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EUGENE CITY COUNCIL AGENDA ITEM SUMMARY Public Hearing: An Ordinance Concerning Hazardous Substances User Fees; Amending Sections 3.692 and 3.694 of the Eugene Code, 1971; and Adding Section 3.695 to that Code Meeting Date: February 14, 2005 Agenda Item Number: 5 Department: Fire and Emergency Medical Services Staff Contact: Glen Potter www. cl. eugene, or. us Contact Telephone Number: 682-7118 ISSUE STATEMENT The Eugene Toxics Right-to-Know Program is funded by fees assessed to local businesses that are hazardous substance users. A state-imposed fee cap of $2,000 per facility took effect last year, resulting in a substantial fee increase for smaller participating businesses while reducing fees for larger businesses. The council directed the Toxics Board to return with a proposed remedy for this perceived inequity in time for the 2005 program billing cycle. In a work session on January 10 of this year, the council considered two proposals brought forward by the board, and decided to move forward to public hearing on an ordinance that would add certain types of businesses to the program, and would also reduce the threshold employee level for manufacturers from 10 to 2. The proposed ordinance is attached. At the same work session, the council reaffirmed the City's support for a repeal of the State fee cap. BACKGROUND Through the citizen initiative process, in 1996 Eugene voters amended the City Charter to enact the Toxics Right-to-Know Program (the "amendment"). Article VII, paragraph D of the amendment requires that the Charter-created program be self-supporting. Fees have been assessed to each participating business on the basis of full-time-equivalent (FTE) employees working at each business in a calendar year. (Oregon courts have concluded that a program of this type may not assess fees based on quantities of hazardous substances reported.) The number employed by individual participating businesses has ranged from 10 to 1,207. At this time, 73 local manufacturers are required to pay fees, and 40 of those are required to file reports. (There is a threshold of 2,640 pounds of total hazardous substance inputs that must be reached before a company is required to report. However, the State Court of Appeals ruled in 1999 that the City may not use that threshold, or any quantity-based criterion, for determining which companies are required to pay fees or for determining the level of fees.) The annual budget for the program has averaged about $100,000, which funds 0.5 FTE of direct staff support, 0.25 FTE ancillary staff support, plus legal fees and materials and supplies. The total number of FTE against which fees are assessed has ranged from approximately 6,000 to 7,000. Consequently, fees have been about $13 per FTE, though this has varied somewhat based on actual program requirements. The City Council approves the fees each year prior to billing, which normally occurs in April. L:\CMO\2005 Council Agendas\M050214\S0502145.doc