INDIANAPOLIS, Ind. – Republican Mayor Greg Ballard and the city administration are pushing to sell the city’s publicly owned water and sewer utility to Citizens Gas, putting hundreds of union jobs at risk.
A recently released a Memorandum of Understanding regarding the privatization plan, and the sell-off plan itself, both were developed without public input or oversight.
After the fact, Mayor Ballard and Citizens Gas CEO Carey Lykins have held four public hearings on the sale. The second took place on March 29t at Aldersgate Free Methodist Church on the city’s east side. The meeting, before a packed crowd, started off with Mayor Ballard and Lykins providing a PowerPoint presentation as one-dimensional as what many are calling their crackpot scheme.
What’s at stake with this sell-off is hundreds of union jobs at Veolia, the company contracted by the city to manage and maintain the water utility. In addition, the jobs of customer service representatives and office staff at both Citizens and Veolia are on the chopping block.
Critics say the privatization plan is based on fuzzy math. According to the Memorandum, the city will gain $425 million on the sale, to go toward capital improvement projects to repair the city’s infrastructure. However, that figure is contingent upon $170.6 million due at closing and then $92 million due on October 1, 2011. As part of this backroom deal, Citizens Gas will make payments of $262 million in cash over two years in lieu of property taxes, but this could hinge on the value of Citizens’ surety bonds, the value of the Water Company headquarters if Citizens decides it does not want it, and up to $15 million based on some vaguely referenced cost sharing agreement.
The agreement also does not guarantee the safety and quality of the water, since there were no metrics to measure the quality of the water against any standards.
Mayor Ballard’s rationale for the sale is that the city-county council will no longer have any input into utility rates, thus removing “undue political influence.” Opponents of the plan charge that this rhetoric is a thinly veiled excuse to remove any democratic control over water rates, which have already increased this past year and are set to increase even more after the sale. The board of Citizens Gas includes only two African-Americans and none of the board members are on a fixed income.
The audience asked pointed questions about the future of the workers and jobs after the sale. Lykins provided only vague and ominously nebulous answers. But what was indicated was that 60 days after the sale, anyone’s job is up in the air. Lykins did confirm that office staff would most likely be first in line for elimination.
There are two more public meetings on the sale and then the proposal goes to the Board of Waterworks, the Board of Public Works, the City-County Council, and last, the Indiana Utility Regulatory Committee, which has final authority to approve or reject the deal. More information is available at the city’s web site.