The following is cut and pasted directly from the Indiana Code at in.gov. It is possible, but unlikely, that the sections reported here are modified by the unique hybrid (but approved) method of using multiple code provisions to enable New Albany’s municipal wastewater utility. – RS
IC 8-1.5-3-8
Rates and chargesSec. 8. (a) A municipality owning a utility under this chapter shall furnish reasonably adequate services and facilities.(b) The rates and charges made by a municipality for a service rendered or to be rendered, either directly or in connection therewith, must be nondiscriminatory, reasonable, and just.(c) “Reasonable and just rates and charges for services” means rates and charges that produce sufficient revenue to:(1) pay all the legal and other necessary expenses incident to the operation of the utility, including:(A) maintenance costs;(B) operating charges;(C) upkeep;(D) repairs;(E) depreciation;(F) interest charges on bonds or other obligations, including leases; and(G) costs associated with the acquisition of utility property under IC 8-1.5-2;(2) provide a sinking fund for the liquidation of bonds or other obligations, including leases;(3) provide a debt service reserve for bonds or other obligations, including leases, in an amount established by the municipality, not to exceed the maximum annual debt service on the bonds or obligations or the maximum annual lease rentals;(4) provide adequate money for working capital;(5) provide adequate money for making extensions and replacements to the extent not provided for through depreciation in subdivision (1); and(6) provide money for the payment of any taxes that may be assessed against the utility.(d) It is the intent of this section that the rates and charges produce an income sufficient to maintain the utility property in a sound physical and financial condition to render adequate and efficient service. Rates and charges too low to meet these requirements are unlawful.(e) The board may recommend to the municipal legislative body rates and charges sufficient to include a reasonable return on the utility plant of the municipality.(f) Rates and charges established under this section are subject to the approval of:(1) the municipal legislative body by ordinance; and(2) the commission, in accordance with the procedures set forth in IC 8-1-2.The commission shall approve rates and charges that are sufficient, in addition to the cash revenue requirements set forth in subsection (c), to include a reasonable return on the utility plant of the municipality if the legislative body so elects.(g) Except for a municipally owned utility taxed under IC 6-1.1-8-3, the commission shall approve rates and charges sufficient to compensate the municipality for taxes that would be due the municipality on the utility property were it privately owned. These rates and charges in lieu of taxes may be transferred to the municipal general fund, if the legislative body so elects.(h) The commission shall grant a request that an increase in rates and charges not be effective until after the occurrence of a future event if the legislative body so requests.(i) A municipality that acquires and operates a utility under IC 8-1.5-2 by exercising the power of eminent domain may not impose a special rate, charge, surcharge, or other fee, other than rates and charges approved under this section or otherwise authorized by law, on the customers of the utility in order to pay for the costs associated with acquiring the utility through the exercise of the power of eminent domain.As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.105-1983, SEC.2; P.L.35-1990, SEC.28; P.L.172-2009, SEC.5.
IC 8-1.5-3-8.1Hearings; adoption of rates and chargesSec. 8.1. (a) This section applies to all municipally owned water utilities that have been taken out of the jurisdiction of the commission for the approval of rates and charges.(b) After the introduction of the ordinance establishing the rates and charges under section 8 of this chapter, but before the ordinance is finally adopted, the municipal legislative body shall hold a public hearing at which users of the waterworks, owners of property served or to be served by the waterworks, and other interested persons may be heard concerning the proposed rates and charges. Notice of the hearing, setting forth the proposed schedule of rates and charges, shall be:(1) published in accordance with IC 5-3-1 (IC 5-3-1-1 through IC 5-3-1-9);(2) mailed to owners of vacant or unimproved property if the ordinance includes a fee for water service to vacant or unimproved property; and(3) mailed to users of the waterworks located outside the municipality’s corporate boundaries.The notice may be mailed in any form so long as the notice of hearing is conspicuous. The hearing may be adjourned from time to time.(c) After the hearing, the municipal legislative body shall adopt the ordinance establishing the rates and charges, either as originally introduced or as modified. A copy of the schedule of rates and charges adopted shall be kept on file and available for public inspection in the offices of the board and the municipal clerk.(d) The rates and charges established for any class of users or property shall be extended to cover any additional property that is subsequently served and falls within the same class, without any hearing or notice.(e) The municipal legislative body may change or readjust the rates and charges in the same manner as they were established.(f) Rates and charges collected under this chapter are considered revenues of the waterworks.As added by P.L.77-1991, SEC.1.IC 8-1.5-3-8.2Objections to rates and charges; bonds; hearingsSec. 8.2. (a) This section applies to all municipally owned water utilities that have been taken out of the jurisdiction of the commission for the approval of rates and charges.(b) Owners of property connected or to be connected to and served by the waterworks authorized under this chapter may file a written petition objecting to the rates and charges of the waterworks so long as:(1) the petition contains the names and addresses of the petitioners;(2) the petitioners attended the public hearing provided under section 8.1 of this chapter;(3) the written petition is filed with the municipal legislative body within five (5) days after the ordinance establishing the rates and charges is adopted under section 8.1 of this chapter; and(4) the written petition states specifically the ground or grounds of objection.(c) Unless the objecting petition is abandoned, the municipal clerk shall file in the office of the clerk of the circuit or superior court of the county a copy of the rate ordinance or ordinances together with the petition. The court shall then set the matter for hearing at the earliest date possible, which must be within twenty (20) days after the filing of the petition with the court. The court shall send notice of the hearing by certified mail to the municipality and to the first signer of the petition at the address shown on the petition. All interested parties shall appear in the court without further notice, and the municipality may not conduct any further proceedings concerning the rates and charges until the matters presented by the petition have been heard and determined by the court.(d) At the discretion and upon direction of the court, the petitioners shall file with the petition a bond in the sum and with the security fixed by the court. The bond must be conditioned on the petitioners’ payment of all or part of the costs of the hearing and any damages awarded to the municipality if the petition is denied, as ordered by the court.(e) Upon the date fixed in the notice, the court shall, without a jury, hear the evidence produced. The court may confirm the decision of the municipal legislative body or sustain the objecting petition. The order of the court is final and conclusive upon all parties to the proceeding and parties who might have appeared at the hearing, subject only to the right of direct appeal. All questions that were presented or might have been presented are considered to have been adjudicated by the order of the court, and no collateral attack upon the decision of the municipal legislative body or order of the court is permitted.(f) If the court sustains the petition, or if the petition is sustained on appeal, the municipal legislative body shall set the rates and charges in accordance with the decision of the court.
