OPENPUBLICA · PUBLIC MEETING RECORD
Record of Proceedings

Bend City Council Work Session - April 22, 2026: Climate Fee, Water Update, Venue Study

City Council — Wednesday, April 22, 2026
BodyBend, Oregon
SessionCity Council
DateWednesday, April 22, 2026
StatusFILED
Video Record
0:00 / 2:07:47

Transcript — Verbatim
0:05

All right, I'm gonna call this work session on April 22nd.

0:09

Um here.

0:11

Um the mayor is going to be joining us online from uh Pendleton in um a few minutes, I think.

0:19

Uh if she's not oh, there she is, there she is.

0:22

And counselor Norris will be here after this first item on the work session agenda.

0:28

So first we are going to uh get to start with uh electrification, and um I'm just gonna ask as we have 50 minutes to talk about this, and I would love it if we could hold all questions and comments until Cassie gets through the whole thing, and then we can go backwards and ask questions and go through each slide.

0:50

Okay.

0:50

Um good afternoon, counselors.

0:52

Just a quick roll.

0:54

Oh, I'm sorry, we'll call.

0:55

An interval.

0:56

We'll call.

0:56

Counselor Platt, we'll start with you.

0:58

I apologize.

1:03

Megan Perkins, she, her.

1:04

Mike Riley, yeah, Ariel Mendez, heat him.

1:07

Gina Franzosa, she her.

1:11

All right.

1:12

Now we're legit.

1:14

Okay, good afternoon.

1:15

I'm Cassie Lacey, senior management analyst in the city manager's office.

1:18

I do have Daniel Walker online from Brightline Group to help field any questions over Zoom.

1:25

Um, so I'm here to get the final pieces of direction that we need from the council in order to develop the code chapter and the ordinance for the climate pollution fee that we've been working on for the last several months.

1:37

Okay, specifically, we will be looking for your direction direction from you all today about exemptions or other adjustments and the effective date of the climate pollution fee.

1:46

Those are the topics that we had the round table on two weeks ago.

1:49

And then we also need direction from you on the applicability of the fee to specific building types and on the fee update and review process.

1:57

And then the process for the fee looking ahead is that we're scheduled to bring the first reading of the ordinance and the code chapter to at the council meeting on June 3rd, and then the second reading on June 17th.

2:08

And then one additional policy document that will come later is the actual fee resolution.

2:12

This would be adopted shortly before the effective date of the fee.

2:16

Um, so we will schedule a work session about two months before whatever decision you make on the effective date of the fee to review that fee resolution and review the updated fee calculation and fee schedule.

2:27

So next I'm gonna walk through all of the different policy questions that we need for you tonight so that we can just see the full scope of the discussion, and then as uh counselor Perkins said, we'll go back and actually talk about each one.

2:40

Um so we held a round table two weeks ago on April 8th to hear input from stakeholders on ideas for potential fee exemptions and the fee implementation timeline.

2:48

We share a few ideas to discuss with the group, and then we also heard some new ideas from roundtable participants.

2:55

Um we've been doing a little bit of research into the different ideas that were proposed for the fee exemptions and adjustments.

3:02

We've determined that two of the ideas are ones that are relatively straightforward enough that we can go ahead and incorporate those ideas into the policy documents that we'll be bringing to you on June 3rd.

3:12

So those are the first policy questions we have for you regarding whether or you want to move forward with these two ideas or not.

3:18

So the first one is the option to create an exemption for deed restricted affordable housing.

3:23

This would be an exemption on any affordable housing project that has a deed restriction.

3:27

Um we could potentially leverage um or sort of mirror the existing process that we have in place for getting affordable housing projects through expedited permitting, which makes doing this relatively simple.

3:38

Some of the roundtable participants had requested that the city create exemptions for up to 120% AMI levels.

3:45

This exemption would be based on the having the deed restriction and not necessarily specific to any particular AMI level.

3:52

Um so there are some, there's not very many, but some deed restrictive projects do go all the way up to 120% AMI, so it would just be inclusive of any that had that deed restriction.

4:01

Um and then as a reminder, virtually all of our affordable housing projects are built without gas already.

4:06

Um this fee would not apply to multifamily, which is also a percentage of the um affordable housing projects.

4:12

So we would not expect this exemption to be utilized very much.

4:15

The purpose would just be to have it in place to ensure that there isn't an additional fee on affordable housing in the event that the market conditions change or if there's sort of a one-off situation where a project decides to use gas.

4:28

Um the other one that we need direction on today is how to treat dual fuel equipment.

4:34

The options for this include an outright exemption for houses with dual fuel systems with the new code update going into place in April.

