The city of North Vernon’s proposed annexation of surrounding properties has a potentially expensive side effect, via the extension of city sewer service.

The annexations, say city officials, run along State Road 7. Wastewater Superintendent Russell Vaught explains that the work to extend sewer service will take place in two parts. One following State Road 7 to County Road 750, the other to State Road 3.

The issue, explain city officials, is that in order for the project to break-even, cost-wise, 805 new customers will be needed to hook up to the service. At this time, only 102 new customers are available, Vaught told City Council members on Monday night.

Noting the disparity in numbers, council members pondered their options. They discussed the possibility of passing the costs on to current sewer customers, as well as the city covering the shortfall. Council member Connie Rayburn was vocal in her opposition to implementing a “major” increase in utility rates to customers, a position echoed by other members. Members indicated a desire to potentially pay for project out of Tax-Increment Financing funds.

Larry Greathouse, North Vernon city attorney, advised that the City Council and TIF will have to pay, noting that customers won’t be able to afford it.

Prior to Monday night’s adjournment, Clerk-Treasurer Shawn Gerkin expressed his opinion on the subject. He cautioned the council against counting on TIF dollars to fund the project. Gerkin noted the increased number of items that TIF money has been pledged to fund. While he stated that some TIF funding can be utilized, Gerkin suggested a blended approach: a combination of tax-dollars and an increase in utility rates. Gerkin suggested that such a move could be made with an increase of around $3 per month, per customer.

Council members agreed to consider the issue and agreed to work with the city’s Utilities Board in a way that makes the most sense.