Sunday, August 11, 2013

What Happened to $425 Million from Sale of City's Utilities?; Ballard Administration Now to Push for Dramatically Increased Stormwater Fees

Indianapolis Star's Jon Murray reports:
Indianapolis city leaders are readying an ambitious push to reduce flooding of basements, yards, ditches and roads in hundreds of areas by attacking a $315 million backlog of storm sewer and drainage improvements.

To foot the bill for the costly 20-year program, they are turning to most property owners for help.

Public works officials are set to propose the first changes in seven years to the stormwater fees that currently cost residential property owners $27 a year. Most property owners would pay more. For some, the cost would nearly double. A few would pay much more.

Since city leaders created the stormwater fee in 2001 — to pay for projects geared toward that goal — the amount charged always has lagged behind the need, officials say. It started at $1.25 per month for residences and was increased to $2.25 in 2006.
The city long has borrowed against future collections to speed up projects.

Insufficient stormwater fees have shortchanged maintenance of storm sewers, dams, levees, ditches and sewer intakes by more than $4 million a year, DPW officials say.
 To see the rest of the lengthy article, click here.

What is not discussed in the article is that the City had the money to do these repairs without raising stormwater fees.   In 2010, Indianapolis sold the city's sewer and water utilities to Citizens Engergy for $425 million and Citizens' picking up $1.5 billion in utility debt.   In order to buy the utilities, Citizens had to take out a 30 year loan and has now asked for as much as a 50% increase in rates.  But Citizens Energy is a public trust owned by the public, virtually the same people as Marion County property owners.  The sale of the utilities was much like a husband selling a car to his wife then bragging about how much he made off the sale.  Household income still has to be used to pay off the loan on the car.

Here the payment was made to the City using money borrowed over 30 years.  It would have made sense for the city to spend the proceeds of that sale, that $425 million, on long-term infrastructure needs like fixing Indianapolis' stormwater problem.  Instead though Mayor Ballard used the cash to pave roads (which improvement might last 5-7 years) and for such projects as building a cricket stadium on the east side of Indianapolis.  Now that the well has gone dry, and long-term projects didn't get fixed, Mayor Ballard wants to sock it to property owners.

On a related note, apparently Mayor Ballard, while initially opposing Acting Mayor Ryan Vaughn's plan to push for an income tax increase after he learned of it, has changed his mind and decided to back the increase.  This comes little over a week after the Mayor's proposal to raise property taxes failed.


Pete Boggs said...

These are the storm clouds which reasonably predict a record but silent number of nonparticipating "Republicans" in upcoming elections; adding to 8M in 2012.

At best, nonparticipants will target support for ideologically engaged candidates; ignoring the false branding of those who without public notice, have switched parties.

Unfortunately, Republicans have lost their sense of purpose.

Douglas Korti said...

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