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HomeMy WebLinkAbout11-524 NOVEMBER 22, 2011 11-524 ORDINANCE FIRST READING (CARRIED LOST LAID OVER WITHDRAWN ) PURPOSE: CREATION OF A MUNICIPAL VEHICLE REGISTRATION FEE (WHEEL TAX) INITIATED BY: COUNCIL MEMBER POESCHL TRANSIT ADVISORY BOARD RECOMMENDATION (10/19/11): Implement a wheel tax between $5 and $10 to be used specifically for transit (4-2). A GENERAL ORDINANCE OF THE CITY OF OSHKOSH CREATING SECTION 27-6 OF THE OSHKOSH MUNICIPAL CODE PERTAINING TO MUNICIPAL VEHICLE REGISTRATION FEE. The Common Council of the City of Oshkosh do ordain as follows: SECTION 1. That Section 27-6 of the Oshkosh Municipal Code pertaining to municipal vehicle registration fee is hereby created as follows: SECTION 27-6 MUNICIPAL VEHICLE REGISTRATION FEE (A) Definitions. "Motor vehicle", under the terms of this section, means an automobile or motor truck registered under Subsection 341.25(1)(c) of the Wisconsin Statutes at a gross weight of not more than 8,000 pounds. (B) Fee Imposed. A municipal vehicle registration fee is imposed on every motor vehicle registered in Wisconsin and customarily kept in the City of Oshkosh. The amount of the fee is $10 annually. The municipal vehicle registration fee is in addition to state registration fees. (C) Exemptions. The following motor vehicles are exempt from the municipal vehicle registration fee: (1) All vehicles exempted by Chapter 341 of the Wisconsin Statutes from payment of a state vehicle registration fee. (2) All vehicles registered by the state under Subsection 341.26 of the Wisconsin Statutes for a fee of$5. (3) No vehicle registration fee shall be imposed on a motor vehicle which is a replacement for a motor vehicle for which a current City of Oshkosh municipal vehicle registration fee has been paid. NOVEMBER 22, 2011 11-524 ORDINANCE FIRST READING CONT'D (D) Use of Revenues. Revenues derived from the application of this section shall be directed for use by the City for the operations of the City of Oshkosh's Transit System. (E) Administration. The Director of Finance shall be responsible for the administration of this section. (F) Effective Date. This section shall take effect for all vehicles registered on or after April 1, 2012 and be in force upon its passage and publication. SECTION 2. The City Manager is directed to notify the Wisconsin Department of Transportation of the imposition of this fee as required by Chapter Transportation 126 of the Wisconsin Administrative Code. SECTION 3. This ordinance shall be in full force and effect upon its passage and publication for all vehicles registered on or after April 1, 2012. SECTION 4. Publication Notice. Please take notice that the City of Oshkosh enacted ordinance #11-XXX (A GENERAL ORDINANCE OF THE CITY OF OSHKOSH CREATING SECTION 27-6 OF THE OSHKOSH MUNICIPAL CODE PERTAINING TO MUNICIPAL VEHICLE REGISTRATION FEE [WHEEL TAX]) on December 13, 2011. The ordinance imposes a municipal vehicle registration fee of $10 on vehicles registered in the City, with certain exemptions, with the proceeds directed toward operations of the Oshkosh Transit System. The full text of the ordinance may be obtained at the Office of the City Clerk, 215 Church Avenue and through the City's website at www.ci.oshkosh.wi.us. Clerk's phone: 920/236-5011. O.IHKOIH City of Oshkosh - Transportation Department ON THE WATER 926 Dempsey Trail, Oshkosh,WI 54902 (920) 232-5342 (920)232-5343 fax MEMORANDUM TO: Honorable Mayor and Members of the Common Council FROM: Christopher Strong, P.E., Director of Transportation DATE: November 16, 2011 RE: Creation of a Municipal Vehicle Registration Fee (Wheel Tax) Background Over the last few months, the Transit Advisory Board has discussed a request, presented by Councilor Poeschl, to institute a municipal vehicle registration fee, commonly known as a"wheel tax". According to Wisc. Statutes 341.35, a municipality may institute such a fee provided that the net proceeds are directed toward transportation-related purposes. The Wisconsin Department of Transportation is responsible for administering this fee, and simply adds it to the standard state registration fee for any vehicle customarily situated in a jurisdiction where this fee is in effect. The state charges an administrative fee of 10 cents per vehicle, and then pays the remainder of the money to the municipality. The Board, at its October 19, 2011 meeting, recommended 4-2 to institute a $5 to $10 municipal vehicle registration fee, with the proceeds being specifically directed to the Oshkosh Transit System. At the November 8, 2011 Common Council meeting, it was decided that the matter should be referred back to the Transit Advisory Board for additional clarification and input. This was to be discussed at the November 16, 2011 Board meeting. (Minutes will be available by the time the Common Council is scheduled to vote on this on December 13, 2011.) Analysis Staff developed a draft ordinance based on input received from the Transit Advisory Board and Councilor Poeschl. The fee is set at $10 for every vehicle customarily situated in the City of Oshkosh, although certain vehicle classes are statutorily exempt from this fee. The fee would be in effect as of April 1, 2012, which reflects the notification requirements established by the state. There was some discussion at the Board meeting as to whether to include a sunset date, at which time the ordinance would automatically repeal itself unless there were future Council action. The Board instead recommended that the Council be required to