Utility board adopts rule allowing limited sewer extensions to out-of-city economic sites

The City of Bloomington Utilities Services Board on Jan. 29 adopted changes to Section 24.2 of its rules and regulations to allow the utilities director, with subsequent city-council ratification, to grant sanitary-sewer service extensions to properties outside municipal boundaries under Indiana Code 36-4-3-21 when those properties are identified by the city’s Department of Economic Development as strategic economic development sites.

Board members and staff said the measure is intended as a narrow, discretionary tool for large, job-creating projects rather than routine service to existing outside businesses. Unidentified Speaker 8 summarized the change as authority for the director to enter agreements so outside properties could “make an annual payment to the city as though it’s making a tax payment,” avoiding full annexation while compensating the city for services.

The amendment updates the first paragraph of Section 24.2 to specify that service will be provided when annexation is successful or via agreement and council ratification under Indiana Code 36-4-3-21 for developments the Department of Economic Development has identified as strategic economic development sites. The board discussed limiting the policy to major commercial or industrial projects rather than single-family residential lots.

During discussion, board members pressed how the policy would apply in practice. Unidentified Speaker 4 asked whether the change might allow the city to “punish businesses” by selectively extending service; Unidentified Speaker 8 and others said the intent is not punitive but to preserve city services and that outside counsel recommended the approach as a flexible tool amid changing state annexation law. The board also discussed contiguity requirements for voluntary annexation and said engineering feasibility, system capacity and a separate sewer-main-extension agreement would be required before service is extended.

A motion to adopt the changes was moved and seconded and the board approved the amendment. No vote tally by name was recorded in the transcript. The board directed staff to finalize language and noted staff could return with revised wording explicitly limiting use to new economic-development opportunities if members preferred.

The change references Indiana Code 36-4-3-21; staff noted further implementation would require case-by-case engineering review and separate contractual agreements for sewer-main construction and in-lieu payments to the city.