MANKATO — The Mankato City Council is proposing a street light utility fee that will be paid by all properties, including nonprofits, to spread out the cost among more users.
The council will vote on the measure Monday night. With the majority of council members in support, it likely will pass, said Councilman Jack Considine. The average property owner would pay $2.50 per month.
“Quite frankly, it makes sense,” Considine said. “We’re taking the same amount of money we’re using for street lights and we’re taking that out of property taxes. ... Everybody who uses street lights are going to pay into (a street light fund), including hospitals and the university. It gets spread out a little farther.”
About $500,000 is in the city’s general fund to be directed to street light costs. If the measure passes, that cost will be taken out of the city budget, and a fee will be charged to all properties, which will be paid monthly beginning in January and will be included in city utility bills, said Council President Mike Laven.
Laven said nonprofits (public schools, hospitals, government entities and the Salvation Army, as examples) will be kicking in about $139,000 of the cost, which he said helps ease the burden for many property owners. About 3 percent of Mankato properties are tax exempt, but they make up more than 22 percent of the land mass, said City Manager Pat Hentges.
However, Laven said the savings in property taxes will be about the same as the fee itself.
“It is a dollar-for-dollar reduction (for most property owners),” Laven said. “To make it harder to calculate, we have rising health care, gas and electric rates that eats all of the $500,000 and more. So some properties will see reductions, while others may see increases.”
Hentges said while most property owners won’t save money, the goal wasn’t simply to shift $500,000 out of the budget to help keep the levy down, although that was part of it.
“The goal was to diversify our revenue source to be able to isolate costs,” Hentges said.
Here is the proposed fee schedule:
n Single-family residences will pay $2.50 per month, as will commercial and industrial properties under 75 feet.
n Two- or three-unit residences will pay $5 per month.
n Commercial and industrial properties with more than 75 feet of frontage, as well as tax-exempt properties, will pay 5 cents per linear foot of frontage.
Mayo Clinic Health System in Mankato, for example, would pay about $138 per month. Minnesota State University would pay about $1,160 per month.
“It’s taking a look at the service to the entire community and spreading that across the whole community,” Laven said.
Not all council members are on board, nor are many nonprofits. Councilman Mark Frost emailed Susan Kroon of Blue Earth Nicollet County Humane Society and suggested she gather as many nonprofits as possible to attend Monday’s meeting.
“By the way, the attitude toward nonprofits in the current council is they are a bunch of freeloaders getting a free ride from taxed properties in Mankato,” Frost wrote to Kroon, copying in The Free Press on the email. “Even though it’s never been said that bluntly, the words used suggest that attitude, while the services offered by these nonprofits (churches, Salvation Army, BENCHS, etc.) are never mentioned.”
Frost, who couldn’t be reached for comment Friday, said in his email when the fee passes Monday it will be the second such fee assessed to nonprofits. The first passed a few years ago was a storm water fee.
Laven said he has never, nor will ever, consider nonprofits “freeloaders,” and he believes the fee makes the cost of street lights more fair for every user. Considine agrees.
“This isn’t about going after nonprofits,” Laven said.
Susie Brown, public policy director for the Minnesota Council of Nonprofits, said it’s not for her to say if the amount of the fee to each individual nonprofit will have a significant impact. It’s the principle.
“The principle part is nonprofit organizations are exempt from supporting the operations of government, being that we are complementing the operations of government, and our resources are directed toward that,” Brown said.
Brown said the Council of Nonprofits understands the fiscal squeeze on local government, and even that certain individual-use fees might be understandable (water and sewer usage for individual operational needs, for example). However, she said, street lights serve the general public (street traffic outside the nonprofit, for example).
Brown is planning to attend Monday’s meeting, and she said other area nonprofit representatives will as well.
Despite the likelihood of the measure passing, Brown said, “We would always hope to influence opinions.”
Considine said the revenue from the fee will go into a dedicated fund, so any excess revenue can only be used for street lights.
“It’s transparent,” Considine said, adding that diversifying the city’s revenue stream also will bolster its bond rating. “We won’t be taking money and sneaking it back into the general fund. That money will be for street lights.”
As of 2010, 28 Minnesota cities (or 3 percent) had a street light utility fee. Considine said, over the past 18 months of discussing the issue, the council looked at data from some of those cities to determine the pros and cons.
Laven said the fee may increase in the future.
“If the cost of the lights increases, that would be the only reason the council would increase the street light utility fee,” Laven said.