(La Porte, IN) – Both sides in a promised legal battle over an annexation effort by the City of LaPorte squared off before stakeholders on Friday.
Attorney Christian Matozzo, who represents “Citizens Against Annexation,” along with LaPorte City Attorney Nick Otis and City Planner Craig Phillips addressed the 39 North Conservancy District Board.
Matozzo, of South Bend, raised doubts about the city’s ability to annex the district consisting of 150 residential, commercial, and industrial property owners along Indiana 39 from Severs Road to the Indiana Toll Road.
He questioned whether the city has the money to start providing municipal services to property owners in the district should the annexation go through.
Matozzo went further, saying that the city, from heavy borrowing in the past to finance upgrades to its aging infrastructure, is legally prohibited from taking on more debt to fund a $12 million dollar upgrade of the conservancy’s existing water lines.
“We have the money to pay for the improvements,” said LaPorte City Attorney Nick Otis.
City Planner Craig Phillips said the money would come from placing the conservancy into a tax increment financing district.
Revenue generated from increases in property value within the district because of the infrastructure upgrades and any further development would be captured and applied to the debt, he explained.
Phillips also said that the city has not exhausted its ability to borrow enough funds to do the work.
“We have far and above the capacity to do this financially,” he said.
Under a Memorandum of Understanding, the city has agreed to put in larger diameter lines that carry enough water to improve fire protection and meet higher demand from anticipated growth in development, in addition to a water tower, a new booster station, and to perform any necessary looping of the water lines.
Under the MOU approved by the City Council and District Board, it’s also the city’s intention to complete the work in three years.
However, Matozzo said, the city should have to complete the work before annexing instead of waiting until enough tax dollars are collected from the property owners to begin the work.
“What does annexation really mean? Annexation means not ‘Let’s take over property, raise everyone’s taxes, and then build it.’ Annexation means we have the money, and since we’re already giving you the services, we’re just going to step in and pay for it,” he said.
Currently, the city is the provider of water to the conservancy district but decided last year to not renew the contract before its 2025 expiration.
Under an ordinance adopted in 2016, the city no longer provides utilities outside the city limits but will honor existing service contracts until they expire or until those service territories are annexed into the city.
Otis said annexation is the solution for property owners not having to pay for the upgrades themselves and to keep water flowing through their taps.
“Where will you get your water when the contract expires?” Otis said.
Matozzo also mentioned that a public notice announcing the intent to annex and outlining the right of property owners to remonstrate has not been published in the newspaper.
Notices have not been delivered to property owners by certified mail as required by state law, despite an ordinance to annex being approved by the City Council on September 6th.
He said there can be no annexation or a remonstrance unless the notices are given.
Otis said public notices haven’t gone out yet because of the complicated work involved to make sure they comply fully with the law, but they will at some point.
“We are certainly going to comply with all of the notice requirements,” he said.
Over the summer, the city obtained 57 percent of signatures from district property owners requesting annexation, which is the first requirement in the state process to move forward.
Matozzo believes a remonstrance, once all of the facts are properly laid out, will be supported by the required 51 percent of the property owners for the arguments to be heard in court.
“That’s what we think will happen once this notice is sent out,” he said.
39 North Conservancy District Attorney Shaw Friedman said all five members of the board are in support of the annexation, saying that the conservancy has done a fantastic job of borrowing funds to pay for installing the infrastructure more than 20 years ago and luring additional growth while retiring the debt.
The city has agreed to buy the existing infrastructure for $2 million in the form of credits on the water bills of district property owners.
Friedman said paying for the needed upgrades and maintenance of the system, along with much tougher water testing requirements for conservancies, is too much of a burden now for the small district.
“It’s been the little engine that could, but we could no more,” he said.
Board President Mark Childers said he believes annexation under the agreed-upon terms is the best plan.
“The main goal is to help develop the area further,” he said.