Tuesday, April 13, 2010

Pike Township Meeting on Water/Sewage Utility Sale

I attended the public forum tonight about the sale of the city's water and sewage utilities earlier in the evening. Mayor Greg Ballard and CEO of Citizens Energy Group Carey Lykins, were both present. A number of City-County Council representatives, including Monroe Gray and Maggie Lewis (my representative).

Talking to attendees at the meeting and overhearing other conversations, as well as the tone of written questions in the Q&A segment, pained a picture that Pike Township residents are skeptical at best. At worst (and probably more realistic), they're flat-out opposed.

Unlike some of the Democrat bloggers I read, I am not flat out opposed to privatization efforts. However, I have not been convinced that this actually will be a better option for tax payers. And because this is a sale, not a lease, there will be no recourse for the city to reverse the deal short of Citizens Energy Group pretty much shutting down the water and sewer utilities.

Additionally, I read the Memorandum of Intent (MOI) that the city and Citizens wrote up about the sale. And I'm concerned about where all this money Citizens is paying is actually going to go, and that there is little, if any, restrictions on it. I asked Maggie Lewis to look into if the money from the sale is allocated to specific use, or has any prohibitions on use. And, if needed, could she make sure that an amendment is proposed to prohibit money from going to the CIB and the Pacers bailout.

Finally, I'd like to remind everyone that the $400 million figure often tossed around is an exaggeration. And less mentioned is the $2 billion figure as well. Chris Worden over at iPOPA explains:

The terms are these. The City of Indianapolis will receive $170 million at closing, then $90 million on October 1, 2011. In addition, Citizens Gas will assume $1.5 billion dollars worth of the city’s debt. This is why people keep talking about a $2 billion dollar deal.

Folks, the "$2 billion sale" figure is false, no matter how many times Abdul and the Mayor say it. If you read the Memorandum of Understanding (MOU) between Citizens and the City, you will see that Citizens Gas will only move forward with this deal if the Indiana Utility Regulatory Commission (IURC) permits the assumption of this debt to be figured into its rate structure. In other words, you won’t save dollars because this debt is assumed. You’ll just pay it in higher water and sewer rates instead of in higher taxes.

Mayor Ballard has a long way to go to convince citizens that this is not only a good deal for the city, but a necessity.

And finally, before I close and get back to work, I hope that people such as Abdul-Hakim Shabazz stop dismissing the use of the utility sale for the CIB as a conspiracy that stems from Internet bloggers. It was a concern of those at the public forum tonight, and Ballard could've elevated their concerns easily if he flat out said that there are no plans to bail out a team that is worth $300 million. But considering Mayor Ballard spent a few months at the state legislature lobbying for various taxes to be raised for the Pacers, then we're always going to have that doubt in our minds until Ballard resolves the issue by denying the funds.

Jon Easter also has an excellent write-up of the forum he attended over at Indy Democrat.

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