CHAPTER 23. MUNICIPAL SEWAGE WORKS
IC 36-9-23
Chapter 23. Municipal Sewage Works
IC 36-9-23-1
Application of chapter
Sec. 1. This chapter applies to all municipalities.
As added by Acts 1981, P.L.309, SEC.96.
IC 36-9-23-2
Municipal powers
Sec. 2. A municipality may:
(1) acquire, construct, improve, operate, and maintain sewage
works under this chapter;
(2) acquire, by gift, grant, purchase, condemnation, or
otherwise, all lands, rights-of-way, and other property that are
necessary for the sewage works;
(3) issue revenue bonds to pay the cost of acquiring,
constructing, and improving the sewage works and property;
and
(4) lease sewage works from a person, an entity, a corporation,
a public utility, or a unit for a term not to exceed fifty (50)
years.
A sewage works leased under this section is subject to IC 5-16-7.
As added by Acts 1981, P.L.309, SEC.96. Amended by P.L.35-1990,
SEC.68.
IC 36-9-23-3
Supervision and control
Sec. 3. The construction, acquisition, improvement, operation, and
maintenance of sewage works under this chapter shall be supervised
and controlled by the municipal works board. However, the
municipal legislative body may, by ordinance, transfer the powers
and duties of the works board under this chapter to:
(1) a sanitary board established under section 4 of this chapter;
or
(2) the utility service board, if the municipality has such a board
operating one (1) or more municipally owned utilities.
As added by Acts 1981, P.L.309, SEC.96.
IC 36-9-23-4
Sanitary board
Sec. 4. (a) A sanitary board established under this chapter consists
of:
(1) the municipal executive; and
(2) two (2) persons appointed by the municipal legislative body,
one (1) of whom must be a registered professional engineer.
The legislative body may not appoint any paid or unpaid municipal
officer or employee to the board.
(b) One (1) of the original appointees to the sanitary board serves
for a term of two (2) years, and the other serves for a term of three
(3) years.
(c) When the term of a member of the sanitary board expires, a
successor shall be appointed for a term of three (3) years in the
manner prescribed by subsection (a).
(d) Vacancies on the sanitary board shall be filled for the
unexpired term in the manner prescribed by subsection (a).
(e) The municipal executive is the chairman of the sanitary board.
(f) The sanitary board shall select a vice chairman from its
members, and shall select a secretary and a treasurer, who need not
be members of the board. However, the board may combine the
offices of secretary and treasurer into a single office of
secretary-treasurer. The officers selected under this subsection serve
at the pleasure of the board.
(g) Each member of the sanitary board is entitled to the
compensation, if any, that is fixed by:
(1) the executive, with the approval of the legislative body, in
a city; or
(2) the legislative body, in a town;
as a salary or as payment for meetings attended. Each member is also
entitled to payment for reasonable expenses incurred in the
performance of his duties.
(h) The compensation of the secretary and treasurer of the sanitary
board shall be fixed by:
(1) the executive, with the approval of the legislative body, in
a city; or
(2) the legislative body, in a town.
(i) The municipal legislative body shall fix the bond required of
each member of the sanitary board and of the treasurer of the board.
These bonds shall be filed with the county recorder under
IC 5-4-1-5.1.
(j) The sanitary board may establish rules and bylaws for its own
government.
As added by Acts 1981, P.L.309, SEC.96.
IC 36-9-23-5
Board defined
Sec. 5. As used in sections 6 through 37 of this chapter, "board"
means:
(1) the municipal works board; or
(2) if the municipality has transferred the powers and duties of
the works board under section 3 of this chapter, the:
(A) sanitary board; or
(B) utility service board;
to which those powers have been transferred.
As added by Acts 1981, P.L.309, SEC.96. Amended by P.L.1-2007,
SEC.247; P.L.114-2008, SEC.28.
IC 36-9-23-6
Contracts
Sec. 6. (a) The board may enter into all contracts or agreements
necessary or incidental to the performance of its duties and the
execution of its powers under this chapter. However, the board may
not obligate itself or the municipality beyond the extent to which
money has been or may be provided under this chapter.
(b) A contract relating to the financing of the acquisition or
construction of any sewage works, or to any trust indenture
authorized by this chapter, is not effective until it is approved by the
municipal legislative body.
(c) A contract or an agreement with any contractor or contractors
for labor, equipment, or materials shall be let and entered into under
the statutes governing the letting of contracts by agencies of
municipalities.
(d) The board or any public utility (as defined in IC 8-1-6-3)
contracting with the board for the treatment, purification, or disposal
in a sanitary manner of liquid and solid waste, sewage, night soil, or
industrial waste may contract with a water utility furnishing water
service to users or property served in the municipality or by the
public utility to do the following:
(1) Ascertain the amount of water consumed.
(2) Compute the amount of the charge to be billed for sewer
services to each user or property served.
(3) Bill and collect the amounts due for sewer services.
(4) Discontinue water service to delinquent sewer users.
A contract under this subsection is enforceable without the approval
of the Indiana utility regulatory commission.
(e) The procedures in IC 36-9-25-11.5(a) through
IC 36-9-25-11.5(e) apply to the discontinuance of water service to a
delinquent sewer user under a contract between the board and a
water utility described in subsection (d).
As added by Acts 1981, P.L.309, SEC.96. Amended by P.L.27-1995,
SEC.7; P.L.34-1999, SEC.6.