4:42

We do expect potentially significant increase in uh the amount of these dual fuel systems since builders will be putting in the heat pumps for the air conditioning units.

4:51

Um so if you do create an outright exemption for these, I would expect it to be a very broad exemption or a pretty broad exemption that potentially a lot of homes would fall under.

5:01

And then the other option for dual fuel equipment is that we would create an additional equipment type in the fee schedule for dual fuel heat pump systems.

5:08

It would use a different number for the net carbon emissions than a standalone gas furnace, which would be lower to account for the lower gas use, but there would still be a fee to sort of account for the remaining gas use that is still attributable to those systems.

5:24

So those are the two that we like direction so that we can incorporate them into the ordinance on June 3rd.

5:31

And then for the effective date of the fee, three options were raised at the round table April 1st, 2027, July 1st, 2027, and January 1st, 2028.

5:43

Some of the considerations for the effective date are one is that in order to get the fee into place, we need we are needing better clarity from Pacific Power on their compliance pathway for achieving the renewable energy standards from Hospital 2021.

5:57

At the round table, they shared that they might be able to get us that information in the middle or second part of this year, which we did not think that was true before the round table.

6:06

So hearing that new information at the round table makes me more comfortable than I was when I presented at the round table that a 2027 implementation date that would be less of a barrier for a 2027 implementation timeline.

6:18

Another thing to consider is the building code timeline.

6:21

The updated building code becomes mandatory on April 1st, 2027.

6:24

There might be efficiencies with aligning with the new building code since builders will be building to new requirements at that time, including the potential expansion of heat pumps as air conditioning units.

Discussion Breakdown — Share of Meeting
Environmental Protection██████████████████████████████30%
Water And Wastewater Management██████████████████████████26%
Economic Development█████████████████████21%
Affordable Housing███████████11%
Engineering And Infrastructure██████6%
Procedural████4%
Community Engagement█1%
Workforce Development█1%
Summary of Proceedings

Bend City Council Work Session – April 22, 2026

The Bend City Council held a work session on April 22, 2026, covering three major topics: final policy direction for the proposed Climate Pollution Fee, an annual water conservation and supply update, and a feasibility study for a new public assembly venue. Council provided clear direction on fee exemptions, effective date, and building applicability, received updates on water conservation progress and drought preparedness, and expressed support for further exploration of a multi-purpose event venue.

Climate Pollution Fee Direction

Staff Presentation (Cassie Lacey, Senior Management Analyst):

  • Staff requested final direction on exemptions/adjustments, effective date, building types, and fee update process to develop the code chapter and ordinance for first reading on June 3, 2026.
  • Two items were ready for immediate policy inclusion: (1) an exemption for deed-restricted affordable housing, and (2) treatment of dual-fuel equipment (either outright exemption or a separate fee schedule line).
  • For the effective date, three options were discussed: April 1, 2027; July 1, 2027; and January 1, 2028. Staff noted alignment with the state building code becoming mandatory on April 1, 2027.
  • Building type applicability: staff recommended applying the fee to all new residential structures built under the residential code (single-family, duplex, townhouses, ADUs), excluding triplexes/quadplexes built under commercial code due to administrative complexity and low volume (only one three-unit development in the past year).
  • Additional ideas (renewable natural gas, 120% AMI exemption, solar homes, pilot project) were identified as feasible but requiring more time, potentially delaying the June 3 adoption.

Council Discussion and Positions:

  • Dual-fuel equipment: Council unanimously agreed to include dual-fuel heat pumps as a separate equipment type in the fee schedule (lower fee based on lower net carbon), rather than an outright exemption. Councilor Platt stated, “I am not in favor of any kind of exemption for a dual fuel system,” and Councilor Perkins added that the existing net-carbon formula already accounts for lower emissions.
  • Deed-restricted affordable housing exemption: Council unanimously voted against providing an exemption. Councilor Platt cited letters from two major affordable housing builders (Rooted and Habitat) who oppose the exemption, arguing that electric efficient homes have lower and more predictable operating costs. Councilor Franzosa read from the emails: “Exemptions that allow less efficient systems risk locking homeowners into high lifetime costs.” Mayor noted that the fee is not a major barrier and can be revisited if issues arise.
  • Effective date: Council reached consensus on April 1, 2027, to align with the state building code. Councilor Mendez noted the predictability for builders. Staff confirmed April 1 is the earliest feasible date. Mayor expressed some concern about staff readiness but accepted the consensus.
  • Building types: Council agreed to apply the fee to all residential code structures and to track triplexes/quadplexes built under commercial code via annual reporting. Councilor Franzosa emphasized infill housing support, but others preferred administrative efficiency. The issue can be revisited if market trends change.
  • Fee update process: Council approved the proposed annual fee resolution update (each June) and annual reporting on adoption rates, revenue, energy mix, greenhouse gas reductions, utility bill impacts, and equipment cost changes. Councilor Platt requested adding tracking of electric resistance vs. heat pump heating sources and legislative/utility changes. Staff confirmed that data can be collected.
  • Additional ideas: Council postponed further exploration of renewable natural gas, solar exemptions, and pilot projects, directing staff to consider them in the upcoming non-financial incentives work with the Environmental Climate Committee. Councilor Mendez suggested that some ideas could fit into the non-financial incentives discussion.
  • Next steps: Staff will bring the first reading of the ordinance and code chapter on June 3, 2026. Councilors Platt and Mendez volunteered to work with staff on draft language.

