Water employee: Veolia falsified records to get bonuses

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A supervisor at Indianapolis Water has told state regulators the private operator of the city-owned utility falsified records to earn performance bonuses.

Tom Plummer’s testimony, filed Tuesday with the Indiana Utility Regulatory Commission, is part of a ratepayer group’s effort to stop the city from paying Veolia Water a $29 million contract-termination fee.

The IURC is weighing the city’s request to sell the utility to Citizens Energy Group for $1.9 billion.

Consumer Ratepayers, a group that includes Plummer and 10 other water customers, on Dec. 17 alleged Veolia effectively defaulted on its management contract with the city on numerous occasions.

As such, the city could terminate the contract “for cause” and not pay Veolia the $29 million, they contend.

Underlying the complaint is their attempt to win money for salaried water employees they allege had their benefits gutted following the city’s purchase of the water utility eight years ago and subsequent management contract with Veolia.

Their complaint is the first relatively contentious filing in the IURC case and threatens to at least slow the commission’s deliberations on the sale request.

Plummer is identified as a 31-year employee who now works as operating supervisor in the utility’s central control station, which distributes water to eight counties in the metro area.

“I have personal knowledge of false record-keeping by US Filter/Veolia,” Plummer testified, referring to the previous name of Veolia’s water operations.

“Several Indianapolis Water employees told me that they were asked by (Veolia) personnel to alter records in order to make it appear that (the company) had earned an incentive payment when in fact the unchanged records would not have supported the claim for the incentive payment,” Plummer said in the complaint.

He alleges that Veolia earned $294,000 in 2003 because it reported that it met a one-hour response criteria for 106 water emergencies, “this in spite of the fact  that there were over 600 water-main breaks” that year.

“It was clear that many more of those main breaks would have been emergencies if not for under-reporting. Many employees have told me that (Veolia) personnel asked them to alter times recorded and events logged in so as to falsely show that the repair call was responded to within one hour, when in fact it took longer,” Plummer said

He pointed to a 2004 investigation by federal and state regulators into Veolia’s operations, when the number of emergency calls jumped to 485 from 106 in 2003.

“Except for more honest record-keeping, it would be difficult to imagine that many more emergencies in just one year,” he added.

A 2005 memo by a Veolia manager showed that the Environmental Protection Agency, with assistance from the Indiana Department of Environmental Management and the FBI, were conducting an investigation of Veolia’s Indianapolis operations.

Ultimately the U.S. Attorney’s Office in Indianapolis did not file charges.

Nevertheless, the ratepayer group argues that the city has ample instances of impropriety to terminate Veolia’s contract for cause and therefore not pay it $29 million for the remainder of its 20-year contract with the city.

Plummer and the other members of the ratepayer group ask the commission to require the city to pay salaried workers money for benefits that they allege were eliminated or reduced after the city bought the utility from Merrillville-based NiSource eight years ago. At the least, Indianapolis Water customers should receive that money, they say.

Plummer’s group pointed to numerous statements made by city officials, including a July 2001 letter to water employees by then-Indianapolis Mayor Bart Peterson, which states that the new management structure “will honor all employee benefit agreements, including the current bargaining units and collective bargaining agreements.”

The group filed with the commission a review by Indianapolis accounting firm Isenberg & Chivington that pegs damages resulting from reduced benefits over a projected 26-year period at $47.7 million.

Non-union water company employees had sued over the benefit reductions previously. But ultimately a court found the city could not be held liable because the promises were made to employees before the city took control of the waterworks.

“Obviously, the IURC has the authority as an independent agency of government to make the city comply with commitments made to the IURC when the city obtained commission approval to buy the waterworks,” Plummer said.

The ratepayer group estimates that non-union employees have been denied about $16.5 million in benefits since the city acquired the water utility in 2002.  Indianapolis water customers should receive at least that much in the form of a rebate, should the commission elect not to order that amount paid to non-union employees, the group says.

A spokesman for Veolia said the claims by the ratepayers group “are baseless and some are factually inaccurate.”  The company is preparing a response to be filed with the commission.

City officials said the $29 million termination fee amount was agreed upon through mediation and provides that Veolia will continue to manage the water utility until the deal with Citizens is closed. That’s not expected to come until the first quarter of next year at the earliest.

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

Mayor Greg Ballard championed the sale as a way for the city to free up more than $425 million for city infrastructure improvements. Proponents also say the deal will save $60 million a year by consolidating the water utility under Citizens’ gas, steam and chilled-water operations.

Asked as part of his testimony whether Plummer anticipates his job could be in jeopardy, he said “I don’t anticipate that retribution will occur.”

“What’s right is right, and the non-union employees at Indianapolis Water were lied to … . We just want what was promised to us, promised to the City-County Council and promised to the IURC,” he said.


