It’s not unusual to pay a fee for governmental services. If a business wants a service from a city it often expects to pay for it.
If a city charges a fee and a business gets nothing in return, what is it? A tax disguised as a fee?
Homebuilders are unhappy about a new policy that would charge for utilities on empty lots in Bismarck. Under the policy, developers and lot owners will pay $20 per month for an empty lot and $30.95 for a lot with a structure but no meter.
Bismarck also has a stormwater fee increase — $300 per 1,000 square feet — meaning an average 15,000-square-foot lot has gone from $1,050 in fees to $4,500. And a new formula for evaluating property value is raising the cost of building permits.
Last week a number of homebuilders explained their concerns over the fees in a story by reporter Jessica Holdman.
Chad Moldenhauer, owner of K&L Homes and a Bismarck-Mandan Homebuilders Association board member, said developers are worried the fees are being used as a way to pay for other infrastructure.
South Bay developer Kevin Turnbow wondered how the city could charge someone without getting a service in return. "This creates hardship on me and it'll break me," he said.
Chad Wachter, of Investcore and Wachter Development, said the fees make it difficult when trying to plan in advance. He’s in the process of starting a 350-lot development and said it would have been helpful to know in advance what the new fees were going to be.
City Director of Utility Operations Michelle Klose said the fees are a way to pay off debt on the city's utility infrastructure. She estimates there were 4,000 parcels, including cold storage businesses, not sharing the costs of infrastructure and services. The recommended fee brought those parcels into the payment.
The Tribune Editorial Board agrees with the homebuilders and developers that the fees seem to be a selective way of raising revenue. The builders point out that some customers like to buy lots in advance and wait a few years before building. The fees make it more difficult for people to invest in the future.
The homebuilders are right to want something in return for the fees.
We understand and appreciate the fact that the city wants to avoid raising taxes. However, implementing fees on select groups also can result in the costs trickling down to others.
Yes, the city needs to pay off its debt, but it needs to be fair about implementing fees. The city could become addicted to fee policies as a way to create a revenue stream.
Bismarck needs to review this policy.