Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Tax Exempt Properties topic
No spam. Unsubscribe anytime.
Oregon City reopens debate on non‑taxable properties; staff to pursue options and outreach with county and other agencies
Summary
City finance staff presented comparative data showing about 23% of Oregon City’s assessed property is tax‑exempt; commissioners discussed negotiated contributions, targeted fees, payroll/gas taxes and PILOT‑style approaches and asked staff to study legal feasibility and begin outreach to major landowners.
City staff and commissioners reopened a long‑running discussion Aug. 12 about the fiscal impacts of tax‑exempt properties (county, state, colleges, hospitals, nonprofit institutions) in Oregon City and possible ways to recover some public costs or negotiate contributions for city services.
Staff summary and comparative data: Staff (Fonholt) presented comparative percentages showing Oregon City has roughly 23% of its land or assessed value classified as tax‑exempt versus about 8% in West Linn and Lake Oswego, 18% in Milwaukie and 11% in Happy Valley. Fonholt noted that the city previously used targeted fees to capture revenues from non‑taxable properties indirectly (for example, the pavement maintenance utility fee and the community safety enhancement fee). The community safety fee is a flat $6.50 on certain bills and produces roughly $1.1–$1.2 million annually, Fonholt said.
Options discussed by commissioners and staff: - Negotiated agreements: commissioners discussed pursuing negotiated payments or memoranda of understanding with large public property owners (county, school district, hospital) to fund specific services or impacts (for example, a contribution toward police services or offsite infrastructure). Staff said any such arrangement would require negotiation and acceptance by those entities — it cannot be unilaterally imposed by the city. - Targeted fees: staff discussed the pavement maintenance utility fee (sliding scale by trip generation) and community safety fee (flat charge) as models that apply across property types, including tax‑exempt parcels that receive city utility bills. Commissioners suggested exploring a square‑footage‑based fee for large buildings or a thresholded fee tied to building footprint as a way to capture impacts from large tax‑exempt facilities, while noting legal and equity questions. - Payroll or gross‑receipts taxes, local gas taxes and other options: commissioners raised payroll-tax examples used by other jurisdictions and local gas or sales taxes as potential revenue sources; staff cautioned legislative and administrative limits and noted political challenges and potential impacts on local workers. - Payment in lieu of taxes (PILOT) or negotiated contributions: the commission discussed whether a PILOT pilot or negotiated funding commitments from institutional landowners could be pursued; staff noted some U.S. municipalities and pilot programs exist, but the options require negotiation and may not be politically feasible.
Equity and enforcement concerns: Commissioners raised that many of the city's residents already pay utility and other fees and underscored concerns about imposing additional burdens on local households. Several commissioners emphasized outreach first — starting discussions with the county and other large owners about shared service impacts and voluntary agreements rather than unilateral levies.
Next steps: Staff said it will explore feasibility and legal constraints for a range of options, return with additional analysis about targeted fee designs (for example, square‑foot thresholds, modification of existing utility fees), and begin preliminary outreach to major public and nonprofit landowners to test interest in negotiated agreements.
Ending: The commission directed staff to research the legal and practical feasibility of targeted fee approaches, PILOT-like negotiated contributions and outreach paths, and to return with options and legal analysis.
