ELKHART — State Rep. Tim Wesco and other area legislators are supporting efforts to limit how much the city of Elkhart can charge commercial customers outside of the city for sewer service.
Wesco is leading an effort to attach amendments to an existing bill and said he believes there is strong support for the idea.
On the other hand, Mayor Dick Moore, who has sought to increase fees charged to customers outside of the city, thinks Wesco and others would be wise to consider interests of Elkhart and other municipalities.
Although the legislative session has passed the halfway mark, Wesco said he’s looking at several bills that could be amended with language that would address the Elkhart issue.
“Right now, I’m looking at all options to see this forward,” said Wesco, a Republican from Osceola.
At the center of the dispute is an ordinance passed by Elkhart City Council last year that attempts to shift about 65 commercial customers to the city’s existing compact policy that an equal number of businesses have been on for years.
The change means that in addition to paying a charge for the amount of sewage processed, the companies would pay a fee based on their property’s assessed valuation. The current formula involves 75 percent of assessed value, but Moore last week proposed altering it to 50 percent.
Those companies currently pay 300 percent of what city customers would pay, but the existing compact policy would see many companies pay at least 500 percent more and some contend their bills could shoot up by 1,200 percent.
“That’s taking it to a whole new level,” Wesco said.
The business owners say they are willing to pay a surcharge for the service, but believe it should be based on usage and not assessed property value.
Part of Wesco’s concern involves the fact that the customers don’t have a representative voice in city government.
“I feel the city is attempting to use these sewer fees as a way to tax businesses that are not in their city,” he said.
Wesco is looking at two types of amendments in hopes of seeing one eventually being part of a bill. One would cap rates and charges at 300 percent of what city users pay. Another would prohibit fees based on assessed value.
One of the bills Wesco is targeting is S.B. 385, which passed out of the Senate and has been assigned to the House Environmental Affairs Committee, where Rep. Tim Neese, R-Elkhart, is a member.
The bill would allow individuals a right to appeal high utility rates, including sewer fees, to the Indiana Utility Regulatory Commission.
Neese said he and committee chairman Dave Wolkins, R-Winona Lake, spoke on behalf of an amendment Wednesday that would cap fees at 300 percent. No action was taken on the amendment, Neese said, because nobody was available to speak against it,.
He said the committee will likely discuss the matter next week.
Neese said that initially, he thought the issue should be handled on the local level, but believes there are other similar situations elsewhere and that guidelines “should be more uniform.”
He said he thinks the Senate bill with the amendment will pass out of committee.
Another bill Wesco is looking at is H.B. 1307, which would allow customers outside of a jurisdiction to appeal to the Utility Regulatory Commission rates that are 50 percent higher than what city residents pay. The bill applies to action prior to March 31, 2012, meaning Elkhart’s ordinance, which was approved on Nov. 19, 2012, would not apply.
The bill was assigned to the Senate committee on utilities, and action on amendments could begin this week.
Moore, who has angered business owners on the perimeter of the city as well as some city council members, points out that Wesco did not consult with city officials before considering his legislative effort and said he perceives some of his comments as “threatening.”
“He apparently forgot about the state passage of the property tax relief bill and that cities would have the discretion to consider establishing fees to fund the continuation of services they expect and deserve,” Moore said in an email to The Truth.
“What Elkhart has done is establish a payment in lieu of taxes. Now it is our own state representatives who are proposing to stop just that,” Moore said. “Stopping the city from setting a cost on its own services where companies are free not to accept the service will indeed draw a reaction from the people of Elkhart’s representatives.”
Moore said such an effort by Wesco is another example of the state intruding on local policies and pointed to the philosophy known by some as the concept of “home rule” that gives preference to local policy making.
Wesco said he understands the importance of home rule. And he also said he realizes that cities often establish surcharges to provide services to customers outside of city limits, but he thinks the circumstances in Elkhart represent a “situation where the state should step in and make sure people are treated fairly.”
Neese said he believes the circumstances in Elkhart have the potential to be counter productive for economic development.
The situation, he said, “needs to be resolved as soon as possible.”
Wesco said he also has the support of Sen. Carlin Yoder, R-Middlebury.