Mooresville officials want to take over water system

MOORESVILLE There were only a few residents who commented at the Mooresville Town Council meeting and public hearing on its intention to take over the town’s water system. But the meeting room was full of people who definitely heard both sides from town councilman Tony Langley and representatives of Indiana American Water Company. The IAWC currently owns and operates the water system, and according to president Alan J. DeBoy and attorney Nicholas K. Kile of Barnes & Thornburg LLP, they will not be willing sellers.

Watkins said at one of the July town council meetings that IAWC went before the Indiana Utility Regulatory Commission and requested a rate increase, which was approved in June. Watkins said the average homeowner’s rate will increase almost 17 percent, businesses will increase 30 to 35 percent and industrial companies will face increases of 40 percent or more. He said this was too big a burden on town water customers and wanted to find a solution.Langley said the advantages of Mooresville owning its own water system include better coordination of fire protection, support for economic development and growth, decreased costs through shared staff with other utilities and town entities. The town would also be able to share heavy equipment and consumer billing with other departments such as the street, sewer and clerk-treasurer. Mooresville would be moving toward a cost-based rate system rather than having rates set on a rate of return to an investor-owned utility; based on replacement value, not on an actual investment and funds paid to stockholders.

Langley presented a PowerPoint presentation so that residents would understand that IAWC is progressing to a single-tariff pricing system. This means that Mooresville, which is in the company’s group 2, along with Wabash and Winchester, would eventually be combined with group 1. This group of towns and cities have some big projects and infrastructure improvements. Langley said simply that Mooresville, which has an efficient water system (100 percent metered customers), would in future be paying for those projects through increased rates and getting not much in return. He said the rate increase gives a 1 percent profit to IAWC and more than $500,000 to Terre Haute, Richmond, Muncie, Noblesville, Crawfordsville, New Albany and Jeffersonville.“Mooresville got zero,” Langley said. He added that IAWC does have some maintenance costs to Mooresville’s water system, but he also pointed out that Group 1’s rate had been decreased by more than 3 percent and industrial customers got a $5.35 decrease. Mooresville residents got a 16.25 percent rate increase and industrial companies were slapped with a 39 to 49 percent rate increase.

Kile and DeBoy, as well as longtime Mooresville resident and company representative Troy Bryant said they were diappointed to hear the town’s intention since IAWC has been providing support for the Mooresille system for 30 years — even before they bought the system from United Water Resources in 2000.“We thought we had a good relationship with the town officials — it was a shock to hear you wanted to take over the system. We monitor and survey our customers and currently have a 91 percent satisfaction rate,” DeBoy said. “We’ve had no compliance issues on record and no violations from the environmental government regulating agencies.”Kile said IAWC officials are concerned about how the council went about its intent to take over the water system. “You’ve given us little chance to respond… there was not enough notice given, and once we received it, we were asking ourselves, ‘What is driving this? Where did this come from?” Kile said. He said they found out they needed a name and password to see documents online, and when they requested the documents themselves, they got a letter back from the council, but “We still haven’t got the information — we don’t even have the ordinance. The process is unfair and gave us inadequate opportunity to prepare for this evening.”Kile said if nothing changed and the council members voted on this without further discussion with IAWC officials on ways to work together, they would be seeing a lot more of him.“Let’s not go down this path of eminent domain,” Kile said. “We want to hear from the private sector rather than have a hostile government takeover. It will be contentious and expensive — the fight will last well beyond your terms in office, and you will have heated debates about the issues among your residents.” Kile pointed out that the city of Fort Wayne began a fight to take over its water system from the Utility Center in 2002. It is still going on and has been before the Supreme Court twice. In four years, the city has paid $1.2 million in legal fees; not counting consultant fees.

Bryant, who has served the water company for 18 years, said IAWC has made a $4 million capital investment in Mooresville’s system. He said that kind of investment calls for rate increases. IAWC has provided stronger fire flows and quality maintenance — costing customers less than a penny a gallon. “Our company is an integral part of the Mooresville community,” Bryant said. “We live here and pay property taxes here — a chunk of that money goes to the schools.”He added that the company has worked with schools, civic organizations and even the Tox-Away days.

Resident Nancy Caldwell asked if she could make her comments after both sides presented their case, but town council president George Watkins said there was a certain order to the public response, and they were to go first. She declined to make public comments, but Watkins said he would allow her to ask questions of company officials and Langley after the meeting. Randy Haymaker, purchaser of 1068 Delwood Drive and longtime Morgan County resident, said “Mooresville is a well-managed community. I was honored to serve on this board from 1973 to 1976. “I work for a consumer-oned utility that serves parts of 48 Indiana and 10 Illinois counties. I know of no other community this size in population and tax base that has better streets, sewers, police, fire, ambulance, library or park srvices. With the new Ivy Tech facility, it will be even better. It is a good place to live and a good place in which to invest.”Haymaker said Mooresville’s track record demonstrates that if it does take over the water system, it will also be well managed. He said not too many years ago, decisions about Mooresville’s water utility were made in France. Now they are made in New Jersey.“I think it’s best for the future of Mooresville that decisions are made locally,” Haymaker said.

Watkins said the council will take comments and presentations under advisement and meet again with IAWC officials. Another special meeting will be held Friday for the public to be able to give more input at 3:30 p.m. at the Mooresville Government Center.DeBoy said after the Tuesday meeting that Group 1’s rate was determined as projects were required. And since Mooresville is efficient, there’s not been a need for these. He said the single-tariff pricing has been in place since the 1990s. He said Langley’s presentation was misleading and had many inaccuracies that need to be corrected.“Mooresville water customers will get a commitment from us (IAWC) that we will address the timing of when rate increases will occur,” DeBoy said. “The utility has to wait 15 months for a rate increase after request filings.”Town Council President George Watkins said the meeting on Friday (Aug. 10) at 3:30 p.m. will not allow time for public input or a question-and-answer session. He said people will be able to ask questions after the meeting and at a later date. The council will be considering a proposed ordinance at the meeting that could begin the process of a local government assuming ownership of its water utility through eminent domain proceedings.

~ By Amy Hillenburg | Reporter | Published August 8th, 2012 in The Reporter-Times