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w~ <br />~ <br />~_;~ r ' <br />EUGENE CITY COUNCIL <br />~~ ~ : <br />AGENDA ITEM SUMMARY <br />Public.Hearing: An Ordinance Concerning Motor Vehicle Fuel Dealer's Business License <br />1 Tax and Repealing Section 3 of Ordinance No. 20337 <br />Meeting Date: January 14, 2008 ~ Agenda Item: 6 <br />Deparlrnent: Public Works Staff Contact: . Kurt Corey . <br />www.eugene-or.gov. Contact Telephone Number:. 682-5241 <br />ISSUE STATEMENT <br />Torught's public hearing is for the purpose of gathering community input on a proposed ordinance amending <br />sections of the Eugene City Code dealing with the Business License Tax on Motor Vehicle Fuel Dealers. <br />The proposed amendments would repeal the sunset provision on the two-cent per gallon fuel tax rate increase <br />enacted in 2005, with the effect of keeping the. tax rate at five cents per gallon after February 29, 2008. <br />Council action on this ordinance is needed by January 28, 2008, in order to prevent administrative <br />implementation of the two-cent roll-back in the t~ rate collected by the city. <br />Eugene lacks adequate funding to operate, maintain, and preserve its local street system. For FY08, the <br />annual deficit for operation and maintenance activities in the Road Fund is now projected to exceed $1..8 <br />million, and the backlog of unfunded capital street repairs has grown to over $170 million. The two=cent per <br />gallon increase enacted in 2005 generates approximately $1.4 million annually to operate, maintain and <br />preserve the city's street system. To ensure continuation of a reliable fuel tax revenue stream to support <br />ongoing street operations, maintenance, and pavement preservarion, the City Manager recommends that <br />council repeal the sunset provision enacted in 2005, which would otherwise cause the tax rate to revert to the <br />three-cent level as of February 29, 2008. <br />BACKGROUND <br />Previous Council Action and History <br />The City's first motor vehicle fuel tax was enacted in January 2003, based on the recommendation from the <br />Citizen's Subcommittee on Transportation System Funding. Their recommendation was for a combination <br />local motor vehicle fuel tax and transportation system maintenance fee for the purpose of generating an <br />additional $9 million annually to address the City's critical transportation system funding needs.. That first <br />fuel tax was implemented at three cents per gallon and has generated about $2 million per year since 2003. <br />A two-cent increase to the motor vehicle fuel tax was approved in January 2005, along with a sunset <br />provision that would cause the tax to revert to three cents per gallon on February 29, 2008, unless further <br />action is taken by the council to prevent that roll-back. ~ Council added the sunset provision; to be effective in <br />the third yeaz of the increase, citing the hope that three years would a11ow sufficienf time to complete a <br />comprehensive review of available funding options in the effort to develop a more permanent funding ~ <br />strategy for transportation system needs, including regional 'and statewide solutions. Those solutions have <br />. not yet come to fruition. <br />F:\CM0~2008 Council AgendasVvI080114~50801146.doc <br />City Councif Agenda page 101 <br />