Sewage seeps into politics as lawmaker's Gary agency sues cities she represents

Chicago Tribune

22-03-2025

A dispute over wastewater treatment user rates is pitting a Gary state lawmaker against communities she represents in the Indiana General Assembly.
State Rep. Ragen Hatcher, D-Gary, whose District 3 seat includes Gary, Hobart, Lake Station and New Chicago, is also the executive director of the Gary Sanitary District.
On Jan. 15, the GSD and the city of Gary filed a federal lawsuit against Hobart, Lake Station and the Merrillville Conservancy District seeking a declaratory judgment to pave the way to raise user rate fees for treating their wastewater.
A declaratory judgment typically spells out the legal relationship between the parties and their legal obligations.
Gary contends the user rates for the three communities are decades old and too low to meet the requirements of a federal consent decree.
In the 1980s, the Environmental Protection Agency cited the GSD for the pumping of toxic sludge laced with PCBs into a small lagoon in violation of the Clean Water Act. A judge later ordered a cleanup.
The lawsuit has further soured relations between Hatcher and Lake Station and Hobart officials.
In last year's primary, leaders in the two cities supported Hatcher's opponent Heather McCarthy who's also Hobart city attorney. Hatcher went on to win the primary and the general election to earn a fourth term in the General Assembly.
In January, Gary Mayor Eddie Melton named Hatcher, an attorney who also holds an MBA, as executive director of the Gary Sanitary District, and she left her post as the city's community development director.
Meanwhile, Hatcher represents Gary, Hobart and Lake Station during the week in Indianapolis in Statehouse matters. The session ends April 29.
Few officials opted to talk about the rate dispute.
Hobart Mayor Josh Huddlestun declined comment and a representative from the MCD didn't return a call for comment.
Hatcher also declined to comment, citing the pending lawsuit, and attorneys for both sides didn't return calls for comment.
Earlier, she said in an interview at a city event March 10 that an independent study was ongoing on the rates.
'What we know right now about Merrillville, Hobart and Lake Station is they are paying less than what it costs to treat their wastewater.'
The complaint alleged the shortfall impacts Gary residents.
'Specifically, MCD and Hobart's user charge rates have placed a disproportionate burden on the citizens of Gary, who are paying substantially higher rates than those directly supported by MCD and Hobart,' the complaint said.
Lake Station Mayor Bill Carroll, however, disagreed. He said he doesn't feel Hatcher serves the interests of the communities she represents.
'If I can't be paid as a fireman… but yet Ragen Hatcher can be a representative for the communities she's trying to increase the user rate on, I think it's a huge conflict of interest,' said Carroll, a Democrat like Hatcher and Huddlestun.
After he became mayor, Carroll joined the Lake Station Volunteer Fire Department, but he doesn't accept pay from the city as a fireman because the city pays his salary as mayor.
'It's not fair to the communities she represents to try to put these huge rates on her constituents. There's no way the IURC (Indiana Utility Rate Commission) or anyone in their right minds think it's fair.'
It couldn't be determined if Hatcher's dual roles represented a conflict. It could be a question for the state's public access counselor, but the office is vacant. A spokesman for Gov. Mike Braun said the job would be filled by the end of March.
A public access counselor's ruling, however, is non-binding.
After talks broke down, Indianapolis-based Taft Stettinius & Hollister LLP filed the lawsuit for the GSD and Gary in the U.S. District Court Northern District of Indiana in Hammond.
The case was assigned to Judge Philip P. Simon and Magistrate Judge Abizer Zanzi was also added.
The Merrillville Conservancy District along with Hobart and Lake Station hired Dentons Bingham Greenbaum LLP, of Jasper, to represent them. The same law firm also filed a petition for a review of rates and charges on Nov. 26, 2024, with the IURC.
The GSD first entered a wastewater treatment agreement with Lake Station in 1982. The complaint said the agreement expired in 2002, and GSD continued to provide treatment services under an implied fact contract at the 1982 rate.
Hobart entered a contract with GSD in 1984 and GSD signed a pact with the MCD in 1995. Hobart city officials weighed building their own sewage treatment plant in 2001 because of rising GSD rates, but ultimately didn't do it.
The communities have been haggling over user fees for several years.
In 2016, they contended GSD sludge disposal costs increased 69% over 2015 levels.
The federal case is ongoing with the last filing submitted March 17.
'At the end of the day, we want the communities to come together and work together,' said Carroll. Technically, we're all fighting for money and that hurts our districts.'