46516

574.294.5471 Fax: 574.293.7964

CityojElkhart, Indiana Office ofthe Mayor The Honorable the dty with aheart " 229 S. Second St. Dick Moore , Mayor :F'Ei Elkhart, Indiana _=

March 21,2013

The Elkhart County Board of Commissioners 117 N. Second Street, Room 101 Goshen, Indiana 46526-3298

Re: Denial of City's Application for Excavation Permits; Disconnection of Certain Residents of the Valley View Hills Subdivision

Dear Commissioners:

I am in receipt of your letter dated March 18,2013, with respect to the City of Elkhart's administration of its Wastewater Utility and the Compact Program. I am deeply disappointed by the County Commissioners' decision to unlawfully deny our Wastewater Utility's request for an excavation permit in order to perform work consistent with our Compact Program requirements. This Program was established by local ordinance and further supported by Indiana law. Before I address the specific points in your letter, I would like to make a few comments.

The Wastewater Utility is owned and operated by the City for the primary benefit of its residents and businesses ,and secondarily for residents and businesses located outside the City's territorial boundaries. The Wastewater Utility is a large and complex asset whose main stakeholders are the people of the City. As the Mayor of Elkhart, I have been entrusted by the people to ensure that this City-owned asset is operated in an efficient and effective manner and that the policies ofthe Wastewater Utility are administered in a lawful and consistent manner. To that end, I have fulfilled my obligation.

The provision of Wastewater Utility services by the City to residents and businesses located in the unincorporated parts of the County must meaningfully benefit the people of the City. Prior to December 14, 1998, that benefit included the payment ofa sewer usage rate equal to three tmes the rate paid by City residents and businesses. After this date, the City determined that the benefit needed to be a payment-in-lieu-of-taxes in an amount equal to 75% of the assessed value of real property times the City'S tax rate. This fee, however, was later modified to a flat fee for County residential property owners after Commissioner Lucchese and his neighbors met with me and my staff about the fairness of the amount and convinced me that the City needed to reconsider this amount for residential customers. I then proposed to the City Council an amendment to the Compact Ordinance to adopt the flat fee for County residential customers, which substantially reduced their monthly fees. And to this day, these fees are still the amounts we are required to charge.

Now, turning to the points in your letter, my response is as follows:

1. I acknowledge your concerns about the City's proposed actions to disconnect sewer services from certain residents in the Valley View Hills neighborhood, but I believe your concerns are based on incomplete and misleading news accounts, and public reaction that is based on misinformation. The City, nonetheless, has postponed all work orders for excavation in the County right-of-way until the excavation permit matter can be resolved. It is our view, though, that the County is not allowed to arbitrarily deny a permit if the applicant meets all lawful permit requirements.

2. Pursuant to the Interlocal Agreement signed in 1992, the City's Wastewater Utility took title to the sewer facilities located in the County's right-of-way after construction and has maintained them ever since. Those customers who are connected to the sewer are being treated the same as all other customers of the City's Wastewater Utility. As such, any customer who violates the City's Ordinances governing the sewer system is subject to being disconnected from the system for failing to comply with the Ordinance. The City's Wastewater Utility Use Ordinance was approved by the City Council and the EPA.

3. The Indiana Code requires customers outside the City limits to sign a waiver of the right to remonstrate against annexation. As a matter of fact, the 1992 Interlocal Agreement that you reference includes a section whereby Elkhart County promised to obtain those signed remonstrance waivers and have them recorded. Our Ordinance No. 5322 requires all extraterritorial sewer customers to sign a compact agreement and that agreement must include a remonstrance waiver as well as a petition for annexation.

4. Disconnection should be used as a last resort and, unfortunately, we are at that point now. The Public Works and Utilities' staff began trying to work with these County customers in the beginning ofDecember 2012; sent at least 5 letters; and hung tags on doors twice. Their efforts have resulted in 110 out of 134 residential customers agreeing to the new contract. The majority of those who signed the new contract are actually receiving lower monthly fees than before. Included in those numbers are 92 Valley View customers of which 75 have now signed compact agreements. It is not the City's goal to disconnect current customers from its Wastewater Utility system, but we have exhausted all reasonable alternative measures. We wish to continue to provide service to those residents living in the Valley View Hills neighborhood, but we cannot provide this service to those residents when they refuse to accept the terms and conditions for this service.

I am reviewing the situation, but we do not see any scenario where the residents would not have to sign our agreement. As I have already pointed out, the Valley View residents are not caught up in a fee issue. In most cases, this agreement results in a lower cost to the homeowner. The vocal individuals do not like the language in the agreement related to annexation. But again, I need to remind you that similar language is within the Interlocal Agreement; these residents have already waived their right to remonstrate against annexation.

Finally, it is our position that Elkhart has met and exceeded all of its commitments in the 1992 agreement. After so many projects where Elkhart has assisted the County in extending sewer service to industries and problem areas, we are very disappointed that you believe we do not honor our agreements because we ask residents to follow the law.

It is extremely important to both of our County and City constituents that we continue to work together in a spirit of cooperation. I would like to meet with you to give you more information about what we are doing in this matter and to discuss your denial of our request for excavation permits. I believe that it may be helpful to you and me to have Tom Byers and Michael Machlan join us in case we need answers to any technical questions.

Please contact me soon so that I can set aside time in my schedule within the next week for us to meet. I look forward to your response.

Sincerely,

CITY OF ELKHART