On Street Repair Fees: Duluth City Council Notes, 6/23/14

The Duluth City Council began its somewhat noble work Monday in a rare respite from the permanent bank of fog that has settled over downtown Duluth. The Councilors were in a cheery mood despite a rather torturous meeting last time around, and the agenda promised a resolution to a long but rather unenthusiastic debate on funding street repair in Duluth. It was the sort of thing everyone wanted done but no one wanted to pay for, and no one seemed to find the solution all that palatable, but the desire to do something prevailed.

But first, the rest of the meeting. There were two general citizen speakers. Mr. Loren Martell gave one of the more intelligent takes on his usual spiel, chiding local officials for their “false sense of urgency” in rushing through proposals that probably need more vetting. Mr. Michael Chelseth, a rising junior at Duluth East, updated the Council on the tennis court project he is spearheading for Washington Square, saying grant-matching or partial funding will likely prove necessary.

Councilor Fosle recused himself from a pair of resolutions concerning liquor licenses at events his band will play at, and Councilor Larson pulled a few more to wait for an ordinance on the Downtown Waterfront Special Service District next meeting, but the rest of the consent agenda went through. Ms. Eve Graves, who has applied to turn an East Hillside home into a “vacation dwelling unit,” gave a brief explanation of her plan for “a tree-hugger clientele” that would be carefully vetted. After Councilor Gardner said that Ms. Graves had assuaged some of the worries she’d heard from neighbors about the impact on the neighborhood, that resolution passed unanimously.

A large contingent of city planners and developers were on hand to back the proposed hotel and marina development on Pier B, the currently blighted lot across a slip from Bayfront Park. A few of the Councilors who had some reservations about such projects spoke in its favor, led by Councilor Sipress, who praised the lack of direct cash subsidies, the much-needed repairs to the slip and site cleanup, the public access, and use of union labor and wage guarantees. Councilor Russ deemed Pier B a judicious use of tax-increment financing (TIF), of which she is not normally a fan, and President Krug added that the project has “come a long way since it was just a strip mall.” It passed unanimously.

This set the stage for the main act of the evening, which was the debate over a proposed fee to finance street repair. There were seven citizen speakers, all opposed to the measure, and five of them repeat performers. Mr. Jim Booth ordered the Council to eliminate vague “amenities,” while Ms. Sue Connor tried to hash out the details on the possible-double tax and wondered why this was different from the street light fee they’d all railed against at the previous meeting. Another speaker suggested a hard line against the Fon du Luth Casino to recover lost revenue, while Mr. Bob Woods made the accurate observation that the “councilors’ facial expressions are half the fun” of  coming to the meetings, and another man made an analogy involving geese. Chamber of Commerce President David Ross joined the critics to denounce the disproportionate impact of the fee on businesses, with even small businesses charged several times the amount of a home, and large businesses charged at an exponential level.

Councilor Fosle asked a few procedural questions that outlined what was at stake: the fee would raise $2.8 million in a full year ($1.2 million in a pro-rated 2014), and would need to be re-approved in the annual fee ordinance that normally comes before the Council every November or December (including this year), or else it would reset to zero. Councilor Fosle also spoke in opposition to the measure, calling it a “cover-up” by the administration that would allow them to hide behind the Council. “Don’t blame the casino,” he added, noting former Councilor Jim Stauber’s insights on street repair funding, and threw out a few vague ideas for raising funds. He said the issue hadn’t received much press (debatable, though there wasn’t exactly a huge media rush before tonight’s vote), and that the Council would be able to ram this through despite citizen objections since they’d dismiss so many of the speakers as the same old people raising the same old complaints. He was joined in dissent by Councilor Filipovich, who repeated his claim from the previous meeting: fees ought to be discussed during the regular budget process.

Several Councilors then set out to defend the fee, though they showed about as much enthusiasm for it as they might for a lobotomy. Everyone was careful to thank the citizens for their input and acknowledge various concerns. Councilor Russ said she’d prefer a tax increase to a fee and complained that it only covered half of what needed to be done, but concluded by saying “it’s hard to find a different way.” Councilors Larson and Gardner mounted a defense of “amenities” or “quality of life” expenditures, saying the investments are necessary, and that the outcry had been far worse several years earlier when the Council did move to slash Parks and Rec and library services. Councilors Sipress and Julsrud emphasized that this was only a stopgap until the city found a better overall solution, and that they would not renew it continually. “There’s a sunset for my vote” in favor of the fee, said Councilor Sipress, while Councilor Juslrud complained of U.S. infrastructure construction in Iraq and Afghanistan while federal spending (preferably funded by a gas tax) languished in the States.

Councilor Filipovich spoke for a second time to ask for “big ideas” to solve the problem, and expressed optimism that some could be found; CAO Montgomery rained on his parade and said it would be “risky to assume this,” and that another solution was “just not there” for the time being, given the “totality of the issue.” Councilor Filipovich peppily urged the CAO to have some faith, while Councilor Fosle expressed his complete lack of faith in a possible future renegotiation of the fee. Councilor Hanson thanked Councilor Filipovich for his “courage,” and applauded the city for doing its best in the budget crunch; he said there was “no hidden money anywhere,” and took shots at the two previous administrations for their handling of employee health benefits and street repair funding. He then announced that he was launching a plan to convert the DECC into a for-profit, city-run casino. Duluth: the Vegas of the Midwest!

In the end, the new fee passed 6-3, with Councilors Filipovich, Fosle, and Hanson in opposition. The related resolution and ordinance that set the fee and allowed for its collection passed by the same margin. The Council then wrapped up its evening, and for once a Duluth governmental body wrapped up its meeting when there was still daylight. There was some sense that they’d done something just for the sake of doing something, but lots of people are unhappy with street repair; the lack of diversity among the opposition speakers suggests most people are reluctantly on board with the fee. Still, the invocation throughout can’t be emphasized enough: this is not a long-term fix, and while the city can certainly pursue state or federal solutions, it cannot rely on them. Street repair is an unending problem in this city, and will likely remain in the fog for the foreseeable future. The debate will go on, and that’s not a bad thing.


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