Town takes next step in water system takeover

MOORESVILLE – The Mooresville Town Council voted on Christmas Eve to suspend the rules of the meeting and pass Ordinance 16-2012 on its first reading to acquire or condemn the water utility system in order to purchase the property from Indiana American Water Company. Councilman Mark Mathis made the motion in the rule suspension and the ordinance. Council members Virginia Perry and Jeff Cook seconded the motions. The vote was unanimous. The town council had sent an offer to IAWC’s attorney Nicolas Kile of Barnes & Thornburg law firm for $6.5 million in November. Their vote Monday came on the heels of an announcement by IAWC that it is refusing the purchase offer.

In a media statement, IAWC president Alan DeBoy said, “We have made it clear that the system is not for sale. Our sole interest is to continue providing high-quality service to our customers here at an affordable rate. “We have again offered to meet with town officials to discuss or address any issues they may have regarding our Mooresville operation. We have asked them to consider the consequences of a hostile government takeover on our customers and local taxpayers, who will ultimately be stuck wiht the bill for their actions.”

In another letter from Kile to Janak, it is stated that, “With respect to the Nov. 21 letter, Indiana American Water does not agree with or acknowledge the town’s purported reservation of rights. To the contrary, Indiana American Water reserves its rights to assert any and all objections that it may have to the actions taken by the town in any subsequently filed litigation.”

Company officials have said they will refuse to sell the water system and plan to fight the acquisition in court. IAWC also has filed suit against the town and council members for not following procedure as to public meeting information, acquiring documents and not publicly hearing more input from ratepayers. Town officials did set up a website and telephone number for residents who had questions about the move, and received a lot of input from ratepayers, according to council president George Watkins.

The town’s attorney in the IAWC case, J. Christopher Janak of the Bose, McKinney & Evans law firm, said the town had three options to IAWC’s refusal of the town’s offer on Friday.“We sent an offer to IAWC in November, and they had 30 days to respond. It expired on Friday, and the company has refused the purchase price,” Janak said.“You can say, ‘We’re done, well, we tried,’ you can choose to negotiate with them (IAWC) or you can proceed with a condemnation (involuntary acquisition) ordinance to proceed forward,” Janak said. “The ordinance doesn’t preclude the council from going back to step two (negotiation).”

Langley said there had been unfounded rumors and even a newspaper letter stating that he wanted the town to purchase the water system so he could run the utility. He flatly denied that intention.“I did manage the town’s utility 20 years ago and then went on to manager other utilities — one of them was 10 times the size of Mooresville,” Langley said. “I have since gone on to other things. I’m happy with what I’m doing now, and I have no interest in working for the utility.”

Watkins agreed, saying, “There’s no one on the council who benefits personally or professionally from this action. My goal and charge is to leave a better Mooresville than when I came on the board.”Watkins said his worry, along with other council members, is that Mooresville residents will be over-burdened with hikes in their water rates because of IAWC’s single-tariff pricing.

Langley questions IAWC intentions

Langley said in the original contract between IAWC and United Water (not the Town) in 1999, the purchase of the system required approval of the IURC. The OUCC (Office of Utility Consumer), included a provision that all parties, including the Town of Mooresville, retained the right to object to IAWC seeking to implement single-tariff pricing. The town has the option to purchase the water system by state statute. He said the company had to know that eventually, the town council would be disturbed by the rate increases and were not truthful in the contract.

IAWC filed a distribution system improvement charge request in October with the Indiana Utility Regulatory Commission. The 3.19 percent surcharge will cost average residential users $1.14 a month. According to DeBoy, this is an effort to capture investments that were made across the state by the water company from July 2011 to Aug. 12, 2012. DeBoy said only water customers are affected by the charge, and its roughly 500 or more sewer customers will not have the charge on their bills. Langley said IAWC has not made large investments in the system, and it does not cost the company enough to warrant the rate increases. Industrial customers have been hit with a 40 percent rate hike, and Langley said another one, at least that large, will be coming. Both Watkins and Langley said their number one concern is that the rates will not be fair to Mooresville residents in the long run.“It could cost an industrial customer $60,000 more a year; that’s the cost of two employees,” Langley said. Watkins said he was also upset by the fact that IAWC and its attorney sent their statement of refusal of the offer to the media, even before the town got it.“I’m just surprised by that practice,” he said.

Council members said their attempt to purchase and run their own water system is not a criticism of how IAWC has operated it. Langley said he isn’t against private ownership, and there are good local people who have handled the company well for many years. But he believes that cost increases on water will be a burden to private homeowners and disastrous for big industrial companies that are in Mooresville or are seeking to settle in Mooresville.“Through the town’s due diligence and hardworking employees, the waste water treatment plant, the police department and the fire department have been operated successfully. We can do this (run the water system),” Watkins said. Janak said the plan to proceed will be discussed in January.

The council also approved a pay request, No. 27, for Wilhelm Construction on the Waste Water Treatment Plant expansion project for $180,069.35. They also approved the transfer from various town funds to the health insurance fund. The council also read over the health insurance update and resolution.

The next town council meeting will be Jan. 13 at 6:30 p.m. in the Mooresville Government Center, 4 E. Harrison St., Mooresville.

By Amy Hillenburg | Reporter | Published December 24th, 2012 in The Reporter Times