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City presents draft fee schedule; short-term rental permit jump prompts objections
Summary
Finance director presented a first-draft fee schedule that would raise the short-term rental per-unit registration from $160 to $540. Residents and council members questioned the methodology, legal limits and fairness; no vote was taken—the schedule was presented as a draft for further review.
The city’s finance director presented a first draft of the fiscal 2025–26 fee schedule on March 3 that would raise the annual per-unit short-term rental registration fee from $160 to $540 and set the long-term rental fee at $125. The draft prompted objections from residents, council members and a local attorney who said the proposal may violate state limitations on user fees.
Emily Green, the city’s finance director, told council the figures were derived from a “deep dive” into personnel time and other program costs. “These fees are based on actual numbers of actual employees that take that have duties responsible for the short term and the long term rental program,” she said, explaining that staff time was apportioned between the two permit classes and then divided by the number of units to reach the per-unit fee.
Several members of the public said the short-term increase is excessive. Kathy McNally, who described legal constraints on municipal user fees, said increasing the short-term permit to underwrite other programs would be “an illegal tax” under Michigan precedent and the Headlee Amendment, and she cited the Michigan Supreme Court case Bolt v. City of Lansing in support of that point.
Council members expressed concern about the size and suddenness of the proposed increase. One council member said the city should consider phasing in any required correction over time rather than imposing the full increase at once; another asked staff to provide the underlying spreadsheet and time allocations for review. Staff noted that comparable nearby jurisdictions charge similar or higher fees (examples cited during the discussion included township and neighboring cities charging in the $500–$600 range), and that the city’s older fee levels had not covered program costs for years.
No final vote was taken — the draft fee schedule will be discussed again at a budget work session in April. Staff said final numbers will be included in the budget packet and that more detailed personnel and time-allocation spreadsheets will be shared with council ahead of the April meeting.
Public commenters also asked that council consider how any fee changes would interact with downtown economic strategies discussed in an earlier work session; several residents said they understand the need to recover costs but want a gradual approach and clearer documentation of how staff time is allocated to the short-term program.
