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MeetingtheChallengeTaskForce <br />ReviewofGeneralFundRevenueAlternatives <br />January22,2010 <br />UtilityConsumptionTaxʹRecommendedasSecondChoice <br />DescriptionAtaxonutilityservicesusedbyresidentsofthe <br />City;leviedontheamountofconsumptionor <br />establishedasaflatfeeperaccount. <br />MeetingtheChallengeActionAsanalternativetotheRestaurantTax,aUtility <br />ConsumptionTaxof1.5%thatwouldnet$2 <br />millionannuallyafteradministrativecostsand <br />adjustmentsforlowincomeandhighvolume <br />users,wasrecommendedbytheTaskForce. <br />LegalAuthority&RestrictionsUnderhomeruleauthority,Oregoncitiescan <br />enactaconsumptiontax. <br />PrecedenceTheCityofAshlandimposesanElectricUtilityUser <br />Tax.Thetaxisdesignedasasurchargeof25%on <br />monthlyenergyuse.Thistaxgeneratesrevenue <br />tofundgeneralCityservicessuchasPolice,Fire, <br />Planning,BuildingandSeniorPrograms,offsetting <br />propertytaxes.Thistaxgeneratesapproximately <br />$2.6millionannually. <br />InMarch1996,theCityofEugeneproposeda1% <br />utilitytaxtofundlowincomehousingwhichfailed <br />atpublicvote;61%noto39%yes. <br />RevenueYield&StabilityIfthetaxwerestructuredasapercentage <br />surchargeontheuseofelectricity,naturalgas, <br />water,stormwaterandwastewaterarough <br />estimateforpotentialyieldsareasfollows: <br />1.0%=$2.2million <br />1.5%=$3.3million <br />2.0%=$4.5million <br />Themonthlyimpacttotheaverageresidentialuser <br />ofelectric,water,stormwaterandwastewater <br />servicesisestimatedbelow: <br />1.0%=$1.25 <br />1.5%=$1.87 <br />2.0%=$2.50 <br />Impacttocommercialusersisnotprovidedas <br />commercialconsumptionvariesgreatlyby <br />business.Residentialconsumptionaccountsfor <br />approximately60%oftheelectricretailrevenue <br /> <br />