ELKHART — Legislation involving municipal sewer policies, aimed partially at the city of Elkhart, has been finalized by the Indiana General Assembly.
State Sen. Joe Zakas said his bill, Senate Bill 53, will head to the governor’s desk with very little changes made in the final days of the legislative session.
Amendments added to the bill address what happens when sewer contracts between a municipality and customers outside city limits expire and a new policy is established.
“It’s a fairly good compromise on what to do when a contract expires,” Zakas said. “Hopefully, all parties concerned will find it to be a benefit.”
Elkhart Mayor Dick Moore, though, said the bill could "impede economic development across the state.”
SB 53 prohibits municipalities from cutting off service to customers outside of the city who have continued to pay bills for up to a two-year period.
It also establishes an opportunity for binding arbitration during that period, which is a key aspect for Moore.
Approval of the bill comes after a contentious local battle in 2013 in which Moore and city council struggled to develop a new plan after business owners outside of the city demanded changes to the city’s traditional compact fee policy.
Zakas, whose district includes part of Elkhart County, confirmed parts of the bill were included to address concerns voiced in Elkhart, but he said he believes it will benefit communities statewide.
Those elements were added by Rep. David Wolkins, of Winona Lake.
Moore, in a statement to The Elkhart Truth, said Wolkins’ amendment makes a "terrible bill even worse" by forcing cities to consider more closely whether to extend sewer service outside the city limits.
Cities, Moore said, will be less inclined to offer service if the future terms of sewer arrangements are potentially outside of their control.
Moore added: "This bill also makes it more difficult to collect late sewer bills. A company inside the city will pay their taxes and also pay a monthly sewer bill and do it without the benefit of arbitration. A company outside that is not annexable only pays the monthly sewer bill. That is terribly wrong. Those outside the city will most likely end up having more rights and a much better financial situation than those inside the city."
Zakas said existing state law “never addressed what happens when a contract expires,” and that his bill would provide customers a little more protection.
The city’s controversial compact fee policy for commercial customers outside of the city was based on a formula that used assessed value to determine the compact fee that is then paid in addition to the monthly sewer charge. That policy is now being phased out.
Business owners complained the policy was unfair and often resulted in charges substantially more than seen in other communities.
A member of the business coalition who opposed the use of compact fees said the legislation comes too late to help him, but he believes it is needed.
“It shouldn't have gotten to the point where the state legislature felt they had to do something," said Rocky Enfield.
“It’s in the citizens’ best interest that it got passed,” Enfield said.
While the city is in the middle of shifting toward a new policy that will rely on a rate study, the legislation could also affect a handful of residential customers who have refused to sign a new agreement with the city.
Moore and the utility department have repeatedly urged residential holdouts for more than a year to sign the new agreement, which was revised to their benefit late last year.
The city was on the verge of cutting off service last summer to 20 some residential customers but ran into opposition from Elkhart County officials, who later admitted the city has a right to cease service in some circumstances.
While the number of holdouts has shrunk to a handful, the city earlier this year hired a company that could cut off service from the street and avoid trespassing onto the customer’s property.
The new law, if signed by Gov. Mike Pence, would become effective July 1, Zakas said.