ROGERS CITY - The Rogers City Housing Commission will get a break from the city after Executive Director Sally Goupell asked for a reduction on its payment in lieu of taxes.
The housing commission runs Hilltop Manor, an income-based housing facility for the elderly or disabled, Mayor Beach Hall said. City council recently voted 4-1 to reduce its payment in lieu of taxes, or PILT, by $2,439. It's the same amount the facility's water and sewer bills will increase after city council adopted new rates in August.
"It's only for the amount that (Goupell) could not pass on (to tenants), and it's only for this year," he said.
Hilltop Manor's PILT is set each year based on 10 percent of its gross rents minus utility costs, Goupell said. Rent totals can fluctuate from month to month, and so too does the PILT. She's asked city council repeatedly to drop the payment altogether, as it's money the housing commission could be using for operations. This time, she requested a 50 percent reduction for the current year, pointing out that other housing commissions make no such payments to their local government.
In July, the housing commission paid $9,258.17 for the previous year, City Clerk Terri Koss said.
Goupell believes Hilltop Manor fills an important role in Rogers City, and said it's a privilege to have it there to help the elderly and disabled. However, she's grateful for the reduction even though it's less than what she requested.
Slown echoed Goupell, saying Hilltop Manor serves an important function for the community. However, its residents do use some city services, which is why the city imposes a PILT on the facility.
Hilltop Manor is the only nonprofit in the city that makes such a payment, Hall said. This is partly because the city worked with the federal government to build the facility, and only recently spun off the housing commission as a separate entity. The commission's executive director is appointed by the city manager with concurrence from the commission board.
Council member Gary Nowak said he voted against the resolution because he believes reducing the housing commission's PILT is unfair to others impacted by water and sewer rate hikes. Others will be affected by them as well, including those living on fixed or limited incomes.
"I asked the question, how about the rest of the people who need a subsidy here," he said. "Nobody else agreed with me, and that's why I voted 'no.'"
Nowak said he believes the housing commission could pay the increase out of its fund equity, which Goupell disputes. While the housing commission has around $96,000 in its fund equity, she said the commission must be able to cover 50 percent of its expenses with this money, according to federal regulations. Also, Goupell said using the money in such a way would be bad business.
"When you have to use the fund equity to pay ongoing monthly expenses, you're eventually going to hit the bottom," she said.
Goupell also disagreed with Nowak's view that the reduction relates to water rate increases, she said. City council picked an amount equal to the rate increase, and she has spoke to council members about the impact the increases will have on Hilltop Manor. However, she's asked the city to eliminate the facility's PILT altogether before.
The PILT reduction is "legal and appropriate," Slown said, as the city has an agreement with the housing commission to adjust Hilltop Manor's payment based on its overall economic status. While the increased rates are a burden to everyone, federal regulations prevent Hilltop Manor from passing the charges on to its residents.
"The city council and city staff want to see Hilltop Manor to be successful and continue providing quality housing to low-income people that it currently provides," he said.
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