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Council looks beyond compact compromise

Despite passage of a compromise, it looks as if the compact sewer fee dispute will continue.
Posted on March 5, 2013 at 12:00 a.m. | Updated on March 5, 2013 at 4:25 p.m.

ELKHART — Don’t let the 9-0 vote approving a phase-in of new compact fees for sewer customers fool you.

In a protracted debate over the city’s plan to begin charging commercial customers outside of the city much higher fees for sewer service, city council’s vote Monday, March 4, appears to be more of a temporary victory for Mayor Dick Moore.

Many of the council members who supported the compromise vowed to reopen debate on the ordinance that triggered the change, a decision cast in November that council members now admit did not receive enough scrutiny.

Prior to the vote, though, Moore heard a slew of complaints and concerns from commercial customers as well as just about every council member and other representatives of the community.

Before voting, council president Ron Troyer promised to assemble a committee representing the administration, business owners and council members in an attempt to hammer out a policy that would be more fair to customers.

Moore declined to say whether he supports the idea of reopening the debate.

Business owners began complaining almost immediately after the council approved plans last year to switch more companies outside of the city from sewer service agreements to compact agreements that are based on assessed value rather than usage.

The uproar forced Moore to propose the phase-in.

The phase-in would allow businesses to pay one-third of the total charges the in 2013, two-thirds of the charges in 2015 and full fees beginning in 2015.

Some council members suggested the phase-in was a temporary solution that was more palatable than doing nothing and seeing customers immediately begin paying the full charges.

“It might not be the relief you are looking for, but it’s a start,” said Democrat council member Tonda Hines.

As Moore and council members listened, business owners lined up to voice their displeasure. Many warned that such a policy would drive business away from Elkhart.

Goshen Coach, which employs upward of 300 people, is one of the biggest companies facing a hike. The company pays about $2,400 per year for the service. That would jump to $36,000 per year, according to Tom Pangburn, an attorney representing Goshen Coach.

“That is stunning to me,” Pangburn said.

He challenged the city to calculate what the company would pay if the company was located within the city and then openly compare it with what the company faces under the compact. “If it’s fair and equitable, we’ll pay it.”

Bill Cripe manages a shopping center on Old U.S. 20 and said he faces several difficult decisions.

“How do I pass that fee on to my tenants that already have contracts and have years left on their lease?” Cripe asked.

His property has struggled with vacancies as it emerges from the economic recession and some of tenants are behind in rent. “I don’t know where that extra $12,00 is coming from,” Cripe said.

Steve Schemenauer, who operates Sherwood Industries, said he’s facing a 1,300 percent increase that he estimates could cost more than $20,000 a year for his three buildings in the Park 6 industrial park north of the city.

“I will be forced to be cut off. I won’t have a choice in the matter,” Schemenauer said. “I will ... have to get (portable toilets) and put them in my parking lot … I don’t have a choice of paying an additional $2,400.”

City council members pointed out that Elkhart County officials are now expressing concern that upset business owners might flee the county.

Randy Wilson, a member of the Elkhart County Redevelopment Commission, suggested last week the county may look into whether building a wastewater treatment plant to accommodate customers outside of the city could be feasible.

Wilson attended Monday’s meeting but made it clear he was not representing the county and said he believes the private sector might have a willingness to finance a private wastewater plant.

“We’re really not trying to stir anything up. We’re just looking at options,” he told council members.

Trevor Wendzonka, on behalf of the Greater Elkhart Chamber of Commerce, said he likes the idea of a study committee and urged the city to include business owners in the discussions.

Moore said the policy is intended to provide “payment in lieu of taxes for the sewer service.” He also pointed out that 63 companies have been paying compact fees for years with little or no complaints.

Moore appeared unfazed that the county is looking into the matter and might conduct a study that would assess the circumstances.

“We welcome the study … We believe as they look into the option of treating their own sewage, they will find our offer to be the best,” Moore said.

The mayor urged customers to sign the compact agreement and avoid penalties and potentially being disconnected.

Moore disagreed with those who claim the policy could have a negative impact on business attraction and retention. He added there’s “not one shred of evidence that the policy will slow growth on the perimeter of the city.”

Republican councilman Brian Dickerson immediately countered that claim.

“We are having a direct impact upon businesses community. These are things that are going to have a lasting impact. ... I want to address it head on,” he said.

Republican David Henke warned the policy would kill jobs and limit growth.

“It makes no real financial sense to me,” he said.

Henke and others admitted the council failed to look into details of the ordinance because they were too focused on a provision providing a discount to the RV/MH Hall of Fame.

“We were wrong,” Henke said. “We’re here to clean it up — with the administration or without — it has to be cleaned up. It affects all of us.”

Pangburn, of Goshen Coach, said he left the meeting feeling a bit more hopeful.

“Universally, they all agreed that is unfair, so I’m optimistic that it will be addressed quickly to base sewer rates on usage rather than assessed value,” he said.


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