The Portland City Council pushed back a decision Wednesday on how to allocate money to help pave the city's gravel and dirt roads and to improve streets that lack sidewalks and curbs.



The council's problem: The money it has to spend is just a drop in the bucket.

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In 2016, the council created a fee known as the Local Transportation Infrastructure Charge. So far, it has brought in $2.2 million.



That's a tiny fraction — one-tenth of 1 percent — of the $1.5 billion the Portland Bureau of Transportation estimates it would cost to pave the city's 50 miles of dirt and gravel roads and fix the 200 miles of streets that lack sidewalks and curbs.



To stretch the extremely limited funds, Portland's Bureau of Transportation has proposed partnering with the Bureau of Environmental Services. BES funds improvements to city streets to manage and minimize polluted stormwater runoff.



The two agencies would issue $10 million in bonds to get the paving work started, with the bonds paid back over time using the fee dollars and BES funds.



PBOT had proposed focusing the first $10 million chunk of paving work in three neighborhoods it identified as priorities: Cully and Division-Midway on Portland's east side and Tryon-Stephens on the west side.

Each of those neighborhoods has a relatively high concentration of unimproved streets, and had already worked with the city to develop plans that prioritize residential street improvements. They also scored high on an equity measure, which identified blocks in the city with low-income residents, racial and ethnic diversity and higher numbers of renters.



But, after reviewing maps that showed proposed work for 2018, Mayor Ted Wheeler expressed concern that the result would be piecemeal road-building projects that wouldn't be cost-effective for the city.

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"I'm no great construction expert, so I could be totally out to lunch here, but it seems to me there's efficiencies and economies to doing the whole area, as opposed to picking and choosing little pieces," Wheeler said.



PBOT staff responded that there simply wasn't enough funding to take a more comprehensive approach.

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Wheeler suggested that the agency would be better served by concentrating on improving the streets in one neighborhood at a time.



"Why not do more in a given area, in one year, and then move on to the next area the subsequent year?" he asked.



"Any advice, support, direction you can provide, we'd be happy to hear. It's hard because we don't have many resources," said Ann Hill, a program manager with the Bureau of Transportation.



The allocation proposal also entirely left out one of Portland's most notoriously under-paved neighborhoods: Brentwood Darlington.



"Once again, we're left off the map," said Chelsea Powers, chair of the neighborhood association, urging them to address the gravel roads.



"Our neighborhood is home to over five miles of them that literally trap our neighborhoods in their homes in poor weather, with potholes the size of a sedan," Powers said.



The Portland Bureau of Transportation has also asked the City Council to consider changing the formula that's used to calculate the Local Transportation Infrastructure Charge.



The charge applies to infill developers or property owners who build new homes on lots with gravel and dirt roads.

It's currently a flat fee of $600 per foot of frontage on a gravel or unimproved street. PBOT said in some situations, particularly large corner lots, the fee has hindered development. The agency has proposed capping the charge and exempting affordable housing developments.



With the caps, the maximum charge would range from $30,000 for a small R5 residential lot to $120,000 for a larger RF-zoned residential lot.



Property owners testified in support of capping the fee and called on the City Council to create an appeals process for special cases.

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The city's ombudsman, Margie Sollinger, and Equity Manager Dante James have also raised concerns about the Local Transportation Infrastructure Charge. They sent a joint letter to the commissioners this week, asking them to ensure the fee isn't a burden for low-income homeowners.



"As currently designed, the LTIC program does not have a low-income exception nor is there any financing available to property owners who cannot afford it," they wrote.



Sollinger and James recounted the example of an elderly cook at a local school district who owns and lives in an aging manufactured home in Southeast Portland, on a lot alongside an unimproved street.



She took out a loan to buy a new manufactured home, but when she applied for a permit from the city she was told that installing the new home would require she pay the LTIC an additional $54,000.



PBOT ultimately reversed its decision and didn't make her pay the infrastructure charge, but Sollinger and James said other low-income homeowners could face similarly overwhelming charges.



"Simply stated, a policy that treats everyone equally does not result in equity," they wrote.

Portland Transportation Commissioner Dan Saltzman said he will ask PBOT to continue to refine its proposals and will bring the Local Transportation Infrastructure Charge back to the council for consideration in January or February.