A steep rise in security deposit rates for electrical service for mobile home park residents has officials concerned in the three local communities affected by the change.
Representatives of the Grand Haven-area mobile home parks say they are afraid that the recent change in the local power company policy will have an adverse effect on potential homeowners and renters in their communities.
Their attorney says the policy change would violate Michigan Public Service Commission regulations, if the Grand Haven Board of Light & Power was subject to such state regulations. As a municipal utility, it is not.
Gayle Kroll, manager of the Village Green Mobile Home Park in Grand Haven, said new homeowners previously paid an $80 deposit for new electrical service. As of Nov. 1, the deposit for new service is $400.
Outside of the mobile home parks, the deposit went from $80 to $100 for Grand Haven residents and to $150 for BLP customers who reside outside the city limits.
“We have some people moving in in a couple of weeks who will have to pay the $400,” Kroll said. “They don’t know about it. They will find out when they go to turn on their power.”
It won’t be a huge issue at Village Green, Kroll said, where all but about 10 of the 391 spaces are occupied. There’s not a high rate of turnover because the homes are owner occupied.
“There’s no rentals in Village Green,” she noted. “The homeowners just rent their lots.”
But that’s not the case in River Haven, a manufactured home community in Grand Haven Township.
Heather Rector, divisional vice president for Sun Communities, which owns River Haven, said that about 25 percent of the 721 homes are occupied by renters. About 15 percent of the renters will purchase their homes. Rector said it’s too early to tell what kind of effect the policy change will have on the park and its occupants, but they do expect a negative reaction.
Rector said that approximately 120-150 new residents move into River Haven every year. This includes home sales, home rentals and people moving their current homes into the park.
“We feel a $400 deposit to obtain electric service is essentially targeting our residents unfairly,” she said. “It will affect all of our residents including current homeowners who wish to sell their home within our community. It will make it more difficult for everyone seeking quality affordable housing in Grand Haven to obtain it.”
Calls to management at North Shore Mobile Home Community and RV Park in Ferrysburg, which is also served by the BLP, were not returned.
The BLP spent several months reviewing a total rewrite of its “Electric Service Rules, Standards and Rates,” explained the utility’s administrative services manager, Renee Molyneux. Deposit collection and rules were reviewed and updated as part of this process. These rules are posted online at ghblp.org/residential/policies/customer-service-policies/.
The utility board approved the rule changes at its September meeting and BLP staff began implementation effective Nov. 1. Letters to the mobile home parks were dated Oct. 16.
Molyneux said the changes were necessary to help recoup unpaid utility charges in areas where a lien could not be attached to the property. A lien is a form of security interest granted over a property to secure payment of debt.
Molyneux said the BLP has limits on collecting unpaid utility charges using property liens when the customer rents the property from another or the premises is a mobile home (not attached to the real property).
“When unpaid utility charges cannot be collected through liens on the real property, the BLP collects security deposits as an alternative,” Molyneux said. “Unfortunately, these rental properties and mobile home properties are also where most of our ‘uncollectables’ originate. This deposit process is not new, while some of the amounts have changed for consistency.”
Rental properties with signed waivers of liens (where the customer, not the property owner, takes full responsibility for the electric utility charges) were previously assessed an estimated six months of charges as a deposit.
“For most apartments, this deposit amount was approximately $400 (about $67 per month),” Molyneux said. “Rather than assess an estimate, the new policy is to collect a flat amount of $400.”
The BLP spokesperson said the biggest change in the policy is for mobile homes.
“They were previously assessed a flat rate of only $80, significantly below the amount required on rental properties with similar electrical usage,” Molyneux said. “The BLP has demonstrated that a deposit of $80 is inadequate protection to collect unpaid charges that may reach six months of billings. As I am sure you are aware, it is our other customers who pay these costs when these charges remain unpaid.”
This is not a retroactive assessment, Molyneux said. It will only be applied to new customers as they open service at an impacted rental property or mobile home.
Kroll said that she could see checking a customer’s payment history and requiring a deposit accordingly, but she doesn’t understand why the deposit for everyone has to be that high.
The Village Green manager said she checked minutes from the BLP’s August and September meetings and learned that the write-off for all of the utility’s customers in 2019 totaled $31,735.
Kroll said she has sent letters to Legal Aid, a fair housing agency and the Michigan Civil Rights Commission, as well as to the BLP, stating that they believe the higher deposit is discriminatory. The letter requests information as to whether or not “this might constitute a violation of the civil rights of our new residents,” whom she described as living on a fixed income from Social Security or disability, and most of whom are senior citizens.