Elkhart’s plan to annex hundreds of properties over the next five years could be put on hold if a proposed moratorium passes in the state assembly.
An amendment was added to Senate Bill 273 Monday that would prohibit municipalities from annexing contiguous properties unless they introduce annexation ordinances and adopt fiscal plans by April 1, 2014.
In 2013, the city of Elkhart started moving forward with a four-phase plan to annex some 16 areas over a five year period. Three of the four phases have financial plans in the books, but the fourth phase my not be finalized by the April 1 deadline.
The amended SB 273 is currently being considered in a conference committee, but State Sen. Jim Buck (R) from Indiana’s 21st District said it will be submitted to the full House and Senate by March 14.
According to Sen. Buck the proposed bill and amendment won’t impede annexation in the long run as long as it’s done in accordance with what property owners are allowed to do to remonstrate against attempted, undesired, annexation.
The amended SB 273 would establish an 18 month moratorium on annexations so that a state study committee could review the law.
“Indiana has one of the most punitive annexation laws in the country,” said Sen. Buck, “to the point where annexation takes place for money and not for development.”
Sen. Buck said there have been cases where municipal governments take profitable parcels of land, like agricultural properties, and annex them. The senator described this type of unessential annexation as “territory grabbing” to improve the stature and profits of a city.
“You’ll see some of them say, ‘we’re one of the fastest growing cities.’ But they’re only growing because they’re bringing in more population—and they’re bringing them in a way that’s not agreeable,” Sen. Buck added.
There is an exception to proposed SB 273: if an area has an immediate need for development, such as an industry or business expressing interest to relocating within a municipality’s jurisdiction, then a friendly annexation would be permitted after April 1, 2014 for that purpose.
Elkhart Mayor Dick Moore said he is greatly concerned by Monday’s amendment. Moore said lawmakers in Indianapolis advised Elkhart to consider annexation as a potential resolution for the city’s sewer dispute.
The annexation plan was passed in the fall of 2013 to replace the highly contested sewer compact fees. As properties, both commercial and residential, were annexed into the city they would begin paying city taxes and sewer rates and stop paying the compact fee.
Moore said the transition from compact fees to taxes leaves a revenue gap for all of 2015. If the moratorium is passed in the state assembly, Moore said he’s not sure how or when the city will be able to recoup the anticipated revenue from taxes.
Sen. Buck explained that the point of SB 273 and its amendments is to prevent annexation from becoming a way for municipalities to generate extra revenue. However, Moore disagreed with the senators idea.
“The senator thinks about grabbing companies just for the purpose of raising revenue—that’s your lifeblood, revenue is your lifeblood—you can’t continue serving if you don’t do that,” said Moore. He’s talking about annexing properties and expanding city limits to keep businesses’ property taxes coming as companies move to properties outside the city.
Here’s a list of the four phases of Elkhart’s annexation plans:
Area #1 Airport
Area #2 CR 6 and CR 15
Area #3 Cr 17 and Middlebury St.
Area #4 Borg and Pierina
Area #5 CR 6 and SR 19
Area #6 Mishawaka Road and SR 19
Area #7 CR 6 and CR 11
Area #8 East of CR 1 and US 20 West
Area #9 Toledo Road and CR 13
Area #10 Toledo Road and CR 17
Area #11 CR 6 and CR 17
Area #12 Beck Drive and CR 17
Area #13 West of CR 1 and US 20 West
Area #14 SR 19 and CR 4
Area #15 CR 6 and CR 7
Area # 16 SR 19 and CR 24