City Hall update // City utility fees have increased 62 percent under Rybak

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September 10, 2012 // UPDATED 5:48 pm - December 27, 2012
By: Nick Halter
Nick Halter

Mayor R.T. Rybak has taken plenty of criticism over the past few years for increasing property taxes in Minneapolis. Those tax hikes have been well documented.

But what about utility fees under the third-term mayor? 

When Rybak took office in 2002, the average Minneapolis household was paying $641 a year for water, sewer and trash removal. Under his proposed 2013 budget, that same house will pay $1,040 for the same services, an increase of 62 percent. 

Water costs have gone from $181 a year to $340 a year. Garbage and recycling has gone from $213 a year to $296 a year. Finally, sewer and storm water has gone from $219 a year to $404 a year. 

Rybak this year is proposing a 2.5 percent increase in utility fees. On average, he has increased utility fees by 4.5 percent per year during his tenure. 

If city utility fees had stayed on par with inflation over the past decade, they would cost the average family $816 in 2013.

Rybak’s spokesman, John Stiles, gave three explanations for the increased costs.  

“Exploding” pensions obligations for public employee retirement funds that were closed before Rybak took office.

Deferred maintenance in water and sewer infrastructure that Stiles said had been ignored in the years prior to Rybak’s election. Stiles said Rybak’s budgets have invested in those improvements. 

Increased fees from the Met Council for inflow and infiltration that were imposed on Minneapolis and other cities “in order to pay for exurban sprawl, which amounts to an unfunded mandate that Minneapolis has strongly objected to,” Stiles said. 

Council freezes taxi rates

Maximum taxicab fares in Minneapolis will remain at $2.75 per mile for one year, as the City Council on Aug. 31 voted to freeze current rates. 

The City Council in 2009 voted to automatically adjust how much taxis could charge based on a series of price indexes. Those indexes suggested the city should raise fares to $2.85 a mile and to increase the first-mile cost from $4.70 to $4.78. 

Council Member Elizabeth Glidden, however, proposed a resolution to freeze the rates so that Minneapolis would be on par with St. Paul and the MSP Airport. MSP already caps rates at $2.75 and St. Paul has proposed the same rate. 

If the city had raised taxi fares, Minneapolis would have ranked fifth in the country for major cities, behind Honolulu, Miami, San Francisco and Boston. 

By freezing cab rates, Minneapolis will remain seventh on the national list. 

Last year, the city raised the maximum rates from $2.50 a mile to $2.75 a mile, but none of the cab companies decided to raise their rates from $2.50, said the city’s business licensing chief, Grant Wilson. 

“The fact that most, if not all, of taxicab companies are self regulating themselves so as not to go to maximum increases is a message to us,” Glidden said. 

City looks to hike business license fees

The City Council is considering a 3 percent bump in business license fees, which would raise city revenue by $300,000. 

The fee hike, which would go into effect on Jan. 1, would increase most licensing by 3 percent, though some are exempted by state and city law. For instance, a Class D on-sale liquor license would jump from $6,814 to $7,018 per year. 

The City Council has raised licensing fees every year since 2007, except for 2010. From 2007 to 2009, the city raised license fees by 3 percent each year. In 2011 and 2012, the city raised licensing fees by 1.5 percent each year. 

Reach Nick Halter at nhalter@mnpubs.com.