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Middlebury council reviews $22.9 million wastewater upgrade and seeks redevelopment funding to avoid large rate hikes
Summary
Council members heard an engineer’s estimate that a full wastewater treatment upgrade would cost about $22.9 million, with a two‑phase plan that would split phase one (around $9.8 million) into a 2030 build. Staff proposed seeking $3.75 million from local redevelopment/TIF funds and said Elkart County redevelopment has considered contributing up to $9 million; the draft will go to county redevelopment for vetting before the council considers formal approval.
Council members on Feb. 2 reviewed preliminary engineering figures and a funding concept for a multi‑phase wastewater treatment plant upgrade. Staff presented a Donahue preliminary engineering report that estimated the full program at about $22.9 million and described a two‑phase approach with phase one targeted for 2030 at roughly $9.8 million. The report proposes splitting costs so that county redevelopment districts would contribute significantly while the town uses its redevelopment/TIF resources to limit rate increases for utility customers.
Why it matters: Town staff told council that without external contributions the project could trigger “significant” rate increases for sewer users. The recommended funding approach — in staff’s draft — envisions up to $9 million from county redevelopment districts and approximately $3.75 million from Middlebury’s redevelopment/TIF districts toward phase one, with the remainder covered through other financing mechanisms. Staff said the county redevelopment commission will consider a version of the draft this week and that the town council would need to approve any final agreement.
Details and context: Staff explained the county’s interest was tied to a request by Elkart County to extend sewer to industrial land north of the toll road; the county’s regional sewer district would maintain new lines while the town would continue to treat wastewater. Staff said the draft plan allocates roughly $6 million from a State Road 13 TIF district and $3 million from an Mberry East TIF district (county TIFs) toward the county portion, with town TIFs (Elroy and downtown) carrying portions earmarked for 2028–2030. Staff also noted other possible funding routes, including State Revolving Fund (SRF) and EDA grants, and cautioned that the draft still needs county and redevelopment vetting.
Council members asked about who controls design and how the connections would be managed if areas are annexed in the future; staff said Donahue (the town’s consultant) would likely do design work and emphasized that any future dedicated lines would need to be brought to town standards before transfer. Staff reiterated the upgrade is driven in part by existing condition and by requests from county partners seeking treatment capacity.
Next steps: Staff plans to circulate draft agreements (including a sample agreement used for a prior connection) and to update council after the county redevelopment meeting. No formal funding commitment or binding agreement was made at the Feb. 2 meeting; staff said the matter will return to council after county redevelopment and additional review.
