Should Portland establish a new Transportation Utility Fee to help fund basic maintenance and safety of the City’s transportation system (add Code Chapter 17.20)?

The City of Portland ordains. Section 1. The Council finds:The Portland Bureau of Transportation (PBOT), like transportation agencies across the nation, is facing a financial crisis that has been building for years, driven by a combination of stagnant or declining revenue sources, while costs continue to increase significantly. Over 70% of PBOT's funding comes from restricted sources, which are tied to specific expenses, such as grants for specific capital improvement projects. The limited pool of unrestricted funding that can be used flexibly for things like basic maintenance and operations is known as General Transportation Revenue (GTR). Since Fiscal Year (FY) 2019-20, PBOT has experienced $42 million in reductions to discretionary GTR-funded programs and services such as paving, residential street sweeping, and the 823-SAFE community response line for traffic calming and safety improvements. During this same period, the bureau drew down GTR reserves by $63 million and eliminated 66 full-time-equivalent positions. PBOT's financial outlook has continued to worsen as federal grants or grant opportunities were rescinded or shut off by the current administration. The ballot referral of the 2025 state transportation bill has also meant $10.6 million less revenue for PBOT this fiscal year (2025-26) and likely $24 million less next fiscal year (2026-27). At the same time, many roads, bridges, signals and other infrastructure are in disrepair. Over the last five years, the percentage of streets in poor condition has increased significantly – from 43% to 64% on busy streets and from 55% to 72% on local streets. Almost half of the bridges PBOT maintains are at or past their expected asset life and 20% are weight-restricted. The longer the City waits to repair our system, the more expensive it is to fix. The City is committed to Vision Zero, the goal to eliminate traffic deaths and serious injuries. However, limited funding continues to hinder the City's ability to implement safety improvements, even on our most dangerous streets. In 2023, Portland experienced a tragic record of 69 traffic deaths. Although fatalities have declined somewhat since then, traffic deaths and serious injuries remain far too common. A functioning transportation system is vital to Portland's economic prosperity, contributing to housing production, jobs creation, and climate resilience. Without additional, ongoing, and stable system maintenance funding, the City cannot meet community expectations for safety, reliability, and equitable access. On May 7, 2025, the Council passed Resolution 37705 directing PBOT to construct and maintain sidewalks while addressing pavement maintenance deficiencies throughout Portland, improving safety and accessibility for all residents through the Sidewalk Improvement and Paving Program (SIPP). On July 16, 2025, the Council passed Resolution 37712 directing the Public Works Service Area and Budget and Finance Service Area (now the Office of the Chief Financial Officer) to develop a comprehensive strategy to identify and evaluate viable alternative transportation funding options. On September 17, 2025, the Council passed Resolution 37716 reaffirming its commitment to the Vision Zero Action Plan and directing the convening of a cross-bureau Vision Zero Task Force to coordinate strategies and actions to eliminate traffic-related fatalities and serious injuries in Portland. On December 15th, 2025, PBOT presented a report to the Transportation and Infrastructure Committee detailing the Bureau's review of alternative transportation revenue mechanisms, scan of transportation funding models implemented in other cities, and a narrowed list of four revenue options for further vetting, including a transportation utility fee. On January 12, 2026, PBOT returned to the Transportation and Infrastructure Committee to present different rate scenarios and estimated revenue amounts for a transportation utility fee, street damage restoration fee, retail delivery fee concept, and third-party food delivery fee concept as well as the Bureau's plan to share this information with the community and gather input about the revenue options, priorities for investing new revenue, and accountability. Between January and March, PBOT implemented a robust public engagement plan that included: presentations to PBOT Modal Committees and District Land Use/Transportation Committees, drop-in open houses in each of the four Council Districts, an online open house, and outreach to various organizations representing labor, businesses, workforce equity, utilities, culturally specific programs, neighborhood associations, affordable housing, economic development, transportation policy, and environmental advocacy. On March 9, 2026, PBOT provided a report to the Transportation and Infrastructure Committee on the feedback the Bureau gathered through its public engagement process. PBOT received over 600 responses about the transportation utility fee from the Council District open houses and the online feedback form. Approximately 78% of those responses supported a transportation fee. Portlanders also shared a preference for new revenue to pay for basic maintenance and safety improvements. A transportation utility fee is a monthly fee charged to residents and businesses based on their use of the transportation system. Based on trip-generation modeling, the City estimates that 70% of trips in Portland are generated by residential properties and 30% by non-residential/commercial properties. There is a strong connection between the transportation system maintenance, operations, and safety costs and the number of trips generated by properties that use the public right-of-way. The Transportation Utility Fee allocates a portion of these costs among properties based on their estimated generation of trips and corresponding use of the transportation system. Cities across the U.S., including 31 in Oregon, have implemented a transportation utility fee to pay for basic road maintenance and safety improvements. For the Portland Metro Area, the current regional average monthly transportation utility fee is $12.08 for a single-family property and $9.49 for a multifamily property, per dwelling unit. Fees for multifamily properties are generally lower than for single-family properties because, on average, multifamily properties generate fewer trips. A transportation utility fee is typically collected on existing public utility billing systems, lowering administrative costs and providing opportunities to address affordability for low-income residents of single family homes through existing discount programs. Implementing measures to make equivalent relief available to low-income residents of multifamily properties who are billed for the TUF would address affordability equitably. A transportation utility fee is a revenue source not tied to fossil fuel consumption. The adoption of a transportation utility fee, therefore, aligns with the City's 2022-2025 Climate Emergency Workplan, which calls for decoupling transportation funding from fossil fuels in order to avoid conflicts between revenue needs and climate goals. Adopting