A little more than a year ago, reeling from the defeat of a gas tax and searching for ways to pay for road repairs, the city of Bend cut spending in other departments and shifted funds around to dig up money for potholes and paving.

Now, the city and the Metropolitan Planning Organization policy board — a regional group with representatives from the city, Deschutes County and the Oregon Department of Transportation — are paring back spending on roadwork. Local spending on road repairs could be about $1.2 million less than in previous years because of a court ruling, a Bend City Council decision to shift sewer and water fee revenue to road construction and a likely decision from the Metropolitan Planning Organization to reduce street preservation spending.

Local leaders hope the loss can be offset by money from a $5.3 billion state transportation funding package — House Bill 2017 — passed last year.

The state transportation department estimates that average annual spending in Bend will be about $1.9 million, but that doesn’t mean Bend will receive $1.9 million every year. The spending is tied to a gradual increase in the statewide gas tax, which increased 4 cents this year and will continue increasing by 2 cents in 2020, 2022 and 2024.

David Abbas, director of Bend’s streets and operations department, said he’s working with state transportation officials and the city’s finance department to figure out how much money Bend will get for street preservation in 2019.

“HB 2017 is going to help, but it is a phased-in program,” he said.

The increase in state gas tax revenue should replace the loss of about $700,000 annually in revenue from water and sewer fees paid by customers of Roats Water System, Avion Water and the city’s utility system, Abbas said. Those fees previously went to a fund for new road construction, but the city’s 2017-19 budget shifted that revenue to street maintenance.

On Wednesday, the Bend City Council voted 4-1 to increase water and sewer fees by 1 percent — about $1 to $3 a month for the average homeowner — and dedicate the fees to extending Empire Avenue to 27th Street and connecting Murphy Road to 15th Street. Councilor Nathan Boddie voted against the increase, while Councilor Bruce Abernethy was absent and Mayor Casey Roats, whose family owns a water utility, recused himself.

Spending water and sewer fees on road maintenance was a one-time influx of money that the city knew wouldn’t be sustainable, Abbas said. He said he expected the city streets will be OK, even if spending is less during the next two years than it was during this two-year budget cycle or in future years.

“We’ll be in pretty good shape still,” Abbas said. “I feel like we’re still positioned to do some good things and continue the improving trend.”

Less certain is what will happen with the roughly $350,000 to $400,000 the city had freed to spend on roads by shrinking the percent of hotel tax revenue spent on tourism promotion. A Deschutes County judge ruled in May that Bend violated state law by spending the money on roads instead of tourism. The city plans to appeal that decision to the Oregon Court of Appeals.

In the meantime, the city’s missing out on enough money to repave 4 miles of 12-foot-wide lanes, add chip seal — a protective coating of liquid asphalt and crushed rocks — to 22 miles of lanes or coat 40 miles of lanes with slurry seal, which seals cracks and preserves pavement.

The Metropolitan Planning Organization, meanwhile, spent close to $700,000 on Bend street preservation during each of the past two years. Funding models the policy board discussed at a meeting this week call for reducing that to $600,000 in 2018, $550,000 in 2019 and $500,000 in 2020.

Tyler Deke, manager of the organization, said the policy board hasn’t indicated how much it wants to reduce the budget, but it’s likely to cut some street maintenance funding.

“I think given the maintenance need, some money will always be dedicated to maintenance,” he said.

The organization is shifting more money to upgrading traffic signals as part of what’s called an intelligent transportation system. Four intersections — Franklin Avenue and Wall Street, Franklin and Bond Street, Franklin and Third Street and Third and Wilson Avenue — are the most critical priorities, Deke said.

While all estimates are preliminary, the Third/Wilson intersection is expected to cost $800,000, and the Third/Franklin signal is expected to cost $600,000, he said. Replacing the two signals downtown would likely cost $1 million.

Updated traffic signals, like the one at Greenwood and Eighth Street, would be more responsive to traffic fluctuations. They can provide longer or shorter green lights depending on traffic.

— Reporter: 541-633-2160; jshumway@bendbulletin.com