PER CURIAM.

Defendant Brown City appeals as of right a grant of summary disposition in favor of plaintiff Mapleview Estates, Inc. We reverse and remand for entry of summary disposition in favor of defendant.

Plaintiff, the developer of a manufactured housing community, sued after defendant raised the fees for connecting new homes to its central water supply and sewer systems. Plaintiff argued that the fee was actually a disguised tax and, under the Headlee Amendment, Const 1963, art 9, § 31, should have been submitted to a popular vote. The trial court agreed and granted plaintiff's motion for summary disposition but denied plaintiff's motion for an award of costs and attorney fees pursuant to Const 1963, art 9, § 32.

Defendant argues that under controlling law its tap-in fees are a user fee, not a tax, and therefore not subject to the Headlee Amendment, and that the amount it set for the fees is reasonable. We agree. Whether the tap-in fees are a "tax" or a "user fee" is a question of law that this Court reviews de novo. Bolt v. City of Lansing, 459 Mich. 152, 158; 587 N.W.2d 264 (1998). The Headlee Amendment reads, in relevant part, as follows:

Units of Local Government are hereby prohibited from levying any tax not authorized by law or charter when this section is ratified or from increasing the rate of an existing tax above that rate authorized by law or charter when this section is ratified, without the approval of a majority of the qualified electors of that unit of Local Government voting thereon. [Const 1963, art 9, § 31.]

This section "adds the requirement of voter approval of new taxes." American Axle Mfg, Inc. v. Hamtramck, 461 Mich. 352, 356; 604 N.W.2d 330 (2000).

The Supreme Court, in American Axle Mfg, supra, concluded:

"The plain language of Headlee prohibits a local government from levying a tax in excess of that permitted by law or charter and it prohibits increasing the authorized tax rate without approval of the electors. But nowhere does Headlee require a direct vote of the electors in order to permit a local unit of government to increase taxes if the local unit of government has the authority by law or charter to levy the increase." [ Id. at 358, quoting Smith v. Scio Twp., 173 Mich. App. 381, 386; 433 N.W.2d 855 (1988).]

A tax imposed without voter approval "unquestionably violates the Headlee Amendment." Bolt, supra at 158. Conversely, a charge that is a user fee, "is not affected by the Headlee Amendment." Id. at 159. The Headlee Amendment does not define either "tax" or "fee," so "[t]here is no bright-line test for distinguishing between a valid user fee and a tax that violates the Headlee Amendment." Id. at 160. A fee is generally "`exchanged for a service rendered or a benefit conferred, and some reasonable relationship exists between the amount of the fee and the value of the service or benefit.'" Id. at 161, quoting Saginaw Co. v. John Sexton Corp. of Michigan, 232 Mich. App. 202, 210; 591 N.W.2d 52 (1998). Taxes are for the purpose of raising revenue. Bolt, supra at 161.

There are three factors to consider when deciding if a charge is a fee or a tax. Id. To be considered a fee, a charge must: (1) serve a regulatory purpose rather than a revenue-raising purpose, (2) be proportionate to the necessary costs of the service, and (3) be voluntary, in the sense that the payor may choose not to avail himself of the benefit and thereby avoid the charge. Id. at 161-162. The inquiry into the first two factors is closely intertwined:

"To be sustained [as a regulatory fee], the act . . . must be held to be one for regulation only, and not as a means primarily of producing revenue. Such a measure will be upheld by the courts when plainly intended as a police regulation, and the revenue derived therefrom is not disproportionate to the cost of issuing the license, and the regulation of the business to which it applies." [ Id. at 162, quoting Vernor v. Secretary of State, 179 Mich. 157, 167; 146 N.W. 338 (1914).]

Defendant's increased fees for tapping into the water and sewer systems are not wholly out of proportion to its actual costs of supplying the services. According to an engineering report commissioned by the city, the fee for connecting a single site to the water system should be $706 and the fee for connecting a single site to the sewer system should be $1,630. The fees actually set by the city council were $600 and $800. These fees are in fact less than the actual costs of providing the services, so they are not excessive and cannot be regarded as a means of producing revenue.

