Monday, July 26, 2010

Utilities Transfer Deal Will Increase Not Decrease Utility Rates

The Indianapolis Star has become joined at the hip when it comes to the propaganda campaign to convince Indianapolis residents that the plan to transfer ownership of the water and sewer utilities will decrease, not increase utility rate increases during the coming years. Yesterday, the newspaper penned an editorial endorsing the largest hidden tax increase in the history of the City. The Star's Fransecsa Jarosz admits it's a roll of the dice as to what will transpire in the coming years:

If all goes as projected, the sale transferring the municipally owned utilities to Citizens Energy Group would give residents a break on estimated triple-digit rate increases over the next 15 years.

If projections miss, residents would see their rates increase above those estimates to pay off hundreds of millions in debt for the sale.

Which scenario plays out depends on whether Citizens, a local nonprofit trust, can follow through on cutting $43 million from the utilities' operations every year.

That's something that can't be known until Citizens takes over the utilities and combines them with its steam, chilled water and gas operations in an effort to find savings.

Past mergers, public and private, have had mixed success. Although Citizens leaders are confident they will achieve the cuts, they offer no guarantees . . .

"If we're wrong about the synergies, we recognize the ratepayers would have to cover those costs. There's no riskless transaction," said Chris Cotterill, Republican Mayor Greg Ballard's chief of staff. "We think that's a manageable risk."
"A manageable risk" says Chris Cotterill, who won't even be around to answer questions for the utter costly failure that will most assuredly greet Indianapolis ratepayers. He'll probably be enjoyng his high-paid job he anticipates getting with his former employer, Barnes & Thornburg, for all the millions of taxpayer dollars he and fellow B&T employee, CCC President Ryan Vaughn, have helped steer to the firm in the form of legal work during the corrupt Ballard administration, not to mention the fact that Vaughn's firm represents Veolia, the private operator of the water utility that this deal forces Citizens Energy to keep intact.

The past is prologue. Nobody can point to a single government merger plan of any sort in this county that has produced a dollar of savings over the past five decades. The only thing we know for certain is that Citizens is being forced to borrow hundreds of millions of dollars it plans to pass on to city ratepayers to fund a massive government works project Ballard and the Republican council want to fund ahead of next year's election to buy votes. City contractors have been lining Ballard's campaign pockets for the past three years and want their pay off and Ballard is all too willing to assuage them. There's a reason the Republican-led council rejected an amendment that would have forced Citizens to ensure rate mitigation as a result of the utilities transfer. They all know it will do the exact opposite. They're just having a good laugh at your expense that they managed to get the Indianapolis Star and the City's so-called "civic leaders" to buy into this massive fraud.

UPDATE: The council approved the utilities transfer tonight by a vote of 19-10, with all Republicans, three Democrats and the lone Libertarian voting for its passage. As I've explained before, this proposal is a massive hidden tax increase on the people of Indianapolis perpetrated by our Republican mayor and Republican council. CCC President Ryan Vaughn steered its passage despite the obvious conflict of interest he has because of the financial stake a big client of his firm--Veolia--has in the deal. Libertarian Ed Coleman proves he is a phony politician who is completely lacking in principle by his vote tonight. As several have noted to me, Coleman is desparately trying to get back in good graces with the Republican Party after abandoning it a couple of years ago. Coleman will never have an opportunity to serve on the council again. Perhaps the best he can hope for is a new job courtesy of his support of this proposal. The three Democrats who voted for it included Jackie Nytes, whose CDC has been rewarded with more than $1 million in grants by Mayor Ballard and whose husband's printing business has been awarded lucrative contracts by Ballard's administration. Mary Moriarty Adams, another Democrat who voted for it, is a county employee. Councilor Paul Bateman, the final Democrat who voted for it, has been under investigation for his role in a now-defunct nonprofit organization. Bateman and others have been accused by a federal bankruptcy trustee of misappropriating more than a million dollars from the Russell Foundation. Like I've said on numerous occasions, city government in Indianapolis is every bit as corrupt as it is in Chicago. The only difference is that Chicago has a prosecutor who will hold the politicians to account for their criminal actions; Indianapolis does not.  


Downtown Indy said...

I think the truth is they WILL stem the possibility of 'triple-digit' water rate increases.

But they haven't said anything about what happens to the natural gas rate.

Or did I miss that part?

They can easily explain away rate increases for gas as being due to higher production costs and market conditions.

It is a lot easier to make a case for a rate increase for gas than it is for water. Water just doesn't have the cost fluctuations fluctuations of natural gas.

Downtown Indy said...

When they talk about 'rates' I think they are talking about the cost per 1000 gallons used.

Do they conveniently ignore the service/surcharge amount when they say that? Or are they talking about the total bill each use pays?

We get hit for water usage AND also a hefty fee besides. Want to guess whether they will jack up the surcharges or even add NEW ones?

I am betting they will, and that is how they will 'keep water rates down.'

Had Enough Indy? said...

The PR assault on this deal pushes the idea that the rate increase due to the sale/transfer, would be less than the rate increase that was anticipated in the Peterson administration, before DPW got the price tag knocked down at the EPA.

But, the supposed $1 billion estimate of these savings in the new EPA agreement, has never been itemized to my knowledge, and may be as little at $300 million. The cost of floating all these bonds will be $900 million or more.

In the end, its all an Alice in Wonder fiscal riddle, polished up by a PR firm.

Marycatherine Barton said...

Straight talk from AI!! Thanks so much. However, I think that the STAR is probably IN on this massive fraud so well delineated here.

Blog Admin said...

Is this another case of "we have to pass it to see how it works"?

Looks like our local government has picked up how the national Congress does business.

dcrutch said...

You nailed it, Indy Student. We're to trust our government to perform due diligence as our public servants. They fear we might not want to spend more money we don't have on a tax increase, So, like health "reform", we've given a grandiose scheme. To not trust them or their scheme is to be ignorant of the nuances, or to be uncaring for your city.

Did you read the New York Times article today about England decentralizing their government health care system? They're simplifying the bureaucracy to save money and have the health decisions closer to the people.

Fancy that. Ignorant Brits.

M Theory said...

Citizen's Gas won't discuss the service and delivery fees which are astronomical.

Those fees will be added to water bills.

This is not going to end well for the residents of Marion County. These deals never do.

Marycatherine Barton said...

The Marion County Libertarian Party should announce whether it agrees with Coleman's vote, or not, and give its reasons. I cannot remember whether Tom John took a stand on this, Ballard's water deal, but Ed Treacy did. What say ye, Tim McGuire.

Gary R. Welsh said...

The Libertarian Party confirmed they're unfit to serve in any capacity in this county when they ignored many of their members concnerns about the proposal and backed the plan.

“This was a complicated deal and an important vote. We know Councilor Coleman carefully reviewed the facts and came to his conclusion after significant deliberation,” says LPMC Chairman Timothy Maguire. “After weighing all the pros and cons, we feel that this was the right move for Indianapolis.”

I guess they want to continue their perfect trend of successfully electing nobody to public office in Indianapolis