City of Bend says Phase 1 of transportation fee is seeing success; Phase 2 fee hike planned for next summer

BEND, Ore. (KTVZ) -- The city of Bend's controversial transportation fee is picking up speed, and the city says Phase 1 is already showing success. It's expected to meet its $5 million revenue goal by July of next year.

Councilors will decide in coming weeks on Phase 2's fee schedule that begins next July increasing the revenue target to $10 million.

"That means, an increase in fees to get to that $10 million. And part of that Phase 2 is kind of figuring out really what that looks like on the non-residential side," said Senior Management Analyst Sarah Hutson.

The initial Phase 2 discussion, including a focus on what exemptions to allow, was on the Wednesday evening city council agenda. Here's that presentation:

Bend residents and businesses previously have voiced their frustration with the fees at city-held roundtables, highlighting transparency and affordability. 

Daniel Elder, the manager of Campfire Hotel, said at a meeting in February that small businesses are being taxed unfairly: "I'd be lying if I said I wasn't concerned about the fee, as it pertains to the hospitality realm. We're a very heavily taxed industry as is, and adding more is going to impact us in a negative way."

Single-unit home utility bills currently pay about $5.60 a month for the fee, while businesses are charged based on square footage. Those prices will increase beginning July 1st, 2025. But the city says discounts will be available for those on utility bill assistance.

Hutson said, "We've been collecting data through our business registration process to get data from businesses in the city so that we have that information for that next layer of the fee structure."

Despite the pushback, the city says it's seen more positive engagement, now that the fee's first phase has been implemented.

"Some people have questions, but even less than we thought might be the case, I think which shows that we communicated this as well as we hoped to, and we'll continue to communicate," Hutson said.