FILE - The Portlandia statue sits atop the Portland Building, home to thousands of city employees.
Bradley W. Parks / OPB
Portland City Council will vote Wednesday whether to dramatically increase a fee paid by contractors to help repair roads.
Currently, when utility companies need to cut into pavement to lay electrical wire, sewer pipes, or other hardware, they must pay the city around $7.22 per square foot of damage to the street. The proposal before councilors this week would nearly double that cost to $13.84 per square foot.
According to the Portland Bureau of Transportation, this increase could bring in roughly $22 million more to the struggling bureau each year.
City transportation officials say this increase has the potential to be “transformational” to the city’s ability to pay for road maintenance, which has lagged for years and been a constant source of public debate.
“We’ve been in cut mode for so long and we’ve been constrained in what we can do because of a lack of funding,” said PBOT Director Millicent Williams at an April 2 council meeting. “By moving forward something that would innovatively fill that gap, that’s an exciting opportunity.”
The current cost to carve into city streets largely covers the city’s ability to administer fee collection, but it doesn’t pay for the damage done to the street through excavation. While companies are expected to repair the area of street it’s cut into, the process has an impact on the entire road.
According to PBOT, streets that have been excavated need to be repaved three times more frequently than those that haven’t been cut into.
The boosted “street damage restoration fee” would directly pay for the cost to repave and maintain city roads.
Ironically, some of the most frequent street excavators are city departments, like the Water Bureau and Bureau of Environmental Services. At an earlier council meeting, some members of the public raised concerns that this fee increase could lead to increased water and sewer bills.
Other utilities that cut into streets often are telecommunications companies, like Comcast as well as energy companies like NW Natural and Portland General Electric.
Councilors, who unanimously supported the fee hike at an earlier council meeting, are expected to advance the measure Wednesday night. If approved, it would go into effect starting Jan. 1, 2027.
The vote comes as PBOT continues to see its budget shrink. Since 2020, the bureau reports having to cut its budget by some $42 million, resulting in layoffs, delayed maintenance work, depleted street safety programs and other shuttered services. Neglected maintenance has left PBOT facing $6 billion in upgrades to get the streets, sidewalks, signs, and other assets it oversees to “fair” condition.
PBOT already has a source of revenue to pay for street maintenance, the local 10-cent per gallon gas tax. But, according to the city, inflation has halved the tax’s buying power since it was approved by voters in 2016.
The street damage fee is one of two new revenue sources Portland councilors are considering to spark revenue growth for roadwork.
Also on the table: a brand new monthly street utility fee on residents and businesses. A single-family home would pay $144 annually, and multi-family homes would pay $101 annually per residential unit. Commercial buildings would pay about 4.3% of their existing water, sewer, and stormwater utility bill. If adopted as-is, the fee could bring PBOT around $47 million annually.
This proposal is similar to a previous revenue idea floated a decade ago. In 2014, then-mayor Charlie Hales and then-commissioner Steve Novick (now a city councilor) proposed a “street fee” to charge households between $36 and $144 annually. Facing strong opposition from business and fellow council members, the plan fizzled out.
Councilors are still making tweaks to the new street fee proposal. It may come to a full council vote later this month.