As necessary as the extra investment may be to responsibly maintain pipes, culverts, ditches, and other infrastructure that keep rainwater and snowmelt safely draining away from homes and businesses in Duluth, preventing flooding, the delayed start of stormwater-utility rate increases can be welcomed with relief.
The Duluth Public Utilities Commission voted unanimously two weeks ago to hold off for six months, from Jan. 1 to July 1. The Duluth Area Chamber of Commerce had pushed for a 12-month delay, and commissioners certainly can consider another extension as July approaches, weighing again the state of our coronavirus-ravaged local economy then.
"I do think we need to take to heart and take seriously the impact of COVID, particularly on our small businesses and in some cases our larger institutions,” Duluth City Councilor and Duluth Public Utilities Commission member Joel Sipress said at the commission’s meeting, according to News Tribune coverage.
“I absolutely support the delay for six months,” commission member Robert Prusak said, and if things are still extraordinary six months from now, delaying it another six months. But we need to move forward with this."
The commission certainly makes a sound argument for moving forward with what, really, is a nominal rate increase — and just the first since 2016 and only the third since stormwater was added to our utility bills in 1998. The approved hike is 11.25% more per year for six years. As steep as that may sound, what we pay now for stormwater services is only $6.75 per residential unit per month, on average. In 2026, under the increase, that would jump to just $12.80. The stormwater portion of our utility bill accounts for less than 5% of the check we write each month for public utilities.
And here’s the justification: Portions of Duluth's stormwater system date back to the 1880s, and nearly a third of it is more than 50 years old. The city studied the aging, in-need-of-upgrading system for a year or longer, and its expert determination is that $4.7 million annually are needed to responsibly maintain and invest to avoid failures that could lead to flooded basements and yards.
The city currently is budgeting only $1.1 million for its stormwater system. The proposed rate increase would result in long-overdue adequate funding.
"Our system has reached a place where we cannot really ignore the safe, reliable, and efficient aspects of the mission (of the Duluth Public Utilities Commission) just to think about trying to keep rates low temporarily," commission member Chris McIntosh told News Tribune Editorial Board members in July. "If we just keep rates low now we'll just be passing costs off to the future even more. ... We just cannot ignore the system any further."
Especially not with the city's new, voter-approved half-percent sales tax for street repairs leading to more roadwork starting this year. It makes good fiscal sense to repair or replace stormwater pipes and other infrastructure beneath city streets when they are torn up for repairs.
The stormwater fee increases were approved with discounts for larger commercial and industrial property owners. And an increase in the cash available for stormwater improvements does promise more work for local contractors. Nonetheless, an increase now, while “the vast majority of (chamber) member businesses are struggling mightily with the financial hardship precipitated by the coronavirus pandemic,” would be a potentially devastating added burden at about the most inopportune time, as chamber President and CEO David Ross said in a letter to the commission prior to its vote.
Delaying provides “additional time for local businesses to recover from the financial hardship many are experiencing,” Ross wrote.
It provides additional time for homeowners, too, who need it just as badly. The delay can be welcomed with relief — especially with the door open for another delay six months into 2021.