Bend residents and businesses this year won’t see a planned increase to utility bills some were bracing for, but City officials say they’ll be looking at other ways to raise more money for streets.
The Transportation Utility Fee, adopted in 2024, was part of the City’s strategy to supplant declining revenue streams like the state’s gas tax, the main source of road maintenance funding for the City. At the time, the City adopted a phased approach for rolling out the new charge, aiming to collect a total of $15 million in the fee’s third year, which begins July 1.
But the hike the City contemplated in 2024 wasn’t included in a package of other fee increases approved by the City Council on June 17.
At a work session last September, the Bend City Council agreed on an “indefinite pause” to the fee increase in 2027, floating other potential local revenue streams like registration fees, a seasonal gas tax, parking fees and dipping into the general fund for fire and police.
The pause came after the City Council weathered pushback to a transportation fee hike a few months earlier. Some business owners, residents and economic development groups wrote letters and gave public comment expressing concerns about the cumulative effects of the fee, along with other rising costs. In addition, City leaders were optimistic the Oregon legislature’s special session would result in transportation funding for local governments. That package — anchored by a 6-cent hike to the state’s gas tax — would’ve padded Bend’s road maintenance revenue by $2.7 million, the City estimated.
But voters overwhelmingly shot down the proposed state gas tax increase during last month’s election.
“There definitely were expectations around Phase 3 (of the fee) that weren’t met,” Bend City Councilor Ariel Méndez told the Source Monday. “The state funding we were hoping to get isn’t going to arrive.”
“In the meantime, we still have needs,” he added.
The lack of new funding won’t immediately affect the department in charge of road maintenance, because it wasn’t planning on using state money or extra fee revenue in the upcoming year, said Transportation and Mobility Director David Abbas.
With the fee, the City has promised smoother pavement, fewer potholes, more frequent striping, sweeping and plowing, plus safer crosswalks and more.
According to Abbas, raising the fee to $15 million would provide enough funding for more than just preserving pavement — paying for more safety features like concrete crosswalk islands, flashing beacons, buffered bike lane delineators, plus a new crew dedicated to filling sidewalk gaps.
It would “really be able to move the needle and do some new things,” Abbas told the Source. “Phase 1 and Phase 2 is really to kind of keep up with the inflation that was happening and continue to hold our ground, or try to hold our ground, as far as conditions go.”
That hiked transportation utility fees from $5.60 per month to $10.50 for single-family residences, and $4.35 to $7.75 for multifamily residences. Businesses saw fees increase anywhere from a few dollars to a few hundred dollars per month, depending on the size and type of the business. The fee was calculated with a formula meant to account for the wear and tear that business traffic puts on Bend’s roads.
The City reported in November 2025 that Bend’s overall pavement condition ticked up slightly last year, but is still below the industry target. The City’s two-year budget, approved in 2025, estimated it will cost about $4.5 million per year to maintain current pavement conditions. That same budget allocated $4.3 million per year for that purpose while moving $200,000 per year from street preservation to bicycle and pedestrian programs.
Some business owners have questioned why they are expected to bear additional costs to fund bicycle and pedestrian safety, rather than just road maintenance, said Sara Odendahl, CEO of the Bend Chamber of Commerce. That question would remain should the City pursue another fee hike, Odendahl said.
“We fully recognize the need to fund transportation,” Odendahl said, mentioning tourism, goods and services. “But to put that all on the backs of the business community is concerning, I think.”
Under the current structure, 44% of the fee revenue comes from businesses, and the rest comes from residential accounts. But because there are fewer businesses than residents, businesses end up paying more per bill.
Rather than raising fees again, the City could pull back or reassess some of its planned projects, Odendahl said.
City Councilor Méndez said he believes there is a real tension between funding for pavement upkeep and funding for safer crosswalks and bike lanes.
“My priority is safety, but I’m not going to ignore the fiscal responsibility of maintaining our pavement conditions,” Méndez said.
The bulk of transportation construction funding in Bend comes from charges on new development and a $190 million taxpayer bond voters approved in 2020.
The City Council could discuss other funding this winter, Abbas said. Based on last September’s work session, several options appear to be on the table. Méndez suggested using more general fund dollars — which come from local property taxes — to fund transportation, potentially replacing the hole with a utility fee for police and fire. After seeing new transportation fee revenue, the City reduced the general fund subsidy for street maintenance from $10 million to $9 million.
Bend Mayor Melanie Kebler said she favored the idea of a Deschutes County-level vehicle registration fee, 40% of which would go to cities.
And the City may rekindle discussions of a local gas tax, a proposal Bend voters shot down in 2016. Méndez said that could be a seasonal tax in the summer months in order to capture more revenue from tourists.
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