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Elkhart business coalition looks at options beyond lawsuit

The chances of a lawsuit being filed against the city of Elkhart over its sewer policy appear to have diminished.

Posted on Nov. 26, 2013 at 12:00 a.m. | Updated on Nov. 26, 2013 at 4:45 p.m.

ELKHART — Plans to file a lawsuit over the city’s compact sewer policy appear to be in doubt after last week’s passage of a new policy that will phase out the controversial surcharge.

Speaking personally, one of the coalition leaders, Rocky Enfield, said he would not participate in a lawsuit and called the city’s decision to phase out the compact fees after 2014 a victory for businesses outside of city.

However, another businessman said coalition members are still looking at their options and wouldn’t rule out a lawsuit involving the city’s sewer policy for commercial customers outside of the city.

Enfield, who works in the insurance business and has a small office north of the city limits, said he didn’t stand to gain much through a lawsuit.

In fact, he’ll see his compact fee that comes with a monthly sewer bill fall from an original $243 to $81 in 2014. After that, the additional fee will be set on a yet-to- be-determined surcharge based on usage and may well be even lower.

Enfield said he believes the work of the coalition helped change public policy.

“It’s a win as far as I’m concerned,” Enfield said Monday afternoon, Nov. 25.

The coalition had formed a limited liability company as a way to protect the names of businesses if a lawsuit was filed, but Enfield had agreed to use his name in legal documents.

If the group files suit, he said they would have to find somebody else who’s willing to have their name publicized.

The coalition, formally known as Elkhart Citizens For Fair Sewer Rates, made numerous threats in recent weeks that any agreement that included the use of assessed value in the formula used to calculate the monthly fee would result in a lawsuit. The group even sent Mayor Dick Moore a copy of the lawsuit they planned to file just days before council’s final vote.

Council unanimously approved a heavily revised sewer ordinance on Nov. 18 that restructures the way the city charges commercial and residential sewer customers, ending a nearly yearlong controversy. It replaces some aspects of an ordinance approved 12 months earlier that led to a firestorm of complaints from businesses outside of the city.

Under the plan, the city will discontinue the compact fee after 2014 and establish a surcharge that will be based on a rate study that will be conducted next year.

The coalition banded together last summer, arguing the compact fee was excessive, illegal and unfair. The group also launched a campaign yard sign that directly attacked Moore and also urged the city to alter its residential compact policy toward residents of Valley View Hills subdivision.

Businesses and many Republicans argued that relying on assessed value to assess monthly compact charges made little sense.

Steve Schemenauer, a spokesman for the coalition, continues to argue the policy is illegal even though it had been in place for more than 15 years.

Among the aspects that make it illegal is that revenues from the compact fees don’t go toward the utility, Schemenauer said.

Schemenauer said some coalition members are still contemplating their options, which could include individually filing complaints with the Indiana Utility Regulatory Commission.

He declined to speculate what the chances are that a lawsuit still might be filed.

“Yes, it’s a partial success in the fact businesses have got the mayor to reduce the illegality of what he’s doing,” Schemenauer said Tuesday.

“We gave them in writing all the ways they were violating state law and they totally ignored it,” Schemenauer said.

“I wish the state would just step in and say, ‘Hey Elkhart, you’re cheating your authority. There’s no law that allows you to do this.’”

City council member Dave Osborne welcomed news that chances of a lawsuit appear to have diminished.

“They’re basically getting what they want,” Osborne said.

Enfield said he believed the work of the coalition and threat of a lawsuit forced Moore to compromise.

Moore had little reaction but added: “The threat of a lawsuit was never considered. Our local law is based on both federal and state law and we are very comfortable with it. As stated, we will never allow our city policy to be driven by threat of a lawsuit.”

Osborne said he was never seriously worried about a lawsuit.

“If the state government’s letting you do it and the federal government is letting you do it ... why are we in violation?” Osborne asked.

The group also rallied behind residential customers outside of the city and specifically residents of Valley View who have been upset with how they have been treated by the city over sewer service for years.

The new sewer agreement reduces the residential compact fee from $50 to $35.

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