(La Porte, IN) - The La Porte City Council unanimously approved a purchase agreement last night with the 39 North Conservancy District.

 

City Attorney Nick Otis said the city will pay $2 million to the 150 property owners in the district for existing underground lines the district paid to have installed to provide municipal water service from the city of La Porte.

 

Water service is credited for the noticeable growth in industrial and residential development that’s occurred since the district was formed in the late 1990’s.

 

Otis said payment from the city will be in the form of credits on the utility bills of district property owners.

 

In some cases, Otis said the amount of monthly credits will vary greatly depending on whether a customer is a heavy industrial user or property owner with more invested from being in the district for a much longer period of time than other property owners.

 

Otis said the payment is not being made with cash because doing so for a municipality in such arrangements is prohibited.

 

“We can’t give cash out to property owners by law,” he said.

 

The credits will be given from anywhere between five years and 15 years depending on the amount owed to each district property owner.

 

Under the agreement, the city will receive $500,000 from the district’s existing $660,000 cash balance.

 

The 39 North Conservancy District Board will consider the agreement at its meeting on Friday.

 

In March, the city annexed the district after a majority of property owners signed petitions supporting the move.  In exchange, the city will make an estimated $12 million in upgrades to the existing infrastructure for the purpose of increasing water flows.

 

Demand for water caused by development has left the system unable to serve additional customers, which held back plans for more industrial and residential development in the district.

 

A distribution center and assisted living facility have been approved since the annexation went into effect because of the city’s commitment to improve water capacity.

 

Mayor Tom Dermody said the annexation will be something looked upon favorably in the years to come because of district landowners receiving better water capacity and the additional land that’s opening up for development as a result.

 

“This is something for the future that will be remembered,” he said.

 

Otis said the annexation also lifts a financial burden from property owners no longer facing the possibility of paying for the water system improvements themselves.