Since March, staffers working on the Democratic National Convention have been using the city of Denver’s tax-free gas pumps to fill up their cars — and using its carwashes.

A dispute about this prompted city officials Tuesday to promise that the local host committee will reimburse the city at a market rate for gas — and pay state and federal taxes on the fuel.

It was never the intent of the city not to properly charge the Democrats for the fuel or its taxes, said Katherine Archuleta, mayoral liaison to the convention.

Some Denver City Council members became angry when Denver public-works employee Christine Downs told them Tuesday that the host committee will reimburse the city for the carwashes and tax-free fuel it is using for its fleet of vehicles.

Councilwoman Jeanne Faatz reacted sharply.

She said she didn’t think it was fair that local host-committee employees, as well as those with the Democratic National Convention Committee (DNCC) who use those cars, are driving around on tax-free fuel.

“It didn’t sit well,” she said. “I pay taxes on my fuel when I fill up my own car.”

City Councilman Charlie Brown agreed.

“Does the (Democratic) Party want to accept tax-free fuel?” he asked. “This money goes to our state highway system. Why shouldn’t the DNC be willing to help our roads and our maintenance and our construction?”

Denver Mayor John Hickenlooper told council members that Minneapolis had a similar deal with the Republicans.

That isn’t true, said Teresa McFarland, spokeswoman for the local host committee for the Republican National Convention.

“We pay for fuel like everyone else does,” she said.

Later in the day, the camp of GOP presidential hopeful John McCain issued a statement saying that Sen. Barack Obama, the presumptive Democratic nominee, was “for a gas-tax holiday — as long as it benefits him and his political party.”

It is against the Colorado Department of Revenue’s rules for any nonprofit, private business or government contractor to receive tax-free fuel, which is reserved for local and state governments.

The Denver 2008 Convention Host Committee holds an unsigned contract with the city for fuel and carwashes.

The host committee has racked up about $10,000 in charges so far, but no bills have been issued and no reimbursements sent, Downs said. The value of the contract is estimated at $466,125.

Archuleta said city gas pumps are preferred for security purposes — particularly during the convention, when host-committee vehicles will be carrying dignitaries, she said.

“The City of Denver and the Denver Host Committee informed us late this afternoon about this matter and told us that the Denver Host Committee will pay all applicable taxes and fees related to their fuel contract, as they should,” the DNCC said in a statement Tuesday.

Staff writer Chuck Plunkett contributed to this story.