Thursday, March 11, 2010

iPOPA On Ballard Water Deal

You know, I have to admit that when someone says something better than I can, I have to throw them the credit. Chris Worden often does this. Yesterday, he waxed on Mayor Greg Ballard's best Mitch Daniels impression in the deal with Citizens Energy Group unloading the Indianapolis Water Company for billions.

Here is his wonderful analysis. You can read more at iPOPA.

It seems these days that no Republican politician can avoid "the lure." They get offered lump sum cash for an asset now, and they sell out control, which is ironic because it runs completely contrary to all their smug talk about accountability and the Shepard-Kernan Commission's report as well.

Just like Governor Daniels did with the Indiana Toll Road, Ballard has worked a deal to sell the city's water operations to Citizens Gas for $1.9 billion with promise of infrastructure improvements. (Actually, the Toll Road was a 99-year lease; this IS an actual sale).

From the outset, because the Mayor has kept everybody in the dark until the deal was done, I haven't had time to really study it yet.

But here's what I already don't get. I'm told that the upside for Citizens Gas is that it's a charitable trust, not a company that has to appease stockholders. This means that IF it makes profits, the result is either reduced rates or reinvestment in infrastructure. I'm also told the Board members are fiduciaries, which means they have to act in the best interests of the ratepayers. Yaaaay!

Except what happens when Citizens makes a bad business decision? Say for example that something that seemed a good idea at the time, such as Coke Manufacturing, turns out to be a huge error (p. 62) and the company has to take a substantial hit because it can't find a buyer for the dismantled enterprise and now it has ongoing remediation costs? Did the fact it's a charitable trust ensure that mistakes don't result in rate increases? Well, no.

Can the Mayor fire anybody? Not anymore.

So can we hold someone responsible at a charitable trust if the trustees go completely outside of their core competency, for example, by taking control of a completely mammoth and unrelated enterprise? How could they? The public has no say in who the trustees are, nor in who they appoint to the Citizens Board, nor in who that Board hires or fires.

At least with the Mayor, there was a modicum of accountability if things got screwed up.

Harry S. Truman had a plaque on his desk that read: "The Buck Stops Here."

Greg Ballard just auctioned off that entire spirit so that he can fill the potholes he's left gaping and the sidewalks he's left crumbling.

He might even use some of that as a parlor trick to tell you he achieved the 10% cut in spending that he pledged he would achieve as a condition to his seeking re-election.

The real tragedy is that if the Democratic City-County Council voted as a block, this deal could not pass. But my prediction is that when somebody is told they can get some new sidewalks and look like heroes at re-election time, one or more D's will fall off the wagon and join the Mayor in selling out because, just like the Mayor, they probably won't even BE in office when the excrement hits the oscillating unit.

Hey, Mayor, have you thought about selling the Health & Hospital Corporation to Clarian?

1 comment:

Marycatherine Barton said...

I fully agree with you, Jon. Superb statement from IPOPA, about the Ballard Water 'Deal'.