IC 36-9-23-7
Board; operation of works
Sec. 7. After the completion or acquisition of the sewage works,
the board shall operate, manage, and control the works and may
order and complete any extensions or improvements it considers
necessary. The board shall adopt rules for the use and operation of
the sewage works and of other sewers and drains connected to the
works, to the extent that they may affect the operation of the works.
As added by Acts 1981, P.L.309, SEC.96.
IC 36-9-23-8
Board; restoration of works
Sec. 8. If requested to do so by the proper authority, the board
shall, to the extent possible from money provided under this chapter,
restore to their original condition any public ways or public works
damaged by the board in the performance of its duties.
As added by Acts 1981, P.L.309, SEC.96.
IC 36-9-23-9
Board; authority relating to employees; payment of expenses
Sec. 9. The board may employ, fix the compensation of, and
prescribe the duties of engineers, architects, inspectors,
superintendents, managers, collectors, attorneys, and any other
employees it considers necessary. The expenses incurred under this
section shall be paid solely from money provided under this chapter.
As added by Acts 1981, P.L.309, SEC.96.
IC 36-9-23-10
Ordinance prior to construction or acquisition of works; contents;
notice
Sec. 10. (a) Before the construction, acquisition, or lease of any
sewage works under this chapter, the municipal legislative body shall
adopt an ordinance or ordinances:
(1) setting forth a brief general description of the works and, if
the works are to be constructed, a reference to the plans and
specifications prepared and filed by an engineer chosen by the
board;
(2) setting forth the cost of the works, as estimated by the
engineer;
(3) ordering the construction, acquisition, or lease of the works;
(4) setting forth an estimate of the fees for the several classes of
users or property to be served;
(5) ordering the issuance of revenue bonds of the municipality
under this chapter, in the amount necessary to pay the cost of
the works; and
(6) containing any other necessary provisions.
(b) Unless all or part of the works is being constructed in
compliance with an order of the department of environmental
management to abate water pollution, notice of the adoption and the
purport of the ordinance or ordinances shall immediately be given by
publication in accordance with IC 5-3-1.
As added by Acts 1981, P.L.309, SEC.96. Amended by P.L.143-1985,
SEC.197; P.L.35-1990, SEC.69.
IC 36-9-23-11
Cost estimate
Sec. 11. The engineer's estimate of costs under section 10(a)(2) of
this chapter must include:
(1) the cost of acquiring or constructing the sewage works;
(2) the cost of all property, easements, franchises, and other
rights considered necessary or convenient for the works;
(3) interest on bonds before and during the construction or
acquisition, and for a period not exceeding twenty-four (24)
months after completion of the construction or acquisition;
(4) engineering expenses, including expenses for plans,
specifications, and surveys;
(5) legal expenses;
(6) expenses for estimates of cost and of revenues;
(7) administrative expenses; and
(8) other expenses necessary or incidental to:
(A) determining the feasibility of the works;
(B) financing the works;
(C) constructing or acquiring the works; and
(D) placing the works in operation.
As added by Acts 1981, P.L.309, SEC.96.
IC 36-9-23-12
Petition objecting to construction or acquisition of works; court
hearing; notice; bond; further proceedings on project prohibited
if petition sustained
Sec. 12. (a) This section does not apply to undertakings in
compliance with orders of the department of environmental
management for which no objections are authorized.
(b) Forty (40) or more owners of property connected or to be
connected to and served by sewage works authorized by an ordinance
under section 10(a) of this chapter may file a written petition
objecting to the construction or acquisition of the works. The petition
must be filed with the municipal legislative body, must contain the
names and addresses of the petitioners, and must set forth the
following objections:
(1) The works are not required by the public needs.
(2) The cost of the proposed works would be excessive
considering the value of the service to be rendered to the
affected community.
(3) Any other ground of objection.
The petition shall be filed within twenty (20) days after the
publication of notice under section 10(b) of this chapter.
(c) Unless the proposed works are 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 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 ten (10)
signers of the petition at the addresses 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 works until the matters presented by the petition have been heard
and determined by the court.
(d) The petitioners shall file with their 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 it is sustained on appeal,
the municipal legislative body may not institute any further
proceedings for the construction of the sewage works described in
the ordinance or ordinances for a period of one (1) year after the date
of the order, unless the construction is required by a subsequent
order of the state department of environmental management to abate
water pollution.
As added by Acts 1981, P.L.309, SEC.96. Amended by P.L.143-1985,
SEC.198.
IC 36-9-23-12.5
User moving to new residence; forwarding final bill
Sec. 12.5. Whenever a sewer user moves to a different residence
from the one being supplied sewer service, but within the same
municipality, the sewer utility shall forward the user's final sewer bill
to the new address.
As added by P.L.349-1985, SEC.4.
IC 36-9-23-13
Preliminary expenses; payment from general fund; repayment
from bond proceeds
Sec. 13. (a) All necessary preliminary expenses actually incurred
by the board before the issuance and delivery of revenue bonds,
including expenses incurred in:
(1) making surveys;
(2) estimating costs and revenues;
(3) employing engineers or other employees;
(4) giving notices; and
(5) taking options;
may be paid in the manner prescribed by this section.
