PENDLETON — The Pendleton City Council considered several novel ideas to raise more money for street maintenance, including a restaurant sales tax, an income tax, and a payroll tax.
But when it came time to make a decision Tuesday, the council stuck with using familiar methods to gather more than $1 million in additional road repair revenue annually.
The council’s proposals — a 4-cent gas tax, $2 lodging fee, and a $3 increase to the street utility fee — are either a revival of a previous tax or an add-on to an existing fee.
The council also endorsed the idea of a new ticket fee on large events, but the concept has been put on hold while the city convenes a committee to take a deeper look at the issue.
The council discussed each tax and fee at the meeting and went over how much money city staff expected it to generate.
Speaking in favor of the gas tax, Councilor Carole Innes said the council needed to take action on street repair.
“We need to show some leadership and step up and not kick it down the road,” she said. “Even though it might be a bit painful, that’s our job. Our job is to sell it and make our constituents understand, if you don’t want to be in the same place in 9 or 10 years, you have to make sure we have enough funding to keep our roads in good condition.”
Gas tax (Estimated annual revenue: $440,000)
The council settled on a 4-cent gas tax fairly quickly, but had a more lengthy debate on whether the gas tax should sunset in five years or 10.
Councilor McKennon McDonald worried that a 10-year expiration date would be a tough sell to voters.
But the 10-year sunset won out, backed by Councilor Scott Fairley and his primary concern that the city would drop the revenue source before the streets were brought into good condition.
“If we let these fees sunset, we run the risk of future councils not being willing to take a political risk to increase fees,” he said. “Frankly, speaking for myself and the vast majority up here, we’re up here to solve problems and not be the most popular people in the city, and I just don’t know if we can guarantee that will always be the case for the council.”
The council seemed intent on putting the gas tax in front of voters in May, which would be 10 years after voters passed a 4-cent gas tax to help fund the Airport Road extension and almost five years after voters rejected a 5-cent gas tax for road maintenance.
The Airport Road gas tax ended in 2013 after the city’s contribution was funded, but the road has yet to attract industrial development and the city’s focus has since turned to the Pendleton Unmanned Aerial Systems Range.
The 2015 gas tax proposal was meant to solely address road maintenance, but the measure went down at the ballot box as the Oregon Fuels Association’s political action committee spent thousands of dollars to defeat it.
Lodging fee ($306,000 per year)
Because state law requires cities to spend 70% of a hotel room fee on tourism promotion, Pendleton will need to do some financial wrangling to funnel the money toward streets.
Based on a similar situation in the city of Salem, City Attorney Nancy Kerns said the city could use the new funds for a “recreation facility,” like the Pendleton Aquatic Center. The council could then turn around and spend the general fund money that would normally be spent on the aquatic center and redirect it toward streets.
Another hotel room fee on top of the 8% lodging room tax and a $1.50 Tourism Promotion Assessment Charge isn’t popular with local hoteliers, several of whom were in the crowd Tuesday.
The Oregon Restaurant and Lodging Association has the ability to put money where its members’ mouth is.
To beat back a 5% restaurant sales tax proposal in Hood River County, the association’s PAC spent $12,714 specifically earmarked to defeat the tax, and residents voted it down in May.
Street utility fee ($250,000 per year)
Before the meeting, the city distributed a survey to get an idea of what the public would support to generate new revenue for road maintenance.
Some form of gas tax, lodging fee, and ticket fee all garnered majority support in the survey, but only about 1 in 3 respondents supported an increase in the street utility fee.
But the council is forging ahead with raising the street utility fee, which the council established in late 2015 as a $5-per-month fee.
Price indexing has since raised the fee to $5.21, and the council wants to implement some sort of sliding scale or exemption to protect low-income households from the raise.
If the council implements the higher fee, Councilor McDonald said members need to communicate with the public why it was doing it.
The street utility fee was instituted shortly after the last gas tax proposal failed, and McDonald said some residents perceived the move as a way of making up for the gas tax’s defeat.
Despite the months of deliberation, Mayor John Turner said there’s still work to do.
The council still needs to find a way to direct another $110,000 from the general fund through cuts or increased fees and members will likely have to form a political action committee to support the gas tax ballot measure.
“The work really gets started now,” Turner said. “There’s going to be a lot of angry people no matter what decision we make. We got to have the presence to support it.”
The council will formally approve each funding concept and direct staff to prepare them for enactment at the next city council meeting on Dec. 3.
The council meeting will be held at 7 p.m. in council chambers in city hall, 500 S.W. Dorion Ave.