St. Paul's pumped-up street maintenance fees are getting an indepth look from a City Council looking at softening the hit to some landowners.
The driver of the discussion is Mike Schumann, the well-liked co-owner of Traditions, the upscale furniture store on the corner of Grand Avenue W. and Oxford Street. He calls the fees "fundamentally unfair" because he is paying "in excess of benefits derived."
Council members have a study session April 20 at which they will again survey colorful grids detailing how property taxes and assessments would fluctuate under more than a dozen scenarios.
"We've tweaked it one way or another to get to the end result of being fair. So far we have not been able to find any solutions that wouldn't put an unbearable burden on others," said Council Member Dave Thune, who represents downtown and Grand Avenue.
The city will collect $25 million in right-of-way (ROW) fees in 2011 to pay for such street maintenance as plowing, cleaning, salting, tree trimming and street lighting. Property owners are charged per foot of right-of-way frontage. The charge is assessed by property classifications, which factor in locations and type.
All St. Paul property owners whose land abuts a public right-of-way are assessed a street maintenance fee. Although in place for a century, former Mayor Randy Kelly pushed to increase the fees starting in 2003, partly to keep a campaign promise to hold down the property tax levy. The fees also are a means for the one-third of city property owners who are exempt from property taxes -- such as government agencies, schools, churches and charitable organizations -- to pay for maintaining the streets they use.
As a commercial property owner on a corner, Schumann pays per foot for both the Grand Avenue and the Oxford Street right-of-way frontage. In contrast, residential homeowners on corners pay just for the shorter of the two street frontages.
Schumann said he pays roughly $350 for the footage facing Grand Avenue and $1,200 total when the Oxford frontage is added. "Commercial properties are paying 100 percent of the freight for north-south streets, which are really used by everybody," Schumann said.
He said the system is illegal, because corner businesses aren't treated the same as corner residential properties. "The City Council still seems to be working with us, [but] if it doesn't get resolved, there will be litigation," he said.
Another group that gets nailed: Churches downtown must pay the higher assessments for downtown street maintenance. The churches have argued to council members that they don't use the buildings as often or heavily as businesses or condos and can't afford the fees. But if City Hall helped the churches, someone else would suffer.
Matt Anfang, president of St. Paul Building Owners and Manufacturers Association, is a supporter of the current fees. "The [right-of-way] maintenance is not supposed to be about your impact or use, but about the level of service provided," he said.
Despite ongoing study, no one at City Hall is charging hard for change.
"I'm thinking no," Council Member Pat Harris said. "The problem with changing it is every time you squeeze the balloon on one side, it gets bigger on the other end."
Or as Council President Kathy Lantry said, "If you fix it for one, you unfix it for another."
Council Member Melvin Carter III said, "Ultimately, there's a pretty widespread understanding that it's a tangled web."
Mayor Chris Coleman's spokesman Richard Carlbom said the mayor supports the current system and hasn't considered changes.
Thune isn't ready to give up on a more "progressive" approach to the fees. He said, "I never like to anticipate a negative result until I've expended every last ounce of my energy."
Rochelle Olson • 612-673-1747
