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Utility district expresses concerns over new legislation

In late October 2011, Indiana Freedoms held a meeting in LaGrange County that drew nearly 100 people from multiple counties, all to discuss what they felt were serious problems with regional utility districts across the state. At the time, leaders noted that new legislation would be introduced during the 2012 Indiana General Assembly that addressed their concerns.

Now, two house bills have moved on to the Indiana Senate that could change how utility districts can operate and bill residents in the district.

The LaGrange County Regional Utility District Board held a special session earlier this week to discuss the legislation, how it will affect sewers in LaGrange County, and action they need to take.

“They have pigeonholed all sewer districts together, despite the fact that we consider ourselves above board,” Board President Mike Sutter said at the start of the meeting. “The legislation proposed is detrimental to this district and others in the state.”

The two bills, HB1117 and HB1225, were voted on earlier this week and can be taken up by the Senate as early as next week. District legal counsel John Gastineau told the board that the bills could be passed as is by the senate, or the Senate can pass its own versions. In that case, the House and Senate would need to hold a conference committee to work out the differences. “The chances of no changes coming out of the legislature is zero,” Gastineau told the board.

Both bills tackle similar issues, with HB1225 having the harshest provisions, the board was told. HB1225 is being cosponsored by Rep. David Yarde, who represents LaGrange County.

The key items brought to the board’s attention were amendments that deal with forcing property owners to connect to a sewer system, billing for services, the appointment of board members, and changes to how youth camps would be billed.

Gastineau told the board that one of the most detrimental portions of the bills is the changes that take away the power to force connections.

The bills could allow property owners who have septic systems that are certified as operational to opt out of hooking into a sewer system for five-year intervals. The bills also allow for property owners to opt out based on other factors, such as total acreage.

Currently, state law allows a district to force property owners to hook into a system if their property line is within 300 ft. of a sewer line. Sewer districts contend that they need 100 percent participation in a service area to make the systems economical as well as allow them to calculate costs and user fees.








The bills also look at the practice of charging a flat rate to property owners. If billing a flat rate, the district would have to provide a written statement on how that rate is calculated. The amendment in the bill also changes the part of the law that allows campgrounds to be billed at a metered rate. The new legislation would mean bills to campgrounds and youth camps would be on actual usage only throughout the year. The net result could be very little, if any, billing in off-season months.

Currently, a campground is billed over the winter months an amount equal to the lowest monthly summer bill. “This would bill for actual use only,” Gastineau told the board.

When asked if the winter bills to campgrounds would still include the district’s debt service fees, Gastineau said he did not know at this time. Many of the changes to the law and their effect on the district will depend on how the new laws are interpreted, Gastineau told the board.

The legislation would also reduce the factor of a single family equivalent that a youth camp would be billed, from 0.3 per bed, equal to campgrounds, to 0.125 per bed.

Additional amendments to the portion of the Indiana Code dealing with billing could see the district unable to have partial billings during the construction of a system, a practice the district says it needs to do to finance the projects.

Another amendment in the bills would limit the use of easements and eminent domain by districts.

The board expressed concerns that if the bills passed and took effect July 1, 2012, it could jeopardize the current Shipshewana West project. Board Treasurer Bob Jarolim noted that the district has already expended $636,000 on the project with the expectation that the funds would be replaced through the project financing. If the money can’t be repaid to the district if the project fails to go through, Jarolim said he would be concerned about whether or not the district could remain solvent.

County Commissioner George Bachman expressed his disappointment over the fact that none of the local state legislators have responded to the board or him concerning the bills. “On legislation that will affect our county, why didn’t they talk to someone?” Bachman asked.

Sutter recommended that the board members continue to work on contacting representatives, as well as work with groups such as lake associations and businesses to let legislators know about the impact the bills would have on LaGrange County.

Gastineau agreed that the board needed to mobilize those that will be affected, adding that “A lot of the measures will shift the rate burden onto the residential users.”

The board also took comments from the public that were at the meeting. Howe resident Phil Malone told the board that he would like to see the county health department do regular checks of the water quality. He also agreed with provisions of the bills that would change the board from appointed to elected.

He also voiced his concerns that if the district puts a sewer system in Lima Township, which could include Howe and the Twin Lakes area, “I have no doubt that the Howe School would close. They can’t afford to install that.”

Sutter noted that the district “has no interest in Region C. We’re not going there.”

They agreed that a system is needed in the area and would help Howe. The district pulled a possible Region C system “off the table” previously.