Sewer funding options debated

Residents are essentially being asked to pay twice for a major sewer project, said a Greenwood City Council member who wants the city to consider ways to fund the project other than raising monthly sewer bills.

The city is planning nearly $80 million in projects including a $62.2 million, 10-mile pipeline and a new $7.5 million public works building. Greenwood residents and others in the Center Grove area who are connected to the sewer system pay an average of $32 a month for sewer service. That amount would rise to about $36 in 2017 and to more than $48 in 2020, if rate increases were approved.

Council member Chuck Landon said the city should use money from the tax-increment financing, or TIF, districts to help pay for at least a portion of the new sewer pipeline.

If a sewer rate hike is approved without TIF funds also being used for the project, he would consider it as residents paying twice because the tax dollars collected in the TIF districts should be going toward infrastructure projects, he said. TIF districts collect property taxes from certain businesses and set aside the funds for infrastructure and economic development projects. That money does not go to fund schools, libraries and other local governments.

City officials have proposed the 49 percent increase to sewer rates during the next four years to fund the projects. The Indiana Department of Environmental Management has mandated that the city make repairs and upgrades to its sewer system to stop systematic overflows or face heavy fines.

The city has spent millions of dollars from TIF districts to bring in more businesses, which adds jobs and attracts new residents who then increase the load on the sewer system, Landon said.

Property tax dollars collected by the TIF districts should be spent on infrastructure projects, such as sewer expansions, but instead, residents are being forced to pay for the expansion with a rate increase, which effectively means they are paying twice, he said.

Property tax dollars aren’t spent on the sewer utility, and historically TIF funds have only been spent on the sewer system in a few select projects, city attorney Krista Taggart said.

The customer base of the sewer utility extends beyond the tax base of the city, and the utility has to be sustainable on its own through rates and fees, she said.

“The overall need for this project is not because of commercial development. It is because of the residential development,” city engineer Mark Richards said.

Landon didn’t disagree that the residential developments are the cause of the increase but said the primary driver behind those developments was the TIF funds used to spur business growth, which brought those people to the Greenwood area.

Since TIF funds carry some responsibility for the increased usage to the sewer system, those funds should also be used to help alleviate the problem, Landon said.

However, the TIF district near State Road 135 — where a section of the sewer expansion is planned — is new and doesn’t have any funds in it yet, Richards said.

Funds from the other TIF districts could be used, Landon said.

“The RDC has a track record of paying out of any TIF district for any project anywhere in the city for a lot of things that aren’t infrastructure,” he said.

The city used funds from the east side TIF district to pay for the development of Freedom Springs Aquatic Center on the southwest side of the city and to pay for the Interstate 65 interchange at Worthsville Road, which at the time was not included in a TIF district.

City officials have also discussed using funds from the State Road 135 TIF district to make improvements to Freedom Springs.

Landon said he doesn’t doubt the necessity of the project, just how it will be funded.

The rate increases can be a challenge for residents on a fixed income, such as seniors, Landon said.

The council will need to vote twice to approve the rates. Two open houses and a public hearing are planned to gather public input.

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What: Open house to discuss proposed sewer rates and projects

When: 5:30 to 7 p.m., Oct. 25

Where: Center Grove North Middle School, 202. N. Morgantown Road, Greenwood.

What: Open house to discuss proposed sewer rates and projects

When: 4:30 to 6:30 p.m., Nov. 3

Where: City center building, 300 S. Madison Ave., Greenwood.

What: Public hearing for sewer rates

When: 7 p.m., Nov. 9, during Greenwood City Council meeting

Where: City center building

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Here is a look at how the average sewer bill would increase over the next few years under the city’s proposal: