PORT ANGELES — The Building Industry Association of Washington has threatened legal action against the city of Port Angeles unless it ceases charging base rate utility fees for vacant and undeveloped property.
The Building Industry Association of Washington (BIAW) sent a letter the city stating that it plans to “take all steps necessary to protect the interests of real property owners in Port Angeles, including litigation,” if the city does not repeal its ordinance.
In December, the city council approved Ordinance 3744, levying base rate fees against properties that are vacant or had voluntarily disconnected from the electric, water, wastewater, solid waste and medic 1 utilities.
The plan was to be introduced in two phases, with charges being levied against voluntarily disconnected properties beginning Dec. 30, 2024. The second phase, levying charges against vacant properties inside the city’s service area, would begin after the city reviewed ownership of those properties.
Ordinance
The base rates are fixed fees that cover the cost of maintaining and operating the city’s utility systems, city Communications Coordinator Jessica Straits said.
The charges would cost non-discounted residential customers anywhere from $1,500 to $2,400 or more per year, depending on a number of factors. Commercial properties also were affected by the ordinance.
The city believes the ordinance is “fully compliant with relevant requirements,” Straits said.
The BIAW disagrees.
“The charges imposed on these property owners are unconstitutionally imposed property taxes,” its letter stated.
The letter said the utility rate charges are taxes and, by charging the same monthly rate regardless of property value, they violate the state’s requirement that property be taxed based on the value of the property.
The letter also argued that the charges cannot be considered valid because the main purpose is to raise revenue rather than to regulate, and there is no direct relationship between the base utility rate charge and the services received by the property owner.
According to the letter, the revenue can be put toward any deficit in the city budget. However, Straits said the revenue may only be used for utility purposes and cannot go to the general fund.
The letter stated the base rate for vacant and undeveloped property is unconstitutional “because property owners are charged by the city for a benefit they do not receive … solely for the reason of owning property within city limits.”
“These charges are levied only to either subsidize those properties using utility services, or to generate revenue for other budget shortfalls,” the letter read. “In lieu of giving up their real property, the owners are forced to pay money for services to benefit the public, which is clear uncompensated government taking.”
“The city welcomes the opportunity to review the issues raised by the BIAW and will be doing so in the near future,” Straits wrote in an email.
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Reporter Emma Maple can be reached by email at emma.maple@peninsuladailynews.com.
