Indianapolis Shifts Utility Ownership, Ops To Charitable Trust

Early in 2011, ownership and operation of the water and wastewater utilities of the city of Indianapolis will shift from the city to a charitable trust, the Citizens Energy Group, which was established more than 123 years ago by the municipal code as the department of utilities.

In a major departure from the way American cities provide water and sewer services, the Indianapolis City Council last summer approved the transfer of water and wastewater assets to the trust which will:
• Rid the city of 1.5 billion in public debt;
• Assume all assets and liabilities including the consent decree for the abatement of combined sewer overflows by 2025; and
• Dedicate the remaining $450 million payment as part of the utility transfer for use by the Department of Public Works to implement public works improvements on streets, bridges, sidewalks, multi-use trails, parks and demolition of abandoned houses.

To become final, the transaction must be approved by the Indiana Utility Regulatory Commission (IURC), an action city officials expect will occur in the first quarter of 2011.

At the time the council approved the transaction in July, Council President Ryan Vaughn described the vote as the most significant step forward for the city since the passage of UniGov, the consolidation of Indianapolis and Marion County governments which was adopted in 1970.

Mayor Greg Ballard said the transfer of utilities to Citizens Energy Group will remove partisan politics from water and wastewater utilities, while providing funding for a city-wide transformation.

“Placing our water and wastewater utilities in Citizens’ public charitable trust will ensure the utilities will be managed by professional utility operators and will create lower-than-currently-projected rates,” said Ballard.

Familiar challenges
Stephen Nielsen, P,E., deputy director engineering division, describes the Indianapolis water and wastewater infrastructure as similar to that of many other American cities in which systems’ piping infrastructure is well past its life expectancy, constantly being monitored for failures and requiring a constant stream of projects to rehabilitate and install new pipe.

Planners expect the transition from the city to the Citizens Energy Group to be seamless.

“Projects under way when the transition becomes effective will not be affected,” said Nielsen. “Contracts will remain in place just as they were. However, after the change, we will be able to better coordinate projects.”

The city and Citizens will work together to ensure employees of the Department of Public Works and Department of Waterworks will remain employed either with the city or Citizens.

Prior to the city council vote on the utility transfer, the city administration and Citizens Energy Group focused on transparency to ensure the public was informed and educated on all aspects of the proposed change in utility ownership. The mayor’s office and Citizens Energy Group representatives held more than 60 public forums with various groups to explain provisions and benefits of the proposed change.

The utility transfer has received widespread community support from the Indianapolis Star, Indianapolis Business Journal and organizations including the Greater Indianapolis Progress Committee and the Interdenominational Ministerial Alliance.

The city/county water and sanitary sewer infrastructure covers approximately 320 square miles while also providing services on a wholesale basis to the cities of Beech Grove, Lawrence and Greenwood, the Ben Davis Conservancy District and three outside-the-county development areas.

Since 2002, the Indianapolis Department of Waterworks has provided drinking water to nearly one million people in central Indiana. Through a public-private partnership, Veolie Water has managed day-to-day operations of the water system.

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