Businesses in opposition: accuse City of Langdon of double-dipping

The recent Langdon City Commission meeting had a strong showing from area business owners as they came forward to show their disagreement with Langdon City Ordinance 6.0105. This is the fifth time the ordinance has been brought forward for the Commission to address this year.

Posted 11/14/19

By Melissa Anderson

The ordinance relates to usage fees for city utilities such as water, sewer, and garbage within the commercially zoned areas of Langdon. The ordinance states that businesses must pay their actual usage or a minimum fee, whichever is greater. For businesses that do not have a direct hookup in their business, they are required to pay a utility usage minimum fee in addition to full garbage, special fees, and other miscellaneous fees as determined by the Langdon City Commission.

At previous city meetings in May of 2019, the Commission had discussed the ordinance with Langdon City Auditor RoxAnne Hoffarth. At those meetings, Hoffarth informed the Commission that no other cities that she spoke with had similar ordinances in place and that should the city remove all of the extra accounts that resulted because of the ordinance, the city would sustain substantial revenue loss from the business sector. At those meetings, Karla Rademacher, owner of Quality Specialty Products & Printing, had petitioned for the fee be lowered from $100 to $25 as the building owner is already paying for the total utilities for that building. At the June 24 meeting, the commissioners voted in a roll call vote to leave the ordinance as written. At every meeting relating to the ordinance, commission chair Jerry Nowatzki has stated that the ordinance could be revisited at a later date if more than one business petitions the City Commission to change the ordinance.

Those concerned about the ordinance’s legitimacy voiced their opposition in force with several services represented from Main Street Langdon. Nowatzki addressed the gathered citizens and explained the City Commission’s position and interpretation and thus justification for the ordinance. Nowatzki stated that following a meeting with Langdon City Attorney Quentin Wenzel and another commissioner, the Commission views the ordinance like this example – if businesses share a like-minded business area such as a hairdresser or manicurist, they would not have to pay the minimal fee. However, if there is a different type of business such as a clothing boutique or travel agency within that same space, they will have to pay the fee.

“We are not rewriting the ordinance right now. We believe that the spirit of the ordinance, as it was written in talking to previous commissioners and previous mayors, that the whole idea was because it’s cost prohibitive and sometimes not feasible to include a new meter. That’s why the ordinance was put there in the first place,” Nowatzki said. “That ordinance is on the books. That ordinance will be enforced by the way the city commission feels it should be enforced.”

Casey Entzi rebuttal to this statement was by noting that the Commission will not be enforcing the ordinance the way it is written. Entzi stated that the Commission needs to enforce the ordinance equally across everyone the way it is written. Nowatzki responded using the example of a contracted cosmetologist cutting hair in a building, in which case the Commission would not view that as a separate business.

“So if Big O, Firestone and Goodyear were all under the same meter, you would not charge them separate because they are all providing the same service?” Entzi asked.

“Correct,” Nowatzki responded. “This is the analogy that I came up with. There is a lot of room in Christie’s showroom. If I put up three partitions and opened up a travel agency, that would be different. But if I’m going to sell car parts in that building for Christie’s, even though I’m not a Christie employee, that’s going to fall under them, and I’m not going to pay a water bill.”

The citizens present at the meeting asked the commissioners to explain what the basis for the ordinance is – specifically, what the city feels they are being cheated out of by having more than one business in the same area by not having this ordinance in place. Entzi reasoned that because the water and sewer are covered by the building owner and its meter, that the utility usage is being paid. Commissioner Lawrence Henry stated that the garbage is one utility that the additional business would not be covered by the building owner. For this reason, the ordinance and the minimum fee for utilities of $100 is in place.

“You think it’s reasonable to charge $100 for garbage?” Entzi asked the Commission.

Hoffarth clarified that the minimum fee would cover water, sewage and garbage. The commissioners agreed with the fee covering the basic services. North Dakota Century Code 49.04.02, which relates to reasonable charges for services and commodities of public utility, was cited by Entzi as the City being in violation of as “every unjust and unreasonable rate or charge made, demanded, or received for such product, commodity, or service is prohibited and unlawful”.

“It’s basically saying you can’t be unreasonable. It’s a little bit vague, but if you’re telling me you think it’s reasonable to charge $100 a month for garbage for an additional business- that’s the only additional resource that’s being consumed – that you’re not otherwise already charging for. You are double charging,” Entzi said.

Glitz & Glam owner Barbara Crockett was also present at the meeting to voice her disagreement with the ordinance. Crockett stated that no services offered at the location have changed since she first opened the business. The boutique/salon combination has only been changed in who is responsible for running each section. Crockett has booth rent for the salon and boutique as it makes having those services easier for her and those who are operating within the building more control.

