The Indiana Utility Regulatory Commission could determine wastewater user rates the Gary Sanitary District could impose on Hobart, Lake Station, and the Merrillville Conservancy District.
The two cities and the conservancy district asked the IURC to resolve a stalemate between the parties in November 2024.
The IURC action stalled after the GSD and city of Gary filed a federal lawsuit in January 2025 seeking a declaratory judgment against the user communities to pave the way for the rate increase.
Gary contended it needed increased revenue to meet the demands of a four-decade-old federal consent decree involving violations of the Clean Water Act.
A federal judge dismissed the lawsuit for lack of jurisdiction on Feb. 12. The GSD didn’t appeal the ruling.
That moved the case back to the IURC. In filings, both sides sought time to negotiate to try to reach a settlement.
The three communities asked for the state to set a date for a prehearing conference on or before April 30 if no agreement is reached.
On April 15, the GSD asked the IURC to establish a schedule for the proceedings. It proposed an upfront negotiation period of 60 days and sought a May 7 answer from IURC.
GSD’s legal team, Taft Stettinius & Hollister in Indianapolis, said in a filing that the underlying dispute over wholesale sewage rates involves “complex factual, technical, and legal issues.”
It said the parties should be allowed to explore a negotiated resolution, if possible.
Last August, the Gary Sanitary Board approved wastewater user rate hikes for Hobart, Lake Station and the MCD upon the recommendation of GSD executive director Ragen Hatcher, a state representative whose District 3 includes Hobart and Lake Station, along with Gary.
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Hobart Mayor Josh Huddlestun attended the meeting and urged the board to negotiate with the communities.
“The city of Hobart is not opposed to a rate increase; we’re simply asking for a good faith negotiation… we understand everything is going up,” Huddlestun said during the Aug. 15, 2025, meeting.
GSD attorney Jewell Harris Jr. said Tuesday the rate increase hasn’t gone into effect because of the ongoing legal cases.
“We are under a requirement of the DOJ to make these changes to our rates,” Hatcher said at the meeting last August.
She defended the rate increase, saying it would support the city’s long-term control plan for combined sewer overflows.
The GSD first entered into a wastewater treatment agreement with Lake Station in 1982. The federal 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.
Carole Carlson is a freelance reporter with the Post-Tribune.