Elkhart businesses threaten lawsuit over sewer dispute

A group of businesses have told Elkhart's mayor that a lawsuit could be filed if the city chooses to continue charging some sewer customers based on assessed property vlaue.
Posted on Sept. 6, 2013 at 1:00 a.m. | Updated on Sept. 6, 2013 at 4:46 p.m.

ELKHART — Suggestions of a possible lawsuit against the city of Elkhart concerning the sewer dispute were crystallized into a formal threat conveyed to Mayor Dick Moore.

Steve Schemenauer, a spokesman for the business coalition made up of companies outside of the city, told Moore in an email sent Friday, Sept. 6, that plans for a lawsuit against the city are progressing.

The letter comes at a time when Moore is preparing yet another compromise proposal for consideration by city council in the standoff over how the city should charge sewer customers outside of the city.

Moore said this week he will have a new proposal by Sept. 23, but declined to give any hints about what it might contain.

Schemenauer reasserted the business coalition’s opposition to the use of assessed property value as a way to calculate sewer charges for commercial customers outside of the city.

Moore has sought to stick with the traditional compact fee formula that relies on assessed value, but has agreed more than once to reduce the rate.

The businesses have said they understand some kind of surcharge is appropriate, “but (assessed value) is our ‘Red Line in the Sand,’” Schemenauer told Moore.

“As you formulate your proposal, we hope the city is wise enough not to base it on AV. You have the ability to continue this battle. We have the financial might to fight back, but you also have the ability to form a compromise that is acceptable to the business community, and end this battle. The ball is in your court, but the time for decision is quickly running out,” Schemenauer’s letter read.

Moore, asked for comment, suggested Friday that Schemenauer’s attorney should contact the city’s legal office and lay out their complaint. He also down played the threat.

“A threat of a lawsuit against the city and its utility should not dictate local public policy. What is in the best interest of the city will drive our policy decisions,” Moore said via email.

Schemenauer said they are in the midst of raising upward of $100,000 they believe might be necessary for a lengthy court battle, but already have enough to file a complaint and seek a summary judgment against the city.

He said they’ve been told by a law firm that they have a “high confidence” of winning a legal battle against the city in their attempts to prevent the city from continuing to use assessed value in the calculation.

Businesses contend the assessed value method of charging for sewer doesn’t make much sense and unfairly penalizes companies for having nice facilities.

The letter also alludes to some people’s desires to seek repayment for past charges stemming over years.

Schemenauer said letters asking for financial support for a lawsuit have been sent to 145 companies.

The business coalition has rallied for months against a city ordinance adopted last November that shifted 75 companies to the compact policy that 63 other companies have been on for years.

Those 75 companies had been on a service agreement that charged a 300 percent surcharge, which is generally believed to be less expensive than what many pay under the compact policy.

The ordinance was viewed by the administration as a way to level the playing field, but some companies contend the compact fees represent a “money grab.”

Moore vetoed a Republican ordinance last month that would have established a surcharge of 15 percent.

In doing so, the council rejected Moore’s plan that would cut monthly sewer bills in half, but still used the assessed value formula.


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