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Label:
Resolution
Support modification of Bureau of Transportation street opening permits to utilities to include damage cost recovery related to long-term pavement degradation associated with excavation in the public right-of-way
Adopted
Amended by Council
WHEREAS,the City of Portland holds its public streets and rights-of-way in trust for the benefit of the public and has invested substantial public funds in constructing, maintaining, and preserving its pavement infrastructure; and
WHEREAS, Portland City Code Chapter 17.24 requires any person performing excavation within a public street to obtain a Street Opening Permit pursuant to PCC 17.24.020, and authorizes the Portland Bureau of Transportation (PBOT) to establish permit fees and related requirements; and
WHEREAS,PBOT Administrative Rule TRN-10.19 governs Utility Permits in the Right-of-Way and requires that any person desiring to make a public improvement, perform work in, or use the public right-of-way must first obtain a permit from the City Engineer; and
WHEREAS, over the last three years, more than 53 miles of utility trenching, representing approximately 1,400 blocks of excavation, have occurred within Portland's public streets; and
WHEREAS, excavation and trenching within the paved portion of the right-of-way disrupt pavement structure, weaken adjacent pavement edges, allow water intrusion, and accelerate cracking, settlement, and deterioration of the pavement area beyond the immediate trench boundaries; and
WHEREAS, industry research and pavement management data demonstrate that trenching can reduce pavement service life at least 60% percent; and
WHEREAS, maintaining good pavement condition through timely preservation treatments is significantly more cost-effective than allowing pavement to deteriorate to the point where full reconstruction is required; and
WHEREAS, under current City practice, the existing restoration standards completed by utilities and other permittees do not address the structural damage caused by utility trenching; and
WHEREAS, existing Street Opening Permit fees recover administrative and inspection costs associated with processing permits and overseeing restoration activities, but do not recover the City's proportional costs associated with long-term pavement life loss and accelerated deterioration caused by excavation activity; and
WHEREAS, the City would benefit if utilities coordinated with each other or with PBOT to minimize the number of street openings or to construct openings on streets planned for paving improvements; and
WHEREAS, Portland City Code Section 12.15.020 recognizes that frequent excavation is a primary cause of early and excessive deterioration of the right-of-way and the City's regulatory authority to protect the structural integrity of its streets; and
WHEREAS, other city jurisdictions, including the City of Los Angeles, Oakland, and San Francisco in California and Seattle, Washington, have established damage fees to capture the costs of the deterioration caused by excavation. These cities' fees range from $7 to $22.50 per square foot. The City of Los Angeles has the most mature model and uses an average fee of $13.84 per square foot; and
WHEREAS, Portland City Code Section 12.15.050 provides that regulatory fees and compensation for use of the right-of-way are separate from and in addition to other City charges and are not taxes subject to the property tax limitations of Article XI, Sections 11 and 11b of the Oregon Constitution, and are not imposed on property or property owners; and
WHEREAS, on July 16, 2025, the Council adopted Resolution 37712 directing the Public Works Service Area and Budget and Finance Service Area to develop a comprehensive strategy to identify and evaluate viable alternative funding sources to help address transportation funding needs; and
WHEREAS, on December 15, 2025, the Public Works Service Area and Budget and Finance Service Area presented an Alternative Transportation Funding Report, reviewing possible funding approaches, to the Transportation and Infrastructure Committee. The report presented a narrowed list of four revenue options for further vetting, including a proposal to assess a damage fee to the current utility street opening permitting process; and
WHEREAS, on January 26, 2026, PBOT presented several damage fee scenarios, modeling the fee structure from the City of Los Angeles damage fee model, along with other revenue approaches and a public engagement plan, to the Transportation and Infrastructure Committee. Based on feedback from the committee, staff presented the damage fee scenarios to the public to obtain additional feedback; and
WHEREAS, PBOT documented public support for adopting a damage fee through open houses held at each of the four Council Districts, as well as an online survey; and
WHEREAS, the Council finds that it is reasonable and proportional to recover the long-term pavement degradation costs attributable to excavation from those entities performing street cuts; and
WHEREAS, revenue collected from a Street Damage Restoration Fee will be directed to pavement management, preservation, rehabilitation, and reconstruction, as well as the administration, coordination, and enforcement of the utility permitting and restoration.
NOW, THEREFORE, BE IT RESOLVED that City Council supports and affirms the City Administrator's authority under PCC 17.24.020 and related administrative rules to modify Administrative Rule TRN-10.19, Utility Permits in the Right-of-Way, to include a Street Damage Restoration Fee reflecting a proportional share of documented long-term pavement degradation costs associated with excavation in the public right-of-way; and
BE IT FURTHER RESOLVED the Council supports the City Administrator encouraging city and non-city utilities to coordinate with each other and with PBOT paving improvements to maximize the life of the City of Portland's pavement assets; and
BE IT FURTHER RESOLVED the Council supports the City Administrator investing revenue collected from a Street Damage Restoration Fee into pavement management, preservation, rehabilitation, and reconstruction, as well as the administration, coordination and enforcement of the utility permitting and restoration; and
BE IT FURTHER RESOLVED the Council supports the City Administrator's intent to include a Street Damage Restoration Fee at the 100% damage recovery amount as part of the Transportation Fee Schedule, as shown in Exhibit A attached to this Resolution and implement this fee by January 1, 2027. Exhibit A includes rates for Fiscal Year (FY) 2026-27; and
BE IT FURTHER RESOLVED the Council requests that PBOT provide an annual report on the Street Damage Restoration Fee that includes the following:
A. A report on revenues collected and expenditures made; and
B. An evaluation of whether the fee remains proportional to documented pavement degradation costs; and
C. Any recommended adjustments to the fee methodology or administrative rules to ensure continued proportionality and legal compliance.
