Evansville-Vanderburgh County consolidation planners want to ax the 35 percent higher sewer services rate paid by county residents outside the city.

County-only residents also would be kept out of reach of the city's zoning codes.

Those two county-friendly proposals are part of newly approved recommendations from the Evansville-Vanderburgh County Reorganization Committee.

"My personal feeling is that we should just drop the (rate paid by county-only residents who receive city sewer services) to be equal to the city rate," said Ed Hafer Jr., chairman of the reorganization committee's finance and tax subcommittee, in a meeting Thursday.

Hafer promised to get more data about the fiscal impact of forgoing the extra revenue that would be realized in a consolidated government by maintaining the higher rates paid by roughly 11,000 county-only residents who receive Evansville sewer services. About 40,000 city residents are sewer customers.

The city's nearly 19,000 water customers outside city limits don't pay more than customers in the city.

The higher sewer rates for county-only residents were passed in 2002, with City Council members citing the greater distances that their sewage had to be pumped.

In a June 10, 2002, presentation to the City Council, then-Mayor Russ Lloyd Jr. called for a rate structure in which "everybody pays their fair share and subsidies are removed."

"It should not be a surprise that it costs more to provide sewer service to county users than it does to city," Lloyd said then. "Serving a county user requires more sewer pipe and pumps to transport the sewage because they are farther away from the treatment plants."

But reorganization committee members believe the higher rates may be inequitable, and some advocates have suggested consolidation might find more favor with county-only residents if they could see their rates brought even with the rates paid by city residents.

"I was also told by a couple of elected officials that the real reason that (higher rates outside the city) was done was to just, basically to have a carrot to dangle in front of people in terms of making annexation more palatable," Hafer said Thursday.

The Rev. Adrian Brooks Sr., a reorganization committee member, said any sewer rate equalization that brings rates paid by city residents up to the county residents' rates could be unpopular.

"If (an equalization) is going to increase the city residents, then it has not really been beneficial to the Center City residents," Brooks said.

Planning, zoning

The report of the reorganization committee's planning and zoning subcommittee contains this clause:

"All codes and ordinances pertaining to land development, land use, nuisance, property maintenance, zoning, and construction (hereinafter referred to collectively as the 'land use ordinances') in effect with respect to property outside the Evansville city corporate boundary at the time of the government reorganization referendum is adopted shall remain in effect for property outside the Evansville city corporate boundary and not be affected solely by government reorganization."

Subcommittee member Rebecca Kasha said the language is intended to assure county-only residents that "the more restrictive city zoning will not apply and affect agricultural interests."

"The concern was that once we merged, we would have two sets of zoning codes to choose from," Kasha said. "The agricultural interests wanted some assurance that their way of life and their living would not be affected by the more restrictive zoning codes in the city — that, for example, would prohibit livestock.

"We agreed the zoning codes currently in effect would stay in effect and not be affected (by consolidation)."

Early on in the subcommittee's work, members mulled the idea of compensating rural landowners for giving up their rights to sell their land for commercial development. The intent would have been to perpetuate rural Vanderburgh County's character.

But Kasha said that idea didn't make it into the subcommittee's report because members thought it smacked too much of dictating policy to the proposed Common Council.

Finance, tax

The finance and tax subcommittee report states that "a major portion" of the group's work was done by Indianapolis-based public accounting and consulting firm Crowe Horwath.

The firm, acting as financial adviser to the reorganization committee, spends much of its financial analysis of consolidation explaining how it arrived at a theoretical baseline scenario that reallocates current city expenses and property tax levy and the tax rates that fund them from city taxpayers to all taxpayers.

"It's just a basic, pure consolidation of offices and services between the two (taxing districts) unless there's a rationale for keeping them distinctly separate," said Crowe Horwath analyst Tom Guevara. "It's if you were simply saying: 'We're going to meld these two (local governments) together without regard to looking at specific cost savings and/or methods of financing.'"

Under the theoretical baseline scenario, the overall tax rate for Vanderburgh County taxpayers outside the city increases by almost 28 cents per $100 of net assessed value and city taxpayers' tax rate decreases by almost 13 cents.

But Guevara and Hafer say a huge number of scenarios for the provision of government services and distribution of expenses can be constructed.

Crowe Horwath has created a half-dozen scenarios using such variables as net and gross assessed value, and some of those result in higher overall tax rates for taxpayers in a proposed urban services district that would follow the city's boundaries. A general services taxing district would encompass all of Vanderburgh County.

One scenario removes expenses from the Evansville Police Department from the general services district and allocates them to the urban services district. Another also allocates police services to the urban services district but allocates expenses of the current Vanderburgh County Sheriff's Office to a special services district that includes only taxpayers outside the city. Corrections costs would remain in the general services district on the grounds that all taxpayers benefit from them.

Crowe Horwath's financial analysis stresses that a consolidated government's budgets and tax rates would depend upon the policy decisions of a proposed 11-member Common Council.

"(The Common Council) will have a lot of leeway with respect to how revenues may be allocated and what services may be put into what (taxing) districts," Guevara told the reorganization committee last month.

"... We also don't know what's going to happen with respect to the future with regard to economic conditions that may affect things such as property tax levies, income tax revenues and other sorts of revenues that may be available to provide services in the reorganized city."

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