by Zach Bonahoom
While campaigning through neighborhoods on Fort Wayne’s southwest side in 2011, I heard one resounding sentiment from residents: “We need water relief!”
The city can provide better water than Aqua Indiana to residents on the southwest side. We proved it during the drought in 2012 by coming to the rescue when Aqua failed to provide an adequate water supply.
Mayor Henry has asked city council for power to condemn and purchase the private utility company, Aqua Indiana. With flashy press releases and passionate rhetoric coming from all sides, it may be difficult to understand what is really happening with the Aqua Indiana water utility takeover. If we ignore the political motivations and focus on the process, it can be easier to grasp.
In December, the Mayor sent an ordinance to council asking them to approve both the “necessity for takeover” and the “condemnation” phases of the Aqua Indiana utility takeover. This ordinance is set to be discussed by council on January 22nd.
During the necessity for takeover phase, the city would make offers to Aqua Indiana, and follow other “negotiation” steps, to agree on a price tag to purchase the company. City council should give the Mayor this authority to negotiate, and by doing so would signal agreement that an attempt to takeover the utility should be made. This first phase (necessity and negotiation) triggers a chain of events, likely to include multiple independent appraisals of the utility and it’s assets, giving council a better understanding of what the utility might cost in the future. For the sake of transparency, this phase should be carefully looked at by city council before proceeding.
Then, if and when an agreement cannot be reached, (agreement is unlikely because Aqua Indiana has little incentive to sell) the second phase is condemnation. During condemnation, a judge would decide the value of the entire utility company and the city would then have the ability to takeover by purchasing the company. (IC 8-1.5-2-15 & IC 32-24)
City council could pass the ordinance as written this month, then, in some amount of time (the process could take years) city council will be asked to approve financing for the condemned utility. If city council passes the ordinance as is, they would be giving the Mayor power to condemn Aqua Indiana before having any estimates as to what it may cost to purchase the utility in the future. City council would be surrendering all of their oversight power until the very end of the process, after a judge has determined a price.
By then, it will be too late for oversight on cost, council will be all but forced to approve. They could of course vote “no” to financing the purchase and the takeover would fail. After years of negotiation and thousands in legal fees from both sides, the residents on the southwest side would be the big losers, and council would certainly be painted as the “bad guys” by the Mayor’s office.
Negotiation and condemnation authority should be granted separately by city council. By asking for both powers now, the Mayor is asking for a blank check from the city’s fiscal body. While it may make the process more expedient from the city’s perspective, it certainly undermines the value of the people’s voice on city council and regard for taxpayer dollars.
At the risk of being politically demonized, city council should use their constituent given power to control the final price tag as much as possible.The entire city, which this council represents, will no doubt be forced to pay for the takeover in some fashion, further expanding the need for transparency.
Most agree the utility should be taken over by the city, but we should not write a blank check to the Mayor for acquisition of a poorly performing utility. City council should approve necessity and negotiation only, and if no agreement on price can be found, the Mayor can return to council and ask for condemnation approval. At that point, council will have a much better estimate of cost. The council will be portrayed as trying to slow the process, but by splitting the ordinance into two parts, city council can proceed retaining the most oversight and acting responsibly on behalf of all city taxpayers.
The Mayors strategy to combine the two phases is both for efficiency and political good standing. If the council prudently chooses to split the two processes in order to have more say in the final cost, they will no doubt be painted as “impeding progress.” No matter what, it presents a unique and difficult decision for councilman Mitch Harper, who has said he plans to run for mayor in 2015. Nearly all of Harper’s constituents are served by Aqua Indiana. This southwest part of the city, Harper’s district, is a must win for any Republican candidate in Fort Wayne, and a sought after district for Democrats.
Zach Bonahoom is former Republican candidate for City Clerk, contributor to 1190 WOWO, small business owner and commercial real estate broker with CBRE in Fort Wayne.
