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Citizens deal risky for the people

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The Indianapolis chapter of the Indiana Democratic African American Caucus offers analysis of key public policy issues in an effort to educate both the Black community, and the Indianapolis community at large.

The mayor of the city of Indianapolis has proposed a deal in a non-binding Memorandum of Understanding (MOU) which the water and sewage treatment plants are purchased by Citizen’s Energy Group for $1.9 billion. In the MOU the city is supposed to get at least $425 million in cash and Citizen’s takes on $1.5 billion of the $4 billion of the city’s debt related to water and sewage infrastructure needs.

We discussed the non-binding MOU, gaining critical input from IDAAC members’ City-County Councilor Jose Evans and businessman Brian Williams, and have several concerns with the purchase agreement as it is currently structured.

Water is an important public good. Privatizing a public good as essential as water should be approached with caution and plenty of public input. The mayor did not hold one community discussion regarding the public’s expectations of acceptable water standards and continuing accessibility issues, before presenting the MOU, and is seeking to remove the public’s right to regulate this public good.

There are components of the deal which are beneficial, including:

The politics are removed from rate increases.

According to Citizen’s Gas and the mayor’s office, no one’s water will be cut off for lack of payment of their gas bill and vice versa.

Citizen’s proposal includes participation in the Septic Tank Elimination Program.

Citizen’s may be able to reduce the amount of expected rate increases in the future through efficiency gains.

Some of the areas of concern are as follows:

The current MOU does not provide for provisions that ensure enhanced water standards, which exceed the Environmental Protection Agency minimum criteria for water quality.

We would still be responsible for what amounts as one of the major problems of the system that impacts our communities, most visibly on any rainy day, without a revenue generating asset to help finance a solution.

Where’s the financial data? As part of the federal consent decree to improve Indianapolis water systems, a schedule was produced that aligns fee increases with required improvements. This information should be made available to the public.

Where’s the money going? We are interested in how the $425 million in proceeds from the sale of the utility will be distributed to communities in most need of services. In light of the fact that the public was not able to discuss the other proposals that were submitted, and there was no discussion of water quality, the best course of action would be to start the process over. However, this is not likely to occur, so we call on the City-County Council and the mayor to do the following:

Protect water quality standards. Having missed the opportunity for a community wide discussion about water quality standards and what to do with future proceeds before presenting the non-binding MOU, include some mechanism whereby Citizen’s is responsible for gaining community input on water quality standards.

Be clear about where the money is going. A major step would be to identify projects by council district before the City-County Council votes on the matter.

Keep community input on public goods. Given the loss of community accountability in removing the water and sewer treatment systems out of the city-county council jurisdiction, it is important that the Citizen’s board no longer be a completely self-perpetuating board but also include appointments from the City County Council as well as the mayor’s office.

Our recommendations seek to protect the citizens of Indianapolis from exposure to the most dangerous risks presented in the deal, while also ensuring a mutually agreeable working relationship with a public trust and the citizens of Indianapolis. Assuming that the council will vote on the actual deal and not the MOU, we would expect to see the fore-mentioned recommendations included in the discussion of the deal before the council takes action.

Indiana Democratic African American Caucus – Indianapolis Chapter

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