In St. Paul, massive street repair bills rile homeowners

Not long after they bought a house on Osceola Avenue in St. Paul in October 2017, Simon and Christina Anderson Taghioff were surprised to see an "invoice" from the city for mill and overlay work to Victoria Street. Because they live on a corner lot, with 150 feet fronting Victoria, they were charged nearly $5,000 for its repaving.

"Our first reaction was, 'Is this normal?' " Simon Taghioff said.

It wasn't. At least not until the state Supreme Court in 2016 threw out St. Paul's previous system of paying for street maintenance — a right-of-way fee charged to all properties, including churches. For mill and overlay projects, done on the city's busier streets, St. Paul in 2017 started charging property owners 50% of the repair cost, based on their linear feet of street frontage, with the city picking up the rest. That meant whopping new bills of as much as $8,000 for some homeowners.

Considering that property owners on most residential streets pay significantly less for "seal-coating," the Taghioffs and dozens of others last month appeared at City Council meetings to challenge the fairness of St. Paul's mill and overlay assessment system. And that has prodded members of the City Council to once more re-examine how to pay for street maintenance.

"Policies are created for the good of the public and often we learn what's working and what's not when we put policies in place and get feedback," City Council Member Rebecca Noecker said. "I was really impressed by the testimony and the feedback we received from the property owners."

The council approved mill and overlay assessments in 2017 and put through five more for 2018, before dozens of homeowners started showing up at council meetings last month to challenge the fees.

The council voted to put off a vote for 30 days to study the issue further.

On Tuesday, Noecker said that review is continuing and a vote scheduled for Wednesday on mill and overlay projects for Victoria, Stryker, Forest and Arlington could be delayed again.

"We are going to have to pay for this one way or another," she said. Noecker said she would prefer putting less of the burden for arterial streets that carry citywide traffic on those streets' property owners. "I think there should be some limit."

The city budgeted $2.4 million for mill and overlay projects in 2018. In 2019, the city intends to spend $5 million.

St. Paul settled on its current system after the 2016 Supreme Court ruling left a $30 million hole in the city's street maintenance budget, including how to pay for mill and overlay — a process for more heavily traveled streets in which several inches of paving are removed before fresh asphalt is reapplied.

Public works officials consulted with the City Attorney's office to come up with the system, said Bruce Beese, administration manager for St. Paul Public Works. Several area cities use a similar method to pay for mill and overlay, he said, with homeowners in some suburbs assessed for the full cost.

"We didn't want to go there," he said.

But even paying 50% of the cost is onerous, and potentially illegal, said Taghioff.

Living on an arterial street doesn't mean property owners use it more than they would a residential street, he said.

"They fail the special benefit test, in which the city is not supposed to tax individual properties in excess of the benefit an improvement provides," he said.

At first, Taghioff, an engineer from London, and his wife, an attorney from Owatonna, wanted to shrink an outsized bill. Since then, he said it's become a quest for fairness.

They've heard from homeowners all over town — retirees, single mothers on food stamps, disabled people and young families — burdened by unexpectedly large bills they'd never had to pay before.

And if the City Council doesn't change it, he said they will likely sue.

"I'm convinced there's a real injustice here," Taghioff said.