Overlooked law could raise costs for South Bend builders, developers

Passed in 2001, the ordinance in question charges property owners certain fees for sewer and/or water main construction on new development inside or outside of the city.

It also charges customers outside the city an annual “compact” fee for sewer and/or water service equal to a portion of the difference between the city and county tax rates.

Akin to similar ones in Elkhart and Mishawaka, the rule is meant to level the playing field between city and county customers and to encourage more development inside of the city.

While upfront residential fees would be capped at $5,000 under the law, commercial fees could exceed $100,000, depending on the size and location of the property.

Annual compact fees for county customers — including both commercial and residential customers — would equal 30 percent of the difference between the county and city tax rates.

The rule’s mechanics

The Department of Public Works became aware of the ordinance while updating its sewer and water regulations earlier this year and is making plans to enforce it moving forward.