Mergers & Acquisitions and Deals and Hancock County and Sewer and Regional News and Water and Utilities

Private water, sewer utilities propose sale to Cumberland

May 15, 2010

Indianapolis’ water and sewer utilities aren’t the only ones with a “sale pending” sign out front.

Privately owned Gem Utilities Inc. and Gem Water Inc. have proposed selling their sewer and water operations to the town of Cumberland for $6 million.

Greenfield-based Gem serves more than 550 homes and businesses in an area mostly east of Mount Comfort Road and on both sides of U.S. 40.

Gem’s most visible structure is the “Look up to Jesus” water tower just south of U.S. 40, whose paint job would surely be secularized under municipal ownership.

The town of Cumberland, which straddles Hancock and Marion counties, has asked the Indiana Utility Regulatory Commission to approve the deal, to allow it to impose Gem’s existing water rates, and to allow it to issue up to $2.1 million in waterworks revenue bonds.

Cumberland already has a sewer service but wants to extend sewer and water service, particularly farther east into Hancock County.

Improved utility service “is essential in these difficult financial times to position the town to effectively compete for economic development opportunities as they may arise,” Cumberland Town Manager Jeffrey Sheridan told the commission.

Sheridan said the deal should benefit Gem customers because Cumberland can issue tax-exempt debt that the private owner cannot.

It’s the reverse scenario for big brother Indianapolis, where Mayor Greg Ballard is trying to sell the city’s water and sewer utilities to Citizens Energy Group. Ballard touts the deal as a way to depoliticize the systems, bring efficiencies to the utilities, and to reduce city debt and generate $450 million for capital projects.

ADVERTISEMENT

Recent Articles by IBJ Staff

Comments powered by Disqus