owners are concerned about the competitive disadvantage created by Eugene's fuel tax when applied to their diesel-fueled fleets which are being driven primarily outside the city limits of Eugene. Additional Proposed Revisions - In consultation with the State Fuels Tax Group, staff is proposing a few additional housekeeping amendments in addition to those previously discussed. The first proposed housekeeping amendment addresses the issue of the interest rate to be charged on delinquent tax payments (i.e., equivalent to 12% per annum) and is consistent with the ORS language applicable to the State motor vehicle fuel tax. The second proposed housekeeping amendment expands the language for the exemption of exported fuels to include export transactions in any quantity, since the intention was to exempt all exported fuel not in the fuel tank of a motor vehicle on the basis that such fuel would not ultimately be used in propelling a motor vehicle on Eugene city streets. The third proposed housekeeping amendment would add language to clarify the intent and practice around granting refunds to purchasers who pay the City' s tax for fuel that will not ultimately be used in on-street motor vehicles. These proposed changes are intended to clarify council's intent around the application of the city fuel tax and also to help maintain consistency between the administration of the city and state fuel taxes. Timing - The funding need for the City' s pavement preservation program is critical and imminent. With no additional funding, the existing backlog of pavement preservation projects is projected to grow from the current level of nearly $94 million to a projected $180 million within the next decade. Additional funding is needed to reverse this trend to ensure the efficient and safe operation of our local transportation system. Staff discussions with our tax administrator, the ODOT Fuels Tax Group in Salem, suggest that a minimum of 30 to 60 days from the date of adoption would be required for implementation of the increased fuel tax in order to give adequate notice to the dealers and to make appropriate modifications to the reporting forms and instructions. L:\CMO\2005 Council Agendas\M050124\S0501247.doc