MONCKS CORNER -- Bruce and Vicki Barnes pay $125 a year to lease their waterfront lot on Lake Moultrie from state-owned utility Santee Cooper.
That's about to change.
Santee Cooper officials outlined a plan Monday to charge residents in three subdivisions bordering the lake 3.5 percent of the appraised lot's value.
For the Barneses, the proposed increase could mean about $4,000 a year to lease their Lakeside Drive lot in Thornley Forest subdivision that their two-story, four-bedroom brick house sits on.
"When I bought the house nine years ago, I didn't budget for another $300 to $400 extra a month to live here," said Bruce Barnes, a civil service employee at Charleston Air Force Base. "I will never own this property."
His wife, Vicki, who runs a dance school, said it's going to be difficult to afford the increase.
"I think it's so unfair," she said.
The Barneses are among 357 leaseholders around the lake who will start receiving letters this week that lay out details of the utility's plan.
"All of those lots are well below market value," said R.M. Singletary, Santee Cooper executive vice president of corporate services. "We want to make sure we have a consistent, fair
way to go forward."
Currently, residents in Halls, Overton and Thornley Forest subdivisions pay average lease rates of $200 to $300 a year, prices set decades ago on the federally regulated land that can never be sold inside the dikes of the man-made lake.
Many of the 40-year leases on the property expire between 2012 and 2021, and Santee Cooper wants to set a fee based on current market rates.
Historically, Singletary said, the utility has set lease rates based on 5 percent of the appraised value of the property at the time of renewal.
"Due to the restrictions on these leases and no purchase option, a lower rate should apply," he said of the 3.5 percent proposal.
At that rate, a waterfront lot in Thornley Forest II with an average appraised value of $111,034 would be assessed $3,886 while an interior lot valued at $20,889 would be charged $731.
In Overton, a waterfront lot appraised at $166,528 would face a yearly lease fee of $5,828 while an interior lot valued at $20,000 would be charged $700.
And in Halls, on the lake's western edge near Cross Generating Station, a waterfront lot with an average appraised value of $72,000 would be assessed $2,520 while a lot just off the lake valued at $15,412 would be charged $539.
"We are in shock," Overton Civic Club President Johnny Lamm said of the proposal. "The figures released (Monday) will be absolutely devastating to many residents who are retired and on fixed incomes."
Retirees Clyde and Mary Anderson of North Charleston, who hold a lease in Thornley Forest, said they probably would not be able to afford the higher rate for the lake-side lot where they have a mobile home.
"I think that's too much," Mary Anderson said.
To cushion the sudden shock of the substantially higher yearly rates, for those leases that expire before Dec. 31, 2015, Santee Cooper is proposing to phase in the new lease rate over three years.
For instance, residents with a lease expiring in 2014, such as the Barneses, would pay one-third of the new cost the first year, two-thirds the second year and the entire amount the third year.
"Folks, after five years, have more time to get ready," Singletary said.
Lease rates also will be reassessed every five years with a maximum increase of 15 percent over the five-year period, according to the proposal.
In addition, Singletary said the utility might take into consideration an adjustment for waterfront leaseholders who improved their lots with seawalls to prevent erosion.
"But we have to be careful how far we go with that," he said. "We are trying to keep this as transparent and simple and fair as we can."
Santee Cooper President and Chief Executive Officer Lonnie Carter said it's time to hear from the leaseholders and the ratepayers.
"We really need to put something on the table and let everyone have a shot at it," he said.
Santee Cooper will receive public comments through Sept. 30 and hold public meetings as requested from the affected homeowners' associations and others.
Singletary hopes to present a final plan to the utility's board of directors in October.
In an unrelated matter, Santee Cooper's board voted unanimously to extend leases on 381 lots up for sale by three years after the term expires and charge a 5 percent lease fee of the appraised value.
In 1995, the utility offered all leaseholders, except those in Halls, Overton and Thornley subdivisions, the opportunity to buy their leased lots around the lake with the stipulation that leases would not be extended beyond 10 years when they expired. Nearly 85 percent of the leaseholders bought their lots. The remaining leases expire between 2012 and 2021, so with the three-year extension on top of the 10-year extension, the last date someone can buy their lot is 2034.
"This gives them a chance to take care of business," Carter said.
Reach Warren Wise at 937-5524 or email@example.com.