a transportation utility fee for non-residential/commercial properties calculated as a percentage of the total charges on the utility bill as an initial approach would allow for low-cost and efficient collection and would provide additional time to further examine the transportation utility fee methodology for non-residential/commercial properties. PBOT has demonstrated the ability to effectively manage local transportation funding. For example, PBOT's Fixing Our Streets Program, funded by the local 10-cent gas tax, was approved by Portland voters in 2016 (54% approval) and renewed in 2020 (74% approval) and again in 2024 (72% approval) to pay for basic maintenance and safety improvements. Fixing Our Streets' robust accountability structure, which includes annual reporting to the Council and an oversight committee, has been key for the program's success and continued public support. NOW, THEREFORE, the Council directs:The Transportation Utility Fee is created and will be collected by the Public Works Service Area on the utility bill on or after January 1, 2027, according to the methodology shown in Exhibit A.Add City Code Chapter 17.20 as shown in Exhibit B.Create TRN-3.450 Transportation Fee Schedule Exhibit H to add the new Transportation Utility Fee to the Transportation Fee Schedule as shown in Exhibit C, attached to this Ordinance. Exhibit C includes rates for Fiscal Year (FY) 2026-27. Exhibit C is binding City policy.Financial assistance available to water, sewer, and stormwater accounts also applies to the Transportation Utility Fee.Income-qualified residents of multifamily properties who would be eligible for financial assistance for water, sewer, or stormwater services but are not directly billed for those services due to their housing type shall be eligible to receive a Transportation Utility Fee relief equivalent to the discount provided to single-family residential accounts. Public Works, in consultation with the City Data and Privacy Office, shall engage with community-based organizations, nonprofits, renters' rights organizations, and the Portland Utility Board to develop a revised transportation financial assistance and discount program that considers renters and underserved and marginalized populations. Public Works shall provide a report and recommendations, including options for assistance, discount amounts, and delivery methods, to Council no later than December 31, 2026. The City shall provide a simple and accessible application process, with options for online, in-person, and community-based assistance. Residents approved for the relief shall remain eligible for a period of no less than two years before recertification is required.The Public Works Service Area shall conduct outreach and partner with community-based organizations to ensure that eligible residents are aware of and able to access the relief program. The revenue generated from the Transportation Utility Fee must be deposited into a dedicated account in the City's Transportation Operating Fund and must be used consistent with the purposes of that fund, including for transportation system maintenance and operations.Transportation Utility Fee revenues may help stabilize the Portland Bureau of Transportation's (PBOT) current service level shortfall by prioritizing basic maintenance, safety improvements, and operations as outlined below. Funding may also be used to service debt.75% of annual Transportation Utility Fee revenues shall be expended on activities that maintain, preserve, and rehabilitate existing transportation infrastructure, including maintenance activities that help the City achieve Vision Zero goals and that align with the SIPP objectives.Eligible maintenance and preservation activities include, but are not limited to:Pavement preservation, crack sealing, capital maintenance, and resurfacingPothole and base repairTraffic signal and streetlight maintenancePavement markings and signage replacementBicycle and pedestrian facility maintenanceSidewalk and curb repairADA accessibility improvements associated with maintenanceBridge and culvert maintenanceStreet sweeping and drainage maintenance within rights-of-wayBike lane sweeping and cleaningTransportation asset management and condition monitoring25% of annual Transportation Utility Fee revenues shall be used for transportation-related safety expenses. Half of these revenues (12.5%) shall be expended on activities that move us closer to our Vision Zero goals; half of these revenues (12.5%) shall be expended on the SIPP objectives. These revenues shall not be used for major roadway expansion. Eligible activities include:Vision Zero improvements identified in the Vision Zero Action Plans, addenda, and programmingBicycle or pedestrian safety improvements Intersection safety modifications that do not add general purpose travel lanesSafety improvements associated with resurfacing projectsADA upgrades required during sidewalk repairSIPP improvementsSidewalks and alternative pathways, but not pavement maintenance projects, that enhance safety as identified in the Sidewalk Improvement and Paving ProgramPBOT shall make maintenance and safety investments across the city based on asset and infrastructure data about critical maintenance and safety needs necessary to maintain the network. Investments will also be prioritized in areas that have historically experienced disinvestment and have high concentrations of low-income households.PBOT, in consultation with the Revenue Division and in coordination with the Public Works Committee, will continue to engage the business community and other key stakeholders to develop a recommendation for an impact based Transportation Utility Fee methodology for non-residential/commercial properties. PBOT will hold rate design hearings by February 15th for discussion and feedback on different approaches. At a minimum, approaches will include:a trip-based Transportation Utility Fee, similar to the 31 other Oregon cities.a land use based methodology with a combined per unit and parcel square footage rate model. Special consideration will be given to impacts on small businesses. PBOT will report back by April 1st with a recommendation that could be implemented January 1, 2028, one year after the implementation of Portland's Transportation Utility Fee. PBOT shall put in place an appeals process prior to the Transportation Utility Fee implementation date of January 1, 2027. The appeals process will be developed to provide relief for non-residential users where the water-sewer-stormwater bill is disproportionate to the transportation impact based on regional averages for similar types of businesses. PBOT will propose rate adjustments, including inflationary increases, or new rate design proposals, to the Council through the City's annual budget process.PBOT will ensure accountability for the Transportation Utility Fee by utilizing the same structure and process, including use of the existing Fixing Our Streets Oversight Committee, as is currently used with the Fixing Our Streets Program. This structure includes: Funding allocated to clearly defined programs/servicesAnnual reports to the Council Annual external auditsA community committee to provide guidance and oversightThe City Administrator will update procedures and administrative rules as necessary.