Duluth residents soon could be in for some bigger utility bills. By a 7-0 vote Tuesday night, the Duluth Public Utilities Commission approved a resolution of intent laying out a plan to increase the stormwater sewer system fee the city charges residents by 11.25 percent for each of the next six consecutive years.
If implemented, the monthly stormwater fee local homeowners pay would grow from $6.75 at present to $12.80 by 2026, a 90-percent jump over six years.
Eric Shaffer, Duluth's chief engineer of utilities, said the city will need to step up its investment in an aging stormwater system or run the risk of increasing failures, potentially damaging public streets and private property. He said there is much deferred maintenance to be tackled throughout Duluth's extensive stormwater system, including about 411 miles of pipe, more than 10,000 catch basins, 5,000 manholes, 2,500 culverts and 100 miles of open ditch.
To catch up on repairs, he estimates the city will need to begin annually sinking about $4.6 million into its stormwater system — a dramatic departure from the $1.2 million per year it now budgets for the work.
Many of the anticipated investments in new stormwater infrastructure will need to be timed to coincide with street improvements funded by a half-percent sales tax recently adopted to fund street improvements.
Shaffer noted that the city expects it will cost about $1 million yet this year to purchase and install six blocks of new stormwater infrastructure on East Second Street that's being rebuilt as St. Luke's reconfigures its medical campus, bringing new emergency facilities online.
At large City Councilor Derek Medved, who also serves on the utilities commission, asked how the city would likely pay off any revenue bond required to fund the imminent work on East Second Street.
Shaffer pointed to the proposed rate increases as the likely funding mechanism.
"So, this also shows another urgent reason why the rate increase needs to happen," Medved said.
Jim Benning, Duluth's director of public works and utilities, said he and Shaffer had explored whether it might be possible to push back the timeline for Second Street work, given other pressing financial commitments to complete work on Superior Street, Woodland Avenue and Decker Road. But he said: "The answer is 'no,' because the medical district is depending on us to complete these improvements. So, we're kind of between a rock and a hard place on this one."
While the resolution adopted Tuesday expresses commissioners' intent to ratchet up stormwater utility fees over the next six years, it is not a binding document. In fact, the resolution calls for public meetings and forums in June to lay out the rationale for the proposed increases and gather public input before taking any final action, likely in September.
Given recent concerns about COVID-19 and the danger of the virus spreading through public gatherings however, Benning acknowledged that timeline could slip.
The resolution also noted the utility commission's intent to incorporate discounts for structural best management practices into the city's final stormwater rate structure.