PENDLETON, Oregon – At its meeting Tuesday night, the Pendleton City Council approved a plan to gain an additional $1 million in funding to bring Pendleton’s streets up to par over a 10-year period. One important part of it is a gas tax, that will require the approval of voters. The four-cent tax would expire after 10 years.
Pendleton Mayor John Turner issued the following statement following the decision:
The top priority of Pendleton’s citizenry is to fix Pendleton’s deteriorating streets and to provide sustainable funding to keep the streets in good condition. In response, the City Council has reached agreement on a solution to this difficult and expensive problem.
The Council has been studying street maintenance for two years, trying to understand the extent of the problem and to determine how much money it will take to provide sustainable repairs. For decades, the City spent only its share of gas taxes on street repair. This was typically about $350,000 per year. Over time this has resulted in about $12 million dollars in deferred maintenance. The problem is getting bigger every year and is estimated to become a $26 million backlog in ten years at the current rate of spending.
Over the past four years the amount budgeted for street maintenance has been gradually increased by using a new in 2015 street utility fee, marijuana tax receipts, cuts to other parts of the General Fund, and increased state gas tax money. In the current fiscal year, Pendleton will spend about $1.2 million on its streets. Engineering studies show, however, that the City really needs to spend $2.2 million each year for the coming decade if it expects to get its streets into a condition that can be affordably sustained. So, the task has been to determine the best way to come up with an additional $1 million per year for street repairs.
The Council put together a list of hypothetical ideas on how to raise this revenue and made some 30 presentations to civic groups and citizens to get their reaction. The most popular of the ideas presented were to increase hotel taxes, begin a city gas tax, and charge a fee for large events. At the City Council session on Tuesday, December 3rd, the Council voted to approve a way to move forward by:
Asking voters to approve a 4 cent gas tax that would expire after ten years. This tax is estimated to raise approximately $440,000 per year and would be on the ballot in May of 2020.
The Council approved a hotel room fee or tax equivalent to $2.00 per night. This is estimated to raise about $306,000 per year. State law requires that 70% of the revenues generated by this fee or tax to be used for tourism or entertainment related activities, so these new revenues will be used to replace General Fund dollars that are used to support these types of activities, freeing up $306,000 to be used for street repair.
The current street utility fee of $5.21 per month will increase by $3.00 per month, resulting in about $250,000 in new revenues annually. There will be a provision to exempt low income families from paying this new fee.
The City will make cuts to its general fund in order to raise another $110,000 annually for street maintenance.
The idea of charging an event fee was endorsed, but there remain quite a few questions on how this fee will be administered and what events will be required to collect it. The Council will work with a joint committee of representatives from the larger events and the education community to determine the best way to administer such a fee. The leaders of the Round-Up, Happy Canyon, and the Music Fest have declared their willingness to work with the City on this issue. Once the questions can be answered, the goal will be to raise at least $95,000 a year from an event fee. This committee will begin meeting in January.
A precise date for implementing the new hotel fee or tax and the increase in the street utility fee has not been set, but residents can expect to see them started in time to impact the 2020-2021 budget which begins on July 1st, 2020. The Pendleton Development Commission recently approved a one-time contribution of $1.4 million for street maintenance within the urban renewal district, which will also help reduce the overall deferred maintenance backlog.
The Council knows that new fees or taxes are rarely popular and it will require tremendous moral courage and resolve to stand up to the criticism that always comes with any new project of this size. We are showing our citizens that we are doing what you are telling us to do. So, when the vocal minority of keyboard warriors start writing letters about government waste and its insatiable appetite for new dollars, please remember we are going down this path in order to fix a decades-old problem.