It’s been about a year since I retired as Prior Lake city manager. Over these last 12 months, I have kept silent on the inner workings of the city. My time is now focused as a citizen-taxpayer concerned for how and where my tax dollars are spent. It is for that reason that I break my silence and fully support John Diers’ opinion piece in the Feb. 15 Prior Lake American.
In August 2018, the Minnesota Supreme Court ruled on a case that created negative implications for growing cities and the taxpayers residing within them. The Harstad v. Woodbury decision ruled that cities could no longer collect from developers the costs of road and intersection improvements necessitated by the growth their housing subdivisions brought to a city. Prior to the court prohibition, the city of Prior Lake had been collecting around $250,000 per year from new home developers to cover these street costs.
If the Harstad hole created by the court was not addressed by legislative change, Prior Lake would be faced with the lesser of two bad choices: Allow infrastructure to become less adequate for growing traffic needs, or socialize the costs of growth across existing taxpayers in the form of an increased tax levy.
The city staff pulled the alarm on these two choices. Staff unequivocally stated: The absence of a fee is not an absence of cost. Not collecting this fee on the cost a new home brings to our community is a cost-transfer to all taxpayers.
In February 2019, the City Council took an important step in defense of taxpayers. They passed a resolution calling on Minnesota State Legislators to intervene and draft law to address the Harstad hole. The legislation requested would place the incremental costs growth brings to a community where they rightfully belong — on new growth.
All of the cities of Scott County (Belle Plaine, Elko New Market, Jordan, New Prague, Savage and Shakopee) concurred passing similar resolutions. Numerous Scott County townships have expressed their support as well. With alignment and support across the county, Sen. Eric Pratt and Reps. Brad Tabke and Tony Albright drafted legislation that would give municipalities the statutory authority needed to place costs where they belong to protect taxpayers.
This seems straightforward, the bill will most certainly pass — or will they?
The Builders Association of the Twin Cities and Housing First Minnesota stand in opposition to our legislators righting this wrong. BATC would have us believe that city fees are a serious obstacle to affordable housing. Their argument is specious. A survey of Prior Lake fees showed that total city-development-fee-related costs are around 4% of the sales price of a new home.
Diers got it right. Your City Council and city staff are working hard to build a broad-based coalition to support adoption of this important legislation. The effort is growing as is the size of the collaboration. Scott County Association for Leadership and Efficiency has endorsed the effort and is fully funding a lobbyist. The League of Minnesota Cities, Metro Cities and the Municipal Legislative Commission have all made changing the law a legislative priority. The momentum is building, but we remain a long way from the legislative solution.
So please talk to your legislators. Ask them to pass S.F. 2442 and H.F. 2296 as an important step toward development paying for itself.