Tuesday, March 30, 2010
Water Deal Meeting Creates More Questions Than Answers
Somewhere between I would say 100 or 125 people gathered on at the Aldersgate Free Methodist Church wanting answers from Mayor Greg Ballard on the proposed transfer of the waste water and water utilities from the city to Citizens Energy Group, and many, including me, left with more questions. It was a puzzling hour and half full of contradictions and defensiveness from Mayor Ballard and Citizens CEO Carey Lykins. At times, it was just plain odd.
As meeting-goers entered the sanctuary of the church, they were asked to sign in and were given a white folder from the City of Indianapolis. Inside was an assortment of news releases from the city, slick information pieces touting the so-called benefits of the transfer and a profile of Citizens Energy Group. Also, there was a sheet included asking for feedback as well as a card for questions.
After a brief introduction from former WTHR reporter and anchor Roger Harvey (who now is a Senior Vice President for Bose, McKinney & Evans Public Relations), Ballard stumbled and stammered through an explanation of the events that led to the "memorandum of understanding" between the city and Citizens that now sits ready for a final deal and then approval of the two city boards, the City-County Council, and the IURC.
Ballard claimed that the city had provided opportunities for public input in the process through the Infrastructure Advisory Commission meetings and that taking the feedback into account, it became clear that the roads and sidewalks of the city needed to be fixed. He said he didn't want to raise taxes to do it, so that birthed the idea of spinning off city assets to raise the money. So, essentially for $425 million to work on those infrastructure projects, Citizens Energy Group takes over the city's water and wastewater utilities.
At two points during the presentation, Ballard read his own quotes nearly verbatim off the screen.
Lykins, for his part, just explained Citizens Energy's history and how, despite your rates rising over time, that the rates will actually be lower than they would be otherwise because of the public trust that Citizens is. Essentially, you aren't paying shareholders dividends. He also explained that the transfer would save $40 million due to the consolidation of operational and administrative expenses (but somehow no current employees would be laid off...probably...maybe...possibly...).
Then the Q&A began. Questions were screened by a screener and asked by Harvey. Not one of the questions were what I considered to be easy. It became very clear that the people asking the questions did not trust Mayor Ballard's judgement and did not accept his premise that the public had been included in the construction of the deal.
Several questions dealt with Lykins' claim that the vast majority of people working at United and Veolia Water would be retained. Lykins kept saying that the day-to-day operations side of taking care of your water and wastewater would continue to operate with essentially the same staff as it does today. "We don't have water people stashed away in our basement," said Lykins. "You can't run a water company with gas people."
But, Lykins finally conceded that some people in the administrative area of the company might have to find new work. He used the example of billing and how much the companies spend in logistically getting out your bills. That cost would be cut as one company. Mayor Ballard was quick to point out that the $425 million to spend on infrastructure would create jobs.
Let's examine that for a minute. If Citizens needs less people because billing is consolidated, then these people are going to go out and build the sidewalks and resurface the streets? That makes no sense. I can just imagine that single mother in billing right now going out and running an asphalt spreader. Yep.
Another question asked the mayor why he wasn't taxing businesses in the city in order to offset rate increases and pay for infrastructure improvement. Ballard responded, "You want me to raise taxes? Really?" A couple of people in the audience responded, "You already are!"
Ballard was also asked why the city thought this was necessary. He was asked specifically why the city could not provide consistency and predictability in utility rates (a major reason Ballard said that it was necessary to make this transfer), Ballard said, "Because of short term political decisions."
Essentially, "I can't be trusted to make the right calls, and I don't want to make them...so here Citizens."
So, the city takes a big risk because its mayor doesn't believe he is up to the task or he's unwilling to take it on. This is the type of leadership we can get from Mayor Ballard? We can do better.
Far smarter people than I have been dissecting the water deal. I personally saw Democratic Mayoral candidates Brian Williams, Jose Evans, and representatives from Melina Kennedy's campaign in the audience. Williams did a long dissection of the issue here. Evans commented on the issue here. Nothing official has come from the Kennedy campaign, but I was at a breakfast put on by Kennedy's campaign, and it's clear that the water deal is front and center for them also. I have heard nothing yet from Ron Gibson on the situation.
From my perspective, I don't understand the deal. I don't understand why the city needed to make the deal, and I don't understand how Citizens Energy Group can keep staff and still cut costs. The whole deal seems to have been done and, as one questioner said, "the horses are five miles down the road" on this one.
There are two more chances for you to put in your input on this deal and ask the tough questions of the Mayor. Here they are:
April 13, 6:30-8:00 p.m., Nu Corinthian Church's Family Life Center, 5935 W. 56th St.
April 20, 5:00-6:30 p.m., Divine Savior Lutheran Church, 7315 E. 75th St.
You can also visit the city's page on the deal at www.indy.gov/utilities.