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Mayor Moore proposes cutting commercial compact sewer fees in half

Elkhart Mayor Dick Moore today proposed a big cut in the amount charged for sewer service to commercial customers outside of the city.

Posted on June 6, 2013 at 1:00 a.m. | Updated on June 6, 2013 at 2:49 p.m.

ELKHART — Mayor Dick Moore proposed cutting the payment formula used for commercial sewer service to customers outside of the city by slightly more than half the current amount.

He also wants to begin annexing some of the commercial properties into the city that already rely on city sewer service.

The proposals, announced at a news conference Thursday, June 6, closely reflect the recommendations from the sewer task force, he said.

The broad-based task force wrapped up work last week and sent Moore its recommendations.

Moore said a key part of the plan is to begin annexing some of the properties that already receive sewer service and said officials from Elkhart County are cooperating in an effort to work out some of the complexities linked to tax increment finance districts.

The problem with annexing land that includes the specialized tax district is that the county typically would not want to give up the revenues derived from the district, but one county official said recently there is a willingness to negotiate with the city.

Moore called the cooperation with the county on the matter “extremely impressive.”

“I can tell you this much: Our fear of annexing into a county TIF zone has been somewhat relieved,” Moore said.

He views the new payment schedule to be an interim step toward annexation.

Moore’s plan significantly reduces the amount many companies would pay for the right to have sewer service outside of the city.

Fees for commercial customers who have been on the compact policy prior to Jan. 1 are based on a formula using 75 percent of assessed value. The new plan would reduce that to 35 percent and would be phased in over three years.

The 75 other companies that are not paying any additional fees because the sewer service agreements have expired would see their fees phased in over three years.

When the compact fee policy was established in the late 1990s, the plan was to begin annexing those properties, Moore said.

Somehow, though, the city never followed through.

Suggestions that city officials view the compact fees as more lucrative then revenues from annexation, he said, are a “mythology.”

Moore and city council have been looking for a compromise since December when business owners outside of the city who were being shifted to the compact policy expressed outrage over the change.

Thursday’s plan marks the third attempted compromise by Moore.

Moore said he plans to introduce his proposals when council meets June 17.

Word of his plan comes at a time when the council is preparing to hold two special meetings next week on sewer fees.

Moore called on council president Ron Troyer to “respect” the work on the task force and consider the plan. He also asked the council to rescind formally an earlier proposal by Moore that would have cut the formula to 50 percent.

Council had set aside the 50 percent plan while waiting for the task force to develop recommendations.

The council has scheduled meetings for 6 p.m. Monday and Tuesday, June 10 and 11.

Whether Democrats attend those meetings remains to be seen. Those who want to see Moore’s plan given the spotlight could boycott the special meetings to reduce the chances council could move in another direction.

Democrat Councilman Dave Osborne attended the news conference and said he is inclined to support Moore’s newest plan.

“Annexation is the solution to a lot of these problems. The city needs to move ahead with an aggressive annexation plan and that’s what the mayor plans on doing,” Osborne said.

Kyle Hannon, president of the Greater Elkhart Chamber of Commerce, served on the task force. The former city councilman called Moore’s plan “the best workable compromise that was available.”

John Letherman, Elkhart County Council president and task force member, echoed Hannon’s thoughts.

“I think it’s as good of a compromise as we’re going to get right now, remembering that the compact is a transition to annexation,” Letherman said.

Some Republicans on the city council, though, might object to using assessed value in the formula. They have repeatedly said they prefer a calculation based on usage.

Moore did not specify how the new rate would be phased in.

Revenues from compact fees are funneled into the Greater Elkhart Fund, which can be used for various purposes following approval by the council.

Moore said the city is still working to determine the financial impact and added, “it will no doubt further compound the financial challenges the city is faced with.”

The task force was created by Moore as part of an agreement with state lawmakers who were close to adopting legislation that could have eventually put limits on how much Elkhart could charge customers outside of the city.

Moore thanked the task force for its effort.

“This is a great example of private sector and public sector leaders coming together to solve a local issue locally,” Moore said.

Moore declined to speculate on what the council might do.

“I have no assurances,” he said.

Elkhart Truth reporter Angelle Barbazon contributed to this report.

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