City Hall a winner in new stormwater-fee structure

Share this:
May 2, 2005 // UPDATED 1:54 pm - April 26, 2007
By: Scott Russell
Scott Russell

The city's new stormwater fees have created many quiet winners and plenty of upset losers - and one winner is City Hall itself (the building, not the power brokers.)

City Hall, 350 S. 5th St., is jointly owned by the city and Hennepin County. It got a $1,374 cut in its March sewer bill; if that keeps up, it will save more than $16,000 a year.

The new billing system is supposed to be revenue-neutral but fairer. The charge is based on an estimate of how much stormwater runs off a property. The new bills have caused many complaints, notably from property owners with a lot of runoff-generating hard surfaces and relatively low water use, such as churches and some industrial users.

However, high water users are more likely to see a break. That's because the city formerly based stormwater and sanitary sewer fees on water use, charging $3.64 per "water unit." Now, only sanitary sewer fees are calculated that way, with the water-unit fee cut to $2.

That made City Hall a winner. It used 1,027 water units from Feb. 20 to March 20, said Jose Cervantes, executive director of the Municipal Building Commission that runs City Hall. Under the old system, the combined sewer bill would have been $3,738.28 for March; instead, the bill was $2,054 (sanitary sewer) plus $310.26 (stormwater sewer) - a $1,374 overall savings.

Others are paying more, such as Douglas Corp., which owns an Elliot Park storage facility.

"The property at 620 12th Ave. S. has been in the same family since the late 1800s," wrote Arthur Glassman, its general counsel, noting the bill had skyrocketed. "Does the City Council realize what they have done to small businesses?"

As businesses and institutions are coming to grips with the change, so are governments - even the city itself, which owns lots of property.

Steven Kotke, deputy director of Public Works for internal services, said the utility bills for city-owned property are decentralized, and he did not yet know if city government as a whole would pay more or less under the new billing system.

Just like other property owners, the city is analyzing its bills to make sure that they are accurate and that the hard-surface estimates are correct, Kotke said.

He pulled a few examples at Skyway News' request. For instance:

  • The Public Service Center, 250 S. 4th St., a city-owned office building, had its combined sewer fees drop $140 a month, from $840 to $700, or a decrease of $1,680 a year

  • Fire Station #20, 4646 Humboldt Ave. N., a typical fire station, had its combined sewer bill nearly double, from $65 a month to $121 a month, or a $672 annual increase.

  • The 1,397-stall Gateway parking ramp, 400 S. 3rd St., had its bill increase from $131 to $673 a month, or $6,504 more annually.

The new bills also affected other governments. The new stormwater fee is going to cost the Minneapolis Public Schools $428,000 more a year, said Marjorie Rolland, chief financial officer, who based the estimate on bills from 17 schools.

The hike is equal to five-plus teachers, figuring $80,000 per person for salary and benefits.

The school district plans to appeal, and has a meeting scheduled with the city, Rolland said.

The Minneapolis Park and Recreation Board still is negotiating with the city over its new bills. Don Siggelkow, general manager for administration and finance, initially estimated the Park Board's utility bill would increase by $334,00 a year.

Tim Anderson, a Hennepin County principal accountant, said he did not know the impact of the new bills on county-owned property. "We are at a loss at this point. We are waiting for the bills to start coming from the city," he said.

The city began its new stormwater fee in March. Some apartment owners complained that the old system was unfair. They said they paid high rates because of high water use. Yet they generated relatively little stormwater runoff per person because of their high-density buildings. In contrast, they said surface parking lots with no water hookup paid no sewer bill, but generated plenty of runoff.

The city sought a state law change to allow the new stormwater fee.