(b) The board shall, from time to time, certify the items of
expense to the municipal fiscal officer, directing him to pay the
amounts certified. The fiscal officer shall draw a warrant or warrants
in the correct amounts on the general fund, without appropriation. If
there is no money in the general fund, the fiscal officer shall request
the municipal legislative body to transfer from other funds of the
municipality an amount sufficient to meet the items of expense, or to
make a temporary loan for this purpose. The legislative body shall
comply with the request promptly.
(c) Money transferred under subsection (b) shall be repaid by the
board to the fund from which it was taken, out of the first proceeds
of the sale of revenue bonds and before any other disbursements are
made from those proceeds. The amount advanced to pay the
preliminary expenses constitutes a first charge against the proceeds
resulting from the sale of the revenue bonds until repaid.
As added by Acts 1981, P.L.309, SEC.96.
IC 36-9-23-14
Condemnation; authority; security for damages to owner from
failure to accept and pay for property; purchase or condemnation
of existing works; option or contract; repair estimate
Sec. 14. (a) A municipality may, in the manner prescribed by
IC 32-24, condemn:
(1) sewage works; and
(2) any land, easements, franchises, and other property it
considers necessary for the construction of sewage works or for
improvements to sewage works.
However, the municipality may pay for any property condemned or
purchased only from money provided under this chapter.
(b) In any proceedings to condemn, orders that are just to the
municipality and to the owners of the property to be condemned may
be made. An undertaking or other security securing the property
owners against any loss or damage resulting from the failure of the
municipality to accept and pay for the property may be required, but
the undertaking or security imposes liability upon the municipality
only in the amount that may be paid from money provided under this
chapter.
(c) If the board wants to purchase sewage works, it may obtain
and exercise an option for the purchase of the works, or may enter
into a contract for the purchase in the manner and under the terms
and conditions that it considers proper.
(d) If the board wants to purchase or condemn sewage works
already constructed, it must, at or before the time of adoption of the
ordinance authorizing the acquisition, determine what repairs,
replacements, additions, and other actions are required to make the
works effective for their purpose. An estimate of the cost of these
actions shall be included in the estimate of cost made under section
11 of this chapter. These actions shall be taken upon the acquisition
of the works, as a part of the cost of the acquisition.
As added by Acts 1981, P.L.309, SEC.96. Amended by P.L.2-2002,
SEC.122.
IC 36-9-23-15
Acquisition of property subject to lien or other encumbrance
Sec. 15. Property upon which any lien or other encumbrance
exists may not be acquired under this chapter unless, at the time the
property is acquired, a sufficient sum of money is deposited in trust
to pay and redeem the lien or encumbrance in full.
As added by Acts 1981, P.L.309, SEC.96.
IC 36-9-23-16
Sewage treatment plant prerequisite; contracts and revenues;
construction of connecting sewers; payment of cost; effect on
maturity date of bonds
Sec. 16. (a) A municipality that does not have a sewage treatment
plant, and wants to acquire, construct, improve, operate, and
maintain sewage works other than a sewage treatment plant, may
proceed under this chapter only if it first contracts for the required
treatment of the sewage emanating from its works.
(b) A municipality owning and operating facilities for sewage
treatment may contract to treat all or part of the sewage of:
(1) any other municipality;
(2) any facility of the department of correction; or
(3) if a contract described in subdivision (2) is in effect, any
person or entity, a municipal corporation, a private corporation,
or a federal government facility that is located within five (5)
miles of the sewer line connecting the municipality to the
facility of the department of correction under the contract.
The contracts must be authorized by ordinance and are subject to
approval by the department of environmental management according
to rules adopted by the water pollution control board as to the
sufficiency of the provision for sewage treatment.
(c) Unless otherwise provided in the authorizing ordinance or
governing indenture, the revenues received by the owner under the
contract are considered a part of the revenues of the owner's sewage
treatment facilities, and shall be applied in accordance with the
applicable statutes.
(d) The necessary intercepting and connecting sewers and
appurtenances to connect the sewage treatment facilities and sewage
works of the contracting parties may be constructed in part or in
whole by either of the contracting parties, as provided in the contract.
For a municipality, the money to pay for this construction may be
provided by the issuance of bonds under the applicable statutes, as
part of the cost of the facilities or works of the respective parties.
(e) All bonds issued under this section are payable before the
expiration date of the contract. The parties may contract for the terms
of the bonds, and for any term or terms beyond the last maturity of
the bonds.
As added by Acts 1981, P.L.309, SEC.96. Amended by P.L.143-1985,
SEC.199; P.L.318-1989, SEC.1.
IC 36-9-23-17
Sources of funds
Sec. 17. (a) This chapter does not authorize a municipality to
make any contract or to incur any obligation that is not payable
solely from money provided under this chapter.
(b) Money for the costs of the sewage works or any improvement
of the works may be provided only:
(1) by the issuance of revenue bonds of the municipality;
(2) from a cumulative fund established by the municipality for
that purpose; or
(3) by grant or loan from the federal government or any of its
agencies.
(c) A municipality obtaining a loan from the federal government
or a federal agency may issue its obligations under this chapter to the
federal government or federal agency to evidence its indebtedness.
The obligations are not a corporate indebtedness of the municipality,
are payable solely from the revenues of the sewage works, and may
be made of equal priority or subordinate to any other revenue bonds
issued or to be issued under this chapter.
(d) Notwithstanding subsection (b), money to finance the
construction of any of the self-liquidating works authorized by this
chapter may be obtained from any state or federal agency.
