The City's Transportation Fee (sometimes known as a transportation utility fee or TUF) is a recurring monthly fee to be used for operations and maintenance of the City transportation system, which may include pavement restoration, street preservation, signs, striping, sidewalk and other concrete work, bicycle and multi-modal system enhancement, street sweeping and cleaning, winters operations such as snow removal and implementation of programs identified in the Transportation System Plan.  

Everyone relies on the transportation system (e.g., mail delivery, garbage hauling services, food delivery, bus routes, walking, biking, and driving to work, school, and services, etc.). Transportation Fees are most often used for the maintenance and repair of a city’s transportation system. A Transportation Fee provides a stable source of revenue to support our transportation system, allowing for safe and efficient movement of people, goods, and services. 

The Transportation Fee is collected through the customer’s regular utility bill. The fee is a charge, like your monthly sewer charge, to ensure users of the road system share the costs of maintenance needed to keep the street system operating at an adequate level. 

We all rely on our transportation system to go about our daily lives. A connected, well-maintained transportation system allows people—and the goods and services we depend on—to move around safely and efficiently. Our transportation system is a public investment that needs regular maintenance to ensure mobility, public safety, economic activity and quality of life. 

In the past, the City has relied on revenues from the State Gas Tax and a portion of property taxes to maintain the City’s street system, but these funding sources are limited and declining over time for several reasons. 

Gas Tax Limitations. The amount available from state gas tax revenues, which is governed by state law, for street maintenance continues to decrease while the wear and tear on our roads increases as we grow. Increased fuel efficiency and growth of electric vehicles (which don’t consume taxable fuels) have led to less fuel consumption, but does not reduce impact to the road system. And even though fuel costs have increased, gas tax receipts are based on a per-gallon calculation (not per dollar). The City does not have a local gas tax. A local gas tax would require a public vote. Bend voters rejected a gas tax when one was proposed on the ballot in 2016.  

Property Tax Limitations. In the past, a small portion of the City’s General Fund has been used toward much-needed street preservation activities; however, these have been discretionary, one-time investments. Property taxes are the biggest source of revenue for the General Fund, which primarily pays for public safety needs. Property tax rates and increases to property assessed values are limited by state law (Measures 5 & 50), and Bend has one of the lowest property tax rates in the state, which cannot be raised. Because of these legislative restrictions on property taxes, many jurisdictions in Oregon need to seek levies, bonds, or other revenue sources to help fill funding gaps.  

Limited funding, a growing transportation system, and cost escalation have resulted in an increasing backlog of maintenance needs. The City can no longer rely on declining and discretionary funds to maintain its transportation network. 

The City needed to come up with its own sustainable revenue source to meet our local needs. In 2019, the Citywide Transportation Advisory Committee’s (CTAC) Funding Work Group recommended a Transportation Fee as a preferred funding option to help protect the City's street infrastructure investment. A Transportation Fee was also recommended as a funding tool by City Council advisory committees in 2009 and 2011.

The Transportation Fee is being implemented in phases, through fee resolutions adopted by City Council. We are currently in Phase 2 of the fee, which is intended to raise $10 million in fiscal year 2025-2026. 

The basis of the Transportation Fee is on a household or business' impact to the transportation system.  

In Phase 2, single-unit utility bill accounts pay $10.50/month. Multi-unit attached housing (like an apartment) accounts pay $7.75/month (per unit).  

Most businesses will be charged based on building size and business type, with rates ranging from $6.25 to $20.50 per 1,000 square feet per month, depending on the intensity of use. 

More detail on the current Transportation Fee rates can be found in the fee schedule.

A public engagement process in the form of City Council roundtables took place in August, September, and October of 2023 to gather input on uses of revenue, ways to lessen the impact of this new fee on customers facing financial hardship, and how to balance the use of other funding tools for future transportation system needs. Discussions with the Bend Economic Development Advisory Board (BEDAB) began in October 2023 to shape recommendations on how to structure the nonresidential Transportation Fee. Neighborhood District town hall meetings took place Fall 2023. 

Council discussed the fee at several public meetings leading up to the adoption.

