Duluth City Council Forming a Back-Up Plan for Street Repairs

By KBJR News 1

November 12, 2012 Updated Nov 12, 2012 at 10:44 PM CDT

DULUTH, MN (Northland's NewsCenter) - Few things annoy people more than pothole pocked streets.

With the main source of revenue for street improvements in Duluth in limbo in the courts, and the city with no budget set aside for street reconstruction next year the problem could only get worse.

The city is fighting hard to keep the downtown Fond du Luth casino as a revenue stream for street repair with another court hearing tomorrow in St. Paul in the State Court of Appeals.

This hearing is part of an ongoing dispute between the City and the Fond du Lac Band over Casino revenues, which the city has been using to fund street maintenance, but with the revenue source far from guaranteed, the City Council has been putting together a back-up funding plan

Duluth's streets currently are a patchwork of temporary fixes.

"If you drive outside of the thoroughfares it gets pretty bad pretty quickly," said Dan Hartman, president of the Duluth City Council.

"We simply don't have the money to invest in our streets right now and that's a problem that will only get worse," said Mayor Don Ness.

The 2012 National Citizen's Survey revealed only 17 percent of Duluthians believe the streets are in 'good' or 'excellent' shape, actually up from a mere two percent in 2009.

It's progress on a slippery hillside.

"We're built upon a hill, because we have harsh winters, because we have a very old streets system," said Mayor Ness.

For the past several years, Duluth has funded street improvements with the City's contracted share of profits from the Fond du Luth Casino. That money was in exchange for allowing the casino to operate in the city's downtown, but in 2009, the Band stopped paying, claiming the contract was illegal. The city lost about $6 million a year and took the band to court.

"Raising six million dollars for streets from a different source would be very painful," said Mayor Ness.

As the city fights the court battle, the city council searches for the least painful back up plan.

"I don't have any illusion that the city's going to receive money from the casino for quite some time, even if we receive any at all," said Councilor Jim Stauber.

The city is still paying old street debt too.

"Probably upwards of $14 to18 million on street improvements we've made in the past, so somewhere we have to come up with that money as well," said Stauber.

"We want to have some plan at the end of the day that we can look back on and say we actually didn't push this down the road, we actually tried to solve it," said Hartman.

Some solutions have been suggested. Councilor Stauber's plan would cut $4 million from the city budget, increase street assessments and raise taxes. That would raise $14.4 million a year.

"If casino money starts to flow again, we can either add it or we can reduce the levy to make up for that," said Stauber.

The Stauber plan could result in painful job cuts.

"But it's a starting point," said Stauber.

Councilor Hartman's plan would raise property taxes by a dollar or so for every foot of frontage lining the street.

"I'm looking for, really to just replace the same amount of dollars we lost," said Hartman.

Some councilors complain, it's a regressive tax. An alternative option consists of raising sales tax a half a percent, but Mayor Ness says getting legislative approval would be tough, as Duluth already has a one percent sales tax.

"I think they're seeing how difficult it is to come up with a balanced approach on a big question facing our city," said Mayor Ness.

Even if the city does get casino revenues back, it won't entirely solve the city's street problem.

"We need about $20 million a year to actually sustainably fix our streets. That was only six," said Hartman.

With every option, suggested so far, including a tax hike, it appears Duluthians can expect to pay more to repair the roads.

While more options could come to the table, the council expects to have a consensus on a plan to pay for Duluth's street improvements by early next year.

The hope is to get public input on it in February or March.

Posted to Web by Jena Pike