(e) Notwithstanding subsection (b), any industrial cost recovery
received by the municipality and required to be paid by industrial
users under the terms of a federal grant are not considered revenues
under this chapter. The municipal legislative body may use industrial
cost recovery grants as provided by the terms of federal grants.
As added by Acts 1981, P.L.309, SEC.96.
IC 36-9-23-18
Bonds; liability of municipality; interest; redemption; form;
registration; sale; temporary bonds; additional bonds; exemption
from taxation
Sec. 18. (a) Revenue bonds issued under this chapter are payable
solely from the revenues of the sewage works for which they are
issued, and are not a corporate indebtedness of the municipality.
(b) The revenue bonds bear interest at a rate not to exceed the
maximum rate per annum specified by the municipal legislative
body, payable annually or at shorter intervals, and mature at the time
or times determined by ordinance.
(c) The revenue bonds may be made redeemable before maturity
at the option of the municipality, to be exercised by the board, at not
more than their par value plus a premium of five percent (5%), under
the terms and conditions fixed by the ordinance authorizing the
issuance of the bonds.
(d) The principal and interest of the revenue bonds may be made
payable in any lawful medium.
(e) The ordinance authorizing the issuance of the revenue bonds
must determine the form of the bonds, including any interest coupons
to be attached to them, and must fix the denomination or
denominations of the bonds and the place or places of payment of
their principal and interest, which may be at any bank or trust
company in Indiana or another state.
(f) The revenue bonds must contain a statement on their face that
the municipality is not obligated to pay the principal or interest on
them, except from the special fund provided from the net revenues
of the sewage works.
(g) The revenue bonds are negotiable instruments.
(h) Provision may be made for the registration of any of the
revenue bonds in the name of the owner as to principal alone, or as
to both principal and interest, but fully registered bonds shall be
made convertible to coupon bonds at the option of the registered
owner.
(i) The revenue bonds shall be executed in the same manner as
other revenue bonds issued by municipalities are executed.
(j) The revenue bonds shall be sold by the municipal fiscal officer
in the manner that is determined to be in the best interests of the
municipality, but at not less than par value and only at public sale in
accordance with the statutes concerning the sale of municipal bonds.
(k) Before the preparation of the definite revenue bonds,
temporary revenue bonds may be issued with or without coupons.
The temporary revenue bonds, which shall be issued in the manner
prescribed by this section, may be exchanged for the definite revenue
bonds when they are issued.
(l) If the proceeds of the revenue bonds are less than the cost of
the sewage works, additional revenue bonds may be issued under this
section to provide the amount of the deficit. Unless otherwise
provided in the ordinance authorizing the first issue, or in the trust
indenture authorized by section 22 of this chapter, the additional
revenue bonds are considered part of the first issue and are entitled
to payment from the same fund, without priority for the first issue.
(m) Subject to the provisions and limitations of any ordinance or
trust indenture pertaining to any outstanding revenue bonds,
additional bonds payable from the revenues of the sewage works may
be authorized and issued in the manner prescribed by this section, for
the purpose of improving any works acquired or constructed under
this chapter.
(n) Revenue bonds issued under this section are exempt from
taxation for all purposes.
As added by Acts 1981, P.L.309, SEC.96.
IC 36-9-23-19
Bonds; actions to contest validity; limitations
Sec. 19. Any action to contest the validity of revenue bonds issued
under this chapter must be brought at least five (5) days before the
advertised date for the sale of the bonds.
As added by Acts 1981, P.L.309, SEC.96.
IC 36-9-23-20
Bonds; disposition of proceeds; lien of holders or trustee
Sec. 20. (a) The first proceeds of any revenue bonds issued under
this chapter shall be used to repay all amounts advanced for
preliminary expenses under section 13 of this chapter. The remaining
proceeds of the bond issue shall be applied to the cost of acquiring,
constructing, or improving the sewage works.
(b) After the payments required by subsection (a) have been made,
any proceeds of the bond issue that have not been spent shall be
deposited in the sinking fund established by section 21 of this
chapter.
(c) The holders of the revenue bonds, or the trustees under section
22 of this chapter, have a lien on the bond proceeds until they are
applied under this section.
As added by Acts 1981, P.L.309, SEC.96.
IC 36-9-23-21
Bonds; sinking fund
Sec. 21. At or before the time of issuance of revenue bonds under
this chapter, the municipal legislative body, by ordinance, shall:
(1) establish a sinking fund for the payment of:
(A) the principal of and interest on the bonds; and
(B) the charges of banks or trust companies for making payment
of the principal or interest; and
(2) pledge the net revenues of the sewage works, after the
payment of the reasonable expense of operation, repair, and
maintenance of the works, to the payment of the expenses
described in subdivision (1).
The ordinance may also provide for the accumulation of reasonable
reserves in the sinking fund as a protection against default, and for
the payment of premiums on bonds retired by call or purchase under
this chapter.
As added by Acts 1981, P.L.309, SEC.96.
IC 36-9-23-22
Bonds; security by trust indenture permitted; terms of indenture
Sec. 22. (a) The municipal legislative body may secure revenue
bonds issued under this chapter by a trust indenture between the
municipality and a corporate trustee, which may be any trust
company or bank having the powers of a trust company in Indiana,
or another state. However, such a trust indenture may not convey or
mortgage any part of the sewage works.
