Town sues to take water utility

MARTINSVILLE – Following the rejection of a takeover offer, the Town of Mooresville filed a lawsuit Thursday asking Morgan County Superior Court I Judge G. Thomas Gray to allow condemnation of the Indiana American Water Company (IAWC) and its takeover by the town. The company operates the town’s water utility. The council had voted Monday to take the action.

In November, following an ongoing legal battle, the town offered $6.5 million dollars for the company’s Mooresville operation. The company, which has its headquarters in Greenwood, refused the offer.

In its suit, the town alleges that under state law, the town “is entitled to exercise the power of eminent domain to acquire public water utilities in and around it’s boundaries, such as the IAWC Mooresville Operation.”That operation includes “but is not limited to, the assembled group of real and personal property assets of the water utility operation serving in and around Mooresville.” Those assets consists of land and land rights, land improvements and buildings, wells and springs, pumping equipment, distribution reservoirs, tanks, transmission and distribution mains, piping, valves, services, meter installations, hydrants, furniture and equipment, transportation equipment, tools, shop and garage equipment, laboratory equipment, power operated equipment, and communication equipment. The company has operated the water utility since 2002 and is the successor to Hoosier Water Company.

According to the town, Indiana Code 8-1-2-93 states, in part, that “any public utility accepting or operating under any indeterminate license, permit, or franchise granted after April 30, 1913, shall by acceptance of an such indeterminate license, permit, or franchise be ‘deemed to have consented to a future purchase or condemnation of its property including property located in contiguous territory within six miles of the corporate limits of such municipality.’”The town states that it needs to acquire or appropriate all of the IAWC Mooresville operation “in order to exercise its rights under Indiana Law and provide water utility service in and around Mooresville.”The town had an appraisal of the operation and offered the company $6.5 million dollars for its operation — an offer the town said was refused.

The town states it “has negotiated in good faith regarding the just and proper compensation” for the utility but has not been able to reach an agreement. The town is asking the judge to order the appropriation of the IAWC Mooresville operation and appoint appraisers to determine the fair value of the operation. No date for a hearing has been set by the court.

In October, IAWC filed a lawsuit in Morgan County Circuit Court asking Judge Matthew Hanson to stop the town’s takeover and award the company damages. The suit contended the town held illegal meetings and withheld pubic information from the company.At the town’s request, the suit had been moved into federal court where it is pending.

By Keith Rhoades | Reporter | Published December 29th, 2012 in The Reporter Times