Angry reaction brings a halt to use of city pumps
Daniel J. Chaconand Kevin Vaughan, Rocky Mountain News
Tuesday, July 22, 2008
Councilwoman Jeanne Faatz wants the private group to pay its share in fuel taxes.
What is this?
The committee hosting the Democratic National Convention has used the city's gas pumps to fill up and apparently avoided paying state and federal fuel taxes.
The practice, which began four months ago, may have ended hours after its disclosure. An aide to Mayor John Hickenlooper released a statement Tuesday evening saying that Denver 2008 Host Committee members would pay market prices for fuel and would also be liable for all applicable taxes.
However, Public Works spokeswoman Christine Downs told City Council members just hours before that host committee members were fueling up at the city pumps. The city does not pay taxes on the fuel for its fleet, and Downs said the host committee would not either.
The disclosure brought immediate scrutiny. Colorado Attorney General John Suthers said the practice "would seem" to be illegal and referred the matter to the state Department of Revenue.
Nonprofits, such as the host committee, are subject to state and federal gasoline taxes, according to the Department of Revenue.
The issue arose during the regular weekly meeting of Hickenlooper and City Council members. Downs requested authorization for a contract so the Public Works Department could be reimbursed by the host committee for use of "fueling facilities, fuel and car washes."
Downs said the contract with the host committee started in March and that $9,700 in fuel and services had been purchased from the city so far. But the committee has yet to be billed. The city anticipates $466,125 in total revenues from the contract, Downs said.
City Councilman Charlie Brown raised the question of whether the host committee would be paying fuel taxes, and Downs said it wouldn't.
"There's something there that just doesn't seem right to me because, in a sense, you're saying then that the officials who pass the laws are not willing to live by them," said Councilwoman Jeanne Faatz.
Hickenlooper said the practice isn't unique to Denver.
"I do know for a fact that they're doing the same exact thing in Minneapolis," Hickenlooper said, referring to the city that along with St. Paul is hosting the Republican National Convention.
But Teresa McFarland, a spokeswoman for the Minneapolis-St. Paul host committee, said its members are getting their gas at public pumps.
"We're not getting a tax break on fuel," she said. "That's not the setup at this end."
In Colorado, consumers pay 40.4 cents per gallon in state and federal fuel taxes.
"We're a nonpartisan, nonprofit committee, but certainly, if the city feels that taxes are applicable, we will pay those, too," said Chris Lopez, spokesman for the host committee. "So we would pay all applicable taxes on any of the fuel."
The host committee, which is responsible for raising money to put on the convention, is using the city's pumps "for safety and security reasons," Lopez said.
"We know the gas is not tainted," he said. "We use it as a safety and security measure."
Hickenlooper said GM is "loaning" the host committee vehicles and he expects a large number to be hybrids. It wasn't clear Tuesday whether host committee members are using those loaners or their personal vehicles.
Dick Wadhams, chairman of the Colorado Republican Party, said the city's arrangement with the DNC host committee was "appalling."
"I'm hoping this is not the first of many stories about how Colorado taxpayers are apparently subsidizing the Democratic convention," Wadhams said.
After the meeting, Faatz said it was wrong for the DNC host committee to get a tax break.
DNC host's tax-free gas evaporates : Updates : The Rocky Mountain News