For years some cities have recovered the costs for infrastructure through infrastructure developmemt fees. The state legislature has passed laws allowing for cities to charge for sanitary sewer, storm sewer, water and parks fees and the expectation was that the same was true for street fees.

But recently the Minnesota Supreme Court ruled in Harstad v City of Woodbury that local government entities do not have the authority under existing statute to charge infrastructure development fees.

To some cities including our neighbors like Prior Lake, it is estimated that the city will experience as much as a $26 million shortfall if the infrastructure development fee continues to be prohibited.

Under the Prior Lake’s current ordinances, developers pay for the infrastructure required to serve the needs of their subdivisions. Sewer, water, storm water and even neighborhood roadways are installed to the city’s specifications by the developer who recovers his costs through selling the land and building homes.

What these fees do not reimburse is the indirect roadway costs caused collectively by community development. That is what the infrastructure development fee is intended to do.