Town votes to start water takeover process

MOORESVILLE – The Mooresville Town Council voted unanimously Friday to begin the process that could end in an eminent domain takeover of the town’s water system from 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.Ordinance 12-2012 starts the process to pursue taking over the water system. Members also unanimously approved resolutions in an amended agenda for retaining American Appraisers Inc. and Bose, McKinney & Evans law firm to do surveying, engineering and legal studies on the feasibility of this plan.

Chris Janak of Bose, McKinney & Evans LLP said there will be opportunities for public questions and comments. He said the ordinance only spells out the town’s interest in pursuing certain utility assets, and the council members are not required to follow through with the plan.

Council President George Watkins said at one of the July town council meetings that the company 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 is too big a burden on town water customers and wanted to find a solution.Council member Anthony Langley said the advantages of Mooresville owning its own water system include better coordination of fire protection, support for economic development and growth and 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, according to Langley.

Langley presented a PowerPoint presentation with his evidence that Indiana American is progressing to a single-tariff pricing system. This means 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 Mooresville, which has an efficient water system (100 percent metered customers), would in the future be paying for those projects through increased rates and not getting much in return. He said the rate increase gives a 1 percent profit to the company and more than $500,000 to Terre Haute, Richmond, Muncie, Noblesville, Crawfordsville, New Albany and Jeffersonville.“Mooresville got zero,” Langley said. He added that Indiana American does have some maintenance costs to keep up Mooresville’s water system. However, he also said 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 disappointed to hear the town’s intention since Indiana American 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.”IAWC wants private sector interactionKile said IAWC officials are concerned about how the council went about its intent to take over the water system.

Little public comment was allowed at the town council’s meeting Tuesday and no comment was allowed Friday. The company did give the town a rebuttal to its arguments for taking over the 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 not the requested information.“We still haven’t got the information — we don’t even have the ordinance,” Kile said. “The process is unfair and gave us inadequate opportunity to prepare for this evening.”Kile said if nothing changes and the council members vote 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.

Randy Haymaker, purchaser of 1068 Delwood Drive and longtime Morgan County resident, said in public comment that he supports the town takeover. “Mooresville is a well-managed community,” Haymaker said. “I was honored to serve on this board from 1973 to 1976. I know of no other community this size in population and tax base that has better streets, sewers, police, fire, ambulance, library or park services.” Haymaker said Mooresville’s track record demonstrates that if it does take over the water system, it will also be well managed.

DeBoy said after the Tuesday meeting that Group 1’s rate is determined as projects are 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.

~ By Amy Hillenburg | Reporter | Published August 11th, 2012 in The Reporter-Times