Utility sale is a good deal for the city 7.6.10

Matthew Tully
The Indianapolis Star

For several months I've listened to the debate over the proposed sale of the city's water and sewer utilities to Citizens Energy Group. And, for the most part, I've found the architects of the plan to be focused on the improvements the deal could bring the city, while partisan critics offer empty rhetoric.

Still, it's a complicated issue.

Although I leaned in favor of the deal from the beginning because of what it could mean for the city's deteriorating infrastructure, I've been keenly aware of my lack of expertise on water and sewer issues. It also seemed trickier in many ways than the governor's privatization of the Indiana Toll Road.

That deal, after all, involved a roadway, and not the even more crucial asset of water. And while the lease will extend past most of our lifetimes, it is nonetheless temporary. Mayor Greg Ballard's utilities proposal would be permanent. The city won't get them back.

Ultimately, though, that's acceptable. And the deal is good for the city -- for several reasons.

1. The sale is being made to Citizens Energy, a charitable trust and one of the city's most trusted institutions. It's true that city government would give up its control of the utilities. But it's important to remember that Citizens has a long track record in Indianapolis, and its success is based in large part on having a strong local reputation.

Last week, I wrote about the push for local control of the trouble-plagued Phoenix Apartments. Local leaders argue correctly that an Indianapolis-based landlord would be more sensitive to issues facing the complex. Similarly, Citizens knows it will be under scrutiny once it takes control. Its history shows it understands that, and takes local concerns seriously.

2. Wisely, the mayor's office did not blindly seek the highest possible bid for the utilities. If it had, the city likely could have scored an even larger paycheck. But pursuing the $1.9 billion deal with Citizens alleviated many of the concerns that would have existed with other, less trusted firms.

3. For much of the water utility's existence, it has been privately owned. That changed only when the city purchased it nearly a decade ago. The long history gives weight to the idea that a private entity can effectively manage the utility. And while Citizens would take on crucial duties that it has not previously handled, the result of this transaction would be a utility company managing more utilities. This will lead to cost-saving efficiencies that will help ratepayers.

4. City officials have carefully and transparently pursued this deal. They've responded to a mountain of questions and acknowledged concerns held by many people. The idea has been publicly discussed, including at numerous community forums, for more than a year. Voters have several more weeks to learn about the idea, and to question officials at public meetings, before a possible City-County Council vote at the end of July.

5. The most noticeable impact of this deal would be the massive infusion of cash that the city could spend on a backlog of infrastructure projects that stretches back decades. Additionally, the mayor announced a chunk of money would go toward the demolition of abandoned homes -- one of the city's worst problems, one that contributes mightily to our crime problem.

It's disappointing that county Democratic bosses seem most concerned with the possible boost this deal would give Ballard's 2011 re-election bid.

That shouldn't matter. All that matters is whether this deal is good for the future of Indianapolis.

It appears it is.
http://www.indystar.com/article/20100706/NEWS08/7040379/1101/NEWS08/Utility-sale-is-a-good-deal-for-the-city