Rules Committee to Vote Tonight on Utilities Deal

The City-County Council Rules and Public Policy committee will be meeting tonight to vote on Prop 131 and Prop 132, which involve the proposes sale of the water and sewer utilities and floating an $189 million bond, respectively. The meeting is scheduled for 5:30 pm in room 260 of the City-County Building.

The Rules committee has amended Prop 131 to require that the final version of the actual sales deal come back before the Council for final approval. This is an excellent move and rightly values the Council as an independent arm of City government.

There are 4 fundamental issues regarding the sale of the water and sewer utilities to Citizen Energy, that I think are most important.

1) DEDICATION OF FUNDS: The proceeds from the sale (Prop 131) and the increased sewer utility PILOT (Prop 132) are not dedicated to street and sidewalk repair and installation. From what I hear, the Mayor's office is willing to look at inking down exactly how the money can be spent, but some on the Council want to leave it loose in case a future Council wants to spend it otherwise.

We heard verbal promises by the Republican Council and Democrat Mayor, Bart Peterson, on the first stormwater drainage fee that appears on property tax bills. The promise was that the funds would be used to finance new drainage projects, something the City had been unable to find the funds to do previously. Instead, the money went to pay off old debt for old projects and the money that had been budgeted for those debt payments went elsewhere in the City's budget. So, lots of verbal promises, but no written commitment on how the money could be spent.

We heard verbal promises by the Democrat Council and the Democrat Mayor, Bart Peterson, on the increase in County Option Income Tax, $5 million of which was promised to go to crime prevention grants. While some money has been so spent, the verbal promise was put to the side by the Republican Council that was voted into office in 2007. Now-President of the Council, Ryan Vaughn, and Councillor Ben Hunter, have been the most vocal about the fact that the old Council did not ink down the promise properly and that is why a) they voted against it originally, and b) why they did not feel bound by the promise.

Vaughn, Hunter, and others, are now in the position of voting for or against a proposal of a Republican Mayor, Greg Ballard, who has made verbal promises all over the County regarding how the proceeds from any sale would be (and would not be) spent. They have it within their power to commit to the promises being made. It is now their watch. The Council is up for election next year. The Council could again pass to Democrat control and out of the control of Vaughn, Hunter, and Ballard. If they mean what they say, they will commit to it in writing. This is as true of the spending of the proceeds of the bonds that would be backed by the increased sewer utility PILOT payments, as it is of the proceeds of any sale of the water and sewer utilities.

2) LOCAL PUBLIC INPUT: To move all oversight and public input to the state level for a local service is not wise. That is what they did with the oversight of the cable companies - and that has not worked out well at all for the customers. The Indiana Utility Regulatory Commission has shown itself to be best buds with the utilities they regulate. Marion County residents deserve a local say in a local public process, about local rate hikes and local expenditures. It is, after all, the public's water and sewer utility right now, and it is in their interest that they not be cut out of further issues that will arise. Mayor Ballard has said the one of the express reasons to sell the water and sewer utilities is because politicians don't have the stomach for raising rates. Well, that's not all bad. And, if you go in that direction, at least leave the regular citizens with a process where they can HOPE to influence the outcome of rate appeals that will pull more money from their pockets.

3) RAISING WATER/SEWER RATES INSTEAD OF TAXES: There is a fundamental question involved in all of this - should water/sewer customers pay for their water and sewer usage AND fund street and sidewalk improvements? There is no doubt that there is much need for infrastructure improvements in Indy. But, how to get the money to do it all quickly, is another matter. If the proceeds from the sale are not dedicated specifically to a very short list of possible types of expenditures - then why would anyone agree to increased water and sewer rates? If the funds were to be dedicated, in writing before any deal is finalized, then this question still remains on the table, in my view. I have to admit, I end up on both sides of this one, depending upon how I approach the question in my mind.

If I look first at the huge need for street, sidewalk, and bridge repair and then at the issue of passing the cost onto water and sewer utility customers, I can see a scenario where I could support it. First, the money would have to be dedicated or its off the table for me. Second, there needs to be local oversight of water/sewer utility in the area of protecting our water supply - both in quality and quantity. Not widely know, I think, is that the water company has been pumping water so rapidly from the Perry aquifer, that the underground flow of water into the aquifer has not been able to keep up. The water table has dropped 10 feet as a consequence. This is not trivial. Likewise, overpumping from reservoirs and inadequate water release into our rivers and streams can lead to damage to those biomes. Luckily, the City will retain the Eagle Creek reservoir, considering it a drainage control feature, and not primarily a drinking water supply. But, not all of the rivers and streams in the County can have their water levels increased or decreased by opening and closing the Eagle Creek dam. When I come at this question from this angle, I conclude 'maybe - if there are some other ingredients secured'.

If I look at the water/sewer rate payers first, then the need for infrastructure improvements, I land on the other side of the equation. These rates are going to go up -- way up. Just because the City projects the rate to go up less rapidly if Citizens runs these utilities, the rates are still going way up. There is something positive to be said about keeping the cost of living as low as possible. There are economic and social reasons to do so. This is not a trivial matter. The proponents of the sale are saying it is important to keep rates as low as possible - so sell the utilities. But, then they say - since there are savings, lets split the difference. When I come at this question from this angle, I conclude 'no' to utility rate payers paying for ANYTHING more than the water and sewer they use.

4) CLEAN, SAFE, DRINKING WATER IS OUR NUMBER ONE RESOURCE: This is the most fundamental point of all. Our area spends much of its resources trying to get rid of excess water - especially this time of year. But, that should not lessen the value of clean drinking water to us. I would recommend folks look over the April issue of National Geographic before coming to a conclusion on this point. "Water - Our Thirsty World" is the title. They go into the perspective in other parts of our Country and the world. Some of the titles of articles in this volume: "Water is Life", "The Burden of Thirst", "California's Pipe Dream", and "The Last Drop". I can't conclude that the City should give up its ownership of this resource. Run the utilities better, sure. Give up ownership of the water? No - I cannot go there.

Tonight the Rules committee will decide on whether to recommend the full Council pass the increased PILOT from the sewer utility and approve floating the bonds that would be repaid with that money, as well as approve the Mayor and Citizens continued resolution of the details of the sale with the proviso that the Council gets a say after seeing said deal. This very well may be the most important decision that this Council makes its entire term. Again, the meeting starts at 5:30 in room 260. Since public testimony was taken last week, there may not be any additional time for comments made available. Channel 16, as always, will carry it.