A proposed stormwater fee controversy took an unexpected twist Thursday, when Terre Haute City Council members said there is an agreement that appears to obligate them to a stormwater or sewer rate increase.
The agreement was discussed during Thursday’s lengthy city council sunshine session, which was attended by a standing-room-only crowd, including many representatives of churches and nonprofits.
Presentations, discussions and public comment related to the proposed stormwater fees continued for about 3-1/2 hours.
The agreement that concerned council members is between the Indiana Finance Authority and the Sanitary District, and it came about last year after the city fell behind in making monthly financial transfers to debt-payment accounts. (The city did not miss any debt service payments.)
But because of the delays, the IFA and sanitary district entered into an amended agreement that allows IFA to more closely monitor sanitary district finances. Also, it must approve any transfer of PILOT funds to the city’s general fund (so far this year, no transfer of PILOT has occurred, even though $5 million was built into the city’s general fund budget).
In addition, the agreement says the city will on or before Sept. 1, 2016, “increase its current sewage rates and charges by at least 15 percent, or alternatively, enact stormwater rates and charges in an amount sufficient to generate revenues equivalent to a 15 percent or more increase in its sewage rates and charges.”
Council member Earl Elliott said he learned of the agreement only on Wednesday, while some other council members didn’t learn of it until Thursday. He wanted to know why council wasn’t included in the discussion between the IFA and Sanitary District that led to the agreement.
“Why weren’t we informed or part of the discussion?” Elliott said. “I was terribly disturbed to find this out last night. Did anyone suggest to the administration they tell us?”
Dennis Otten, attorney with Bose, McKinney and Evans, addressed legal issues. He responded to Elliott, “I wasn’t aware that the council was not informed.” Otten added, “I think the discussion will show there is a need for a rate increase” for the sanitary district to meet its obligations, including bond payments.
Elliott responded, “That discussion will be pretty lengthy,” a comment that met with much applause from the audience.
Council members Todd Nation and Martha Crossen raised similar concerns. Crossen, an attorney, said the language in the clause appears to “obligate us to a particular rate increase.” She said she didn’t understand, if that was the case, “why the council wouldn’t have had to approve this agreement.”
Crossen also said, “This is a significant issue.”
At the conclusion of the discussion, Otten indicated that if the council needs more time to discuss the issue, the city can go back to IFA. “I think the program will work with us. Their main concern is going to be making sure there is enough revenues coming into the (sanitary district) to meet its revenue requirements.”
During public discussion, 14 people spoke and outlined their concerns about the proposed stormwater fee. Many in the audience were from churches and nonprofits.
Jeff Harpole, pastor at New Life Fellowship church, spoke for many churches and nonprofits who say they cannot afford the fee and want churches and nonprofits to be exempt. “This issue is about people,” he said. If churches and nonprofits must pay the fee, they will have to reduce ministries and services that include helping the poor and feeding the hungry.
Robert Salmon, Otter Creek Township trustee, said that many will have to pay a stormwater fee who gain nothing from it. He lives outside city limits, but within the sanitary district — and voiced concerns that the city council may impose a fee on him when he can’t vote for the city council or the mayor. “You are taking my money, Otter Creek Township citizens’ money, ... and spending it without any representation.”
Jeff Kochvar, of the Terre Haute Boys and Girls Club, said the nonprofit organization can’t afford the stormwater fee, which would impact services it provides to young people. He urged the council to look at other options.
Attorney Richard Shagley raised concerns about rate increases in the agreement with IFA that council members didn’t know about. “What has been lacking is transparency,” he said.
On July 5, the Terre Haute Board of Sanitary Commissioners voted to table a resolution to establish a stormwater fee. That board will again take up the issue for a vote when it meets at 10 a.m. Tuesday at City Hall.
The City Council could act on the stormwater fee during its regular meeting next Thursday.