The Bolt Court quoted the Headlee Blue Ribbon Commission's definition of "user fee" as follows: "A `fee for service' or `user fee' is a payment made for the voluntary receipt of a measured service, in which the revenue from the fees are [sic] used only for the service provided." Bolt, supra at 167 n. 16, quoting Headlee Blue Ribbon Commission, A Report to Governor John Engler, § 5, p. 30 (September 1994) (emphasis in Bolt). That definition seems to describe exactly the situation in this case those who want new homes in Brown City connected to the municipal water and sewer systems must pay tap-in fees, and the revenue generated by those fees is used for the maintenance and operation of those systems. There was no documentary evidence submitted to show that the funds generated by the increased tap-in fees were to be used for anything other than maintaining and improving the water and sewer systems. Moreover, as this Court recently stated in Graham v. Kochville Twp., 236 Mich. App. 141, 152; 599 N.W.2d 793 (1999), "[b]y exacting [a] fee for connection to the water system, the purpose is clearly to regulate and control the use and distribution of water provided by the municipal system." The tap-in fee clearly serves a regulatory rather than a revenue-raising purpose.

The increased tap-in fee is also voluntary because plaintiff could choose not to avail itself of the benefit and thereby avoid the cost. Bolt, supra at 162. A user fee, the Bolt Court stated, is "`only compulsory for those who use the service, have the ability to choose how much of the service to use, and whether to use it all.'" Id. at 167, quoting Headlee Blue Ribbon Commission Report, supra, § 5, p. 29. Plaintiff is engaged in a commercial enterprise and has the apparent desire to earn profit. It need not pay the tap-in fee unless it decides to install a home site in a particular location. It has the ability to choose whether to use the service at all, and those who occupy plaintiff's homes have the ability to choose how much water and sewer they wish to use. The increased tap-in fee thus meets all three of the Bolt criteria for a user fee rather than a tax: (1) it serves a regulatory rather than a revenue-related purpose, (2) it is proportionate to the costs of the service, and (3) it is voluntary. Id. at 161-162. We find that the trial court erred when it found that the increased tap-in fees constituted a tax.

As defendant obligingly points out, even if the tap-in fees are not a tax, they must still be reasonable. Atlas Valley Golf Country Club, Inc. v. Village of Goodrich, 227 Mich. App. 14, 24; 575 N.W.2d 56 (1997). The Revenue Bond Act (RBA), MCL 141.101 et seq., authorizes municipalities to "purchase, acquire, construct, improve, enlarge, extend or repair" public improvements such as water and sewer systems, and to "own, operate and maintain" them. MCL 141.104, 141.103(a) and (b). The act also authorizes cities to fix the rate for these services, which includes "the charges, fees, rentals, and rates that may be . . . imposed for the services." MCL 141.103(e), 141.121. "A connection charge clearly falls within the ambit of a [municipality's] authority to fix the rate for services" under the RBA, and must simply be "reasonable." Atlas Valley, supra at 21. This Court has declined "to attempt to determine with mathematical precision the relation of the connection to the charge paid by the owner of each parcel of land, since we presume `that the amount of the fee is reasonable, unless the contrary appears upon the face of the law itself, or is established by proper evidence.'" [ Graham, supra at 154, quoting Vernor, supra at 168.]

Because the fees actually set by defendant were lower than the actual costs of connecting to the systems, they are reasonable. The circuit court erred when it granted summary disposition in favor of plaintiff. Moreover, because the fees were not improperly enacted, they are valid. We therefore find that summary disposition should have been granted in favor of defendant.

Plaintiff argues on cross-appeal that it was entitled to actual costs, including attorney fees. However, under Const 1963, art 9, § 32, attorney fees and costs are only to be awarded where the suit to enforce Const 1963, art 9, § 31 is sustained. Macomb Co. Taxpayers Ass'n. v. L'Anse Creuse Public Schools, 455 Mich. 1, 8; 564 N.W.2d 457 (1997). Likewise, under MCR 2.625(A)(1), costs may only be awarded to the prevailing party. Because we find that summary disposition should have been granted to defendant, plaintiff is not entitled to actual costs. See, e.g., Meagher v. Wayne State Univ., 222 Mich. App. 700, 729; 565 N.W.2d 401 (1997) ("prevailing party" ultimately means "a party who wins on the entire record"); see also MCR 2.625(B)(2).

We affirm in part, reverse in part, and remand for entry of summary disposition in favor of defendant. We do not retain jurisdiction.