Group opposes city plan to pay water manager Veolia $29M

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A group of Indianapolis Water customers has asked regulators to block the city’s plan to pay the utility’s operator, Veolia Water, a $29 million contract-termination fee ahead of the planned sale of the city-owned utility to Citizens Energy Group.

Consumer Ratepayers’ request, filed this month with the Indiana Utility Regulatory Commission, alleges that Veolia committed numerous contract violations since 2002 that would entitle the city to terminate the management contract “for cause.”

As such, the city “would not have been obligated to pay Veolia any termination fee. None,” Consumer Ratepayers attorney John R. Price wrote in the Dec. 17 filing.

The IURC this month OK’d Consumer Ratepayers' request to intervene in the case, in which the city seeks state approval to sell Indianapolis Water to Citizens Energy for $1.9 billion.

The ratepayers group consists of 11 Indianapolis Water customers: Andrea Campoli, William Curry, Sheila Curry, Bill Maxson, Teresa Maxson, Steven McGann, Betty McGann, Don Miller, Vincent Perkins, Mari Perkins and Tom Plummer.  Plummer is identified as a long-term employee of the water utility.

Mayor Greg Ballard proposed the sale of the city’s water and sewer utilities to Citizens last March as a way to generate more than $425 million for city infrastructure improvements.

Proponents said the sale would remove the utility from city politics and save $60 million a year by consolidating the water utility under Citizens’ gas, steam and chilled water operations.

Opponents say city oversight is crucial and that a sale leaves it solely in the hands of the IURC, which has been rocked by an ethics scandal in recent months.

Last October, the city announced it would pay Veolia a $29 million contract-termination fee for improvements it made to the water system since it began operating it for the city in 2002. Veolia's contract was to have expired in 2022.

Consumer Ratepayers alleges Veolia effectively defaulted on the management contract on numerous occasions, including failing to maintain operable fire hydrants, refusing to pay costs of a water-quality program mandated by the state, failing to properly manage the utility’s financial affairs and terminating non-bargaining unit employee benefits.

“Veolia’s termination of employee benefits, if without authorization by the city, and Veolia’s failure to properly manage cash needs of the water works, would either one have been another clear instance of default under the management agreement,” Price wrote.

Veolia officials plan to file a detailed response to the motion, said company spokesman Paul Whitmore.

“We think the claims in the motion are baseless and some are factually inaccurate. We believe the settlement agreement represents a very fair resolution of the contract and right now are focused on a smooth transition,” Whitmore said.

Chris Cotterill, chief of staff for Mayor Ballard, acknowledged that the city and Veolia have had “ups and downs” over the years. But Cotterill said the underlying priority in its termination with Veolia was to maintain a “safe, smooth and thoughtful transition.”

He said Veolia initially sought more than $29 million, and the amount was agreed upon through mediation. The alternative was the cost and time of litigation.

“Those kinds of arguments are really great for lawyers and really bad for customers,” Cotterill added.

The city has not yet responded to Consumer Ratepayers’ Dec. 17 filing with the IURC.  City officials hope the commission will approve the deal in the first quarter of next year.

The termination agreement provides that Veolia will continue to manage the water utility on a temporary basis until the deal is closed.

Citizens said it expects to hire “substantially all” of Veolia’s 436 employees at the water utility.


  • funny in deed!
    im just glad they will hire "substantially all" of the same 436 Indianapolis people that have made Veolia water what is is today...(an ISO 9001 Fortune 500 company?) i i think not and agree wtih JIM.. "SMOKE AND MIRRORS"
  • veolia scam
    this company only operates with smoke and mirrors. The only way they make money is when a cash strapped city has to pay them millions to break the contract early due to poor performance and sub-par management teams like the one in place in the San Francisco Bay area. Lot of problems out west.
  • Funny
    i seen the writing on the wall when the city offered to buy the Indianapolis Water Co. back in 2002. The city, then ran by Mayor Bart Peterson out and out lied to all the employees of the water co. about their benefits never to be changed under the buy out agreement. Guess what? The benefits did change and not for the better, which forced me to retire at to much of an early age. So No I dont think any thing is funny anymore when it concerns any dealings of The Indianapolis Water co. to many peoples lives have taken a turn for the worse, considering the change of benefits that James Morris, the then Pres. of IWC, who sold the company and pocketed some 5 million dollars, and Peterson said would not happen. And I applaud long time friend and fellow worker Tom Plummer on his long time continued efforts to bring truth to the table.
  • Does anyone else think it's kinda funny...
    Does anyone else think it's kinda funny that John Price, the attorney representing the Consumer Ratepayers, was an attorney for IWC until 2 years ago? or that two of the raterpayers in this case have the same last name as Carlton Curry, who previously ran IWC?

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  1. I never thought I'd see the day when a Republican Mayor would lead the charge in attempting to raise every tax we have to pay. Now it's income taxes and property taxes that Ballard wants to increase. And to pay for a pre-K program? Many studies have shown that pre-K offer no long-term educational benefits whatsoever. And Ballard is pitching it as a way of fighting crime? Who is he kidding? It's about government provided day care. It's a shame that we elected a Republican who has turned out to be a huge big spending, big taxing, big borrowing liberal Democrat.

  2. Why do we blame the unions? They did not create the 11 different school districts that are the root of the problem.

  3. I was just watching an AOW race from cleveland in 1997...in addition to the 65K for the race, there were more people in boats watching that race from the lake than were IndyCar fans watching the 2014 IndyCar season finale in the Fontana grandstands. Just sayin...That's some resurgence modern IndyCar has going. Almost profitable, nobody in the grandstands and TV ratings dropping 61% at some tracks in the series. Business model..."CRAZY" as said by a NASCAR track general manager. Yup, this thing is purring like a cat! Sponsors...send them your cash, pronto!!! LOL, not a chance.

  4. I'm sure Indiana is paradise for the wealthy and affluent, but what about the rest of us? Over the last 40 years, conservatives and the business elite have run this country (and state)into the ground. The pendulum will swing back as more moderate voters get tired of Reaganomics and regressive social policies. Add to that the wave of minority voters coming up in the next 10 to 15 years and things will get better. unfortunately we have to suffer through 10 more years of gerrymandered districts and dispropionate representation.

  5. Funny thing....rich people telling poor people how bad the other rich people are wanting to cut benefits/school etc and that they should vote for those rich people that just did it. Just saying..............