Official record (Efiles)
Impact Statement
Purpose of proposed legislation and background information
This resolution supports modifications to the Street Opening Permit fee structure to include a Street Damage Restoration Fee (SDRF) to recover a portion of the long-term pavement degradation caused by excavation in the public right-of-way. Portland City Code Chapter 17.24 requires permits for excavation and authorizes PBOT to establish permit fees and administrative rules governing such work.
Excavation disrupts pavement structure, weakens adjacent pavement edges, and accelerates deterioration beyond the immediate trench area. While utilities are required to restore the trench itself, existing permit fees recover only administrative and inspection costs and do not address the broader pavement impacts caused by excavation. Just over the past three years alone, more than 53 miles of trenching—approximately 1,400 blocks—have occurred within Portland streets.
This proposal follows Council direction in Resolution 37712 to identify alternative funding strategies to address PBOT's transportation funding needs. The SDRF would be assessed at the time of Street Opening Permit issuance and would more proportionally align the costs of pavement life reduction with the entities performing excavation.
Financial and budgetary impacts
This resolution does not appropriate funds or require a budget amendment. It supports implementation of a Street Damage Restoration Fee within PBOT's Transportation Fee Schedule, anticipated to take effect in Fiscal Year 2026-27 starting on January 1, 2027.
Revenue generated by the fee will depend on the annual volume and size of street excavations permitted by PBOT. Based on recent permitting activity, the fee is expected to generate approximately $10M dollars in the first half year of collection. Actual revenue may be less due to increased permit cut coordination.
Revenue collected will be deposited into PBOT's Transportation Operating Fund and used for pavement management, preservation, rehabilitation, and reconstruction, as well as the administration and enforcement of the utility permitting and restorations. PBOT will report annually to Council on revenues collected and program performance.
Economic and real estate development impacts
During the month of February and March, PBOT hosted open houses in each of the four Council Districts and an online open house and survey to share information about the street damage restoration fee (including rate scenarios) and gather public feedback about the fee, revenue allocation priorities, and accountability measures. Approximately 87% of respondents who weighed in on the street damage restoration fee supported the fee with most favoring the 75% damage recovery fee rate.
PBOT conducted outreach to major utilities to discuss the street damage restoration fee and elicit their feedback. PBOT also met with various organizations representing businesses, restaurant industry, labor, trades, workforce equity, affordable housing, and economic development to discuss the Street Damage Restoration fee and elicit their feedback.
The proposed Street Damage Restoration Fee would be set at a rate to recover 75% of the cost of damage done due to utility trenching in the right-of-way. Trenching reduces the useful life of pavement by over 60% and cities like Los Angeles, San Franciso, Oakland, San Diego and Seattle all charge street damage restoration fees. Over the last 3 years, over 50 miles of trenching has been done in Portland.
Revenue generated by the Street Damage Restoration Fee will be invested in pavement management, preservation, rehabilitation, and reconstruction as well as coordination of the utility permitting function to help with better utility coordination, reducing pavement cuts and extending pavement asset life.
The proposed allocation of Street Damage Restoration Fee revenues will help to ensure smoother and safer pavement which is the backbone of a reliable transportation system that supports a strong local and regional economy by helping to move customers, employees, and goods and services. Transportation is the operating system of our local economy. When it degrades, businesses pay through delays, higher costs, and lost customers. Earlier investment in pavement preservation prevents more expensive repairs later.
Community impacts and community involvement
The proposed legislation benefits Portland residents and businesses by helping maintain the condition and longevity of the City's street network. Frequent excavation contributes to accelerated pavement deterioration, which can increase long-term maintenance costs and reduce roadway quality.
Revenue from the Street Damage Restoration Fee will support pavement preservation and maintenance activities that improve roadway conditions and extend the life of existing infrastructure. Maintaining pavement in good condition through preservation treatments is significantly more cost-effective than allowing pavement to deteriorate to the point of requiring reconstruction. Every $1 invested in pavement preservation can avoid $6–$10 in future reconstruction costs.
PBOT conducted public outreach through open houses in each of Portland's four Council Districts and an online survey, which indicated general support for policies that ensure entities performing street cuts contribute to addressing the resulting pavement impacts.
100% renewable goal
This action does not directly affect the City's total energy use or renewable energy consumption. However, maintaining pavement condition through preservation treatments can reduce the need for more energy-intensive reconstruction activities. Preservation treatments generally require fewer materials, less construction activity, and fewer greenhouse gas emissions than full roadway reconstruction.
As a result, the proposal may indirectly support the City's long-term sustainability and infrastructure management goals.
Economic and real estate development analysis
Analysis provided by Prosper Portland
Prosper Portland staff has reviewed the Economic and Real Estate Development Impact Analysis submitted for this action and finds that it satisfies the requirements set forth in City Council Resolution 37664. The analysis is sufficiently detailed and complete to be considered a final statement for purposes of this action.
Document history
Document number: 2026-114
President's referral: Finance and Governance Committee of the Whole