The NewAlbanist 
I have a well known belief that EDIT taxes may not be used to subsidize sewer rates. I have not expressed an opinion regarding the use of other tax money, but a consistent application of my reasoning would say that no tax money whatsoever may be used to calculate “reasonable and just rates and charges for service.”
I do not contend that EDIT funds are restricted. Those tax monies, since 2005, can be used for any lawful governmental purpose. I don’t think they should have been freed up, but the lifting of the restriction is all part of the ideological attempt to force local residents to decide how much to tax themselves for the services desired. Gov. Mitchell Daniels and a cooperative legislature continue to restrict even the most effective and efficient cities from growing their general funds, and some cities immediately emptied their EDIT accounts. New Albany did not, choosing to reserve EDIT proceeds, for the most part, to economic development.
In any case, I don’t contend that EDIT can’t be used for any lawful purpose of the city.
But the sewer utility is independent. It is not the city. It is regulated by the city council in the setting of its rates, but it is not otherwise controlled by the city.
I do contend that the sewer utility may not accept EDIT. The list of items that constitute a “reasonable and just” rate is lengthy, but the RATE must pay those expenses…not a lesser rate, plus a taxpayer subsidy.
This is even more applicable in New Albany in that many ratepayers (more than 20 percent) are not city taxpayers. City (income) taxpayers (for EDIT) and other city taxpayers may not be compelled to subsidize the rates of the utility.
Other than bare assertions, and the occasional fictitious citation to nonexistent laws, I have yet to be challenged on this assertion.
Proof that EDIT can’t substitute for charges to the ratepayers?
(5) provide adequate money for making extensions and replacements to the extent not provided for through depreciation in subdivision (1);
The only argument made for using EDIT has been to help pay for EPA-mandated extensions and replacement not provided for through depreciation. The law says the ratepayers must pay this – not the significantly smaller subset of people who pay EDIT that winds up in city coffers.
A serious case can be made that depleting taxpayer funds to subsidize rates creates a discriminatory rates regime in that city EDIT payers are paying a higher-than-lawful rate.
Mr. Coffey’s argument (that those INDIVIDUALS outside the city who don’t pay EDIT that winds up in city coffers) pay an additional 50% on their rate is mooted by established case law that ruled it lawful to charge such people at least 50 percent more than the rate for city residents and businesses.
Mr. Coffey, Mr. Gahan, Mr. McLaughlin, Mr. Price, and even Mayor England still have not justified their support for keeping the rates lower for businesses through the use of taxes those businesses do not pay.
My rudimentary research confirms that a Redevelopment Commission (manager of a TIF) may
the allocation fund…may be used [for]…[t]he construction, reconstruction, or repair of any infrastructure (including streets, sidewalks, and sewers) within or serving the allocation area.
We were told that it is difficult, but not impossible, to demonstrate the connection, but that in our current time frame, it is practically impossible to do so in time to prevent a takeover of the utility (or, to lose the SRF/bondholder deal).
As a technical matter, I think the Redevelopment Commission, using TIF proceeds, can lawfully pay for new projects. I do not know that this is relevant to the current rates ordinance.
What is certain is that the city council has only 4 more days to develop an ordinance acceptable to our bondholders and pass it.
Uncomfortable it may be, and if history began right now, it would be understandable that the council feels it is being rushed.
But what remains unsaid is that this council knew in November that this crisis was imminent. They knew it was coming. In fact, they were told it would likely be an even greater increase. They did nothing.
Then, on January 28, they were informed of a 70 percent rate increase recommendation. They did nothing to find available TIF monies.
Then, on February 29, they were informed of a 36-19 stepped increase. They did nothing to find available TIF monies.
Thursday’s meeting is not the time to declare “we didn’t have time” to consider modifications to the SRF offer.