Elkhart, Ind. Elkhart’s ongoing dispute over its sewer ordinance reached another turning point with the introduction of Mayor Dick Moore’s fourth proposal in ten months.
Moore’s plan calls for phasing out commercial compact fees over the next five years, replacing them with usage charges if and when the properties are annexed into city limits. Right now 65 corporate properties outside city limits pay a fee based on 75-percent of their assessed property value.
Until a deal expired in 2012, the remaining 75 companies paid three times what city residents paid. Mayor Moore said the expiration was one of the catalysts for the sewer discussion. He added that his goal is to ultimately annex all properties on the perimeter of the city.
“If they’re all in by 2015 and off the assessment and paying property taxes, I’ll be very, very happy with that,” said Moore. He claimed he has asked for a five year “bridge” period in case not all the properties are annexed as rapidly as the council may like. However, Moore said he is confident nearly all the properties would eventually be annexed.
But several republican council members say the plan is anything but a compromise, claiming Moore will annex the properties that are “profitable” to the city.
“It’s a lure that says you’re getting a discount the longer you stay with us,” said Councilman David Henke.
The question Henke wants to raise is if the 2018 deadline for switching to surcharges is a good idea, why not adopt it now?
According to Henke, a majority of the council wants a surcharge based on a rate study that would be “defensible in court” and promote longer range revenue growth in a way that is fair to businesses.
Henke said he disagrees with the property value-based fee and wants the charges to be based on usage.
“If you send ten thousand gallons to the city we have to treat it,” said Henke, and regardless of whether or not a company resides in a dilapidated building with hundreds of employees or a nicer structure with fewer employees, that nicer building by default will pay more for its sewage hook up until its annexed.
“That’s the art of calling it compromise but brining the maximum revenue through the sewer project in a fund the mayor most likely controls,” the fund Henke talked about is the Great Elkhart Fund.
But the mayor said the fund has been crucial to paying for unexpected costs and supplements income lost with property tax caps.
“How far do we have to stretch what we have?” Moore asked. His desire to phase out the fee in exchange for annexation is to keep funds coming into the city at higher rates.
But several Republicans are concerned that the fund is under fewer restrictions than the general fund and can be used for mayoral pet projects. Henke argued the mayor is maintaining high revenues from these fees instead of expediting and streamlining government.
If the mayor adjusted the proposed ordinance and opt for a 35-percent fee in 2013, and a 30-percent fee the following year and reduce to a surcharge in three years, Henke said he is confident the mayor could get the nine votes of the council and end the dispute.