(b) The ordinance authorizing the revenue bonds may provide
that:
(1) the trust indenture may contain reasonable provisions for
protecting and enforcing the rights and remedies of the
bondholders, including covenants setting forth the duties of the
municipality and the board in relation to:
(A) the construction, acquisition, improvement, operation,
repair, maintenance, and insurance of the sewage works; and
(B) the custody, safeguarding, and application of all money; and
(2) the works shall be contracted for, constructed, and paid for
under the supervision and approval of consulting engineers
employed or designated by the board and satisfactory to the
original bond purchasers or their successors, assigns, or
nominees, who may be given the right to specify the security to
be given by contractors and by any depository of the proceeds
of bonds, revenues of the works, or other money pertaining to
the works.
(b) The trust indenture may set forth the rights and remedies of
the bondholders and trustee, restricting the individual right of action
of bondholders as is customary in a trust indenture securing bonds
and debentures of corporations. Except as otherwise provided in this
chapter, the municipal legislative body may, by ordinance or in the
trust indenture, specify:
(1) the officer, board, or depository that shall collect the
proceeds of the sale of the bonds and the revenues of the
sewage works; and
(2) the method of disbursing the proceeds and revenues.
As added by Acts 1981, P.L.309, SEC.96.
IC 36-9-23-23
Bonds; enforcement rights of holders; receivership
Sec. 23. (a) The rights granted by this section are subject to any
restrictions contained in the ordinance authorizing the issuance of
revenue bonds or in any trust indenture securing the bonds.
(b) The holder of any revenue bonds or any coupons attached to
them, and the trustee, if any, may, either at law or in equity, protect
and enforce all rights granted by this chapter or under the ordinance
or trust indenture, including the making and collecting of reasonable
and sufficient fees for services rendered by the sewage works.
(c) If the principal or interest of any of the revenue bonds is not
paid on the date named in the bonds for payment, any court having
jurisdiction of the action may appoint a receiver to administer the
sewage works on behalf of the municipality, the bondholders, and the
trustee, if any. The receiver may:
(1) charge and collect fees sufficient to provide for the payment
of the expenses of operation, repair, and maintenance of the
works;
(2) pay any revenue bonds and interest outstanding; and
(3) apply the revenues in conformity with this chapter, the
ordinance authorizing the bond issue, and the trust indenture, if
any.
As added by Acts 1981, P.L.309, SEC.96.
IC 36-9-23-24
Fees; municipality subject to fees of sewage works
Sec. 24. The municipality is subject to the fees established under
this chapter or to fees established in harmony with this chapter, for
services rendered the municipality, and shall pay the fees when due.
The fees are considered part of the revenues of the sewage works and
are subject to the disposition authorized or required for other
revenues of the works.
As added by Acts 1981, P.L.309, SEC.96.
IC 36-9-23-25
Fees; factors used to establish; persons obligated to pay;
disposition of certain fees; adoption of different schedules
permitted
Sec. 25. (a) Subject to section 37 of this chapter, the municipal
legislative body shall, by ordinance, establish just and equitable fees
for the services rendered by the sewage works, and provide the dates
on which the fees are due.
(b) Just and equitable fees are the fees required to maintain the
sewage works in the sound physical and financial condition
necessary to render adequate and efficient service. The fees must be
sufficient to:
(1) pay all expenses incidental to the operation of the works,
including legal expenses, maintenance costs, operating charges,
repairs, lease rentals, and interest charges on bonds or other
obligations;
(2) provide the sinking fund required by section 21 of this
chapter;
(3) provide adequate money to be used as working capital; and
(4) provide adequate money for improving and replacing the
works.
Fees established after notice and hearing under this chapter are
presumed to be just and equitable.
(c) The fees are payable by the owner of each lot, parcel of real
property, or building that:
(1) is connected with the sewage works by or through any part
of the municipal sewer system; or
(2) uses or is served by the works.
Unless the municipal legislative body finds otherwise, the works are
considered to benefit every lot, parcel of real property, or building
connected or to be connected with the municipal sewer system as a
result of construction work under the contract, and the fees shall be
billed and collected accordingly.
(d) The municipal legislative body may use one (1) or more of the
following factors to establish the fees:
(1) A flat charge for each sewer connection.
(2) The amount of water used on the property.
(3) The number and size of water outlets on the property.
(4) The amount, strength, or character of sewage discharged
into the sewers.
(5) The size of sewer connections.
(6) Whether the property has been or will be required to pay
separately for any part of the sewage works.
(7) Whether the property, although vacant or unimproved, is
benefited by a local or lateral sewer because of the availability
of that sewer. However, the owner must have been notified, by
recorded covenants and restrictions or deed restrictions in the
chain of title of his property, that a fee or assessment for sewer
availability may be charged, and the fee may reflect only the
capital cost of the sewer and not the cost of operation and
maintenance of the sewage works.
(8) The cost of collecting, treating, and disposing of garbage in
a sanitary manner, including equipment and wages.
(9) The amount of money sufficient to compensate the
municipality for the property taxes that would be paid on the
sewage works if the sewage works were privately owned.
(10) Any other factors the legislative body considers necessary.
Fees collected under subdivision (8) may be spent for that purpose
only after compliance with all provisions of the ordinance
authorizing the issuance of the revenue bonds for the sewage works.
The board may transfer fees collected in lieu of taxes under
subdivision (9) to the general fund of the municipality.
(e) The municipal legislative body may exercise reasonable
discretion in adopting different schedules of fees, or making
classifications in schedules of fees, based on variations in:
(1) the costs, including capital expenditures, of furnishing
services to various classes of users or to various locations; or
(2) the number of users in various locations.
