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Misleading Budget Claims

The city has used errors and failures in messaging to justify new fees or fee increases.

This new revenue frees up some of the historical revenue sources for new projects and programs. This is called bait-and-switch. ​

6 Errors

In the City Manager’s message on the budget

280% Increase

In the 2023 Fire Levy was a bait-and-switch

$10 Million/Year

Transportation Utility Fee is not funding more street preservation

Key Points

    • City Manager’s Budget Message (Intro to the City Budget) – There are six significant and misleading errors.​​
    • Low permanent property tax rate – The city’s comparison between 10 Oregon cities is invalid. It is an incomplete and inaccurate method of comparing revenue sources. Bend receives more operating revenue per capita than all the cities except Hillsboro. ​
    • The 280% fire levy increase was based on a campaign of false claims.
    • The Transportation Utility fee has not increased the street preservation funding nor the pavement condition index.
    • The tax exemption strategy (MUPTE) program was used in four lopsided deals which led to the lost revenue of $ 2.3 million per year for ten years.​

Misleading Budget Claims

#1: The City Manager’s Budget Message (Bold italics below) has numerous errors

Key Point

Were these errors by the City Manager part of an intentional PR campaign or a failure to check work?

"Annual operating revenues are projected to increase by 12%($63M), while expenses are forecast to rise by 19% ($181M),creating a $118M gap. "

The records show:​

      • Projected revenue increased by $56M​
      • Proposed expense increased by $128M
      • The message mis-represents the gap. It is only $8M.​
        ​Operations Revenue vs Expenses

"As structural gaps between revenue and expenses emerged in the last fiscal year [2025]. ​ "

The records show:​

    • Fiscal year 2025 had a surplus of $39M, the largest surplus
      record in many years.
      ​

"The overall staffing level reflects a general alignment with the city’s population growth since 2010.​"

The records show:​

    • Since 2010, the population growth increased by 27% and the FTE staffing level increased by 85%.
      ​

"Materials and Services: Budgeted to increase by 1.7% ($2.2M) city-wide versus the prior biennium.​ "

The records show:​

    • The budgeted increase is 29% ($31.1M)​

"Debt Service: Budgeted to increase by 29.4% ($26.2M) over the prior biennium. ​"

The records show:​

    • The budgeted increase is 45% ($36M) over the prior biennium. [Note that the public work campus debt service of $18.1M is 50% of the increase.]​

"It’s important to note that reserves are used for ongoing operations, not one-time events and won’t be replenished without new revenue or expense reductions.​"

The records show:​

    • In the 2025-27 biennium, reserves are used to cover $134M of capital outlays.​

#2: Permanent Property Tax Rate Comparison

Key Points

  1. The city repeatedly claims Bend’s permanent property tax rate is a big disadvantage. The city seems to use this same false comparison at every opportunity.
  2. Bend is financially better off than all but 1 of the 10 cities (Hillsboro).

The records were obtained for all ten cities used in the city’s comparison to generate the above table.

Here are the findings:

    • Bend does have the lowest permanent property tax rate ($2.80/TAV), But Bend has the 4th highest total assessed valuation ($15.6B).​
      ​
    • When calculating the permanent property tax revenue per capita, Bend is still near the bottom, but after dividing the “operating revenue” for each cityby their population, Bend ($3,379/capita) is near the top because of its high secondary sources.​
      ​
    • Then be aware that all cities don’t provide the same services with their operations revenue. 8 cities fund their parks and recreation, 7 cities fund libraries, 1 city funds an airport, 1 city doesn’t fund the fire department, 1 city doesn’t fund the water delivery. ​
      ​
    • The final result is Bend has the second highest equivalent operating revenue per capita second only to Hillsboro (who has a high tax basis from their technical businesses).

#3: 280% Fire Levy Increase

Key Points

  1. The records show the 3 key reasons given by the city for supporting the 2023 Fire Levy increase of 280% were FALSE.
  2. The data proves it was a bait-and-switch.

REASON #1 – The rapid population growth ​

The records show the population growth has slowed and actually shrunk in 2025.

REASON #2 - Increased staffing needed to handle the increasing number of calls to maintain a 6-minute maximum response time.

The records show:

  • The “increased staff” was 9 FTEs which nearly all were intended to staff a few fire engine. Fire engines are rarely used in medical calls.
  • The fire chief said calls had increased by 60% (2014 to 2022) but the data shows the increase was only 49% and that percentage was highly impacted by the 2022 volume (covid). For example, the call volume had increased by only 19% from 2014 to 2021.​
  • The fire chief said call volume would increase by 38% (4.6% per year) from 2022 to 2029. The actual call volume increase from 2022 to 2025 has only been an average of 1.9% per year.​
  • There is no strong correlation between the number of FTEs and response time. It seems more about the location of stations and calls.​

REASON #3 - Expenses are increasing faster (5%) than revenue is going up (4%)

The public records from 2015 to 2024 (before the new levy) show:

  • The operating revenue was increasing at 9% per year. ​
  • The operating expenses was increasing at 5% per year.

How has the higher levy (an increase of about $8M per year) used?​

Key Variance #1 - It was the policy from 2015 to 2023, to use debt proceeds to fund the capital outlay. From 2025to 2027, the extra revenue was used instead of debt proceeds.​

Key Variance #2 - From 2015 to 2023, the General Fund subsidy grew at an average 8% per year, but growth in the last four years is nearly flat.

Key Variance #3 - From 2015 to 2023, interfund service charges grew at 9% per year. In the last 4 years, these “overhead charges” grew 18% per year.

The sum of these three variances is more than the Fire Levy increase.

#4: Transportation Utility Fee

Key Points

  1. The Transportation Utility fee has NOT increased street preservation funding.​
  2. The TUF has been offset primarily by; a) decreasing subsidy, b) increasing overhead charges which includes the public works campus, and c) shifting funding to installing buffered bike lanes.
  3. This fee has proven to be a bait-and-switch.

Below are the statistics on street preservation. The funding from 2016 to 2022 was a yearly average of $4.6M. From 2023 to 2027, the funding is a yearly average of $4.1M. Street preservation continues to get the short straw.

The general fund subsidy is decreasing.

The TUF funding has been offset by four items:

  • Decreasing general fund subsidy
  • Excessively high projected personnel expenses
  • Public works campus overhead allocation
  • Balance of accelerating interfund service charges​ (city administration and central services overhead)

#5: Four Lopsided Tax Exemption Deals

Key Point

The City made four lopsided deals with the tax exemption strategy (MUPTE). The lost revenue is $2.3 million per year in exchange for very minimal improvements.

The city made four bad deals

  • The city gifted a total of $22.8M to developers over a ten-year period ($2.3M per year)
  • The “public” benefits the developers agreed improvements to pale in comparison.​
  • Tax exemptions “savings” to a project’s proforma are quickly made up with a few years of rent increases. ​
    ​

This financial data demonstrates that the city has an accuracy problem.