    1. GO PLUMBER GO...........

    2. FOLOW THE MONEY...........

  • Not too late, but complicated
    Maybe if the city wouldn't have sold it's most valuable resource to a private company from the start, this mess would have never happened. If people in Indy don't start getting real upset about this issue by pressing local officials for municipalization the problem will be the same with any company they sell the water to. At least if the city owns the water, citizens can demand change and vote on it. I don't know about anyone else, but I need water to live. Good water!! What will really hurt is when citizens have to choose water or....... I guess there really isn't anything more important besides air and food.
  • par for the course
    Lots of problems with this dog of a company out here in California too. veolia is at best a sub-par poorly managed company that makes most of its money by being asked to leave town before the contracts end due to poor performance. This company is just a big rip off. When will people learn to vote no where this company is involved. Didnt Indy just pay veolia 29million to exit early? What a shame. And veolia just sends it right to france.
  • Believe Mr Plummer
    How do you know that he didn't go to the city Mr. Why Believe Plummer? Do you factually know that he didn't go to the city? Do you know all of the places that he went to? Do you work for the utility? Do you know anything at all? And why is it that you think that Plummer wants to be bought off? Mr. Plummer did the right thing completely. I do not see why you would think that he wants to be bought off. He wants to make sure that all of the employees see all of the things that they were promised 8 years ago. Maybe you should go and read the facts before you make any comments.
  • Where did the "setaside" money for the future go?

    I remember when more money was demanded to set aside money to be paid by the city for future development - replacement of aged infrastructure. A few months later, the same request was made - and it wasn't an extension of what they'd asked the first time. I'd be surprised if more payments haven't been made.

    At least one of those two (let alone any others) was diverted to someone, but whom?

    Where is that money and where will it go?

    There's a lot of funny business going on.

    In terms of reading meters, if someone will actually admit how they read meters, I'd like to see the binoculars they carry around.

    We have a 6' locked fence running our back yard. If someone claims to be a reader and doesn't have binoculars is lying or has a death wish about climbing the fence to read them up close.

    We're starting to see more & more issues as Central Indiana has enough people to achieve critical mass. The choices are to ignore it & let it run free, or find someone to start an Untouchables squad. We can't keep bringing the FBI into our sandbox to try & figure out whose shovel, army men, etc. belongs to whom.

    It makes as look amoral, corrupt, .... (feel free to keep going)...
  • I pay the crooks $4.95 a month
    That way I could have my meter read each month. That was after they had estimated my meter for more than 2 months. I think anyone with an irrigation system was getting hosed by these jerks. When I refused to pay from estimates. When they finally read it I had in excess of a $500 credit which ran from Nov until EOM June of the next year. I had to get the crooks to reverse the BOGUS LATE CHARGES WHICH WERE BASED ON FELONIOUS ESTIMATES. To he'll with their bogus 29M bonus
  • Believe him
    Mr. Plummer did bring it to the everyone's attention 7 years ago. Go back read Nuvo and other papers.
  • What a shocker
    What a shocker! Veolia falsify records? They've been fudging their fire flow tests for years and by the state's own records, Veolia's system regularly runs at 90% of its capacity (and that's assuming Veolia didnt fudge those numbers too). I hope Citizens knows what it's buying. Maybe the reason the Mayor is pushing this deal is because he knows what he's selling.
  • Look Again
    Plummer says that if the money isn't paid to the employees as back benefits, then the customers should get it in the form of rebates. Personally, I'd rather see it as a rate reduction, but there may be other factors involved in doing it that way.
  • Good for Plummer!
    Veolia = liars, cheaters, thieves. A most unscrupulous organization of trickery, book-cooking and more that results in plain old stealing from the City of Indianapolis and from us, the citizens of Indianapolis, who could use those stolen funds -- our money -- to put some energy right back into our local economy. Plummer is absolutely right. And the results of digging deeper will expose more sordid scandalous 'practices and procedures' on Veolia's part. Shame on them...but karma is on it's way to pay them a visit.
  • Plummer wants to be bought off
    Why is Plummer only now informing the public of Veolia's misdeeds? Why didn't he go to the city with his allogations? I think Plummer just wants to get bought off...just like Veolia got bought off.
  • money
    just follow the money. whatever veolia was cheating on the city was making tax money on. the deal to buy the water from citizens great money for the city. now testimony to end the 29M to pay veolia. who's really cheating who? and all along its the citizens who get the short end of the stick as always.
    Executive greed is rampant in our country. In 1970, CEO paychecks were 41 times the average manufacturing worker's salary. In 1997, CEO paychecks were 326 times average salaries. No wonder this country is a mess. Sticking it to your fellow man is what our leaders show as acceptable. Shame on them. Shame on Veolia.
  • Plummer must be Frecnh for idiot
    So Plummer thinks the rate payers of Indianpolis Water should continue to pay the unbelievably generous benefits of the former Indianapolis Water? Is he a socialist from France?
    • correction
      I meant to say that we overpaid for what we actually used
    • Estimated
      I have no dealings with Veolia, other than a customer. They estimated our meters so much over the past five years, there is no doubt that we never paid for what we actually used. I'm sure that they estimated because it was too cold, too hot, too Sunny, too windy, too calm, too cool and too warm. If they go ahead and pay the ETF, it is evident that the city played along with Veolia in this scam / experiment.

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