• City Council provided direction to staff at a work session January 3, 2024, to develop the code that governs the Transportation Fee.
• At the February 7, 2024, City Council meeting, City Council had its initial review of the draft code to implement a Transportation Fee.
• City Council held two listening sessions on February 26 and February 29, 2024, to provide information to the community on the proposed Transportation Fee and take public comment on the proposal.
• At a work session on March 6, 2024, City Council discussed public input received and provided further direction to staff, including additional measures to build public trust and increase financial transparency, such as regular reporting on Transportation Fee activities and holding further discussions about other revenue sources and whether or how they would affect revenue targets or rates for Phase 3 of the Transportation Fee implementation plan.

• The Transportation Fee schedule and implementing code were adopted by City Council after a public hearing on March 20, 2024.

The Transportation Fee generates approximately 56% of its revenue from residential accounts and 44% from non-residential accounts. This allocation differs slightly from initial estimates, which were based on trip generation estimates for broad customer categories using land use information available primarily through the Bend-Redmond Travel Demand Model. Factors including improved data accuracy, residential account growth, and City Council direction resulted in a slight shift from the estimated to actual revenue generation allocation. 

Review the technical memorandum summarizing the analysis used to establish Transportation Fee rates for Phase 2.

The Short-Term Rental Supplement is a Transportation Fee that is added to the initial application and annual renewals of Short-Term Rental Licenses. This supplemental fee accounts for the additional impact that tourist accommodations have on the transportation system. The adopted rate schedule, including the details on these fees, can be found here: Transportation Fee Phase 2 Rate Schedule.
Note that the residential fee applies to all residential units in Bend, and the Short-Term Rental Supplement accounts for the additional use of the transportation system from the overnight-accommodation use in the residential unit.

There are mechanisms in place for the Transportation Fee to account for visitor use on our system. Typically, Transportation Fees are based on traffic impact generated by specific types of development, using data from the Institute of Transportation Engineers Manual. Different types of development vary in their demand on transportation infrastructure, with some creating more wear and tear than others. For instance, visitors who stay in hotels and short-term rentals account for a portion of trips on the transportation network, which is accounted for in how Transportation Fees for lodging accommodations, including short-term rentals, are set. In this way, the Transportation Fee provides a method for visitors to help fund maintenance of the roads they are using while visiting. 

The most direct way to assess visitors is through a lodging tax. State law governs how transient room taxes (which includes hotels, motels, and similar facilities) can be used. Currently, anyone staying in a Bend hotel, vacation rental or other short-term lodging pays a 10.4% Transient Room Tax (TRT). Of the revenue generated, 65% goes to the City's General Fund (which supports public safety and other core services) and 35% is required by state law to be used for tourism promotion including marketing and tourism-related facilities. 

An increase to the Transient Room Tax (TRT) is not a preferred funding method, as under state law, the City would only get 30% of that revenue; 70% of revenue from any increase in the Transient Room Tax (TRT) must be used to fund tourism promotion or pay for tourism-related facilities. 

The Funding Work Group recommended additional funding tools that may be considered in the future. Some of those tools, such as a seasonal fuel tax and targeted food and beverage tax, would allow visitors to help fund the City's transportation needs. 

Over 30 cities in Oregon have a Transportation Fee. The chart below shows a sampling of cities that charge a Transportation Fee and how much each community charges single family residences per month. 

Source: City of Creswell, Oregon (January 2023), updated by City of Bend (August 2023)
Click the image to enlarge.

The City Council will set the fee amounts and decide how the fee is spent in each two-year budget. The budget adoption process is a public process and includes a community advisory committee. The Transportation Fee will be used to enhance the entire transportation system through better operations and maintenance and through implementing programs recommended through a broad community engagement process during the update to the Transportation System Plan. 

The adopting ordinance outlines accountability measures to build transparency and public trust, including reporting on how Transportation Fee dollars are spent within the overall budget. You can learn more in the first annual report. 

City Council has committed to having a discussion about other revenue sources before making a decision on implementation of Phase 3 rates. 

In Spring 2025, Phase 2 of the Transportation Fee was adopted by City Council and will be in effect until changed by City Council. Phase 2 fees are intended to raise $10 million in fiscal year 2025-2026. The goal for Phase 3, as outlined in the Transportation Fee code, is to generate $15 million annually. However, ahead of adoption of fees in Phase 3, City Council intends to hold further discussions about other revenue sources as well as whether and how these additional revenue sources should affect the revenue and rates for Phase 3 of the Transportation Fee.