In the hole: Minnesota residents, businesses charged monthly fee to fix city streets

Tom Steward
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Sep 02, 2014 5:00 AM
In the hole: Minnesota residents, businesses charged monthly fee to fix city streets

By Tom Steward Watchdog Minnesota Bureau

DULUTH, Minn. — You quickly get a clue about the scope of Duluth’s street repair problem by logging onto the city website.

People who click on the “Duluth Progress” tab to view a list of street-improvement projects soon run into a dead-end link. A “404” error message pops up on the face of a “Do Not Enter” wrong-way sign — at the time of this writing, Friday afternoon.

No wonder many Duluth taxpayers have communicated their own “404” error message to the city over a new street improvement fee on August utility bills.

The street fund joins water, sewer, storm water and street lights and other utility fees that can total nearly $50 a month — on top of residents’ property taxes.

“Government has to start living within its means, instead of this thinking that we have an unlimited amount of money. We don’t,” said Jim Booth, a financial planner who’s running for county commissioner. “And it’s exactly the people the politicians say they’re watching out for — the low- and moderate-income people — that they’re hurting.”

This summer, Duluth Mayor Don Ness tried heckling himself over the hot-spot issue, receiving pointed shots, as well as hundreds of likes, on Twitter and Facebook.

“Shouldn’t you be out filling potholes, or something?” Ness tweeted at himself.

“I bought a tank to drive over all the potholes, it’s cheap to drive compared to constantly repairing the suspension on a normal car,” responded one resident.

“By the way- unbelievable pothole in the right lane Woodland Avenue by 21st Ave E. I saw it at the last second and got Don Ness-ed,” wrote another follower.

Rather than rely on property taxes, the city charges 24,200 residential customers $5 per month and 3,800 commercial customers $40 to $240 a month to fill potholes and repair cracks. The Lake Superior city even nicks nonprofits for the curbside upkeep outside their doors.

“Sure it matters. It’s going to be more expense. Any time you add to expenses, in the case of our foundation, that means that we are just able to give away that much less,” said Stephen Mangan, executive director of the Ordean Foundation. “So it does have an impact, and we would certainly strongly support every effort to eliminate that new policy going into effect.”

Duluth needs to fill a $16 million financial pothole left over from previous street upgrades. Compound that overdue bill with the Fond Du-Luth downtown tribal casino pulling the plug on $6 million in annual payments, which went for street work, and fierce northern winters that tear up the city’s steep hillside streets.

One of three City Council members opposing the street utility calls it a “casino revenue replacement fee” that will further stifle economic development and raise the cost of living.

Photo courtesy of City of Duluth

POTHOLEPALOOZA: Duluth faces millions of dollars in street repairs and a $6 million annual shortfall in funding due to loss of casino revenue.

“I’m told owners of multiple properties, in particular, a restaurant group in Duluth, is paying upwards of $20,000 a year for this new tax. And that’s driving up the cost of our goods and services,” said Howard Hanson, a council member who’s proposed a city-owned casino to make up the lost revenue.

Even city councilors supporting the fee, expected to raise about $3 million per year, acknowledged its broad unpopularity.

“Most of what I’m hearing from people is, ‘Don’t do it, we don’t like it, find a different way,’ and it’s hard to come up with a different way,” Barb Russ said before voting for the street fund at the June 23 meeting.

The city also considered raising property taxes about 30 percent over two years to fund road repairs before going in the direction of a street utility account.  One city councilor, however, suggested a virtual menu of local taxes could be on the table, when the new fund comes up for reauthorization next year.

”Maybe that can include a local gas tax or a wheelage tax, maybe it could include a dedicated quarter percent sales tax,” city councilor Emily Larson said at the decisive June meeting. “There are other options that we can and should be pursuing. In the meantime, this gets us one very small step forward.”

City communications staff failed to respond to inquiries from Watchdog Minnesota Bureau. In April, however, Ness took credit for plowing an additional $500,000 in budget savings into pothole prevention.

“Our 2013 budget surplus will allow us to DOUBLE our pothole program this year. We will go from 3 full crews to 7 w/ no impact on ’14 budget,” Mayor Ness tweeted.

“I hope some of those crews get to west Duluth. 40th Ave. W from the highway to Grand is like off roading!” someone tweeted back.

Hashtag?  #Potholepalooza.