ELKHART — There are two ways to look at Mayor Dick Moore’s moratorium on new sewer connections announced last week.
On one hand, it initially sounded harsh and immediate and follows passage of a new state law that Moore strongly opposed.
But it’s also consistent with the city’s new outlook and one that many cities share: Businesses and residencies that want city utilities need to become part of the city.
Moore announced last week that business owners and homeowners beyond current annexation plans will need to be annexed into the city before water and sewer services are made available.
That’s quite a change for Elkhart.
For the past 15 or so years, the city has been willing to extend sewer and water to customers outside of the city in exchange for an additional monthly fee. The city was willing to do so because of the large capacity at its treatment plant and because revenues it generated could be used for a wide variety of uses.
However, that policy fell apart last year when the Moore administration sought to level the playing field and expand the compact fee policy to customers previously on another payment plan known as sewer service agreements.
Business owners affected by the transition rebelled and were successful in gaining support of most city council members who voted to phase out the sewer fees for customers outside of the city in favor of one based on a rate study.
At the same time, Moore and the council agreed to begin an aggressive annexation effort aimed primarily at utility customers.
The moratorium announced last week focuses on potential customers outside of the 16 areas targeted for annexation.
Mike Huber, president of the Elkhart County Redevelopment Commission, said he was unaware of any business plans on the horizon that would be slowed by last week's decision.
A new era?
To a great degree, last week’s move rounds out a new policy that Moore calls “connection through annexation.”
But the move was also sparked by passage of state legislation last month that will soon allow sewer customers beyond city limits to seek arbitration over new sewer rates for two years after the new policy is set. Moore strongly objected to the policy because it will allow a third party to potentially dictate a financial policy of the city.
Moore told The Elkhart Truth in an email that while the city is experiencing a shift in policy, last week’s decision also helps ensures the city will never face anything like the multi-faceted difficulties that made headlines for nearly 12 months last year.
“Let's not forget that the major goal was to be certain the people of the city of Elkhart will never be put in the position that we found ourselves in during 2013,” Moore said.
So far, four of the 16 areas are in the final stage of being annexed. Those and nine others could become part of the city by Jan. 1 if plans proceed as expected. Three more areas will be introduced in January and another round of annexations — not yet identified — could be considered next year.
Moore said he’s been told the compact policy led to roughly 140 companies locating along the perimeter of the city as a result of the compact sewer policy. Much of that, he credits to a “level of comfort” business owners and the city both had over the years.
Some have suggested current annexation should have happened years ago over the course of several administrations.
Moore declined to say whether he thinks the need for annexation represents a correction of sorts or whether it will be the start of a permanent era.
That, he said, remains in the hands of future city leaders.
“Nothing is forever and anything written by government officials can be unwritten,” Moore said.
“Those drafting the pre-annexation ordinance in 1998 resolved an issue of the day and likely felt it to be the wave of the future as well. But then it does appear that connection through annexation is the wave of the future for Elkhart.”
The county has been watching as the city developed an annexation plan, and Huber points out that the county prefers to see industrial development occur in incorporated areas.
Potentially complicating the issue, though, were two tax increment finance districts controlled by the county and located near Elkhart.
There are about a half dozen instances in which proposed annexation areas overlap two of the TIF districts. Potentially, that could have been a stumbling block since those districts are designed to collect revenues for county projects.
The county’s Northeast Corridor TIF district, which includes part of C.R. 6 and C.R. 17, will continue to exist for several more years to pay off existing obligations, but the county will lose about 30 percent of the TIF revenues. A small portion of the Northwest Gateway TIF District along part of Ash Road will be reconfigured after annexation, Huber said.
Last year, Moore issued a moratorium as a gambling chip with state lawmakers, so when he announced another one last week, it initially raised eyebrows among some county officials.
Any concerns, though, were quickly alleviated.
“There’s no concern with us at the county redevelopment commission,” Huber said.
“We feel comfortable that it won’t negatively impact anything in our TIF areas,” he said.