City needs a solid annexation plan

Posted on July 21, 2013 at 1:00 a.m. | Updated on July 21, 2013 at 6:53 p.m.

David Henke is a Republican who represents the 3rd District on the Elkhart City Council. His email address is david.henke@coei.org.


The issue of sewer/compact agreements and the newly launched PILOT program is not so complicated, even though we seem to make it that way.

From a historical perspective, the selling off of excess waste water treatment has provided a $2 million to $2.5 million annual revenue stream to the city’s Greater Elkhart Fund. As customary of municipal government, the low-hanging revenue is hard to pass up and we are not good at measuring the cost of providing such services or measuring the reduction of business expansion caused by the high cost of using this utility. The revenue collected is not directed toward the utility that provided the service.

Some believe that county residents utilizing city services should also pay a premium, as they do not pay city property taxes. Others see an opportunity to sell off excess capacity and dilute the cost of operations for the city’s public utility. It is a business decision that we sell capacity outside our municipal boundaries as Elkhart does for several Michigan areas, including Juno Lake, Edwardsburg, and also Granger, Bristol and many residential and commercial businesses just outside our city borders. Without such customers, Elkhart would not generate the extra revenue and the whole cost to operate the city’s public utility would rest on Elkhart city residents alone.

The third issue of this equation is that Elkhart city has not maintained a solid annexation plan. During this investigation it was found that should Elkhart city annex contiguous properties, the revenue would exceed the amount collected by compact and PILOT programs by nearly $1 million. With that said, Mayor Dick Moore’s proposal is to collect a fee from county properties using city water and/or sewer systems based on the assessed value. Regardless of actual usage that generates the cost of providing the service, his current proposal sets the bill based on the assessed value of your property.

Given the current differences of thought, it is apparent that the city wants and needs the revenue, though it concedes that more revenue could be collected with annexation. It is also clear that businesses feel unable to expand with sewer costs that are between 300 percent and 1,200 percent of the base rate.

When business slows we all suffer in the city and county. Therefore, several council persons have attempted to pass a rate for county users of city utility at 15 percent above actual usage while pushing for the annexation of contiguous properties. Should this happen, the city would expand with increased and sustainable revenue while not impeding the growth of business and jobs locally.

Each participant is treated fairly and each wins as we see our economy as not one of the city and another of the county but of combined regionally where one affects the other.

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