OH what bullshit. I feel for you, carbonout. Seems like some gov't always wants to have a hand in your pocket some way.
Obviously there is no independent trash service there or they couldn't enforce the water/trash system they have. And if you're hooked up to sewer lines, you're going to have to have 'their' water, too.

I agree with ronie, go into their office, council meetings, everywhere, with the humble and ultra polite attitude. Then go to the local newpaper, etc etc.
We too, have what we need with little money. It's all about what you want out of life, huh. We are the last holdouts in this area, and I flat refuse to pay $13K to hook up to rural water, then pay $35 a month in fees before I use a drop of it. Ditto for $20 a month for trash service. We recycle, compost and burn. Since I make everything I can from scratch, it'd take a year to fill a dumpster.