Add Detention Facility Impact Fee Code to ensure fair cost sharing in high-impact land uses and to reduce burden on Portland taxpayers (add Code Chapter 5.80)
The City of Portland ordains.
Section 1. The Council finds:
- The City of Portland incurs significant costs when detention facilities operate within city limits, including police overtime, traffic management, fire and emergency medical responses, and environmental remediation.
- In fiscal year 2025, the Portland Police Bureau (PPB) reported more than $300,000 in expenses directly attributable to PPB operations at or near a single detention facility, straining the City's General Fund and diverting resources from other public safety needs.
- The Portland Bureau of Environmental Services has documented elevated levels of pollutants, including heavy metals and chemical residues in storm water runoff following large-scale protest events. These contaminants increase the costs of meeting water quality standards and harm Portlanders.
- Activities at detention facilities have necessitated street closures, rerouting of public transportation services, and additional traffic control measures that create quantifiable costs for the Portland Bureau of Transportation.
- Establishing a Detention Facility Impact Fee, administered by the City and based on a formal methodology prepared in coordination with City bureaus, is a fair, transparent mechanism to recover costs associated with the unique burdens imposed by detention centers without shifting those costs to the broader public.
NOW, THEREFORE, the Council directs:
- Add City Code Chapter 5.80 as shown in Exhibit A.
- The City Administrator to update procedures and administrative rules as necessary.
- The City Administrator, in concert with impacted bureaus, to prepare a report for Council describing the fee methodology adopted by the City Administrator and updating the Council on the implementation of this ordinance.
Official Record (Efiles)
An ordinance when passed by the Council shall be signed by the Auditor. It shall be carefully filed and preserved
in the custody of the Auditor (City Charter Chapter 2 Article 1 Section 2-122)
Passed as amended by Council
Auditor of the City of Portland
Simone Rede
Impact Statement
Purpose of Proposed Legislation and Background Information
The Detention Facility Impact Fee establishes a framework for addressing the extraordinary public costs associated with detention facilities in the City of Portland. The proposed change creates an annual impact fee levied on private property owners who lease or permit their property to be used as detention facilities. The revenue generated from this fee will be dedicated to mitigating the unique costs that detention facilities create, including but not limited to police overtime, environmental cleanup, public health services, and support for Portland households and businesses directly impacted by facility operations.
Detention facilities, whether operated by government agencies or private contractors, consistently impose unique costs on City infrastructure and services that are not generated by other land uses. These costs include heightened demand on police and emergency response, disproportionate use of public safety resources, and environmental or community health impacts. Without a dedicated revenue stream, these expenses fall to the City's general fund, effectively ensuring that the substantial costs of a highly specialized land use are subsidized by small businesses and residents. The Detention Facility Impact Fee shifts this financial burden away from residents and onto the property owners who directly benefit from leasing their property for detention use.
Impact fees are a well-established policy tool used by cities to ensure that the costs and externalities of specialized land uses are borne by those who profit from them rather than by the public. This legislation adapts that model to the detention facility context, ensuring that the public is not left to absorb costs arising from a highly specialized land use.
This ordinance further addresses, in the context of detention facilities, the particular harms of 1) release of chemical substances and residues into public rights-of-way and 2) contamination that renders nearby properties, such as apartment complexes, unsafe. This ordinance allows the City to impose civil penalties on a property owner who allows their land to be used for detention if they cause or fail to prevent these environmental harms. The ordinance allows the City to use the revenue from those penalties for enforcement and to reimburse property owners or occupants in the vicinity of that facility for cleanup, remediation, and protective measures taken in response to the facility's environmental nuisance. In line with the Detention Facility Impact Fee, these regulations ensure that the public, specifically individuals and families that happen to live and work in the vicinity of a detention facility, are not asked to subsidize and absorb the significant costs of the facility, introduced by the decision of the property owner to financially benefit from this costly land use.
Financial and Budgetary Impacts
Revenue from the Detention Facility Impact Fee will be used exclusively for mitigation of facility-related costs, such as City enforcement, environmental remediation, public health services, police overtime, and community safety programs. In addition to offsetting direct City expenditures, the fee will help compensate for the economic and social harms borne by community partners and neighborhood organizations that are adversely impacted by detention facility operations.
Economic and Real Estate Development Impacts
Not applicable
Community Impacts and Community Involvement
Not applicable
100% Renewable Goal
Not applicable
Economic and Real Estate Development Analysis
Analysis provided by Prosper Portland
An Economic and Real Estate Development Impact Analysis was not submitted for this proposed action. Pursuant to City Council Resolution 37664, Prosper Portland staff has reviewed the action and agree that it does not require an Economic and Real Estate Development Impact Analysis.
Financial and Budget Analysis
Analysis provided by City Budget Office
The fiscal impact of the proposed ordinance is highly uncertain because it will depend on several factors that are unknown at this point. The two most significant questions are the size of the fee that can be assessed, and the number of qualifying facilities subject to it. The size of the fee will depend on the public costs such facilities impose on City services. On the other side of the equation are the costs of collecting and implementing such a fee, and financial risk due to legal considerations. The impact of the fee would be equal to the revenues it generates less the implementation and legal costs associated with it. From a process perspective, the City would be required to bring a fee schedule back to Council to vote to adopt before this fee could be implemented, and Council would also need to adopt a budget that includes the creation of the new Fund, if applicable.
Document History
Document number: 2025-429
President's referral: City Council