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Gosh, Zach, you sound like a liberal. Process be damned, the condemnation of a private utility solely for the benefit of a city-owned utility is anti-fourth amendment.
Condemnation of Aqua Indiana because of a service problem that they have now solved is irresponsible. Besides that, Aqua serves customers outside the city limits – which City Utilities has no right to serve without homeowner approval.
The power grab that is going on in this country by government entities needs to stop now. America made it to the top by guaranteeing liberty and carefully relying on capitalism as our economic model.
In Fort Wayne, the Democratic and RINO mayors over the past quarter century have cost the taxpayers dearly with their annexations and financing building projects that private capital will not touch,
No one knows the condition of Aqua's water and sewer lines, so why are we interested in taking the utility over? Every one of these ventures has cost Fort Wayne taxpayers – so why do we need to do anything? Remember that homeowners living in Aboite township knew full well where their water came from – so why not let those who took the risk suffer any consequences?
Gad_fly, your points are well taken, although a government take over of a private company, and a private UTILITY, should be treated as two separate things…This article does not suggest the city begin taking over convenience stores, barber shops, restaurants, coffee shops, book stores, etc. Some residents in Aboite wake up to brown water from their faucet. Conditions are bad there.
All your points about capitalism and liberty I agree with…but they dont completely apply to utilities. It is just not feasible or constructive to have more than one water, sewer, electric utility, etc. Certainly you see the middle ground…
Regarding the homeowners in Aboite knowing "full well," please remember that when annexed, they were promised the same CITY services as the rest of the city…They have now been annexed for a long time, have increased our tax base and a promise from annexation, city water service, has yet to be fulfilled.
ZB
Zach:
It sound like you approve of of government controlled monopolies – I do not. As for Aboite being promised the same services that Fort Wayne had – you and I both know every house in Aboite and every house in Fort Wayne have some form of sewer and water service – even those with wells and septics because it is the law.
I am getting old, but my memory of the Paul Helmke power grabs does not include promises that water services would come from City Utilities. When the City declared eminent domain in order to acquire Aqua Indiana operations north of Dupont, Paul Helmke, responsible for annexing most of those 8000 customers into the City, actually represented the private company against the City in that matter – which is proof enough for me that no such promises were made.
Cities do not have to own water utilities, so this Democrat power grab is to better control the services pricing and to roll more money into the city coffers. Fort Wayne still has the crumbling sewer problem and I suspect the brilliant thinkers at Citizens Square believe the rich folks in Aboite can help pay for these major infrastructure repairs.
I have a dog in this fight. Gadfly, you state:
You are very wrong and I am perplexed at what law you're referring to. I was annexed into the city 7 years ago, in 2006. I still have a septic and a well, no city services at all except forced trash removal. That's it. I also have a chip and seal street, and no street lights. Of course, Hemlke indeed promised all of these, (in spite of what you think), but none of them have been delivered.
The law I am referring to is the one that requires houses being constructed to have a at least a well and a method of disposing of human wastes.
Indiana annexation law gives municipal officials the authority to annex property regardless of the preferences of property owners, So it mattered not whether Helmke promised anything,to Aboite residents. My memory is that the state legislature even wrote some special laws to make Fort Wayne's job easier…I remember that there was a rush to build some fire stations and buy some new trucks that no one down your way needed and a gaggle of new cop cars were added – but that was that. All that Fort Wayne ever gave to annexed areas was higher taxes.
My prior point about the services your house has is still valid. People make choices and eventually have to own up to and be responsible for such decisions. I certainly have made dumb house decisions in my life and the last time that happened, it cost me about $80,000. Yep, the government did me in after I built an energy efficient earth shelter up in Wisconsin. When Fannie and Freddie became the mortgage movers in the '90s, unconventional houses were no longer eligible for mortgages. As I result I had to fire sale it when I found new employment in Fort Wayne.
Sorry to get you agitated, AWB.
AWB I have walked your street, it was deplorable when I did.