Elkhart, Ind. The Elkhart sewer saga continues after Mayor Dick Moore vetoed a recently-passed ordinance Friday.
The measure was proposed by Councilman David Henke (R-3rd District) and would change the way out-of-town customers are charged for sewer service. It would establish a 15 percent surcharge for those who live or own businesses outside the city limits.
The council approved the measure 5-4 during a special meeting Thursday. But, six votes were needed in order to make the decision veto-proof.
"It was not a very difficult decision to veto this particular ordinance," Moore said. "It had been declared invalid, illegal, unenforceable by our own corporate counsel. And, he had advised me not to sign it or I too could be found in violation in the law."
Henke says the ordinance was drafted by a municipal attorney from another city, who agreed to do so at no charge. The council tried to have Elkhart's attorney review the proposal before it came up for a vote, but they were unsuccessful.
"The mayor used his paid attorney that works at the pleasure of the mayor to give him an excuse, in my opinion, to veto," Henke said. "This ordinance was drafted under the format of the state, was wanting to be reviewed by the mayor's own expert, but that was blocked by the city."
Because the ordinance was vetoed, current law will stand. That means customers outside of Elkhart will pay an amount equal to 75 percent of what their property taxes would be if they lived in the city.
Moore says it's not the outcome he'd hoped for, but the 15 percent surcharge could result in the city having to make serious cuts. Revenue from the current compact fee goes into the Greater Elkhart Fund. But, by law, any money collected from a surcharge must go back to the utility.
"This will reduce that balance in 2014 down to zero," Moore said. "And, based on what we're going to be losing on property tax revenue again, it devastated the fund and the budgeting process will become extremely difficult."
But, Henke says money to support projects paid for out of the Greater Elkhart Fund can come from somewhere else. He says the focus should instead be on taking the extreme financial burden of the current compact fee off businesses.
"This outcome, this veto has really put businesses on hold again," he said.
And, that's the last thing anyone wanted. The Greater Elkhart Chamber urged Moore to accept Henke's ordinance earlier this week. Now, they're hopeful the council and mayor will be able to come to a compromise quickly.
"It's a little bit disappointing," said Kyle Hannon, President and CEO of the Greater Elkhart Chamber. "I understand why he did it, but we really just need to get this process moving forward. We want some closure on this, we'd like it to end."
Moore says his office is already working on drafting a new proposal to present to the council in the coming months. He says it will be similar to the 35 percent assessed value ordinance the council voted down last week.
However, Henke says the majority of the council won't approve Moore's idea unless he brings forward an ordinance based on usage.
The council could vote to override Moore's veto, but it would require six votes. They'll have the opportunity to do so when they meet again Aug. 19.