Cities compared: Moorhead utilities too expensive

By Marie Veillette

When Nick Luetmer received his first utility bill last August at his newly rented apartment in Moorhead, just blocks from MSUM campus, he was relieved. The bill totaled around $18, much lower than he was expecting to pay for a month’s worth of water and electricity.
His monthly rent for his one bedroom apartment was set at $395- as much as he could afford with a part-time job, especially when utility and internet costs were added.
Luetmer had lived in university residence halls for two years; one year at NDSU and one at MSUM. He was ready to get away from the uncertainty of assigned roommates and find a place he could call his own. Though being a first time renter also came with uncertainties, the excitement of having no shared space where roommates wouldn’t complain about his routines or habits outweighed everything else.
The feeling of relief delivered with the first utility bill was quickly replaced with worry. Upon closer inspection, Luetmer discovered his bill was only for six days of the month. Having moved toward the end of a billing cycle, the %18 charge only covered about one week. He dreaded to think what a whole month would cost him.
Luetmer is not the only student renter to be surprised with the cost of utilities in Moorhead. A growing number of MSUM students are choosing to live across the border where all or most utilities are frequently included in rent.
April Olson Mata, regional manager with Goldmark Property Management who rents units on both sides of the river, said her company has noticed variances between Moorhead and Fargo utilities.
“One difference we have noticed in regards to utilities between cities is that there are more fees in Moorhead,” she said. “For example, the owners [of a building] pay the garbage for the residents in Moorhead; however, regardless if you live in any apartment in the city or in a house, Moorhead Public Service has a garbage fee on each bill, too.”
Mata is referring to a charge of $9.46, assessed to each unit in a complex, to cover the cost of garbage collection. Many buildings opt to rent a dumpster through a private company, as Moorhead does not offer collections on containers that large.
No matter whether a customer of Moorhead Public Service uses the garbage service, each one is assessed the charge.
This was the case for Luetmer. His landlords rented a dumpster for the four-plex to use, but he still paid the fee each month.
“I thought I was paying to use the dumpster,” Luetmer said. “I didn’t know I was paying $10 for something I wasn’t getting.”
Both Fargo and Moorhead assess fees to their customers for various services. Each city charges a forestry and pest control fee.  Fargo charges $3.50 per month in forestry fees, while Moorhead charges $4.18. Pest control was also lower in Fargo at $1.00 compared to $2.70 in Moorhead.
There are some differences in fees between cities. Fargo charges a $2.50 street lighting fee, whereas Moorhead does not.
Moorhead charges all customers a monthly recycling fee of $2.84. Fargo does not have any fee regarding recycling. Similar to the garbage charge, recycling is charged to every customer, regardless of if they utilize it.
All these little charges may not sound like anything to sweat about, but the small add-on fees accumulate quickly.
Between garbage, forestry, pest control and recycling, renters pay at least $230 per year in Moorhead before any water or electricity fees are included.
In Fargo, the fees are $156 per year. The likelihood of a renter to pay them directly is low, since Fargo adjusts the fees for commercial buildings that can divvy up the costs across units.
A main factor that keeps costs low for Fargo renters is how their electricity is supplied. The city of Fargo does not offer this utility. Customers get a separate bill, usually from Xcel Energy or Otter Tail Power Company.
Both companies have a low customer charge, between $8 and $15 per month, and compatible rates for usage as to what MPS offers.
The main difference is customers are not charged any of those added fees. Excel and Otter Tail simply charge customer and usage fees.
To obtain power through MPS, residents pay customer and usage fees as well as all the add-on charges of the city.
The one place Moorhead seems to be more affordable is in their water costs.
Both Fargo and Moorhead have a customer charge and adjust their charges according to the size of the meter: the larger the width, the greater the cost.
The most common size meter incurs a cost of $8.50 per month in Fargo and $7.70 in Moorhead. Fargo’s customer charge includes the first 2,000 gallons of water used, whereas Moorhead’s fee does not include any usage; customers pay an added fee from gallon one. Even with this added fee, Moorhead offers a cheaper rate at all sizes of meter besides the most common.
Residents of Fargo and Moorhead see both a wastewater and stormwater charge on their monthly bills. Fargo’s $16 wastewater fee comes in a little higher than Moorhead’s at $14.82. Fargo lowered this fee in January from $19 to the current rate.
Stormwater fees are where the greatest price differences between the two cities can be seen. Moorhead charges $10.21, while Fargo only charges $3.
Though Fargo and Moorhead do not deviate in prices all that much, the fees Moorhead charges to all of its customers hurt renters the most because they end up paying for them twice: once directly through their bill and once in the costs included in rent.
Rachel Tengwall, a psychology senior, moved into her first off-campus apartment in August. She was also surprised by the high cost of her utilities.
“I was expecting them to be like $35 or $40, not $70 or $80,” she said.
Tengwall’s landlord is a private renter, and covers the cost of water for the four-plex, but the rest is her responsibility. With the onset of winter, her bills are only going to increase with the addition of heating costs.
The building she lives in is older, and not as efficient in holding in heat or using electricity as the newer buildings going up in Fargo.
Tengwall admitted her apartment search was limited to Fargo when she first started looking.
“I would have made the commute [to school],” she said.
After getting a job in Moorhead, Tengwall said she decided it would be more practical to stay in Minnesota. Though she doesn’t regret where she ended up, she said she is nervous about how much her upcoming bills will increase.
Bill Schwandt, general manager with MPS did not have good news for Moorhead renters. He said rates are expected to increase six and a half percent for water and five to six percent for electricity, effective Jan. 1, 2015. Both of these rates already adjust seasonally to coincide with differences in demand.
It is important to remember each state mandates different fees. Moorhead is not the only city to have many of the fees it charges to residents.
Steve Sprauge, Fargo city auditor, said it is hard to say if the economic uptick and increasing population have affected the utility rates. The increasing number of customers paying in is equaled out by the costs of expanding service to the growing edges of Fargo, he said.
Luetmer, who moved to Fargo this June, says he could not be happier with his new apartment. He now pays around $400 per month for rent and utilities, compared to the $550 or $600 he was paying in Moorhead.
The only utility he pays directly is electricity, which he says has not exceeded $40 since he moved in.
“I still can’t believe I live in a place this nice and can afford it, too,” he said.
Tengwall said she plans to move to Minneapolis after she graduates and her lease is up, but added she would probably move to Fargo if she were staying in the area.
“I feel like in Fargo they have nicer apartments,” she said. “Not just apartments, but a lot of things. That sucks for MSUM students.”

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