Fee Leap Year for Leeper

[XLFD]

It should come as no surprise that city officials are unlawfully trying to extract more money from our property owners; these are the same people who hiked city property tax rates up in order to get $300,000 more (from the same people ravaged by a government-caused spike in inflation) in each of the last two years.  They refuse to call their actions in those series of unlawful summertime votes that raise their own income well over the inflation rate 'hiking' or even 'raising' taxes, so in this latest instance of greed, they would likely not call their unlawful actions a 'hiking of fees' even though they raised a retired girl's fees fourfold, without any warning.

The victim of the city's greed-lust was a girl named Deborah Leeper who resides most of the year in Tennessee, but whose heart and soul still lives in Ludington, along with a four-unit house just a couple of blocks from the sands of Stearns Beach.  We will let her make her own case through the recording of her statement made at the September 23, 2024 Ludington City Council meeting (summarized, to highlight the issue):

Deborah Leeper:  (3:00 in) "I have a property at the corner of Park and West Ludington Avenue, it's an apartment house and is over 100 years old.  I have had it for a few years, it has four apartments and it's grandfathered in for short-term rental.  Over the years we've just made it better and better, my manager is somebody with a degree in hotel management and 40 years of experience here.  We've always met code, we have always been something that people thanked us for, in the guest book they compliment us on everything, our occupancy our appropriateness, all those things.

Up until now, I have spent $1500 every three years just to be a short term rental, that was the fee.  The past year, I did get a notice, she heard something, my manager did, she found out the fee went up 400%.  So it went from $1500 to $6000, without any written notice, without any contact, without any planning for me... I decided to put my retirement in Ludington, and that's what I've done, my investment is here, and I have a basic 3-month property because they're seasonal... please review that decision because it skims all of the profit off my investment from my retirement and all my other things, to think about it for the future.  I'm just a girl, trying to live.  Thank you."

The above is a snippet from the currently unapproved minutes of that meeting summarizing her statement.  Though it is not in the minutes, unlawfully-appointed Interim City Manager Jeanne "Hoax" Oakes invited Ms. Leeper to meet with her the next day to discuss the issue after she spoke and passed out literature to each official (which is against meeting rules, but she was not rudely ushered out like another citizen has been).  

Frankly, with all of the officials and attorneys that work for the city present, many deeply familiar with the short-term rental (STR) city policy, one would have to believe that they would explain why this quadrupling of fees happened.  They didn't, nor has there been any clarification issued in the two weeks since, or any notice put out to inform others whose fees may have increased similarly why their costs multiplied.  

The Ludington Torch promptly sent out a FOIA request looking into aspects of Ms. Leeper's issue, and then did our own research into what may have caused this fee jump.  What we found that, surprise, this fee was placed on her in a totally unlawful manner by unethical city hall staff apathetic to a retired girl just trying to make ends meet.  If it seems like I have been using the word 'unlawful' a lot in this article and these last couple of years in regard to what the City of Ludington has been doing, it's not your imagination.  They unapologetically violate written statutes, their charter and even their own code in order to make some extra cash at the public's expense.

The topic of STRs began in earnest in committee during early 2019, before it came to the council on July 13, 2020 where it was explained in some detail, introducing it to the rest of the council:

You will note that it was explained that an owner of a duplex that offered STRs on both units would only pay $1500 for a license fee, just like any STR with a single unit thereon.  I use the word only facetiously, because nobody outside of greedy city hall believes that the City would expend $1500 of effort in licensing one STR unit, yet they charge that unrealistic figure, even with their former city attorney, Richard Wilson, reminding them on two occasions (while he was still employed) that such licensing fees for STR cannot exceed the reasonable amount of costs that would occur to inspect the premises and approve the license. 

Consider, for similar inspections and certifications issued for the rental inspection program, the charge is only $100 (every three years), which is considered the costs bore by the City for those 'services'.  Where does the extra $1400 come in when the process of licensing is effectively the same?

In the agenda packet for the July 27, 2020 meeting (p.51), they offered a fee schedule, which was passed without controversy, the license fee is defined as $1500 every three years:

This is seen in the minutes of the meeting where a resolution was properly passed setting those rates.  Any change of those rates must be done by a similar resolution passed by council, not administratively, otherwise such increase would be deemed unlawful.  In the past, the City has been mindful of increasing fee rates properly by resolution, but our City has went so far into unlawful territory, that they're not stopping here.

