City Hosed Indianapolis Taxpayers To Benefit Veolia, Big Surprise

The IBJ's Chris O'Malley has an excellent investigative story about how badly the City of Indianapolis screwed over taxpayers in this city to put tens of millions more in the pockets of Veolia, the French-owned private operator of our water utility. A link does not currently exist to the story on the IBJ's website. Among the findings of O'Malley is a 2007 amendment to the one-sided agreement that off-loaded $48 million in retiree medical obligations to the City of Indianapolis that Veolia assumed when it took over management of the water company after the City purchased it. The 35%, $111 million rate increase the Ballard administration submitted to the IURC includes this $48 million obligation. An analyst for the Office of Utility Consumer Counselor complains that the amendment was entirely one-sided in Veolia's favor.

O'Malley cites other shifts in costs the City took on from Veolia, including:

• Costs related to meters, hydrants, valves and service taps were reclassified as capital costs. DPW was required to pay Veolia $5 million for costs incurred prior to amendment.
• DOW agreed to increase fixed-fee payments by $1.9 million, compounded each year by an inflation index more favorable to Veolia.
• Veolia offloaded to the city the responsibility for pesticide monitoring costs and water conservation program.

This amendment was agreed to during Mayor Bart Peterson's last year in office. Many of us involved in Greg Ballard's campaign knew that many nefarious things happened during the original purchase of the water company and subsequent thereto that bordered on criminal, if not outright criminal. Certain law firms and consultants pocketed tens of millions of dollars in deals that royally screwed Indianapolis ratepayers and taxpayers. Both Mayor Bart Peterson and former City-County Council President Beurt SerVaas had financial interests in the outcome of the purchase that neither disclosed during the negotiation and approval of the sale. Then-candidate Greg Ballard promised to conduct a thorough investigation of those transactions once he became mayor; however, that promise was made before Bob Grand and Joe Loftus of Barnes & Thornburg started calling the shots in this administration. A complete cover-up of those transactions ensued and now Ballard is embarking on what amounts to the largest tax increase in Indianapolis history through a sale of the utility that is nothing more than a thinly-veiled effort to fund hundreds of millions of dollars in pork barrel projects that will be paid by Indianapolis water ratepayers.

Ballard demanded that Citizens Energy assume the Veolia contract with the water company and the United Water privatization for the wastewater utility assets, although Citizens Energy could operate these utilities much more efficiently if these agreements did not exist, particularly the Veolia agreement. Guess which law firm represents the private operators? Guess which law firm is driving this deal? In fact, so many of the same players who were involved in the screwing we got during the 2002 purchase of the water company are sitting at the table once again negotiating the fine print of this deal. It is disgusting beyond description. Like I've said on many occasions, the City of Chicago hasn't got anything on the City of Indianapolis when it comes to public corruption.

Incidentally, the law firm primarily handling this transaction for the City of Indianapolis is Baker & Daniels. Yes, that's the same law firm that participated in the last transaction. Yes, that's the same law firm that now employs the City's former chief legal counsel at that time, Scott Chinn, and former deputy mayor to Peterson, Melina Kennedy, who is now the front-runner for the 2011 Democratic mayoral nomination. No wonder she is silent on the pending sale to Citizens Energy. It looks like the law firm that served us so poorly in these past transactions will be a winner regardless of the outcome of the 2011 election.