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Business North - The Daily Briefing - Business Newspaper Online
Expensive Duluth street fee inches closer to passage
Duluth City Councilors advanced a measure Monday that moved them within one vote of creating a street maintenance fee that could be expensive for commercial property owners.
At issue is the creation of a street maintenance utility. Its job would be to set fees to replace about $6 million formerly paid to the city by Fond du Luth Casino – money that was largely spent on street maintenance. The proposed ordinance does not specify how much residential or commercial property owners would pay, but at an April 1 public forum, Chief Administrative Officer Dave Montgomery said “We’re targeting a $8 or $9 per month fee for residents and then a tiered business rate. Those rates would range anywhere from $40 a month up to $300 to $400 a month for the very largest businesses.”
Ironically, few from the business community commented during Monday’s discussion. Among the few organization to present testimony was the Minnesota Council of Nonprofits, which objected to the imposition of a fee, which its members would have to pay, rather than a property tax, which many non-profits are exempt from paying.
“This would create essentially a taxation on otherwise exempt properties,” said Susie Brown, the group’s public policy director. “We believe those organizations that have received a property tax exemption should continue to be exempt from things such as a street fee.”
Real estate broker Joe Kleiman disagreed, saying a fee would spread the burden across a larger pool of street users, instead of putting the largest cost on commercial property owners.
Home owner Dave Salveson said the city’s doesn’t have its priorities in the proper order.
“We’re wasting a whole lot of money on things that should be put off until the future, when times are good. We spend money on bike trails when we should be spending it on streets. There’s just a continuous flow of poor choices. It’s just absolutely ridiculous that we already pay taxes yet we have to pay more tax (the proposed fee) for the street I live on,” he said.
The measure that advanced Monday would give property owners who are paying a street assessment a one-year exemption from the fee. A second reading of that proposal will occur later in June, when the broader ordinance will be considered.
Later in the meeting, city councilors raised the ceiling on a municipal line of credit made available to the Spirit Mountain Recreation Area Authority. Formerly $900,000, it was increased to $1.2 million. Councilors were told the tourist attraction is facing severe cash flow problems that need to be addressed as soon as possible after the group’s new director takes charge.
“There are many operating issues at Spirit Mountain that need to be addressed,” Montgomery said, but cold weather has hurt the operation financially, preventing Spirit Mountain from repaying its loan for the past two years.
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