Let's look at Ms. Leeper's original application in August of 2022, a renewal form signed in October 2023 shows that the fees were still as defined by the resolution, at $1500.  A receipt shows that it was paid:

But then, an undated STR fee schedule is found in the FOIA response, that claims the license fee is $1500 per unit:

This is what seems to have jumped her bill from $1500 every three years to what would be $6000, but when was the license fee actually changed by city council resolution?  Three of the units were originally grandfathered in as STR units, this change in policy strips that from them and assigns a per unit charge which was never part of the STR ordinance or the council resolution that set fees.  

The last part of the FOIA response which appears to explain how the policy appears to be changed comes from a standing committee meeting of the Building & Licenses Committee discussing a new fee schedule and signage policy, Sept. 12, 2023.  

When you look at the Sept. 25, 2023 packet p. 37+, you cannot find any adjustments to the STR license fee, and the fee adjustments anyhow are by simple motions which could not amend the resolution passed back in 2021, even had it been.  This is likely why the FOIA response timeline ends there, because there was never council action (or commitee action, for that matter) to increase the license fee to include all units, even when otherwise originally grandfathered in.  

Ms. Deborah Leeper and other victims of some city administrator looking to inflict more harm on small business owners, needs to demand that her next license payment, due late next year be only $1500, until the city council passes a resolution declaring otherwise.  Whoever wrote out the STR fee schedule shown above that erroneously redefines city-passed policy needs to be firmly disciplined, while the City refunds any kind of overcharge they have done on other victims not as attentive as that Tennessee girl trying to maintain her investment without having the City suck out $6000 from her for doing nothing.

[AnxiousGuy]

I tend to pick up on small details. One small detail I did not hear was, “my property manager is a licensed realtor”. I heard some other qualifications that should entitle a person to manage rental properties, but there are also rules for those sort of things that everyone is expected to follow. It is a shame that the city feels they can quadruple dip on this lady. I wonder if the councils attempts to stick up to her, were an attempt to keep you off the case. Poison the well and make you seem like a bad actor so the issue doesn’t get fully investigated and rectified.

[XLFD]

I hope to follow up with her or her apartment manager to find out what the disposition is going to be on this.  I expect they've already informed her that the fourfold costs were 'legal' and show her the never-passed fee schedule that say $1500/unit.  Nobody in charge, including all of the elected officials, has any empathy with the public when it comes to the aspect of where the public's money should go (they all believe the City is entitled to more and more of it).  Sadly, I expect more of the same because I doubt whether the new city manager was picked because she was one who rocks boats and sides with the people rather than the corporation.

[Willy]

The fees are outrageous. Of course it's all set up to discourage short term rentals. To add insult to her dilemma she is paying a higher rate of property tax since she cannot claim the homestead status. Her best bet is to sell this property    and find another area that's not going to rob her blind. I personally don't know how anyone can invest in real estate rentals in Ludington, pay the crazy fees, insurance, taxes, upkeep and hire the services of a manager and still  make any kind of profit. I assume the only profit she would make is the the increase in value she may realize but then again her taxes will also increase when that happens. Good luck to Deborah.  

[XLFD]

I mildly disagree on one topic in that the fee structure of STRs is not set up to discourage STRs in the city, but to maximize the money that the City can take in without really doing anything extra other than what amounts to a rental inspection every three years-- at 15 times the cost of a rental inspection which is already way too high and an unwanted service to boot.

Your city council representatives are there to represent everyone in their district, and even those who own property and/or businesses in their district and for some reason they originally thought $1500 per property was a fair price for licensing STR-- witness the words of Councilor Moonbeam that clarified even duplexes would only be charged $1500.   Why weren't these people outraged at the meeting that unelected bureaucrats changed their resolution in order to get even more money from those on fixed incomes running a small business?

Likely because they were okay with it, but didn't want to do the controversial action of bringing it in front of the folks again, where people like Deborah would wonder why they need $6000 to do an unnecessary service that other landlords would at most cough up $400 for?  

The City isn't bound by state law or regulations to keep such fees below a certain amount, so they come up with an introductory amount like $1500 to license a STR to attract enough into the system, and they did.  Thirty wasn't enough, they expanded the number and now that they have these people bought in, they feel they can arbitrarily multiple these unreasonably high rates and get away with it without losing those already in and making enough to continue but having to raise their daily rates by $30 or more to cover that increase. 

So at this point they are not trying to discourage STRs because they have likely maxed out on the properties that want to go that way, what they are doing is undeservedly stealing STR owners money because they figure they are better stewards of it than the unwashed public.  The local government should have very little input as to how you use your property and they shouldn't penalize/extort you through excessive fees and taxes to drain any profitable venture you may have going with it.