St. Paul residents bemoan "unfair" right of way assessments

Chad Skally rifled through his folder of city assessments, pulling out the corner properties: $1,814 for the Grand Avenue building he was sitting in, $4,032 for another apartment complex he owns a mile away.

He's done the comparisons. He knows his annual bills for street maintenance are at least twice that of neighbors who have similar buildings in the middle of the block. But whatever additional benefit he is supposed to get for his money hasn't materialized, Skally said.

"The system is obviously broken," he said. "It's such a blatant disparity."

Many St. Paul property owners say the city's right of way assessment process, which is based on street frontage, is unfair. Several attorneys have a stronger word for it: illegal.

Under state law, cities can only charge a fee for properties that benefit from an improvement. That is not what is happening in St. Paul, residents and attorneys argue. St. Paul assesses almost all property owners every year and uses that money for street maintenance, including tree trimming, snowplowing and litter pickup.

Downtown churches initiated a lawsuit in 2011 over the assessment process, which is headed to trial next month. Other property owners plan to bring a class-action suit against the city.

Meanwhile, Council Member Amy Brendmoen is pushing to change another piece of the assessment process — a little-known one that she said unfairly burdens people who already struggle financially.

Residents who can't afford to pay their assessment outright can finance it, but St. Paul charges an interest rate that includes an "add-on finance charge" that goes to the city's Office of Financial Services. That's double-dipping, Brendmoen said, because the city already collects an administrative fee on assessments.

"We were basically harming people who did not have the ability to self-finance their assessment," she said.

The add-on charges, like assessments, are more costly for people who have a lot of property bordering streets. Brendmoen said that is not fair, which is the same argument made by attorneys and residents who oppose the general assessment process.

"There are some similarities in the conversations," she acknowledged, but she is pushing to change the add-on charge independent of the broader debate.

St. Paul city staffers have created a work group to re-evaluate the right of way assessment system. That effort was prompted by a Minnesota Supreme Court ruling in August that the city's assessments are taxes, not fees.

"Assuming people want high-quality street maintenance services, it's a matter of figuring out how best to create a system that the most people view as the most fair," said City Attorney Sammy Clark, a member of the group.

The City Council is scheduled to approve 2017 assessments in December, but doesn't have to ratify them until next fall. Council President Russ Stark said St. Paul could change the assessment process in the middle of next year.

However, the city anticipates collecting $32.5 million in assessment charges next year. If council members do change the process, they would have to figure out how to make up for it in the budget.

If the city doesn't alter its assessment process, a typical homeowner can expect to pay $217.50 next year. Given St. Paul's gridded street system, most property owners' street frontage is minimal. But there are unusual lots, like Frank Gurney's on Wheelock Parkway, which is bordered by three streets and billed at $1,040.85 in 2017.

Gurney, a retiree on a fixed income, has a measured view of his high assessments; he once worked for the city and served on the Planning Commission. He said the city has to pay for road work somehow.

"Would I like to see it lower? Yes. Do I think it should be lower? I'm not so sure," Gurney said, adding that he wants to see a plan to mitigate the costs.

"It's at the point where it should be discussed," he said.

Others, like Jennifer Elmquist, are adamant that change is needed.

Elmquist owns Jennifer's Wee Care, a day care center at the corner of Pascal Street and Jefferson Avenue. Her 2017 assessment would be $1,345.80, according to city assessment rolls. Another child care company, located in a home on the same block as Jennifer's Wee Care, would pay $199.60.

"I don't get a benefit from being on a corner. I would get the same benefit from being in the middle of the block," Elmquist said.

Elmquist said she would like to see the city use taxes, rather than assessments, to pay for street maintenance.

"That's all they are — another tax done in another way," she said.

Skally, who owns seven apartment buildings across the city — four of them on corner lots — sent the city several suggestions for ways to make assessments more equitable.

He would like charges to be based on a building's total square footage, rather than the number of feet on the property that front the street. But after six years of fighting with the city over assessments, he is not banking on lower costs next year.

Jessie Van Berkel • 612-673-4649