Seven years after being voluntarily annexed into the city of Charlestown, residents of the Highview and Lakeview subdivisions are on the cusp of getting sewer lines run to their subdivisions.

What was supposed to be in place within three years after the annexation has instead taken more than double the initial timeframe, forced residents to sit through three administrations — two being Mayor Bob Hall’s — be the subject of legal battles, be levied fines from the Indiana Department of Environmental Management and hear cost estimates that ranged from $17,000 to $1,600 to connect to city sewers.

Now through an American Recovery and Reinvestment Act loan, residents there are within seven to eight months of finally being on Charlestown’s sewer system. The reason for annexation

In 2003, residents of the Highview and Lakeview subdivisions were annexed into the city of Charlestown — under Bob Hall’s administration — with the expectation that they would be hooked onto the city’s sewer system.

The subdivisions built in the 1950s and 1960s originally operated on septic tanks, but problems with the septic systems developed as far back as 1991 and were reported to the Clark County Health Department.

A plan was developed to put the about 150 homeowners in Highview and Lakeview onto the city’s sewers through a four-phase construction project, at a cost ranging between $13,500 to $14,500 per homeowner. The initial costs per household was to include a $10,600 assessment for sewer construction; $1,600 for sewer tap-in fees; between $1,500 to $2,500 to shut down the septic system; and was to be completed in 18 months, according to a previous report in The Evening News.

At the time, the total cost for the project was estimated to be about $3.3 million.

In order to help mitigate some of the costs associated with the construction of the sewer lines, the city had a grant in place that would have required the residents to pay $50 per month for 40 years; that encompassed the cost of new sewers and a monthly usage fee.

Unfortunately, the city lost the grant and the process that began under Bob Hall’s administration did not end there.



A new administration

Mike Hall won the 2004 mayoral election and inherited the Highview/Lakeview project from Bob Hall.

The project remained similar to the one carried over from the previous administration and totaled about $14,000 for each homeowner, which included a $12,000 sewer assessment and the cost of running a pipe from the home to the sewer line, again to be completed in four phases.

The homeowners were going to be responsible for covering 55 percent of the costs, with the city covering the remainder through economic development tax money.

Once construction on the first phase of the project began, Dan Cristiani Excavating — the contractor for the first portion of the project — was required to finish by Sept. 1, 2007, according to the contract.

Following the completion of phase-one construction, residents were going to be required to pay their assessment costs within 60 days, within 90 days the city was to begin the assessment on the sewer bills and six months after the construction, residents were supposed to have their septic systems shut off.

More costs were going to be added on as once residents received the sewer lines, a payment of $10,800 to hook up to the system was required, a $1,600 tap-in fee was added and if the fee was not paid, a lien could be placed on the property.

Included in the first portion of construction was an upgrade for a lift station at Saddleback Estates, costing about $400,000, with the remainder of the $1 million total for the first phase connecting about 50 to 60 of the homeowners to Charlestown’s sewers.

Mike Hall’s administration completed phase-one of the project, but never began phase two, as problems continued to mount for Highview and Lakeview.



Lawsuits

One of the major factors in slowing the project were the lawsuits filed against the city.

The first lawsuit, which Mike Hall claimed was the result of Bob Hall’s administration, involved a deal where the city would pay a reimbursement to KBJ LLC, a local developer, for allowing them to direct the flow of sewer water to a station in its Danbury Oaks subdivision.

Mike Hall alleged that a contract between KBJ and Bob Hall violated Indiana contract law and did not comply with Indiana Code 36-9-22.

“The contract was ruled illegal because it required the city to pay more than the law allowed, it didn’t assess the proper reimbursement fees and the proper procedure wasn’t followed when the contract was signed,” Mike Hall wrote in a letter to the editor published in a Aug. 1, 2007, edition of the Evening News. “It came about during the Bob Hall administration as a Special Environmental Project to avoid paying [IDEM] fines for sewer overflows ... as documented in the Board of Public Works minutes from July 16, 2003.

“The problem occurred when Bob Hall’s Administration didn’t complete the project, which resulted in the city still having to pay IDEM fines and left Highview/Lakeview residents with failing septic systems.”

Unfortunately, a fight with developers was not the only legal battle the city had to contend with, as the residents of Highview/Lakeview also filed a suit against the city.

The second lawsuit was filed following the city council approving an ordinance that would require the residents of Highview and Lakeview to pay a surcharge of $10,800 to hook up to the sewer.

“Our initial reason for filing the suit was [the administration of Mike Hall said] this is the way its going to be,” said Karla Herrin, a resident involved in the suit.

A total of 35 residents, represented by Attorney Niles Driskell, joined in the suit in April 2007, claiming the city failed to follow Barrett law — pertaining to the construction of Indiana sewer systems — and failed to implement capital services within a three-year period following annexation, according to a previous report in The Evening News.

The suit took place about five years after the subdivisions were annexed by Charlestown and was eventually dismissed in early 2008.



A new administration, again

Also in 2008, Bob Hall regained his position as mayor and again took control of the project he had begun more than five years before.

Following his election, Bob Hall told the residents of Highview/Lakeview not to pay any more money toward their sewer services, because he was attempting to work out a new funding mechanism to pay for the portion of the project that remained incomplete.

In the meantime, Bob Hall had settled the suit with KBJ.

The terms of the settlement were that the city will be forced to pay KBJ the tap-in fees received for the water that is sent to the Danbury Oaks subdivision from Highview/Lakeview.

The majority of the water will be sent to Danbury Oaks, according to Bob Hall, although he could not offer a specific estimate or percentage on how much water, and in turn how many of the $1,600 tap-in fees will be diverted to KBJ.

