ELKHART — Mayor Dick Moore announced a moratorium Tuesday in reaction to a new state law involving municipal sewer service.
Just weeks after the Indiana General Assembly passed legislation that will enable sewer customers outside of the city to seek arbitration when new sewer policies are established, Moore has announced a moratorium to new sewer and water extensions outside the city.
The bottom line is simple. Businesses and homeowners outside of the city that want new sewer and water service will need to seek annexation, according to a news release from Moore on Tuesday morning, April 8.
Moore said new state law that goes into effect later this year will make it more difficult for cities and towns to establish fees or rates with customers outside of the city.
The move is the latest in an ongoing battle with state lawmakers who pressured Moore a year ago to move away from compact fees set arbitrarily by the city that are based on assessed value.
Tuesday’s move marks the second time Moore has issued a moratorium in reaction to action by the General Assembly. The first came in April 2013 when state lawmakers began considering legislation that would have changed the way the Elkhart and other cities can provide sewer service to customers beyond city limits.
That came after Republican council members, aligned with business owners outside of the city, led the charge to phase out the compact fees amid resistance from Moore.
Senate Bill 53, approved last month, enables sewer customers outside of the city to seek arbitration during the first two years of a new contract if they feel the new agreement is unfair.
Rep. Dave Wolkins, a Republican from Winona Lake, said recently that the legislation was aimed at Elkhart in part because of the way the city had treated customers outside of the city.
While the compact fee policy had been in place for years, expansion of the policy resulted in widespread complaints from business owners that the rates were excessive.
Moore lobbied against the legislation earlier this year to local state lawmakers.
Moore has said it is unfair that customers inside the city don’t have an opportunity for arbitration while allowing those outside to have that option.
Moore notes that the new law would allow a “third party with no stake in our city” to decide service agreements for the municipality.
Moore also objects to language that would allow customers to continue receiving service under the old agreement for up to two years while arbitration or annexation is considered by the company.
The city is in the middle of an aggressive annexation plan that targets 16 areas around the city that are populated primarily by commercial sewer customers.
On Monday night, city council gave final approval for four tracts. If plans continue on scheduled, annexation of 13 areas could become effective by Jan. 1, 2015.
According to the mayor’s statement:
■ The new policy does not affect customers within the 16 areas targeted by the city for annexation.
■ Once the annexation is complete, the process of connecting to city sewer and water can begin.
■ Service will be extended only to customers whose property is adjacent to city limits and is “annexable,” or the customer has a valid agreement with the city.