Customers want answers after Muncie Sanitary District rate increases and property purchases

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MUNCIE, Ind. -- After an announcement that The Muncie Sanitary District would increase their rates, customers voiced their concerns to FOX59 News. We spoke to sanitary district board members about why they're buying up properties and what the plan is for the White River Levee.

In 2014, The Muncie Sanitary District starting purchasing homes and businesses along the White River. More than 50 properties have since been purchased. Many of them have been torn down. Streets that used to be lined with homes are now vacant and empty lots, plots of land with only grass, dramatically changing the city landscape.

Muncie Sanitary District board members said it all goes back to the levee. In 2009, the city was notified by FEMA that the current levee was no longer certified. That meant the city would be responsible for any flood damage if the levee would fail. The last major flood on record in Muncie was 1913.

FEMA states; "In 2014, FEMA began coordinating with the City of Muncie through FEMA’s Levee Analysis and Mapping Procedures (LAMP) process."

The sanitary board hired engineering firm, CBB, to locate the areas most at risk for potential flooding.

“We have two options. We can either fix the levee to the army core and FEMA standards, or we can leave it like it is," said Mike Cline, vice president of the Muncie Sanitary Board.

Cline said the board choose the cheaper option. To fix the levee, it would have cost the city millions of dollars. The option the city chose was to buy up properties and tear them down, leaving the areas vacant. If the city left the levee as is and didn't purchase and tear down properties, homeowners would be required to purchase flood insurance. The average cost would be about $100/month.

“If we took their assessed values of the homes that we would need to start paying flood insurance, it’s $1.3 million," Cline said. He added, "that’s a pretty weighty decision for us to say, 'we can’t afford to fix the levee, so all of a sudden you’re going to start paying insurance.' That’s a big decision.”

Now, more than $8 million later, the city owns huge blocks of land. Areas like N. Elm St. and N. Madison St. once lined with homes, now are grassy areas, with no plans to rebuild due to flood insurance rates.

The next phase of the project means even more homes will be torn down. District board members said they will start work on area above the levee, the Whitley community. More homes will be bought and torn down.  At the end of the projects multi-phase entirety, board members said they would have bought less than 200 homes at a cost of $190 million.

“I think a lot of this came about with the acquisition of all these properties. Makes us wonder if everything else is being done in a manner that is in the best interest of your customers," one resident said.

Residents are wondering who is front the bill for this massive project. The answer is simple, they are. Through rate increases, the district board said they hope to fully fund the project. Customers will likely see their sanitary rates go up around $3 this month.

Board members said by buying homes and tearing them down, they are saving taxpayers millions of dollars. Still, many are questioning if the city paid too much for some properties. One example is a property on N. Mulberry Street. In 2015, the Delaware County Assessors Office valued the property at $1,400. Then, it was reassessed at a value of $23,000. Public records show the sanitary district paid $67,000 for the land.

Another example is the old flea market. The building is still standing, but vacant. The parcels were valued by the assessors office at about $4,600 before the sanitary district purchased it for $395,000. FOX59 wanted to know why the district was paying way more than what the properties are worth.

“We did get two real estate estimates on that and we paid the middle of those two," explained William Smith, Muncie Sanitary Board President.

Sanitary District Administrator, Nikki Grigsby, showed FOX59 documentation in which two private companies assessed the value for the land. The documents showed that the estimates were near $395,000 for the flea market land. There was no explanation as to why the assessors office valued the property at a much lower amount.

Questions are swirling about if the sanitary district has any involvement in a possible FBI investigating into city business. When asked if the FBI had interviewed or spoken to any members of the sanitary department or board, Smith responded “no absolutely not. Not the board or the administrator.”

FEMA is still waiting for the accreditation package from Muncie.

"FEMA is coordinating with the city to properly identify risks associated with the Muncie levees and will be discussing accreditation options for each levee along with submittal deadlines when the Local Levee Partnership Team meets later this summer," FEMA representatives said. FEMA also stated no grants were available for levee projects.

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