2016-08 ADDING CITY CODE - CHAPTER 51.4 - LOCAL MOTOR FUEL TAX

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CITY COUNCIL MEMORANDUM NO. 2016-6 TO: Mayor Julie Moore Wolfe City Council Members FROM: Tim Gleason, City Manager Gregg Zientara, Director of Finance Richard Marley, Director of Public Works DATE: February 16, 2016 RE: Local Motor Fuel Tax The City of Decatur has the authority to exercise any power and perform any function pertaining to its government and affairs which includes the implementation of a local motor fuel tax. City staff has proposed a$0.05 per gallon tax on non-diesel motor fuel purchased at retail or bulk within the City of Decatur and a$0.01 per gallon tax on diesel motor fuel purchased at retail or bulk within the City of Decatur. The revenue generated from this tax would be used solely for transportation and transportation related projects. There would be additional protection in that City Council must approve any expenditures in the amount of$20,000 or more as per our policies. In addition,the Finance Director would keep these funds segregated by creating a special revenue fund entitled"Local Streets and Roads." The implementing of a local motor fuel tax has been discussed by various City Councils over the years as a means of generating revenue for roadway repairs. On July 3, 2002 a memo was prepared and sent to City Council regarding the budget revenue options, the impact on the City and community and the advantages and disadvantages of the various revenue possibilities. On July 11, 2002 those alternative revenue sources were discussed by the City Council in a study session and a local motor fuel taa�was one of the sources discussed. Following that study session, an ordinance adding a local motor fuel tax was placed on the Agenda for the Council meeting of July 29, 2002 (as well as an ordinance adding a utility tax). Both of those ordinances failed to be passed by the Council at that meeting. On August 15, 2002, a new memo was prepared and provided to the City Council focusing on the issues regarding the revenue and t�resources necessary to avoid staff reductions. A local motor fuel taa�was again discussed but not enacted. At the March 2, 2015 Council meeting, a study session was held for a discussion of a local motor fuel tax. At that meeting, an overview and update was provided to Council regarding the tax as well as the dedication of any such tax to repair our roads. Council decided at that meeting to revisit this issue.