Water Conservation and Supply Update

Staff Presentation (Lori Feya, Environmental Resources Manager; Dan Denning, Water Conservation Program Manager):

  • Celebrated the 100-year anniversary of Bend’s water system, including banners in the Old Mill District and Earth Day activities.
  • Drought preparedness: Despite a severe drought year (snowpack comparable to 1977), the dual surface water/groundwater system ensures supply. Staff coordinate with Tumalo Irrigation District, Forest Service, Avion, and ROATS. Curtailment (event-based emergency) is distinct from long-term conservation.
  • Conservation successes in 2025: Reduced maximum day demand; a 12% voluntary reduction ask yielded aggregate savings across three largest customers; increased participation in turf replacement and device rebates; total water production decreased while population grew. Gallons per capita per day (GPCD) dropped to 161, exceeding the council goal of 165.
  • New tools: Consumption and rebate distribution dashboards allow targeting. Gray water feasibility study showed more potential in multifamily/commercial than single-family.
  • 2026 outlook: April demand is up 20% over last year. Staff are deploying a holistic approach: awareness campaigns (e.g., “B Water Smart”), technical assistance, incentives, and enforcement. Firewise messaging will be coordinated. Green meeting events scheduled.
  • Progress report: A five-year update to the Water Management and Conservation Plan will be submitted to the state in October 2026, including reanalysis of projections and modeling of new measures (gray water, low-income repair assistance).

Council Questions:

  • Councilor Franzosa asked about expanding incentives; staff noted turf replacement remains popular and underperforming programs may be replaced.
  • Councilor Riley asked what a 17 GPCD reduction looks like for a household; staff explained that a two-minute reduction on one irrigation station saves about 20 gallons.

Public Assembly Venue Study

Presentation (John Katz, CSL International; Jeff Knapp, Visit Bend; Katie Brooks, Economic Development Officer):

  • Conducted stakeholder interviews and market analysis over several months. The study found positive conditions for a multi-purpose venue (conference, concerts, community events, amateur sports) in the 1,000–3,000 seat range with a flat floor, retractable seating, and an adjacent hotel.
  • Key factors: Bend is a national destination, has a vibrant downtown and arts community, and is the economic hub of Central Oregon. Challenges include winter accessibility, limited direct flights, and existing venues (Riverhouse, Hayden Homes, Tower Theater).
  • Economic impact in year four: 17,000+ room nights, 30,000 new non-local visitor days, $11.7 million direct spending, $19.8 million total economic output, 247 jobs (full- and part-time), and $323,000 incremental hotel tax.
  • The venue is not intended to replace existing facilities but to fill a gap (e.g., no mid-sized concert venue). Cannibalization is a risk, but the majority of events would be net new. A headquarter hotel is essential for attracting conventions.
  • Estimated cost (based on similar Tahoe Blue Center) is around $110 million, but architecture and site selection are needed.

Council Input and Next Steps:

  • Mayor expressed support for continuing to the next phase without committing public dollars, saying “we're not putting ourselves on the hook to build anything.”
  • Councilor Riley raised concerns about trade-offs, job quality (mostly part-time/service), and opportunity costs given other community priorities. He requested concrete case studies illustrating economic development benefits.
  • Councilor Franzosa emphasized the need to sequence with other community efforts (performing arts center, expo center) and to understand financial models (public-private-philanthropic).
  • Council agreed to allow Visit Bend to proceed with the next phase: architectural design, site selection, detailed feasibility, and financial modeling. Staff will provide updates as the work progresses.

