Portland’s transportation system includes streets, bridges, streetlights, traffic signals, and transit facilities – infrastructure to provide access and mobility throughout the city. The Portland Bureau of Transportation (PBOT) operates and maintains City transportation assets with a replacement value of over $8 billion.
City Council adopted a number of aspirational plans to improve the pedestrian, streetcar, bicycle, and overall transportation system throughout the city, but has not identified how to reconcile and pay for these competing, and expensive, priorities. The new priorities also compete for funding with maintenance of existing assets. We reported in 2006 and again in 2008 that deferring street maintenance results in higher costs, and we are currently in the process of preparing a new report on street paving management. PBOT has identified a significant gap between current funding and the amount needed to maintain existing assets. We conducted this audit to identify trends in revenue and spending for the City’s transportation system.
We found that although the discretionary revenue PBOT uses for operations (primarily from gas taxes and parking revenue) declined during the economic recession, this revenue has increased in recent years. This increase may be attributed to both an improving economy and increases in parking and gas tax rates.
Despite this increase in transportation revenue, spending for many transportation programs has been reduced, including street maintenance, traffic signals, and structural maintenance. Some of the reductions resulted from increased spending in other areas. Pro- grams with increased spending include streetcar operations, downtown marketing, and transit mall upkeep. The amount of spending dedicated to debt payments is also up.
When these new projects were approved, the potential impact of the new projects on existing programs was not quantified. Instead, Council often relied on uncertain future revenues to fund the projects, such as new parking revenues from parking districts that had not yet been created, and development charges that were known to be volatile. While the City Council may not have intended for new projects to displace other transportation services, this has nonethe- less been the result of these spending decisions. Over reliance on uncertain new revenues that did not then materialize decreased the funds available to maintain existing transportation assets.
We recommend that City Council adopt an overall transportation strategy to identify how it plans to balance preservation of existing infrastructure against new transportation development, to guide future funding decisions. Routine reporting of transportation investments and outcomes consistent with this strategy could then provide Council and the public with information to evaluate the outcomes and effectiveness of the transportation strategy. We also recommend that before embarking on major new projects, PBOT prepare a de- tailed risk assessment that identifies trade-offs inherent in assuming new funding commitments, including which programs Council would cut if expected new revenues fail to materialize. The City Budget Office has also recommended this in the past.