Many Gary businesses and other commercial property owners will soon see higher stormwater bills after the city approved a significant rate increase that shifts more of the cost of sewer and drainage upgrades onto nonresidential properties.
The new structure raises stormwater charges to $14.38 per 1,000 gallons for commercial and industrial properties — an increase of nearly 70% from the current $8.50. The change does not apply to residential customers.
The Gary Common Council approved the increase in an 8-0 vote last week.
City officials say the new rates are a first step toward funding a decades-long overhaul of Gary’s aging wastewater system, which has been under federal scrutiny for years.
“The monies are needed to expand the operation of the Gary Sanitation District,” said Gary City Court Judge Deidre Monroe, who presented the ordinance to the council in the absence of the utility’s director, Ragen Hatcher. “We’re looking at about $150 million that is needed, and of course that’s not going to be done with an increase in the fees. However, that’s the first step, and that first step has been asked pretty forcibly that we do something from the Department of Justice as well as the EPA.”
In 2016, the federal government and the state of Indiana took the city of Gary and the Gary Sanitary District to court, accusing them of allowing untreated sewage and stormwater to flow into local waterways in violation of the Clean Water Act. The case required the city and sanitary district to make long-term upgrades to the sewer system to reduce overflows and pollution.
To comply, the city must carry out a roughly $300 million, 30-year Long-Term Control Plan aimed at reducing sewage overflows, improving drainage, and modernizing infrastructure. Federal officials have set a target of about $15 million in annual revenue to support the work.
City officials say the new rates will help Gary move toward that goal.
“It’s not going to affect the residents per se,” Monroe told council members. “It will affect the commercial properties we have in the city of Gary. “We have not had a rate hike in several years so it’ll be on par with our neighboring places.”
Debate began last fall
The increase has been months in the making.
Council members wrestled with the proposal during October budget hearings, when sanitation officials warned that Gary faced mounting federal pressure to raise revenue for sewer upgrades. At the time, officials said holding residential rates steady would likely mean shifting more of the burden to commercial and industrial users.
“By raising our industrial and commercial rates, we can hold residential rates steady,” Hatcher told the council’s Finance Committee in October. “This is about making sure we meet our federal obligations without overburdening residents.”
Still, several council members expressed concern about how sharp increases might affect local employers.
“We also have to maintain the relationships so they don’t begin to leave one by one,” council member Lori Latham said during the October discussions.
During Tuesday’s meeting, Brenda Scott-Henry, director of the city’s Office of Stability and Environmental Affairs, said Gary has identified more than $27 million in priority projects tied to drainage and sewer upgrades.
Those include a roughly $2 million engineering effort to address back-flow drainage problems between 21st and 25th streets, an area that has experienced repeated flooding. She also pointed to ongoing maintenance and transportation-related infrastructure work aimed at addressing long-standing system deficiencies.
“The increase is utility fee, not a tax, and it is located on the property bill,” Scott-Henry said. “We use those fees to implement the compliances of the program itself.”
Together, she said, the projects illustrate how stormwater revenue would be directed toward targeted upgrades rather than general operations.
