ELKHART — Legislation sailing through the Indiana General Assembly could derail part of the City of Elkhart’s annexation plans that are currently unfolding.
State Sen. James Buck’s bill, SB 273, would put the brakes on all annexation plans involving contiguous property if those plans are not moving forward by April 1. The proposal also would establish a moratorium until July 1, 2015, in hopes of allowing lawmakers to look at the entire annexation issue over the summer.
The legislation passed the House 97-0 on Monday and is still a step or two away from heading to the governor’s desk.
With Elkhart in the midst of laying the groundwork to annex 16 areas, the legislation would create a crisis of sorts, said Mike Machlan, city engineer.
“Your’re going to tell cities they can’t expand?” Machlan said Monday night, March 3, following a city council meeting.
“It’s a big deal,” said Brenda DeVries, an attorney for Bingham Greenebaum Doll, the Indianapolis law firm hired by the city to help prepare Elkhart’s annexation plans.
DeVries briefed the council on the potential impact Monday night, minutes before the council took several steps to move ahead with annexation plans involving eight areas.
City officials have already worried about a potential gap in revenue as the city transitions away from compact sewer fees to a sewer policy that will rely on a utility rate study to determine charges for commercial sewer customers outside of the city. Compact fees are set to expire at the end of this year, and the quickest the city is expected to receive revenues from annexation is in early 2016.
Mayor Dick Moore struck a diplomatic tone Tuesday when asked about it. He said he’s aware Indiana Association of Cities and Towns is seeking amendments and noted the legislation could still be modified.
“At this time we do not know what kind of financial crisis, if any, it could bring,” Moore said.
Buck, whose senate district is north of Indianapolis, could not be reached for comment. He’s filed several bills last year and this year that would curtail annexations in different ways.
According to the bill, cities wanting to continue with annexation plans would need to have fiscal reports for specific annexation ordinances approved by their city councils by April 1.
DeVries said Elkhart’s first three phases – representing 12 areas targeted for annexation – are already far enough along in the legal process to make the deadline.
Most of a fourth phase now appears to be in jeopardy for the near future if the bill is signed into law.
Buck’s bill includes several exceptions, including one that Elkhart officials may likely consider if necessary.
The bill provides an exception for communities but requires a letter from their city council explaining why annexation “is necessary for economic development within the municipality.”
“What does necessary mean? This is open to interpretation,” DeVries said. “It is a window — maybe — but If you’re really wanting to pursue annexation, it’s best to get it started before April 1.”
City officials are already adjusting their plans.
Officials recently realigned some of the areas assigned to phases 3 and 4. One of those, previously known as area No. 10, near Toledo Road and C.R. 17, will be renamed as 4A.
Moore said they hope to have 4A introduced to the council before the April 1 deadline.
Beyond the first four phases, the city is looking at other areas, some of which are dependent on approval of some existing annexations proposals before they can be considered. Moore declined to say how many more areas the city is considering.
Moore said they were advised last year to move swiftly because of the potential for legislation like SB 273.
As of a month ago, Machlan said they were unaware of any legislation that could impact Elkhart’s plans.
Moore said they learned about the bill about a week ago.
Even before the council and Moore reached a final agreement late last year on the phase out of compact fees, the city had already starting laying the groundwork for annexation. In fact, initial plans were unveiled a month before the Nov. 18, 2013, compromise was reached.
Machlan applauded the city’s quick preparation for helping ensure three phases are still on schedule to be annexed as soon as Jan. 1, 2015.
“We’re very happy that the annexation team that the mayor put together got this going,” Machlan said.