Huntertown officials and their advisors have developed a plan to accelerate housing development in the town’s northeast quadrant, but members of the Town Council and Utility Service Board are conflicted about the associated risks.

Although the construction of the town’s wastewater treatment plant has meant increased revenues as new houses line the growing landscape, whether or not several pending developments come on line depends on the town extending its sewer lines to that area — which will come with an investment.

During a June 15 joint meeting of Town Council and Utility Service Board members, town engineer Derek Frederickson explained a proposed project that would create capacity for just under 1,000 new sewer connections, which would satisfy the terms of all the primary plats already approved in the northeast quadrant, and leave enough reserve for more than 430 additional homes.

However, neither the town nor two of the three developers planning projects in that area are capable of fronting the nearly $1.6 million in capital needed to get the project off the ground. One developer, Jeff Thomas of Oakmont Development, has agreed to pay 100% of the construction costs associated with the project, with the caveat that Huntertown reimburse him for the project over a 10-year period with additional interest between 7% and 10%. In researching ways to pursue that agreement, the town has considered passing those costs onto new homebuyers through a $1,200 special connection fee and monthly capital surcharges over the 10-year period.

While some elected officials are concerned about the risk involved, Town Manager Beth Shellman said the proposed project presents a unique opportunity for the town.

“I’ve been doing this for 33 years — I have never seen this much development in my life,” she said. “If you don’t do something, you’re going to stop development in this area, or you’re going to slow it down.”

Frederickson has frequently referred to such projects as “growth pays for growth.”

Both Utility Service Board member Kerri Garvin and Town Council member Pat Freck had concerns about the town supporting the project financially, which is not concurrent with the process laid out in Huntertown’s current ordinances.

“I just don’t want to jump into a situation just because these developers keep banging on our door,” Garvin said.

Freck, in particular, felt the move could set an unwanted precedent. She also warned against potential pushback from residents who would have to pay the monthly surcharges and additional connection fees, particularly those purchasing “starter homes.”

“My concern is in the future, what if another large section of property … is purchased by a developer who wants the same kind of arrangement with Huntertown? Again, we’d have to enter into an agreement where basically Huntertown ends up paying 100% of the cost, which is unprecedented. … This could be the new norm,” Freck said.

Council member Mike Stamets said he was reluctant to support the agreement as well, stating that the development community was not supportive of the town’s decision to disconnect from Fort Wayne’s sewer and build its own plant.

Thomas, a co-owner of the business that developed Rolling Oaks in Huntertown, said the project would provide a long-term solution to extending utility services to future developments, including his company’s Cascata Estates project and the Preserves at the Quarry, which will bring a combined 130 homes to the town. Thomas said his interest in providing the upfront construction costs would help Huntertown grow at the rate it wants, which was a goal of the town’s sewer plant project. He has previously entered into similar agreements with other municipalities including the city of Fort Wayne.

Thomas said despite the COVID-19 pandemic, demand for new houses in the Fort Wayne area has continued to rise. Two months ago, his father’s real-estate business, Mike Thomas Associates, saw the most successful April in its history, he said.

“You guys have a lot of great things happening, but that’s got to continue right now through housing because that’s what you guys have from a demand standpoint,” Thomas told town officials June 15. “… You guys already made your biggest risk getting that plant up and running, and it’s already doing fantastic. I’m just looking at continuing to grow Huntertown and the investment you already put in it.”

Town Council President Mike Aker and council member Brandon Seifert each said they would be in favor of the agreement if it came to a vote.

“I understand there’s risk on both ends, but I think it gives the town the opportunity to aggressively pay off the amount that we’re going to owe,” Aker said. “And we can do that faster than what we would normally be able to do.”

“We do have growth still and it’s still going to come no matter what — and the market is indicating that,” Seifert added. “The reason why we built the wastewater treatment plant was because of growth, and we knew that it was coming. Now it sounds like someone on either side is trying to put the stops to it. Well, then why did we build a wastewater treatment plant …?”

Council member Gary Grant said he was in favor of the agreement as well, calling it far less of a risk than building a sewer plant in the first place.

“There’s a reason why the city fought us so hard. Even though at the time we were very minimal in their percentage of revenue that Huntertown was paying into their entire wealth of sanitary sewer systems, they knew this growth was coming also. … I don’t think it’s time to back down now,” Grant said.

Town attorney Dave Hawk, of Hawk, Haynie, Kammeyer and Smith, was less enthusiastic about town council members entering into an agreement without considering the effects of a potential downturn in the housing market. He asked council members to wait at least six months before making a decision, warning that the investment could affect current utility customers if development growth slows unexpectedly.

“Things change,” he said. “There’s an election coming up here in a few more months, and if it goes another direction you’ll see a significant drop in demand. … Whatever risk we take on is a risk that is very significant — it’s a risk to all of our rate payers. I’d like to ask you just to think about this and go slowly on this.”