(A) On April 3, 2002, the Indiana Supreme Court, in a unanimous decision written by the Chief Justice, found that it was permissible for the Town of Speedway to charge differential utility rates to the customers inside of the corporate limits, versus those outside of the corporate limits. Although the "differential" between the inside rate and the outside rate for Speedway was 50% (50% more for the outside customers), the Supreme Court noted that rate differentials of 250% or more are possible, in accordance with the guidelines for setting these utility rates.
(B) Until this decision was rendered by the Supreme Court, communities were reluctant to differentiate rates between inside and outside the corporate limits. This reluctance then directly caused the customers outside the corporate limits to receive utility services at the same rate as those inside the corporate limits. Once municipal utility services are received by unincorporated parcels, the incentives and motivation for annexation are severely reduced, therefore, in those cases where a municipality extended utility service without annexation, the municipality effectively makes their own job of annexation and growth more difficult.
(C) At the recommendation of Wabash Scientific, inc., that the city will consider implementing a system of differentiated utility rates, in accordance with the "Speedway" decision, charging higher utility rates to customers outside the corporate limits of the city. This differentiation would be removed at such time as the customer is annexed to the city. This action is expected to reduce the propensity for remonstrance against annexation.
(Ord. 24-2002, passed 8-5-02)