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Jul 25, 2010

WaterWars - Citizens buy out mayor for $1.9B deal

Indianapolis Mayor Greg Ballard and other city officials this morning announced their plans to move forward on a sale of the city's water and sewer utilities in a $1.9 billion transaction.

"This is a big wHTML clipboard 07252010.jpgin for the city of Indianapolis," Ballard continued in the statement. "It represents a once-in-a-generation opportunity to minimize future utility rate increases and to provide much-needed funding for deteriorating infrastructure such as streets, bridges and sidewalks. Today, we took an important first step toward greatly improving quality of life for our residents, while encouraging job creation and economic growth in our community for many years to come."

Under the deal, Citizens Energy Group, a public charitable trust and local provider of gas, steam and chilled water, would acquire Indianapolis' water and sewer utilities, which now are owned by the city and run by private operators. Citizens would and have full control over their operations and be responsible for hundreds of million in capital projects in coming years.

During a news conference, Ballard touted the move as a government reform effort that would take decisions about the utilities, such as how much rate increases are and when they are requested, out of the hands of politicians. Instead, they would be left up to Citizens' board of directors, whose meetings and documents are public because of Citizens' governance structure.

"At the heart of our discussions with Citizens Energy Group is my determination to reform municipal government and address the needs of water and wastewater ratepayers," Ballard said. "No more politicians putting off doing what's right for the long term for what's politically expedient today."

Rates are projected to increase in coming years by more than 100 percent for water and 400 percent for sewer to help pay for more than $4 billion in needed capital improvements to both systems.

Read more at IndyStar