review the ordinance at some future date. A review date of December 1, 2015 was recommended, in order to allow for roughly four years of experience with the fee. This review date was not included in the ordinance, however, as City of Oshkosh—Transportation Department 1 Creation of a Municipal Vehicle Registration Fee(Wheel Tax)/November 16,2011 the Common Council may request a review of this or any other ordinance at any time. The ordinance directs fee revenues toward Oshkosh Transit System operations. This would guarantee that a certain minimum amount of locally generated funding goes toward the transit system. However, the ordinance does not bind this or future Councils with respect to how to use other local funding. As such, while the ordinance may result in an increase of local funding for the Oshkosh Transit System, there is no guarantee that this will occur. The five jurisdictions which currently have this fee in their ordinances (Beloit, Mayville, Milwaukee, Sheboygan and St. Croix County) have generally directed the funds toward street maintenance and repair. It is not clear how much of a net increase in street maintenance and repair has resulted from fee implementation in these communities. It should be noted that an assembly bill (AB 295) has been proposed which would require municipalities to hold a voter referendum to create a new wheel tax, or to reaffirm a wheel tax that is already in effect. This bill, if passed, would supersede the City ordinance. Fiscal Impact Staff estimates that a$10 fee would generate approximately $470,000 in annual revenues. Wisconsin Administrative Code Trans 126 indicates that payments are remitted to municipalities on a monthly basis, with a lag time of up to 30 days after the end of a month. Therefore, this means that the City could receive a portion of this money(estimated at $270,000) during 2012. The 2012 city budget was balanced without assuming any revenues from this type of fee. Apart from future budgetary adjustments, any revenues from this fee would then result in a budgetary surplus. Impact on Transit System Operations The 2012 draft budget preserves fixed route and paratransit service at 2011 levels with a fare increase proposed on certain types of paratransit service, but without any revenue from this type of fee. The recently adopted Transit Development Plan provides guidance as to how to use any increase in revenue that may be available through this fee, such as toward extending service later into the evenings. While the Oshkosh Transit System serves the vast majority of the City, there are many neighborhoods and properties which do not have convenient access to routes. Some may expect to receive transit service in return for their payment of the municipal vehicle registration fee. However, many of these areas cannot be effectively or efficiently served by transit, due to their low population and land use density. Serving these areas would decrease the system's overall performance effectiveness, which is considered by Federal and State agencies in their funding decisions. It is possible, but not certain, that the additional revenue in 2012 could be leveraged to obtain additional federal and state operating assistance. If so, this could allow the estimated $270,000 to add more than $500,000 to the transit system's budget. However, this assumes that the local levy support remains unchanged. Subsequent Council actions may shift funding allocations within the City of Oshkosh—Transportation Department 2 Creation of a Municipal Vehicle Registration Fee(Wheel Tax)/November 16, 2011 2012 budget so that funding is increased by a smaller amount than are generated by the fee proceeds. The 2012 fee proceeds still could be used even if federal and state funds are not leveraged. This could be translated into additional operational expenses and/or a budgetary surplus. Recommendation The wheel tax under consideration introduces at least two separate questions: 1) should the City institute a wheel tax, and 2) to what purposes should proceeds be directed, if such a tax implemented? The first question is a policy question for the Council to decide. While this additional revenue source could prove helpful in sustaining or enhancing municipal services, it has often been very controversial in communities where it has been implemented. Since the 2012 budget does not rely on revenue from this fee, it may be appropriate to delay a vote on implementing this tax until planning starts for the 2013 budget. If the Council decides that a wheel tax is appropriate, staff recommends that it not be earmarked specifically for transit. While the transit system is available to the entire community, many people are not able to use it due to where they live and/or the types of trips that they typically make. This fee would arguably provide no demonstrable benefit to these individuals. Instead, using more generic language, such as "transportation-related purposes", would give this and future Councils more latitude in the use of these funds, and would not indirectly constrain the transit system to serve areas and trips that it cannot efficiently serve. Finally, if the Council would like to see a sunset clause included in the ordinance, staff recommends that the ordinance be amended to add Section 27-6(G) as follows: (G) Expiration Date. This section shall be automatically repealed on April 1, 2016. Respectfully submitted, Approved: /11_,.„,- (7" P4 Christopher Strong, P.E. Mark A. Rohloff Director of Transportation City Manager City of Oshkosh—Transportation Department 3