“The structure of how people are getting paid has changed. Everybody is paying booth rent because it is easier for me. I don’t have to monitor what’s coming in so closely for everybody. Everybody pays me an amount, and we’re done’,” Crockett said. “There is nothing about my shop that has changed since the day I opened the doors, and all the sudden, somebody else is being charged an additional $100, and I don’t think that’s fair.”

Crockett is referring to the manager of the Adventurous Darling Boutique, that has taken over the clothing boutique aspect of Glitz & Glam, being billed the $100 while the salon services providers are not. Entzi cited another law in NDCC (49-04-07) that prohibits giving businesses undue preference or advantage, which means every separate business within a space needs to be charged according to how the city ordinance is written.

“That’s the problem. You are picking and choosing who you want to charge,” Entzi said.

Entzi continued asking what leverage the City would have to make the separate business pay the fee. The building owner pays the utilities, which means they could not shut off the utilities. Henry gave the example of a phone company providing five separate phone lines to businesses and the need for five different phone bills instead of just one for the whole building.

“It costs them more; there are literally more resources involved. You already have a water meter that you’re charging them water usage for. You’re already charging them for sewage. The only thing you can even argue is the garbage, and $100 a month for garbage is ridiculous,” Entzi said.

Henry asked if it would be fair to residents and other businesses of the city should the rates need to be raised to cover the lost revenue from this ordinance. That those businesses with their own building and utilities would be forced to compensate for other businesses that share space. Crockett explained that the dumpster Glitz & Glam uses is shared with three other businesses, and they all pay the same amount in utilities. Rademacher included her example – she has her business within the Cavalier County Republican office but she also spends three days out of the week working as an employee of the Republican.

“I can see maybe charging a $25 fee for garbage but not the whole she-bang. The landlord gets the main bill, and if you use more water, it reflects it in the bill. You are getting the money,” Rademacher said.

“I just feel like you’re double-dipping. You are already getting it from the landlord so why are you also getting it from everybody else is what I don’t understand,” Crockett added.

Nowatzki defended the city ordinance and the accusation of double-dipping. If the business was housed in it’s own separate building they would be paying the utility fee.

“We don’t look at it so much as double-dipping. If you were somewhere else, your own business, you would be paying this. Now you are sharing a room with someone, [and] you’re a separate business,” Nowatzki said.

Crockett explained that as the building owner, the utilities are paid for, and the rent is reflective of that cost. By making businesses in shared spaces pay the fee on top of their rent- that already includes this within the cost.

“I just feel like everything is just nickeled and dimed so much that it’s so hard for these businesses to stay open,” Crockett said.

The business owners were all in agreement stating that they are trying hard to stay open at a time when online shopping is rampant. By sharing space, the businesses are trying to cut costs as effectively as possible. The city ordinance that is being enforced on these businesses that are already trying to be cost effective only puts pressure to make up the difference in their own revenue by increasing their prices for goods and services.

“Of course they’re not going to shop with us. They’re going to shop somewhere else because we are more expensive than everywhere else, but we have to be cause we have to cover the more expensive costs to be here,” Crockett stated.

“And then where does the city make up the revenue?” Nowatzki asked.

The business owners stated that the city should be making it already because of what they are charging the building owners. Crockett noted that rates have doubled and even tripled since she purchased her building only a few years ago. Henry, again, commented that the rate would then have to increase for everyone to which Crockett responded that the city is not losing any revenue from these businesses as the rent cost is dispersing the payment of the utilities amongst the separate businesses sharing the space. The business owners also noted the additional benefit of having the separate services offered in one space – more traffic is brought to the businesses as a whole, increasing the sales tax revenue that the city receives.

There was also discussion on if other businesses that share space and/or rent in the city are being charged this fee. Those present noted that there were several that they knew of that were not being charged this. No specific businesses were mentioned as none wanted to bring undue attention to them.

“We don’t police this stuff. I don’t walk up and down Main Street and look in everybody’s door and police you guys. We get this brought to our attention from phone calls and complaints from other businesses that are getting charged,” Commissioner Cody Schlittenhard said. “So we’re not attacking anybody with this ordinance. It’s just when it’s brought to our attention- we have to follow it.”

The Commission tabled the issue until the next meeting that will be held on Monday, November 25.

In Other Business

• Lisa Buchweitz requested the city review the peddlers ordinance that the city has as it is out-of-date.

• The City received a letter of resignation from Judy Lill, the Langdon Activity Center Director. Her resignation is effective December 6.

• The Commission reviewed and approved change orders for Phase II project that were submitted by Moore Engineering.

• Henry gave an update on the city hall renovations.

• Cavalier County Job Development Authority Executive Director Shannon Duerr requested the Commission’s approval of a flex pace interest buy-down loan for Jeff Mostad for the purchase of a 19-unit apartment building, North Star Manor, at a maximum of $24,999. The Commission approved this request.

• The Commission approved for publication the resolution of annexation requested by Kevin Stein.

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