LaPorte and district officials defend annexation plan, say it's best deal residents can get

LAPORTE — A South Bend attorney promised a legal fight against LaPorte's annexation of the 39 North Conservancy District, and several public officials from the city and conservancy district pushed back against his arguments.

Attorney Christian Matozzo came to a public meeting of the conservancy district board on Friday, saying he represents residents who oppose annexation by LaPorte.

Matozzo raised doubts about the city's ability to pay for the improvements the city promised in return for the conservancy district board signing an agreement to support annexation. The district comprises roughly 150 residential, commercial and industrial property owners along Indiana 39 from Severs Road to the Indiana Toll Road.

Under the agreement, the city will pay $2 million for water and sewer lines the district installed to attract new business and housing development once the conservancy formed in 1997. The money is to be distributed to property owners within the conservancy district in the form of credits on their water and sewer bills.

The city must also live up to its promises, such as replacing water lines with larger ones and other upgrades to improve water flow and fire protection. Replacing the lines would allow for further development, because current lines are large enough to serve only existing customers.

The city also agreed to put in a water tower, a new booster station and perform any necessary looping of the water lines.

Matozzo said the city is legally prohibited from taking on more debt to fund a $12 million dollar upgrade of the conservancy’s existing water lines after LaPorte already borrowed heavily in the past to finance upgrades to the city's own aging infrastructure.

“We have the money to pay for the improvements,” said LaPorte City Attorney Nick Otis.

City Planner Craig Phillips agreed, saying the city has not exhausted its ability to borrow enough money to do the work.

“We have far and above the capacity to do this financially,” he said.

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 the infrastructure upgrades and any further development would be captured and applied to the debt, he said.

Under the agreement approved by the city council and district board, the city agreed to complete the work within three years.

Matozzo argued 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.

He questioned whether the city has the money to start providing municipal services to property owners in the district if the annexation goes through.

Currently, the city is the provider of water to the conservancy district, but that contract expires in 2025. A LaPorte city ordinance adopted in 2016 requires the city to not provide utilities outside 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 keeping water flowing through their taps.

“Where will you get your water when the contract expires?” Otis said.

Conservancy District attorney Shaw Friedman said all five members of the board support the annexation.

He said the conservancy has done a fantastic job of borrowing money to pay for infrastructure more than 20 years ago and luring additional growth while retiring the debt.

Friedman said the small district can no longer afford to pay for the needed upgrades and maintenance of the system. Also, he said, water testing requirements for conservancies are much tougher and are now too much of a burden.

“It’s been the little engine that could, but we could no more,” Friedman said.

Board President Mark Childers said the annexation agreement is the best terms conservancy residents will get.

“The main goal is to help develop the area further,” he said.

Over the summer, the city obtained signatures from 57 percent of property owners in the district to meet the first state requirement of having majority support from district land owners.

If 65 percent or more of district landowners sign a petition to remonstrate, Matozzo said, the proposed annexation automatically dies under state law. He said signatures from 51 percent of the district property owners are required on the remonstrance petition for a court to decide the matter.

Matozzo believes more people, including some individuals who previously agreed to be annexed, will come out against it once all of the facts are laid out.

Before he can begin the process of legally challenging the annexation, Matozzo needs LaPorte to provide public notice of its intent to annex the district. He's been watching for that to appear in the newspaper and to be delivered to property owners by certified mail as required by state law.

Neither of those things has happened despite an ordinance to annex being approved by the city council on Sep. 6.

Otis said public notices haven’t gone out yet because of the complicated work involved to make sure they comply fully with the law.

“We are certainly going to comply with all of the notice requirements,” he said.

This article originally appeared on South Bend Tribune: Lawyer fights annexation, leaders say it's best deal residents can get