But according to the paperwork filed with the state’s revolving fund, or SRF, loan program, 140 homes will divert their wastewater to Danbury Oaks.

“The proposed project will provide for municipal sanitary sewer service to 140 homes in the Highview/Lakeview area and send the flow to connections in the Danbury Oaks subdivision,” the SRF environmental assessment said.

Using the figures from the environmental assessment KBJ is set to get $224,000 of the $246,400 being received by Charlestown from the Highview/Lakeview tap-in fees.

Even though residents will still be on the hook for $1,600 per home, it is better than the alternative that was believed to be the more likely scenario.

Upon his election, Bob Hall sought funding through the SRF and the initial estimates would cost each resident no more than $32 per month per residence, plus the one-time tap-in fee.

“What the intent was, was to take the money for the sewer taps that we get from approximately 150 homes, the new sewer bills and then borrow money against that, plus the monies that we were due on surcharge and between the two we were going to be able to fund the whole project without a rate increase, without taking any money from the current sewer rate payers,” Bob Hall said.

The project, estimated to cost $1.9 million to $2 million, was to be paid by the 150 homeowners over 30 years, according to Bob Hall, but SRF loans are only granted for 20-year terms.

With the paperwork for the SRF loan in the works, Bob Hall decided to take a shot at getting stimulus funding for the sewers.



ARRA funding and a new timeline

The expectation for receiving the ARRA loan was believed to be unlikely, and the city may have lucked out.

“We were told in the first part of the year [the Highview/Lakeview project] would not qualify for stimulus money,” Bob Hall said.

The city prepared the paperwork anyway and sent it in, still expecting to use SRF as its funding source.

“I assume is that there was some projects that were either underfunded or fell out of funding and they gave us this money,” Bob Hall said.

He became aware of the money being awarded to the city Dec. 22 and subsequently sent out a Christmas card to the residents of Highview and Lakeview announcing the loan.

The letter sent to residents from Bob Hall said, “All you will be required to pay is a regular tap-in fee of $1,600, the cost to connect your home to the sewer main and your regular monthly sewer bill.”

According to city officials, no one had paid any money for the sewer improvements in the neighborhood, beyond the tap-in costs.

“No one had paid anything but the tap-in fees,” said Councilman Scott McKechnie. “That’s all they’ve paid out there.”

Once the funding is in place, the amount should cover the remaining construction needed.

“[The loan] is good for $1.3 million ... which should be just about sufficient to complete the project if things go according to the bids,” said Mike Gillenwater, attorney for the city.

The money will be collected by the city issuing bonds through the SRF and having the loan, at the end of the project, forgiven by the federal government.

“It allows you to sell the bonds to finance the project, yet it’s anticipated that you won’t have to pay those back,” Gillenwater said.

However, not having to pay back the $1.3 million loan will not absolve the residents and the city from all costs.

“We got the $1.3 million in stimulus money, [but] that still leaves a $600,000 balance,” Bob Hall said.

The $600,000 balance is remaining from the first phase of the project, which totaled about $1 million, and was paid out of the city’s economic development income tax funds.

The plan to recover the money loaned by the city is to collect repayment through the residents regular monthly sewer costs.

“Now we’re still, as far as getting the $600,000 back the city has loaned to the project, that is still an issue being worked on by Umbaugh [and Associates — an Indianapolis-based consulting firm],” Bob Hall said. “If we borrow the money, it would still be paid from the new sewer revenue coming in just like it was going to before. [Charlestown will] continue that side of the plan to pay the $600,000.”

The timeline of the project also has been designated.

When the documentation goes back to the state and is officially approved a closing will be set, likely this month. After the closing of the loan, a notice to proceed will be issued. Upon the notice to proceed, Temple and Temple Excavating and Paving Inc. will have 30 to 60 days to start construction and 210 calendar days from the notice to proceed for the project to be finished.

“It’ll be a project that’ll be finished this year,” Bob Hall said. “This, for some people, has been over 20 years trying to get sewers out of the city of Charlestown,” Bob Hall said. “They in good faith joined the city and then it didn’t happen and it became political again ... I’m sure many of them feel like they’ve been kinda jerked around a little bit.

“To me it was just great getting it at no cost and hopefully that will offset some of the frustrations ... through the years.”



Neighborhood zeitgeist

The frustrations felt from residents in the Highview and Lakeview subdivisions have diminished over time and in light of how the funding mechanism for the project has evolved.

“We are very happy with it,” Herrin said. “The timeframe doesn’t bother me personally. It was nice not to have to dig up that money,” she said referring to the costs associated with previous plans.

Even though some residents in the area, like Tom Obermeyer, said they never had problems with their septic systems, the need for many of the people living in the subdivisions was apparent.

“A lot of people in this subdivision needed [the sewers] really bad,” said resident Dale Sipe.

And for some of those homeowners, it has been a long time coming.

“The sewers are long, long overdue,” said resident Don Disch.

Any angst that was ruminating from the amount of time it has taken to hook into Charlestown’s sewer system the overwhelming sentiment instead seems to be acceptance and relief.

“Whenever they get it done, they get it done,” Obermeyer said.

While the cost for most of the residents, now only having to pay the $1,600 tap-in fee and the regular sewer bill, are a substantially better alternative to previous cost estimates, it has not resolved all anxiety.

“Generally speaking, based on present economic conditions, this is a large sum to many regular people,” Disch said. “[But] it seems to be a standard [cost] by virtually all systems I’ve read about.”

Even though he was concerned for the cost for his neighbors to tap-in, Disch and his fellow residents in Highview/Lakeview are no longer angry about the cost or timeframe.

“We long ago ceased to be upset,” Disch said.