Council Considers Fee Structure that Could Charge Some Businesses for Police Calls

Should the owners of busy downtown bars have to pay more for policing?

With the city looking to cut costs and a short-staffed East Lansing Police Department piling up overtime expenses, City Council may ask some downtown businesses to pay more for city police services. 

A new proposed fee structure that would ask downtown businesses to pay ELPD overtime costs after $200,000 is spent on overtime in the downtown area was discussed at the Tuesday, March 4 City Council meeting. If the new fee structure is eventually adopted, it would be included as part of the budget for fiscal year 2026, which begins in July. 

Council put a moratorium on business license fees last May, asking city staff to create a fee structure that more fairly charges businesses that use city resources. Mayor George Brookover motioned to put a moratorium on the fees ahead of the current fiscal year at the May 21, 2024 City Council meeting. 

“I’ve looked at that [fee schedule] and also received communication from downtown business owners about whether our fee structure is; A. Fair; B. Really makes sense in this day and age,” Brookover said at the May 21 meeting. “I also have my own concerns about whether those fees are actually related to our actual costs.”

In its preliminary budget for fiscal year 2026, the Downtown Development Authority would cover the first $200,000 of overtime expenses accrued by ELPD officers responding to calls in the downtown entertainment district. After that, overtime costs racked up on busy nights downtown would be billed to the business that ELPD is called to. The fee structure specifies this would only apply to businesses with entertainment licenses, which include the large bars downtown. 

“The current overtime incurred to date is $750,000 in the police department, $200,000 has been tracked specifically in providing overtime to the downtown businesses on Thursday, Friday and Saturday nights,” City Manager Robert Belleman said. He added that the vacancies at ELPD lead to increased overtime costs. 

The charges for service would apply to calls about assaults, fights, unwanted guests, suspicious person, unknown trouble, obscene complaints, disorderly conduct and noise complaints. Calls for medical assistance would not be charged to a business. 

The charge for service would be applied on “busy nights,” described as Thursday through Saturday nights, Saint Patrick’s Day, athletic tournaments in the city and bar crawls.

The meeting agenda packet includes a narrative about the “underlying history” of the issue, a document provided by Pat Riley, the owner popular downtown bars Harper’s and P.T. O’Malley’s. After an increase in violence downtown in the wake of the COVID-19 pandemic, business owners asked for ELPD to raise its manpower in the downtown area to deter violence. In response, ELPD began stationing four extra officers downtown on Thursday, Friday and Saturday nights. 

The fee structure would be unique to East Lansing. According to the agenda report, staff was unable to find a “charge for service” fee structure in a college town in Michigan. A document included in the agenda from Riley showed that college towns surveyed in neighboring states Ohio, Indiana and Illinois also do not use a “charge for service” structure.

Some business owners have an issue with the proposed fee structure. 

Staff created the plan in response to a request from council to create a more fair fee structure that helps cover the costs of city services. Not everyone is on board with the proposal. 

The agenda report notes concerns from downtown business owners Riley, Mike Krueger (who is also DDA chair) and Thomas Dewey. These concerns include that business owners may not call ELPD to avoid charges for service, instead trying to deal with issues in-house. 

Riley attended the March 4 meeting to expand on issues he sees with the proposed fee structure.

Riley said he doesn’t understand why businesses with an entertainment license may be charged extra for calls, when they already pay for city services through an assortment of taxes and licensing fees. He also said he thinks calls are often being unfairly attributed to some businesses downtown. 

“If you have an altercation between P.T. O’Malley’s and Beggar’s Banquet in the alley, there is no address for the alley,” Riley said. “So, the police officer picks one.”

Riley continued to say that the data the city is using to justify the fee structure is unreliable. He said he reviewed the calls attributed to his businesses and some of them are for police interactions like traffic stops. He said police stops on the same block as Harper’s are all being attributed to his business. 

Riley added that there is no way for a business to budget for charges that will be applied in the future, and that there isn’t any way for business owners to know if calls actually take as much overtime as they will be billed for. 

Council agrees to keep talking about the fee structure–but raise doubt that it will eventually pass. 

The vote at the March 4 meeting was essentially to look further into the proposed fee structure, as a new fee structure would be passed with the fiscal year 2026 budget.

Brookover was the lone vote to shut down the idea of a “calls for service” fee structure. 

“I’m sick and tired of dealing with this,” Brookover said. “I don’t think it’s fair. I don’t think it’s equitable. I think the idea that certain businesses should be… somehow responsible for certain types of services, as opposed to other types of property owners, is illogical to me.” 

Councilmember Erik Altmann said the idea made sense to him, comparing businesses that need to call the police for service more often to trash collection fees.

“If I have more trash than fits in my trash can, I pay a fee. If I have a bulk item for pickup, I pay a fee,” he said. “This mix of taxes and then fees for dedicated services is nothing new and it helps keep it fair. So, I think the structure here is just fine.”

Councilmembers Dana Watson and Mark Meadows indicated they aren’t sold on the proposed fee structure–but voted to approve the motion so the topic can be discussed more during budget season. 

“I think there should be something, but I don’t think this is the right route,” Watson said. “I want to continue to talk about it.”

Meadows indicated he’d prefer to see an occupancy limit-based fee structure, and raised concerns about what happens if the DDA does not offer $200,000 in assistance in a future budget.