Appeal

On May 2nd, the Ramsey County District Court ruled in our favor in our appeal against the City of Saint Paul’s street maintenance assessment charges.

In a 22 page written order, Judge Awsumb ruled definitively that charges assessed to properties under the Street Maintenance Service Program (SMSP) are non-uniform taxes thus requiring proof of special benefit, not regulatory fees.

The court agreed with our argument that the SMSP program was not meaningfully distinguishable from the previous ROW program, which had been the subject of the Minnesota Supreme Court’s adverse ruling in First Baptist Church vs. City of Saint Paul (2016).

First Baptist Decision Still Controlling Law

The City sought to rely upon specific statutory authorization for the remaining four services still included in the program (street sweeping, lighting, seal coating, and mill & overlay). In assessing that claim, the Court concluded that “where there is no public nuisance, hazardous condition, or damage created by a property owner… the maintenance and provision of SMSP services are an exercise of the tax powers and not an exercise of the police powers, regardless of what statute the City claim applies”.

Evaluating the purpose of the charges, the Court was unconvinced by the City’s claim that the SMSP program was an attempt to comply with the 2016 ruling. In actuality, the court found that “It is apparent that the City redrafted its program’s parameters in a way to circumvent the ruling in First Baptist 2016. The City’s primary purpose in creating the SMSP was to raise the same funding that it raised with ROW, but to use different language and a different process to raise that funding so as not to run afoul of First Baptist (2016).”

Having evaluated both the language and the purpose of the SMSP charges, the court found that the charges are an exercise of the City’s tax power, not its fee power, and are therefore not valid unless the City can show a ‘special benefit’ to the properties assessed. Which of course, it can’t. Regular street maintenance is a basic municipal expectation and does not increase property values, as would be necessary to demonstrate special benefit.

We are hopeful that today’s ruling finally brings an end to almost two decades of illegal, non-uniform taxation dressed up as regulatory fees, and that the City of Saint Paul chooses instead to pay for street maintenance through normal property taxes – as it should have done from the beginning.

More than 3 years after we filed our first Appeal against the City of Saint Paul’s Mill & Overlay program, our consolidated Appeal was heard in the Ramsey County District Court today.

The hour long hearing was held virtually. Ben Loetscher of Ferdinand Peters appeared on our behalf, while Anissa Mediger appeared on behalf of the City of Saint Paul. The hearing was before Judge Robert A. Awsumb. Lead plaintiffs were also in attendance.

Since we filed our appeal, several cases all related to the SMSP program were consolidated for trial, as they all involve substantially the same issues.

Before the hearing, the parties agreed to a series of factual stipulations, limiting the issue to be decided to whether the City’s assessments are properly regarded as taxes or fees. It has been our position from the beginning that, following First Baptist and subsequent judicial opinion, the City’s assessments are taxes subject to the Special Benefit Test.

A written ruling detailing the Judge’s decision is anticipated in April. We will post an update once it is available.

We have received word that the City of St. Paul has started sending out initial invoices for its 2019 Mill & Overlay projects.

As with the 2018 projects, the City’s policy of burdening property owners on thoroughfares with the vastly disproportionate costs of maintaining those streets for everyone is unfair and contrary to the law.

Based on initial conversations with Downtown property owners, there is considerable anger and a desire to contest these charges. We are therefore planning to appeal the 2019 charges for those owners, just as we have done on behalf of more than 45 appellants for 2018. We are also gathering initial expressions of interest from owners with property on any of the other 2019 streets.

As with our 2018 appeals, our attorney Jack Hoeschler will represent us in any 2019 joint appeals.

Which Properties Can I Express Interest For?

The 2019 Mill & Overlay projects are as follows:

• Arlington Avenue:  East Shore Drive to White Bear Avenue
• Cleveland Avenue:  Yorkshire Avenue to Mississippi River Boulevard
• Pascal Street:  University Avenue to St. Anthony Avenue (completed April 2019)
• Prior Avenue:  I-94 to Summit Avenue
• St. Clair Avenue:  Fairview Avenue to Snelling Avenue
• Lowertown:  All streets east of Jackson Street to Broadway Street except 4th and 7th Streets and 8th Street from Wacouta Street to Wall Street

If you own property on any of the above streets and have received or anticipate receiving a bill for Mill & Overlay work completed in 2019, we want to hear from you.

How do I express interest in a joint appeal?

You can fill out our new Expression of Intent Form for 2019.

The form is your initial expression of interest in appealing the 2019 Mill & Overlay charges collectively on a contingency basis. You can also call us on (612) 351-2311 or email us at appeal@fairstreetsstpaul.org if you have questions about appealing.

After extensive consultation with our neighbors over the past few days, we are are moving ahead with a joint legal challenge to the City of St. Paul’s mill and overlay policy.

This is not a step we’ve taken lightly. From the beginning, our preferred path to resolution has been through constructive engagement with the city. But the city council’s failure to reform the system itself, even after a 2-month internal process which included zero public consultation, speaks volumes.

While we give full credit to those on the city council who brokered the current political compromise (based on moving the cost of ADA-compliant curbs to the general fund), the system itself has not changed. The city is still disguising a revenue raising exercise as a use of its police powers and circumventing Minnesota law, all so it can claim it’s not raising our property taxes.

Jack Hoeschler to represent appellants

We won’t be fighting alone. Many of our neighbors feel the exact same way. There will be more than 20 named appellants, representing at least 15 separate properties, listed on our appeal.

We’ll be represented as a group by Jack Hoeschler. If the name sounds familiar, that’s because Jack is the same attorney who successfully challenged the city’s Right of Way assessment in the Minnesota Supreme Court in 2016, in First Baptist Church of St. Paul v City of St. Paul.

Jack is an experienced attorney with a wealth of expertise in Real Estate tax valuation and special assessment appeals. We’re absolutely thrilled to have him representing us.

This from Jack:

“I am personally irritated that the City never seems to learn from prior mistakes. The Supreme Court told them they could not do this but they still persist. It is a shame that we have to sue them again to encourage good behavior. I am therefore happy to help everyone who feels similarly.”

We didn’t ask for this fight. We’ve already put in countless hours of our time, far in excess of the amount we were assessed, because we believe it’s important to stand up for our community, to advocate for a fair and sustainable distribution of our shared tax burden, and to insist that the City is held democratically accountable to its constituents.

Just as the 2016 legal challenge in First Baptist was needed to prompt the city to reconsider the old Right of Way policy, it will take a successful legal challenge to demonstrate to the city that they are operating outside the authority granted to them by Minnesota law, as well as the safeguards for taxpayers that go along with it.

If your property was subject to mill & overlay project in 2018 and you are interested in joining our appeal, head on over to our appeal page.

• Judge Millenacker Denial and Memorandum (PDF)