Water case legal bills grow

MOORESVILLE – In its effort to purchase the local water system from Indiana American Water Co., the Town of Mooresville has spent $1.17 million.

Nearly $500,000 of that amount has been spent on a lawsuit against IAWC by the town. It alleges the water company prejudiced potential jurors in the Mooresville area against the town purchasing the system. The suit claims this was accomplished by company officials handing out pamphlets, using mobile signs and holding public meetings.

Mooresville’s legal bills for 2012 through June 2014 were paid with council-approved food and beverage funds, according to Clerk-Treasurer Sandra Perry’s records. Payments were spread out among nearly a dozen attorneys who worked on the case and also covered mileage, mailings, messaging, secretarial overtime, copies, filings and documents.

Perry said the town could be reimbursed $50,000 and possibly more because of sanctions against the water company.

IAWC officials handed out information sheets telling residents the attempted purchase would eventually raise water rates and their taxes. Starting in 2012, IAWC raised its rates by 17 percent for homeowners, more than 30 percent for businesses and 40 percent for industries that use a lot of water. One of those companies is Nice-Pak Products — a major employer in town.

According to an IAWC survey of Mooresville ratepayers, the majority of the people were happy with their water service and didn’t want Mooresville to take it over. Its employees are known to residents and were involved in community activities and charitable efforts, according to plant manager Troy Bryant.

Recently, IAWC had asked the Indiana Utility Regulatory Commission for another rate increase, which would increase its operating revenues by $19.6 million. The utility added distribution system improvement charge adjustments in December 2012 and December 2013 to repair or replace aging infrastructure.

Earlier this month, the IURC rejected the company’s request for the more than 8 percent rate increase, but did grant it a 1 percent increase. The Office of the Utility Consumer Counselor, which represents customers, had recommended IAWC cut its rates by 4 percent.

IAWC has owned the water system since 2000 and president Alan DeBoy, along with counsel Nicholas Kile with Barnes & Thornburg, said the company would not be willing to sell its holdings. But because of an Indiana law, IAWC had to consider when it purchased the system from another private owner that town officials reserved the right to offer a purchase price for it.

To shorten the purchase price process, which took 10 years for the city of Fort Wayne (Aqua Indiana), the state mandated that a jury trial decision on the cost would decide condemnation cases. In Mooresville’s trial, the decision was made after testimony was heard from appraisers, environmental experts, town officials and plant operators.

Town officials moved the jury trial on the water purchase from Morgan County, to be heard by Judge Jeffrey Boles, in Hendricks County Circuit Court. Boles heard the case in early June, and a jury of six individuals decided that Mooresville would have to pay $20.3 million for the property, lines and equipment. Mooresville had offered IAWC more than $9 million.

Bose, McKinney and Evans’ attorney for the water case, J. Christopher Janak, said Thursday that a hearing on sanctions against IAWC will be held at 10:30 a.m. July 22 in the Hendricks County Circuit Court. The Mooresville Town Council has not announced a decision on whether it will appeal the jury’s decision or drop the proceedings. However, discussion of the water case is on the agenda for Tuesday’s Mooresville Town Council meeting.

Montana watches case

Missoula, Montana, is watching Mooresville’s water case and jury trial with interest, according to Tyler Stockton, an intern at the law firm of Boone Karlberg, the firm of record for the city of Missoula.

The city has made more than one offer for Mountain Water Co., which was purchased by the Carlyle Group. Stockton said the case is starting in earnest now. And the residents are behind it. In a survey taken, more than 75 percent of ratepayers approved of having the city control the water system.

Mayor John Engen has a goal to bring the water utility into public ownership, and the city has made offers of up to $65 million. Carlyle rejected those deals, however, and last month, the city of Missoula filed an eminent domain proceeding to force a sale in Missoula County District Court.

The Carlyle Group then announced that the water company would be put on the market. But the mayor said he wouldn’t make any other offers for it, according to news reports by the Missoulian. He said Missoula would be a stable and permanent owner with good intentions. But Engen said in news reports he isn’t willing to make another offer until the Carlyle Group gives assurance it will consider the deal.

by Amy Hillenburg | Reporter | Published June, 29th 2014 in The Reporter Times