There's nothing like kicking people when they're down. That's exactly what the Ballard administration has decided to do to Indianapolis residents by seeking a 35% water rate increase on top of an earlier-approved 11% increase in the midst of the worst economic downturn since the Great Depression. You read that right. A filing has been made with the IURC to increase water rates 35% despite the IURC's blistering Order in June scaling back an emergency rate hike from 17.5% to 11%. The IURC made it clear that the water company had failed to justify planned capital improvements, and it condemned its "profoundly disturbing" one-sided agreement with Veolia, the French-owned company that operates the water company.
This new rate increase is on top of the double-digit increases the City has already implemented to make the necessary sewer and wastewater treatment improvements to comply with the federal Clean Water Act. The water company claims it has $23.2 million in unfunded projects that are mandated by federal EPA. It's funny that the water company couldn't justify those projects in its emergency rate hike earlier this year. Not surprisingly, the contractors and consultants who will do this work have contributed hundreds of thousands of dollars to Ballard's re-election campaign. I guess it's more important to take care of campaign contributors than to look out for the interest of Indianapolis residents.
It's also worth noting that the City recently began efforts to find new partners to help manage or own the waterworks and wastewater treatment facilities of the City. The Ballard administration has boasted that it can potentially net a couple of hundred million dollars that can be used for other infrastructure improvements if it turns over these assets to someone else. It looks to me like the City is trying to shove through as many rate hikes as possible prior to entering into such a transaction to increase the value of the assets to potential buyers. It looks like a short-term gain for the people looking to find more money to spend prior to the next election, while Indianapolis residents will be the long-term losers who will be saddled with paying for the past, poor decisions of the people entrusted with managing these assets.
10 comments:
Another reason why government should be trusted with owning or managing as few assets as possible.
This shuffle-around of the city's water and sewer assets and liabilities sounds like "getting something for nothing". Too good to be true!
Who gains? Allegedly the city budget with $200 of "free money". Private investors will make a sufficient profit. Will the citizen ratepayers have to cough up all this "found money" on water bills? Most likely! How else?
I actually agree with you for a change, Wilson.
Sounds like a mismanagement of funds to me. I think an audit is in order to figure out where all past funds went!
I'm suddenly glad my neighborhood doesn't have city water.
Indy is rapidly becoming a place I don't want to live.
SS,
I've always said the Libertarians need to curb their desire for private ownership/management. I used to be gung ho for privatization, but I've seen too often it not be used for efficiency but to give some politically-connected company a monopoly over the provision of a service. Monopolies don't equal efficiency.
Paul,
I concur that there is no point to privatization if competition is not going to be encouraged.
Ultimately, it comes down to government not doing lots of things it shouldn't - including granting monopoly territories and privileges.
Imagine if the only provider of phone services we had was still AT&T? Think the Internet would be as widespread? Think long distance would be 5 cents a minute or less? Think you'd have a dozen cell phone companies to pick from (of course not! Just AT&T!). Even today, there are areas were high costs have not come down because AT&T held a government sponsored monopoly on running copper to homes and businesses for about 100 years.
I'd so love to be able to buy water, gas or electricity from my choice of at least two providers for each. Off grid is pretty much the only option to escape the monopolies in Indy though.
The problem with the water company is that the privatization agreement was not entered into to save residents money and to achieve a more efficient operation; it was a one-sided agreement conceived and executed by some of the city's most powerful lobbyists on behalf of Veolia. There was every reason for Ballard to undo that agreement upon taking office, but these people started pouring cash into his campaign coffers and guess what, Ballard is their friend. He even went along with paying millions more to Veolia that the IURC blasted as unjustified. Why does the IURC have to do the job the administration is supposed to do? People don't understand just how corrupted the administration of this city has become as a result of the influence peddling activities of these people.
Please send your comments to the IURC; I think that they actually pay attention to well-reasoned arguments and concerns.
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