Bend city councilors discuss, give staff guidance on transportation fee, with hearing, first vote set in two weeks

(Update: Adding video and comments from city senior project analyst)

BEND, Ore. (KTVZ)-- Bend city councilors talked with staff Wednesday night about revisions to the rules and promises surrounding the controversial proposed transportation fee, following two recent listening sessions. A timeline was presented, with a public hearing and first reading scheduled for their next meeting, in two weeks.

The process may be complex - and the politics touchy - but the city's goal is simple, as Senior Project Analyst Sara Hutson put it Thursday: "Whether you walk, drive, roll, so really making sure that we keep up the quality of those services now into the future."

Councilors will decide on how funds will be used, adopting a code that will set the purpose of the fee and the July 1 start date. General takeaways from the two public listening sessions showed calls for greater transparency and worry about affordability as the most important themes to residents.

"They also talked about having public engagement opportunities for the implementation of Phase 2 of the transportation fee, particularly with the Bend Economic Development Advisory Board and the business community," Hutson said.

Councilors who heard plenty of criticism, concern and government mistrust at the two recent listening sessions said only the first phase will be firmly in place when it starts July 1, and the data derived from its first months will have major impact on how the fee and especially two planned future-year phased-in increases are adjusted.

They also want staff to find new ways to more fully inform the public on just where the money is being spent. They could create a special citizen committee, much like one created to track the general obligation bond projects. Much of the concern also focuses on the impacts on businesses, many of whom say it will deal a major blow to their budgets if the current formulas remain in place.

One councilor said during Wednesday's work session, "It may be that different needs come up differently in different years, but at the same time, I think transparency is paramount."

Councilor Mike Riley suggested and others agreed that there should be a discussion, perhaps between years 2 and 3, of going back out to voters with a possible gas tax that would mean revenue for roads and transportation also comes from city visitors.

But City Attorney Mary Alice Winters also warned against making it “so confusing the public doesn’t know what you are doing.”

Councilor Anthony Broadman urged evaluating a gas tax after the fee is implemented despite voters rejection of a gas tax several years ago, so visitors contribute to the system.

City Chief Operating Officer Russ Grayson said staff plans to return to the council late this year, after three to five months of billing the new fee, to review how it’s working out and to begin firming up the second year’s rate structure. Officials said fee formulas in future years are likely to look quite different, especially on the non-residential side.

That could help persuade some business owners that the city is listening, as some last week criticized the basis of square footage, which Todd Dow, a downtown employee, said has “little direct relationship to the impact on transportation.”

A Bend native whose single mother is on a fixed income warned, “$10 or $15 (a month) can make or break some of these families. I believe basically this is the lazy way out.”

Daniel Elder, manager of the Campfire Hotel, voiced concerns about the fees’ impacts on the hospitality industry, especially being introduced mid-year into their budgets, when higher labor costs have many “already struggling to get by.”

Steve Scott, who owns a large mini-storage complex on NE Twin Knolls Drive, said it’s expected to cost him $50 a month. Between that, the library levy and a possible school district local option tax, he said, “those three are going to cost us $13,000 a year. … We pay $112,000 in taxes a ear for that mini-storage, not counting the fees.”

“It’s got out of hand,” Scott said. “If we can’t do something about cutting expenses, instead of raising taxes and fees, we’re all going to get in trouble.”

City Manager Eric King tried to explain that the city, too, is seeing the impacts of inflation, with the cost of paving contacts doubling. “ And while general-fund revenues are growing, expenses are not keeping up, because governments also face, beyond the big cost of personnel, higher material and other costs at a ‘much higher rate” than revenues.

Councilor Ariel Mendez said the impact of property tax limitations continue to hit local governments, and that if you build a new $1 million home in Bend, you only pay taxes on about 38% of that added value.

“In a nutshell, that’s why growth isn’t paying for growth,” he said. “Yes, the budget is growing, but not as fast as growth, and certainly not as fast as expenses.”

King said they have made cuts to the budget, as so many want or even demand, but “as a growing city, our residents are wanting more from us.”