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Duluth City Council cancels streetlight fee, advances street improvement fee

Say goodbye to one fee and perhaps hello to another, Duluth.

The Duluth City Council voted Monday night to do away with an unpopular monthly streetlight fee it charges residents as of Dec. 31, 2018. But councilors will continue to advance a plan to implement a new fee to pay for city street improvements, with a vote on that expected on June 23.

Even as the council took steps to end the $5 monthly streetlight fee residents pay on their utility bills, it continues to propose a $5 monthly fee to pay for street improvements, with owners of larger nonresidential properties being asked to pay anywhere from $30 to $240 per month, based on their size.

Councilor Joel Sipress said he generally does not support using fees to pay for core city services, especially when those fees fail to differentiate between individuals of modest and affluent means. He said it would be fairer to roll the cost of maintaining, powering and upgrading city lights in the city’s general fund budget and adjust the property levy accordingly.

Sipress said taxpayers should not expect the expense of lighting to go away as a result of Monday’s vote, explaining: “This is a vote to trade a fee for a property tax increase.”

Duluth taxpayers could conservatively expect to see a property tax increase of 8 percent to 9 percent to make up for the lost fee, according to David Montgomery, the city’s chief administrative officer.

The repeal of the streetlight fee passed on a 5-4 vote, with councilors Sipress, Sharla Gardner, Barbara Russ, Jay Fosle and Jennifer Julsrud voting in the majority.

Councilors Zack Filipovich, Howie Hanson , Emily Larson and Linda Krug voted against eliminating the fee.

Krug said she would like to see the streetlight fee eliminated as much as anyone else, but she said she considered it fiscally irresponsible to eliminate the fee without a clear plan in place for how it would be replaced.

Meanwhile, the council continues to wrestle with how to pay for street improvements that were previously funded with the help of casino proceeds it received from the Fond du Lac Band of Lake Superior Chippewa. The city has been unable to collect that money since 2009, which is a result of a disagreement with the band that continues to be fought out in court.

Montgomery said the council’s action to eliminate the streetlight fee will set the city back more than another $2 million.

“We started with a $6 million street issue, and we’re creating an $8 million issue,” he said.

Councilor Gardner successfully offered an amendment to a proposed street fee ordinance calling for the city to apply any street fees collected in the previous year to the first year’s payment of any property owner’s street assessment.

“This amendment is an effort to keep people from being double-taxed if their street is being repaired,” she said.

Gardner’s amendment was approved by the council, and since it represented a substantial change, the ordinance will now require a second read before it is ready for vote.