1221 SW 4th Ave. Suite 210, Portland, OR 97204
May 29, 2014— It is true, as some outlets reported yesterday, that the Mayor and I are proposing to do further work on the business / nonresidential side of the proposed Transportation User Fee before putting it to a vote before Council. This does not mean that we are planning to have a fee for residents but no fee for businesses; in fact, we are putting language in the residential fee ordinance that says that if the Council does not pass a nonresidential fee by this November, the residential fee will be cancelled. Both residential and nonresidential users would start paying as of July 2015. But we do think there is reason to do more work on the business/nonresidential fee.
The business / nonresidential fee is inherently more complicated than the residential fee. What we plan to do, as other cities have done, is base the nonresidential fee on the Institute of Traffic Engineers’ “trip generation” model. The ITE divides up businesses and other nonresidential users into a number of categories, and then, based on a lot of research, gives a figure for each type of business for how many “trips” (e.g., traffic) each type generates, per month, for a given number of square feet. Business pay fees based on how many trips they generate.
Other cities use the ITE, but there is some variation in the way they use it; not every city’s nonresidential fee is calculated the same way. Some cities, for example, combine some related ITE categories into one category.
In Portland, in 2007, PBOT worked with many representatives of the business community to create a formula for using the ITE that was broadly acceptable to most of those representatives. In this year’s effort, we took that formula as a starting point, figuring that since it was broadly acceptable in 2007, it would be this year as well.
Over the past week, however, reading numerous emails from small business owners, it became clear to me that many business owners were not part of that 2007 process, and have a lot of questions. Some are not sure which of the ITE categories they fit into; some question the fairness of applying the ITE model to their particular business. And it wasn’t just business owners; religious organizations and other property owners have concerns about the application of the ITE model.
We still believe that the ITE manual is an appropriate basis for computing nonresidential fees. But again, other cities have developed variations on how to use the ITE. We think it is appropriate to take a few months to give business owners and other nonresidential parties who may not have been involved in the 2007 process to ask questions about and help shape our particular formulation.
So, the Mayor’s and my plan is to move forward with a vote on a residential fee, and set a deadline of November 14, 2014 for the City Council to pass a nonresidential fee. Both fees would take effect as of July 1, 2015. If Council does not pass a nonresidential fee by November 14, the residential fee would be cancelled.
I appreciate all the feedback and suggestions that this proposal has garnered, and I look forward to continued dialogue.
Commissioner Steve Novick
City of Portland, OR