As added by Acts 1981, P.L.309, SEC.96. Amended by Acts 1981,
P.L.317, SEC.23; P.L.35-1990, SEC.70; P.L.114-2008, SEC.29.
IC 36-9-23-26
Fees; hearing; notice; adoption; readjustment
Sec. 26. (a) After the introduction of the ordinance establishing
fees under section 25 of this chapter, but before it is finally adopted,
the municipal legislative body shall hold a public hearing at which
users of the sewage works, owners of property served or to be served
by the works, and other interested persons may be heard concerning
the proposed fees. Notice of the hearing, setting forth the proposed
schedule of fees, shall be:
(1) published in accordance with IC 5-3-1;
(2) mailed to owners of vacant or unimproved property if the
ordinance includes a fee for sewer availability to vacant or
unimproved property; and
(3) mailed to users of the sewage works located outside the
municipality's corporate boundaries.
The notice may be mailed in any form so long as the notice of the
hearing is conspicuous. The hearing may be adjourned from time to
time.
(b) After the hearing, the municipal legislative body shall adopt
the ordinance establishing the fees, either as originally introduced or
as modified. A copy of the schedule of fees adopted shall be kept on
file and available for public inspection in the offices of the board and
the municipal clerk.
(c) Subject to section 37 of this chapter, the fees 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.
(d) The municipal legislative body may change or readjust the
fees in the same manner by which they were established.
(e) Fees collected under this chapter are considered revenues of
the sewage works.
As added by Acts 1981, P.L.309, SEC.96. Amended by Acts 1981,
P.L.45, SEC.62; P.L.77-1991, SEC.4; P.L.114-2008, SEC.30.
IC 36-9-23-26.1
Objections to rates and charges; bonds; hearings
Sec. 26.1. (a) Owners of property connected or to be connected to
and served by the sewage works authorized under this chapter may
file a written petition objecting to the rates and charges of the sewage
works so long as:
(1) the petition contains the names and addresses of the
petitioners;
(2) the petitioners attended the public hearing provided under
section 26 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 26 of this chapter;
and
(4) the written petition states specifically the ground or grounds
of objection.
(b) 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.
(c) 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.
(d) 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.
(e) If the court sustains the petition, or if it is sustained on appeal,
the municipal legislative body shall set the rates and charges in
accordance with the decision of the court.
As added by P.L.77-1991, SEC.5.
IC 36-9-23-27
Fees; collection upon commencement of construction; amount
Sec. 27. After a contract for the construction of sewage works has
been let and actual work has commenced, the municipality may bill
and collect fees for the services to be rendered, in an amount
sufficient to pay:
(1) the interest on the revenue bonds; and
(2) other expenses payable before the completion of the works.
As added by Acts 1981, P.L.309, SEC.96.
IC 36-9-23-28
Deposit to ensure payment of fees; amount of deposit; refund;
forfeiture; use to pay judgment; unclaimed deposits
Sec. 28. (a) The legislative body of a municipality that operates
sewage works under this chapter may, by ordinance, require the
owners, lessees, or users of property served by the works to pay a
deposit to ensure payment of sewer fees.
(b) The deposit required may not exceed the estimated average
payment due from the property served by the sewage works for a
three (3) month period. The deposit must be retained in a separate
fund.
(c) The deposit, less any outstanding penalties and service fees,
shall be refunded to the depositor after a notarized statement from
the depositor that as of a certain date the property being served:
(1) has been conveyed or transferred to another person; or
(2) no longer uses or is connected with any part of the
municipal sewage system.
A statement under subdivision (1) must include the name and address
of the person to whom the property is conveyed or transferred.
(d) If a depositor fails to satisfy costs and fees within sixty (60)
days after the termination of his use or ownership of the property
served, he forfeits his deposit and all accrued interest. The forfeited
amount shall be applied to the depositor's outstanding fees. Any
excess that remains due after application of the forfeiture may be
collected in the manner prescribed by section 31 or 32 of this
chapter.
(e) A deposit may be used to satisfy all or part of any judgment
awarded the municipality under section 31 of this chapter.
(f) A deposit made under this section that has remained unclaimed
by the depositor for more than seven (7) years after the termination
of the services for which the deposit was made becomes the property
of the municipality. IC 32-34-1 (unclaimed property) does not apply
to a deposit described in this subsection.
As added by Acts 1981, P.L.309, SEC.96. Amended by P.L.236-1993,
SEC.2; P.L.31-1995, SEC.8; P.L.2-2002, SEC.123.
IC 36-9-23-28.5
Unclaimed overpayments of sewer fees becoming property of
municipality
Sec. 28.5. (a) This section does not apply to a deposit made under
section 28 of this chapter.
(b) IC 32-34-1 does not apply to an overpayment described in
subsection (d).
(c) As used in this section, "payor" refers to the owner, lessee, or
user of property served by the sewage works who has paid for service
from the sewage works.
(d) An overpayment of sewer fees that remains unclaimed by a
payor for more than seven (7) years after the termination of the
service for which the overpayment was made becomes the property
of the municipality.
As added by P.L.40-1996, SEC.12. Amended by P.L.2-2002,
SEC.124.
