11/15/2011 SEWER COMMISSION Minutes

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The issue goes deeper, Waicukauski said, than getting shafted over sewer fees. "The question," he said, "is whether, in any situation, a government can treat identical people differently .because it can save money by discriminating against some. Saving money is not in and of itself a rational basis for giving a benefit to some and'not others." But the Indiana Supreme Court found the city had acted appropriately. "Providing relief or support for citizens facing financial hardship is clearly a legitimate interest," said its decision, written by Justice Frank Sullivan Jr. "Moreover,it was reasonable for the city to believe that property owners who had already paid their assessments were in better financial positions than those who chose installment plans." Samantha Kam, Indianapolis' corporation counsel, said the city legal department has handled most of the work on the case so far but likely will seek outside counsel. "We think we have a strong argument,"she said. "We will be defending the city to the best of our ability." Two taxpayer-rights groups had urged the Supreme Court to take up the case. "We'd like to see the people who paid the repealed tax get a prorated share of their money back,"said Joseph Henchman, vice president of legal and state projects for the Tax Foundation, a nonpartisan tax research group in Washington. "More broadly,"he said,the group hopes to see"a ruling that when'a government cancels a tax, all taxpayers are treated equally. It's unfortunate that Indianapolis is literally fighfing all the way to the Supreme Court on this." Said Pete Sepp, executive vice president of the National Taxpayers Union: "If tax administrators in one city can rely on such faulty interpretations of law to behave this way--effectively denying property tax refunds simply on the basis of whether or not a homeowner paid in full- officials elsewhere may view this as a green light for all kinds of mischief." The Northern Estates case is Armour v. Indianapolis, so named for Christine Armour--because her name starts with A, she pointed out Monday, not because she's more important to the case than other plaintiffs. She declined to provide her age, but she's"a senior citizen"who lives in the'4300 block'of Grayson Drive with three of her children. She opted to pay the $9,278 she owed for the new sewers to avoid having it show up on her water bill for 15 or 20 years. Now she regrets that decision. A partial refund in 2005 would have helped her pay down her mortgage, she said. "Being a senior, it is a hardship to have laid out that much money,"Armour said. "It's unfair to those of us who paid." The litigation is rooted in a change that brought a friendlier approach to eliminating septic tanks during the administration of Mayor Bart Peterson. For years, the city had relied on the much-reviled Barrett Law, which lets local governments in Indiana charge property owners for improvements in their neighborhoods, such as lighting, sidewalks, streets and sewers. The Barrett Law plan forced homeowners to pay$8,000 to$12,000 each after the city installed sewers. Under the new approach, continued under Mayor Greg Ballard, the city pays to install sanitary sewers, while charging residents a$2,530 connection fee. Add in the cost of hiring a contractor to build a line from the home, and the total cost is closer to$5,000. Septic tanks.are a long-standing environmental and health issue in Marion County. Even now, the city and the Marion County Health Department estimate residents and businesses are using as many as 30,000 septic tanks. Eliminating them will take years.