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Thursday, May 29, 2014

Novick Offers November Deadline to Firm Up Street Fee for Businesses

Posted by Denis C. Theriault on Thu, May 29, 2014 at 12:05 PM

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  • illustration by shawn dicriscio
Commissioner Steve Novick announced this morning he supports Mayor Charlie Hales' plan to split up their proposed "transportation user fee"—moving forward on an $11.56 monthly fee for most homeowners, but pulling back on a fee for businesses—but with a pledge to scrap the whole idea if both pieces aren't in place by November 14.

The slowdown follows a swift and apoplectic backlash among business owners in the week since the road maintenance and safety fee was formally announced last Thursday. Opposition from big business lobbyists, like the Portland Business Alliance, was expected. But far more surprising was fury from small businesses and nonprofits, some of whom faced the possibility of paying thousands of dollars a year. In all, the fee could raise up to $50 million a year.

Beyond the obvious sticker shock, many complained the city's fee calculators for helping businesses estimate monthly payment, based on how many trips generated, were imprecise and opaque—and even altogether flawed. That sustained outcry, coming in wave after wave of calls and emails, resonated with the mayor and Novick, forcing their hand just hours before a public hearing on the proposal at 2 this afternoon.

The proposed pullback was first reported last night by Willamette Week. Looming over all of this is the serious fear opponents of the fee will be seriously motivated try to refer it to the ballot. Mollifying the business community and prolonging the debate seems to be a good way to sap some of that energy.

"This does not mean that we are planning to have a fee for residents but no fee for businesses," Novick says in his announcement today. "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."

According to the Oregonian this morning, the plan to split the street fee will pass muster with Commissioner Amanda Fritz, the swing vote Novick and Hales need to put their plan in place. Commissioners Dan Saltzman and Nick Fish have already said they'd prefer to immediately go to voters.

Novick's statement got into the weeds of the debate over the business/nonresidential fee, in an attempt to shed some light on the city's thinking. He repeated that the city is building from the Institute of Traffic Engineers’ “trip generation” model. And he said the formula used this year resembled the one used by then-Commissioner Sam Adams in 2007. Adams' street fee plan wasn't targeted by small businesses—political skullduggery by then-Mayor Tom Potter and opposition from the Oregon Petroleum Association helped doom it instead.

But Novick acknowledged that Portland's calculations based on those rules are different from those used in other cities, including Oregon City, which already charges homeowners $11.56 a month.

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.

Stay tuned this afternoon. We'll have updates from what's looking to be a packed, raucous hearing—late changes notwithstanding.

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