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Home My WebLink AboutItem B - Resolution Referring 3-Cent Increase to Ballot ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Action: Resolution 4915 Calling a City Election on November 6, 2007, for the Purpose of Referring to the Legal Electors of the City of Eugene a Measure Adding a New Subsection (c) to Section 3.467 of the Eugene Code, 1971, to Increase by $0.03 per Gallon the Motor Vehicle Fuel Dealer’s License Tax Meeting Date: August 15, 2007 Agenda Item Number: B Department: City Attorney Staff Contact: Glenn Klein www.eugene-or.gov Contact Telephone Number: 682.5080 ISSUE STATEMENT This resolution calls a city election for the purpose of referring to the legal electors of the City a measure adding a new Subsection (c) to Section 3.467 of the Eugene Code, 1971, to increase by three cents per gallon the motor vehicle fuel dealer’s business license tax. BACKGROUND On August 8, the City Council indicated its intent to repeal Ordinance No. 20384, which was the subject of a referendum petition. This resolution refers the three-cent-per-gallon increase which was the subject of Ordinance No. 20384 to the legal electors of the City. RELATED CITY POLICIES The net proceeds of this motor vehicle fuel dealer’s business license tax are used only for the reconstruction, repair, maintenance, operation and preservation of roads and streets within the City that either the City owns or it is contractually or legally obligated to operate and maintain. The increase of three cents per gallon is necessary in order to meet projected maintenance and operation costs. COUNCIL OPTIONS The City Council may adopt the resolution as proposed, suggest amendments to the resolution, or decline to adopt the resolution. CITY MANAGER’S RECOMMENDATION The City Manager recommends adoption of the proposed resolution. SUGGESTED MOTIONS Move to adopt Resolution 4915 calling a city election on November 6, 2007, for the purpose of referring to the legal electors of the city of Eugene a measure adding a new Subsection (c) to Section 3.467 of the Eugene Code, 1971, to increase by $0.03 per gallon the motor vehicle fuel dealer’s business license tax. F:\CMO\2007 Council Agendas\M070815\S080815B.doc ATTACHMENTS A. Proposed Resolution FOR MORE INFORMATION Staff Contact: Glenn Klein Telephone: 682-5080 Staff E-Mail: glenn.klein@harrang.com F:\CMO\2007 Council Agendas\M070815\S080815B.doc ATTACHMENT A RESOLUTION NO. __________ A RESOLUTION CALLING A CITY ELECTION ON NOVEMBER 6, 2007, FOR THE PURPOSE OF REFERRING TO THE LEGAL ELECTORS OF THE CITY OF EUGENE A MEASURE AMENDING SECTION 3.467 OF THE EUGENE CODE, 1971 TO INCREASE BY $0.03 PER GALLON THE MOTOR VEHICLE FUEL DEALER’S LICENSE TAX. The City Council of the City of Eugene finds as follows: A. Based on a recommendation from the Citizen’s Subcommittee on Transportation System Funding, the City enacted its first motor vehicle fuel tax at three cents per gallon in January, 2003, and has generated approximately $2 million per year since that time. The Committee recommended a combination of the motor vehicle fuel tax and a transportation system maintenance fee in order to generate approximately $9 million annually to address the City’s critical transportation system funding needs. Although the street utility fee, which was designed to generate $6.5 to $7 million annually was adopted, it was repealed before it could be fully implemented. B. A two-cent increase to the motor vehicle fuel tax was approved in January 2005, along with a sunset provision resulting in the tax reverting to three cents per gallon on February 29, 2008. It was anticipated that the three years would allow sufficient time to complete a comprehensive review of available funding options and develop a more permanent funding strategy to meet the City’s transportation system needs. C. In September 2005 the financial status and fund forecast for the City’s Road Fund was reviewed and discussed by the Council. The Council thereafter directed the City Manager to develop a FY07 Road Fund budget and to bring back to the Council a proposal for a new revenue funding package that would address the ongoing operating deficit in street operations and maintenance and generate additional revenue to fund the backlog of unfunded projects. D. Starting in early 2007 a Council subcommittee studied the City’s transportation funding needs and options, and submitted its report in May 2007, and recommended increasing the local motor vehicle fuel tax by three cents per gallon to eights cents per gallon (and repealing the sunset provision), which would generate an estimated $2 million annually. This increase, together with the other funding options recommended by the subcommittee would generate approximately $16 million per year and would address the projected ongoing operating deficits in the Road Fund operations and maintenance activities and provide funding for the $170 million backlog of unfunded projects. E. Due to loss of historical county road partnership revenues and a flat growth in state revenues, the Road Fund is expected to have an annual operating deficit of over $1.6 Resolution - 1 F:\CMO\2007 Council Agendas\M070815\S080815B-attA.doc million for FY08 (about $2.2 million by FY10) for activities such as street lighting, pothole patching, street tree maintenance, signing and striping of City streets. F. Although the five-cent per gallon motor vehicle fuel tax has allowed the City to complete nearly $12.9 million in street preservation project work since 2003, the backlog of needed repair work continues to grow, as do rapidly rising construction costs. In late 2001 the City faced an estimated $67 million backlog in pavement preservation work. By early 2007 the estimated cost of that backlog had grown to nearly $170 million, and without new funding, is projected to grow to $282 million within the next 10 years. G. The Council subcommittee’s recommendation to increase the motor vehicle fuel tax to eight cents per gallon was one component in the recommended funding package, but was an essential component that would ensure the continuation of a reliable revenue stream to support ongoing street operations, maintenance, and preservation. H. The City Council considered the subcommittee’s recommendations, and on May 29, 2007, the City Council approved Ordinance No. 20384 which increased by $0.03 per gallon the motor vehicle fuel dealer’s license tax, and repealed the sunset provision contained in Section 3 of Ordinance No. 20337. I. Subsequent to the submission of a referendum petition, on August 15, 2007, the City Council repealed Ordinance No. 20384. J. The City Council finds it would be in the public interest to submit to the electors of the City a measure amending Section 3.467 of the Eugene Code, 1971, to increase by $0.03 per gallon the motor vehicle fuel dealer’s business license tax. NOW, THEREFORE, based upon the above findings, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EUGENE, a Municipal Corporation of the State of Oregon, as follows: Section 1. A city election is called for the purpose of referring to the legal electors of the City of Eugene a measure adding a new Subsection (c) to Section 3.467 of the Eugene Code, 1971, to read as follows: Amount and Payment. “3.467 In addition to any fees or taxes otherwise provided for by law, every dealer engaging in the city in the sale, use or distribution of motor vehicle fuel, shall: (c) In addition to the license tax imposed by subsection (b) of this section, pay a license tax computed on the basis of $0.03 (three cents) per gallon of such motor vehicle fuel so sold, used or distributed as shown by such statement in the manner and within the time provided in this code.” Section 2. The City Council orders this city election to be held in the City of Eugene, Oregon, concurrently with the statewide election on November 6, 2007, in accordance with the provisions of Chapter 254 of the Oregon Revised Statutes, and the ballots shall be counted and tabulated and the results certified as provided by law. Resolution - 2 F:\CMO\2007 Council Agendas\M070815\S080815B-attA.doc Section 3. The City Recorder is directed to give not less than ten days’ notice of the city election by publication of one notice in the Register Guard, a newspaper published in the City and of general circulation within the City. Section 4. This Resolution shall become effective immediately upon its adoption. th The foregoing Resolution adopted the 15 day of August, 2007. __________________________________________ City Recorder Resolution - 3 F:\CMO\2007 Council Agendas\M070815\S080815B-attA.doc