Key Outcomes

  • Climate Pollution Fee:
    • No exemption for deed-restricted affordable housing.
    • Dual-fuel heat pumps will be included as a separate equipment type in the fee schedule (not exempt).
    • Effective date: April 1, 2027.
    • Fee applicable to all new residential structures under the residential code (single-family, duplex, townhouses, ADUs); triplexes/quadplexes under commercial code excluded but tracked.
    • Annual fee update and reporting approved; additional tracking of heating source types and legislative changes added.
    • First reading of ordinance and code chapter scheduled for June 3, 2026.
  • Water Update: Received; goal exceeded (161 GPCD vs. 165 target). Staff to continue drought outreach and prepare five-year progress report.
  • Venue Study: Council supportive of proceeding to next feasibility phase led by Visit Bend, with recognition of no current commitment of public funds.

Meeting Transcript

All right, I'm gonna call this work session on April 22nd. Um here. Um the mayor is going to be joining us online from uh Pendleton in um a few minutes, I think. Uh if she's not oh, there she is, there she is. And counselor Norris will be here after this first item on the work session agenda. So first we are going to uh get to start with uh electrification, and um I'm just gonna ask as we have 50 minutes to talk about this, and I would love it if we could hold all questions and comments until Cassie gets through the whole thing, and then we can go backwards and ask questions and go through each slide. Okay. Um good afternoon, counselors. Just a quick roll. Oh, I'm sorry, we'll call. An interval. We'll call. Counselor Platt, we'll start with you. I apologize. Megan Perkins, she, her. Mike Riley, yeah, Ariel Mendez, heat him. Gina Franzosa, she her. All right. Now we're legit. Okay, good afternoon. I'm Cassie Lacey, senior management analyst in the city manager's office. I do have Daniel Walker online from Brightline Group to help field any questions over Zoom. Um, so I'm here to get the final pieces of direction that we need from the council in order to develop the code chapter and the ordinance for the climate pollution fee that we've been working on for the last several months. Okay, specifically, we will be looking for your direction direction from you all today about exemptions or other adjustments and the effective date of the climate pollution fee. Those are the topics that we had the round table on two weeks ago. And then we also need direction from you on the applicability of the fee to specific building types and on the fee update and review process. And then the process for the fee looking ahead is that we're scheduled to bring the first reading of the ordinance and the code chapter to at the council meeting on June 3rd, and then the second reading on June 17th. And then one additional policy document that will come later is the actual fee resolution. This would be adopted shortly before the effective date of the fee. Um, so we will schedule a work session about two months before whatever decision you make on the effective date of the fee to review that fee resolution and review the updated fee calculation and fee schedule. So next I'm gonna walk through all of the different policy questions that we need for you tonight so that we can just see the full scope of the discussion, and then as uh counselor Perkins said, we'll go back and actually talk about each one. Um so we held a round table two weeks ago on April 8th to hear input from stakeholders on ideas for potential fee exemptions and the fee implementation timeline. We share a few ideas to discuss with the group, and then we also heard some new ideas from roundtable participants. Um we've been doing a little bit of research into the different ideas that were proposed for the fee exemptions and adjustments. We've determined that two of the ideas are ones that are relatively straightforward enough that we can go ahead and incorporate those ideas into the policy documents that we'll be bringing to you on June 3rd. So those are the first policy questions we have for you regarding whether or you want to move forward with these two ideas or not. So the first one is the option to create an exemption for deed restricted affordable housing. This would be an exemption on any affordable housing project that has a deed restriction. Um we could potentially leverage um or sort of mirror the existing process that we have in place for getting affordable housing projects through expedited permitting, which makes doing this relatively simple. Some of the roundtable participants had requested that the city create exemptions for up to 120% AMI levels. This exemption would be based on the having the deed restriction and not necessarily specific to any particular AMI level. Um so there are some, there's not very many, but some deed restrictive projects do go all the way up to 120% AMI, so it would just be inclusive of any that had that deed restriction. Um and then as a reminder, virtually all of our affordable housing projects are built without gas already. Um this fee would not apply to multifamily, which is also a percentage of the um affordable housing projects. So we would not expect this exemption to be utilized very much. The purpose would just be to have it in place to ensure that there isn't an additional fee on affordable housing in the event that the market conditions change or if there's sort of a one-off situation where a project decides to use gas. Um the other one that we need direction on today is how to treat dual fuel equipment. The options for this include an outright exemption for houses with dual fuel systems with the new code update going into place in April. We do expect potentially significant increase in uh the amount of these dual fuel systems since builders will be putting in the heat pumps for the air conditioning units. Um so if you do create an outright exemption for these, I would expect it to be a very broad exemption or a pretty broad exemption that potentially a lot of homes would fall under.

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