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Statement from Mayor Moore's news conference

Statement from Mayor Moore's news conference

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Published by elkharttruth
In addition to taking questions, Elkhart Mayor Dick Moore read a lengthy statement explaining the history of the city's commercial compact fee and the reasons behind changing it.
In addition to taking questions, Elkhart Mayor Dick Moore read a lengthy statement explaining the history of the city's commercial compact fee and the reasons behind changing it.

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Published by: elkharttruth on Mar 22, 2013
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03/22/2013

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46516
574.294.5471
Fax:
57;+.293.7964
City
of
Elkhart, Indiana
The
Honorable
Office of the Mayor
the
at)'
with
a
heart
Dick Moore
229
S.
Second
St
Mayor
=
.....
:=Eu=-::
Elkhart, Indiana 
March 22, 2013
This
morning I
met
with
the
final group
to
complete my study on the Compact
issue.
began by meeting with one
of
the authors
of
the Compact Agreement and had very interestingdiscussion and
was
educational. I advanced my education by reading the letters and memos
put
forth,by Mayor Perron in 1998. I then called in
so'me
of
my supporters, a group
of
businessmenand
told
them
of
the
cities past and current position on
the
Compact. This morning Ientertained a group
of
outside
the
city property owners
who
are concerned about what they
see
as
a negative impact upon
their
business relative
to
implementation
of
the Compact. Italked
of
the history
of
the Compact and addressed what I had heard
as
their
questions during
the
Council meetings and listened again
to
their concerns.
It
was
as
expected a financial concern. Hearing nothing new, I proceeded
to
announcethis
Press
Conference.The History, Benefits, Challenges, and Solutions Culminating in
the
Elkhart Compact AgreementOver the last 30 years,
the
federal, state and local governments
as
well
as
insurancecompanies and financial institutions have urged communities
to
master plan communitygrowth using land-use plans and
utility
master plans. They have also collectively encouragedcommunities
to
require municipal sewer and water
for
medium/high density housing,commercial/retail projects, and industrial development
for
environmental purposes.
In
the
1990's,
the
State
of
Indiana
passed
legislation making
the
annexation
of
propertycontiguous
to
the city boundaries very difficult.
Since
that
time
annexation rarely occurs andwhen
it
does,
it
is
usually either vacant land
or
property
that
is
in need
of
city water and sewerdue
to
the failure
of
well
and/or
septic.
'.
Prior
to
1998,
the
City
of
Elkhart in order
to
promote business growth,
job
creation andcommunity progress allowed property owners outside the Elkhart city limits
to
connect
to
citysewe'r and water. In exchange, property owners would agree
to
and be required
to
pay threetimes
the
sewer rate
that
Elkhart city property owners pay and agree
to
be annexed by the City
of
Elkhart
without
opposition when annexation occurred.
As
industry and Elkhart grew, this
1
 