IC 36-9-23-29
Connections to sewer by abutting property; approval required;
fees; liens; disposition of fees
Sec. 29. (a) If, as part of the construction of sewage works under
this chapter, a municipality constructs a sewer suitable for use as a
local or lateral sewer by abutting or adjoining property, it may charge
a fee for connections to the sewer. The fee must be based on the pro
rata cost of constructing a local or lateral sewer sufficient to serve
the property.
(b) The board may approve or disapprove applications for
connections and may fix the amount of the connection fee.
(c) A person who applies for a connection shall agree to pay the
connection fee. If payment is not made as agreed, the fee constitutes
a lien on the property for which the connection is made. Such a lien
may be enforced in the manner prescribed by section 34 of this
chapter.
(d) The municipal legislative body shall determine by ordinance
whether the proceeds of connection fees collected under this section
and other laws are to be used as:
(1) net revenues of the sewage works;
(2) payment toward the cost of construction of the works; or
(3) payment toward the cost of improving the works in the
future.
As added by Acts 1981, P.L.309, SEC.96.
IC 36-9-23-30
Municipal power to require connections to sewer and
discontinuance of privies, cesspools, septic tanks, and similar
structures; conditions; penalties; court order; attorney's fees
Sec. 30. (a) Subject to subsection (b), a municipality that operates
sewage works under this chapter or under any statute repealed by
IC 19-2-5-30 (repealed September 1, 1981) may require:
(1) connection to its sewer system of any property producing
sewage or similar waste; and
(2) discontinuance of the use of privies, cesspools, septic tanks,
and similar structures.
(b) A municipality may exercise the powers granted by subsection
(a) only if:
(1) there is an available sanitary sewer within three hundred
(300) feet of the property line of the affected property; and
(2) it has given notice by certified mail to the property owner at
the address of the property, at least ninety (90) days before the
date specified for connection in the notice.
(c) A municipality may establish, enforce, and collect reasonable
penalties for failure to make a connection under this section.
(d) A municipality may apply to the circuit or superior court for
the county in which it is located for an order to require a connection
under this section. The court shall assess the cost of the action and
reasonable attorney's fees of the municipality against the property
owner in such an action.
As added by Acts 1981, P.L.309, SEC.96. Amended by P.L.3-1990,
SEC.135.
IC 36-9-23-31
Fees; nonpayment; delinquency penalty; civil action to recover
Sec. 31. If fees assessed against real property under this chapter
or any statute repealed by IC 19-2-5-30 (repealed September 1, 1981)
are not paid within the time fixed by the municipal legislative body,
they are delinquent. A penalty of ten percent (10%) of the amount of
the fees attaches to the delinquent fees. The amount of the fee, the
penalty, and a reasonable attorney's fee may be recovered by the
board in a civil action in the name of the municipality.
As added by Acts 1981, P.L.309, SEC.96. Amended by P.L.3-1990,
SEC.136.
IC 36-9-23-32
Fees; nonpayment; creation of lien; priority; time of attachment;
notice; subsequent owners; release
Sec. 32. (a) Fees assessed against real property under this chapter
or under any statute repealed by IC 19-2-5-30 constitute a lien
against the property assessed. The lien is superior to all other liens
except tax liens. Except as provided in subsections (b) and (c), the
lien attaches when notice of the lien is filed in the county recorder's
office under section 33 of this chapter.
(b) A fee is not enforceable as a lien against a subsequent owner
of property unless the lien for the fee was recorded with the county
recorder before the conveyance to the subsequent owner. If the
property is conveyed before the lien can be filed, the municipality
shall notify the person who owned the property at the time the fee
became payable. The notice must inform the person that payment,
including penalty fees for delinquencies, is due not more than fifteen
(15) days after the date of the notice. If payment is not received
within one hundred eighty (180) days after the date of the notice, the
amount due may be expensed as a bad debt loss.
(c) A lien attaches against real property occupied by someone
other than the owner only if the utility notified the owner within
twenty (20) days after the time the utility fees became sixty (60) days
delinquent. However, the utility is required to give notice to the
owner if the owner has given the general office of the utility written
notice of the address to which the owner's notice is to be sent. A
notice sent to the owner under this subsection must be sent by
certified mail, return receipt requested, or an equivalent service
permitted under IC 1-1-7-1 to:
(1) the owner of record of real property with a single owner; or
(2) at least one (1) of the owners of real property with multiple
owners;
at the last address of the owner for the property as indicated in the
records of the county auditor on the date of the notice. The cost of
sending notice under this subsection is an administrative cost that
may be billed to the owner.
(d) The municipality shall release:
(1) liens filed with the county recorder after the recorded date
of conveyance of the property; and
(2) delinquent fees incurred by the seller;
upon receipt of a verified demand in writing from the purchaser. The
demand must state that the delinquent fees were not incurred by the
purchaser as a user, lessee, or previous owner, and that the purchaser
has not been paid by the seller for the delinquent fees.
As added by Acts 1981, P.L.309, SEC.96. Amended by P.L.131-2005,
SEC.7; P.L.113-2010, SEC.153.
IC 36-9-23-33
Unpaid fees and penalties
Sec. 33. (a) An officer described in subsection (b) may defer
enforcing the collection of unpaid fees and penalties assessed under
this chapter until the unpaid fees and penalties have been due and
unpaid for at least ninety (90) days.
