Oregon bill would cap grant matches and let small cities use funds for planning and engineering

Representative Ed Deal, state representative for House District 17, asked the House Committee on Emergency Management, General Government and Veterans on March 27 to approve House Bill 3654, which would cap maximum matching-fund requirements for state capital-construction and municipal-infrastructure grants to Oregon cities with populations of 20,000 or fewer.

The bill would create a sliding scale for local matches based on population and allow small cities to use awarded grant funds for all phases of a project, including engineering, planning and support services. “When capital and infrastructure funding grants require Oregon’s smallest towns to provide a 15 to 20% funding match and place strict limits on its use, much‑needed upgrades and improvements become unaffordable,” Rep. Ed Deal said.

Why it matters: Testimony from a coalition representing small cities and from city officials emphasized that matching requirements can block small municipalities from applying for or completing projects. Sean Tate of Tate Public Affairs testified on behalf of the Small Municipalities Advocacy Coalition (SMAC), saying the state has 241 cities, “87% of them having fewer than 20,000 residents,” and that under the bill “211 of Oregon’s 241 cities might benefit.” Julia Hajduk, city manager of Staton, and Michelle Eldridge, city administrator of Harrisburg, described local examples of deferred maintenance and the scale of matches that strain small budgets.

Staton and Harrisburg cited concrete figures to illustrate the burden. Hajduk said the local match for a recent aquifer storage recovery project was about $1.3 million—“more than half of our annual revenue from service charges.” Eldridge said Harrisburg (population 3,651) faced a potential $1.1 million match at a 20% rate for a water project that represents roughly 13% of the city’s operating budget; under House Bill 3654, she said, that cap for Harrisburg would be 5%, reducing the match to $275,000 and lowering the share of the city budget to about 3%.

Committee members asked administrative questions. In response to an inquiry about who would administer program funds, Sean Tate said the bill does not change grant administration; it changes the formula that sets the maximum matching percentage required by a city of a given size. Rep. Diehl, a committee member, asked whether there was any opposition; witnesses replied there was none present.

No final action was taken. The committee opened and closed a public hearing on House Bill 3654 and carried the work session items over to the next meeting.

Speakers quoted in this article are those who testified during the House Committee session and are listed in the article’s speaker array.