Why is the Beulah council taking a “one size fits all” approach to setting our Water and Sewer utility rates? The current and proposed fee structure
- Fails to address the ability of low, moderate, and fixed income households in our community to pay their water/sewer bills.
- Does not differentiate between residential and commercial users.
I submit that a tiered water rate structure (use more, pay more)
- Is the most affordable and equitable rate structure for Beulah’s water/sewer rates.
- With a dedicated property tax millage, a better way to pay for new water/sewer system improvements.
Communities across Michigan use tiered rates and property taxes to fund and maintain their water and sewer utilities.
- Other Michigan cities and villages set up customer class categories based on waterline size and/or annual water usage.
- Which can also be combined with block rates (use more, pay more)
- A tiered water rate structure is readily available with cloud based BS&A accounting and billing software specifically designed for water/sewer billing.
- Beulah currently uses this software.
A tiered rate structure should differentiate between the following:
- Commercial Rate (highest usage and base rates):
- Properties that use the most water and/or have larger waterlines. These businesses put the most strain on our water and sewer system, causing higher initial installation and ongoing maintenance infrastructure costs.
- Examples here are the County government center, hotels/motels, and restaurants.
- Business Rate:
- Properties with standard waterlines like small storefronts, offices, short-term rentals, etc. Basically, any building where the owner can deduct utility costs and property taxes as a business expense.
- Residential Rate:
- Single family properties NOT used for short term rentals or a home business.
- Multi unit, year-round rentals to encourage affordable housing and long term rentals in Beulah.
- Special discounted rates for fixed and low income households, senior citizens, and the disabled. Examples here:
- A 3% income cap on rates for qualifying households.
- Block rates where the base rates are reduced and initial water usage rates are offered at a very low rate based on household size.
Summarizing: commercial, business properties, and short term rentals, should pay higher water and sewer rates than a single family residence, because they can write off water/sewer usage and any dedicated millage expense on their taxes. Many of our local businesses also use more water then the average residential household.
Recent growth in business and short-term rentals also require a larger expansion of Beulah’s water and sewer system, resulting in significant infrastructure upgrades to our existing water/sewer system.
Residents, however, do NOT get a corresponding tax deduction for expenses.
Another issue is the way Beulah bills multiple unit buildings. Billing is inconsistent resulting in reduced revenue. Some year-round, multi-unit rentals pay a single water/sewer base rate. Others are charged a water/sewer base rate on a per unit basis.
By giving a break to short-term rentals, landlords are incented to convert year-round rentals to short term rentals causing further revenue loss. Also, the current proposed rate structure along with the proposed draconian rise in water/sewer base rates will do nothing to address the shortage of affordable rentals and housing in our community.
A dedicated sewer property tax millage of 50%, or more, combined with a tiered water and sewer rate structure should be represented as the most affordable and equitable way to pay for our new sewer system. A millage would also give Beulah a guaranteed, yearly revenue stream for the sewer bond payments, resulting in a less volatile revenue stream and allow Beulah to lower the ridiculously high base rate charges proposed.
Pending council action to address the shortage of affordable rentals and housing in Beulah, there are numerous homestead tax programs that Michigan residents may qualify for. Some residents may also qualify for the State of Michigan Poverty Property Tax Exemption (apply at the township office).
For the Beulah’s year-round residents (claiming a Personal Residence Exemption) a dedicated sewer millage will typically have lower taxable values on their property than a commercial or a real estate investment property (think short term rental here). Therefore, you would pay lower taxes than a business or second home. Also, a millage has built in protections for low, moderate, and fixed income renters and property owners.
Overall, I believe that a dedicated sewer bond property tax millage, combined with a tiered rate structure is in the best interest of the residents of Beulah. The Beulah village council should be pressured to restructure our water and sewer rates in a more equitable manner. Public input is allowed, and should be encouraged, during our poorly attended Village council meetings to voice alternatives to the currently proposed rate structure.
Our current water/sewer ordinances state that access to the Beulah water and sewer system is a privilege. Why this gentrification effort encouraging businesses and short-term rentals over our year-round and long term summer residents?
For more, see nearby Post on Special Assessments.