(b) Except as provided in subsection (l), the officer charged with
the collection of fees and penalties assessed under this chapter shall
enforce their payment. As often as the officer determines is necessary
in a calendar year, the officer shall prepare either of the following:
(1) A list of the delinquent fees and penalties that are
enforceable under this section, which must include the
following:
(A) The name or names of the owner or owners of each lot
or parcel of real property on which fees are delinquent.
(B) A description of the premises, as shown by the records
of the county auditor.
(C) The amount of the delinquent fees, together with the
penalty.
(2) An individual instrument for each lot or parcel of real
property on which the fees are delinquent.
(c) The officer shall record a copy of each list or each individual
instrument with the county recorder who shall charge a fee for
recording the list or each individual instrument in accordance with
the fee schedule established in IC 36-2-7-10. The officer shall then
mail to each property owner on the list or on an individual instrument
a notice stating that a lien against the owner's property has been
recorded. Except for a county having a consolidated city, a service
charge of five dollars ($5), which is in addition to the recording fee
charged under this subsection and under subsection (f), shall be
added to each delinquent fee that is recorded.
(d) This subsection applies only to a county containing a
consolidated city. Using the lists and instruments prepared under
subsection (b) and recorded under subsection (c), the officer shall
certify to the county auditor a list of the liens that remain unpaid
according to a schedule agreed upon by the county treasurer and the
officer for collection with the next cycle's property tax installment.
The county and its officers and employees are not liable for any
material error in the information on the list.
(e) Using the lists and instruments prepared under subsection (b)
and recorded under subsection (c), the officer shall, not later than ten
(10) days after the list or each individual instrument is recorded
under subsection (c), certify to the county auditor a list of the liens
that remain unpaid for collection in the next May. The county and its
officers and employees are not liable for any material error in the
information on this list.
(f) The officer shall release any recorded lien when the delinquent
fees, penalties, service charges, and recording fees have been fully
paid. The county recorder shall charge a fee for releasing the lien in
accordance with IC 36-2-7-10.
(g) On receipt of the list under subsection (e), the county auditor
of each county shall add a fifteen dollar ($15) certification fee for
each lot or parcel of real property on which fees are delinquent,
which fee is in addition to all other fees and charges. The county
auditor shall immediately enter on the tax duplicate for the
municipality the delinquent fees, penalties, service charges,
recording fees, and certification fees, which are due not later than the
due date of the next installment of property taxes. The county
treasurer shall then include any unpaid charges for the delinquent
fee, penalty, service charge, recording fee, and certification fee to the
owner or owners of each lot or parcel of property, at the time the
next cycle's property tax installment is billed.
(h) After certification of liens under subsection (e), the officer
may not collect or accept delinquent fees, penalties, service charges,
recording fees, or certification fees from property owners whose
property has been certified to the county auditor. This subsection
does not apply to a county containing a consolidated city.
(i) If a delinquent fee, penalty, service charge, recording fee, and
certification fee are not paid, they shall be collected by the county
treasurer in the same way that delinquent property taxes are
collected.
(j) At the time of each semiannual tax settlement, the county
treasurer shall certify to the county auditor all fees, charges, and
penalties that have been collected. The county auditor shall deduct
the service charges and certification fees collected by the county
treasurer and pay over to the officer the remaining fees and penalties
due the municipality. The county treasurer shall retain the service
charges and certification fees that have been collected, and shall
deposit them in the county general fund.
(k) Fees, penalties, and service charges that were not recorded
before a recorded conveyance shall be removed from the tax roll for
a purchaser who, in the manner prescribed by section 32(d) of this
chapter, files a verified demand with the county auditor.
(l) A board may write off a fee or penalty under subsection (a)
that is for less than forty dollars ($40).
As added by Acts 1981, P.L.309, SEC.96. Amended by P.L.354-1987,
SEC.1; P.L.45-1990, SEC.8; P.L.1-1993, SEC.249; P.L.57-1993,
SEC.18; P.L.88-1995, SEC.11; P.L.236-1997, SEC.1; P.L.10-1997,
SEC.36; P.L.98-2000, SEC.29; P.L.171-2002, SEC.2; P.L.174-2003,
SEC.1; P.L.39-2008, SEC.6.
IC 36-9-23-34
Liens; foreclosure; attorney's fees
Sec. 34. (a) A municipality or board may foreclose a lien
established by this chapter in order to collect fees and penalties. The
municipality or board shall recover the amount of the fees and
penalties, and a reasonable attorney's fee. The court shall order the
sale to be made without relief from valuation or appraisement laws.
(b) Except as otherwise provided by this chapter, actions under
this chapter are subject to the general statutes regarding municipal
public improvement assessments.
As added by Acts 1981, P.L.309, SEC.96.
IC 36-9-23-35
Proceedings under other chapters not required; powers of
department of environmental management, water pollution control
board, and state department of health not affected
Sec. 35. No proceedings other than those prescribed by this
chapter are required for:
(1) the construction or acquisition of sewage works;
(2) the issuance or sale of bonds; or
(3) the establishment of fees;
under this chapter. However, the functions, powers, and duties of the
department of environmental management, the water pollution
control board, and the state department of health are not affected by
this chapter.
As added by Acts 1981, P.L.309, SEC.96. Amended by P.L.143-1985,
SEC.200; P.L.2-1992, SEC.894.
IC 36-9-23-36
Municipal powers; areas outside corporate boundaries
Sec. 36. (a) Except as provided in subsections (b) and (c), a
municipality may exercise powers granted by this chapter in areas
within ten (10) miles outside its corporate boundaries.