arrangement promoted mainly business growth
in
unincorporated areas outside the city inindustrial parks
and
commercial developments.
The
Elkhart community was able
to
grow andexpand the work force and business was able
to
operate with city sewer and water.
In
1998, the City
of
Elkhart under the leadership
of
Mayor
Jim
Perron moved
to
annex
an
industrial
area
south west
of
the
city limits.
The
industrial park
was
developed under thethree times tool
and
city sewer
and
water
was
extended
to
the
industrial park. Duringconstruction, when a property owner
asked
the city
to
connect
to
the
sewer
and
water lines
the
city required the property owner
to
sign
the three times agreement.
The
city would providesewer and water at three times
the
city rate
and
the property owner would not opposeannexation when the city chose
to
annex the property.
It
was
a good deal,
but
one side failed
to
honor
their
agreement with the City. When
the
plans
to
annex
the
property were announced one large-company calculating
the
cost
to
be
annexed
and
feeling sticker shock,
the
company hired lawyers
to
protest
the
annexation
even
though the company
had
agreed
not
to
do
so.
The
company broke its word
to
the city.
This
move prompted the administration
to
declare
it
would no longer provide city water and sewer
to
new industrial parks and commercial development areas outside
of
the
city limits.
This
in
turn
stopped growth and shutdown expansion
of
industry along
the
perimeter
of
the city. Acompromise
was
needed. Business on one hand needed municipal sewer and water
to
buildand operate (due
to
the
environmental positions taken by federal, state, and localgovernments)
but
was
overwhelmed with the immediate increase in property taxes whenannexed.
The
city,
on
the
other
hand, wanted
to
continue
to
grow outside the city limits,encourage industry, and employ its citizens.
The
Mayor invited a group
of
major landdevelopers in our area
to
serve
as
a committee
to
study the issue and a compromise was metand
the
Elkhart Compact Agreement was established. While there were many things
to
consider,
the
main objective was
to
be sure the city did
not
provide utility services outside
of
the
city in a manner and
at
a cost
that
put
industry inside
our
city at
an
unfair advantage. Thegoal
of
the
Compact was
that
no
matter
where you chose
to
locate inside
or
outside
it
wouldremain financially neutral.The Elkhart Compact AgreementThe main
issues
facing
the
authors
of
the
compact agreement were:1. How
to
avoid sticker shock
to
companies
that
would eventually be annexed by
the
city.
2. 
What would be a fair formula
to
apply
to
property owners outside
the
city both and stillbe fair
to
the
citizens
of
Elkhart whose taxes help maintain
the
sewer and water system?
2 
 
3. 
If
you own a facility
within
the
city limits
of
Elkhart you receive 100%
of
the benefits
of
the
taxes you pay
to
the
city; police, fire, trash, snow plowing, sewer/water, etc.
4. 
If
you are a citizen
of
Elkhart your home property taxes pay some
of
the
cost
of
operating
the
city and you receive 100%
of
the
benefits.
5. 
The Elkhart citizen and business
owner
pay taxes
to
maintain
the
sewage
treatment
plant,
the
sewer and
water
lines,
water
towers, bond payments
for
public utilityprojects,
the
operating costs
of
the
Department
of
Public Works,
the
fire hydrants, roadsetc.
6. 
All properties outside
the
city limits
but
connected
to
sewer and
water
are subject
to
annexation. Once annexed
they
would pay 100%
of
the
city taxes and receive 100%
of
the
benefits.
7. 
The Compact fee
is
not
a sewer usage fee. The Compact fee
is
a payment in lieu
of
citytaxes.The authors in 1998 recognized
that
those under
the
Compact Agreement should
not
pay100% because
they
would
not
receive police, fire, snow plowing, trash collection, etc.
It
was
determined by
the
authors
that
these services encompassed about
25%
of
the
overall cost
to
the
city and,. therefore, those using sewer and
water
outside
the
city limits should pay
the
equivalent
of
75%
of
the
city taxes. The 75% served a second purpose.
If
the
business operatedunder
the
75% Compact fee
for
several years, when
the
property was annexed,
the
stickershock would be far
less.
The
theory
was
if
the
business had grown accustomed
to
paying
75%
of
the
city taxes when annexed
an
increase
of
25%
with the
additional services would be easier
for
the
company
to
absorb and justify.For those located inside
the
city limits
their
property taxes were and are based on theassessed value
of
their
property.
It
was determined by
the
98 group
that
to
be
fair
to
all partiesthose outside
the
city should pay 75%
of
what the
same property would pay
if
inside
the
city.The city could
not
send a
property
tax bill
to
property owners outside
the
city limits
so
thequestion was
how
could
the
city collect
the
75%1
There had
to
be a way and
it
has
now
evolved
intothe
monthly
Compact bill.
As
to
the
benefits
of
being connected
to
city utilities
they
concluded
it
was more than justhaving
the
benefit
of
sewage
treatment
and clean water. According
to
the
State BuildingCodes,
if
the
property owner's facility
is
over 12,500 square feet
the
facility must have a firesuppression system
or
firewall
to
expand
the
facility.
3 

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