Veolia never shifted retirement costs

May 15, 2010

Veolia Water Indianapolis takes issue with last week’s (May 10) story on the Department of Waterworks’ (DOW) rate case, and notes with regret that the reporter neglected to contact us on what is an important public issue.

The headlines and subheads suggest that Veolia “shifted” costs to the city, including obligations for retirees. In fact, such claims are not true.

The amended agreement stipulates that the city fund retirement plans for employees eligible prior to 2005, which it did. Since then, Veolia has funded retirement plans for eligible employees and continues to do so through 2022. It should not be lost on any reader that we will continue to fund this responsibility after 2022 if we are re-awarded the contract. To state that Veolia “unloaded” the liability is frankly both incorrect and irresponsible.  

We were further disappointed by the emphasis given to the department’s retirement obligations (3.7 percent of the increases in overall operating expenses) as compared to the additional debt service funds and working capital request, which are greater than 50 percent of the increase in operating expenses in the proposed rate case. The rate increase requested is due to a $45 million revenue shortfall; the increase in operating costs related to financing issues alone since the last rate case is $46 million.

The article also includes a statement inferring that the DOW’s sale of assets to Carmel created a more favorable profit dynamic for Veolia. In fact, the revenue from these 8,800 “lost” customers flows directly to DOW, not Veolia. Indeed, even with the reduction of Carmel customers, DOW’s overall customer base increased by more than 20,000 as growth and development occurred in the service territory.

The rate case is a complex issue and it is important to keep the community well informed. We would like to bring to the attention of your readers three facts that were not included in the story.

• Veolia Water Indianapolis operates the utility for less money annually than the previous owner/operator did in 2001 without even considering inflation.

• Veolia Water has made significant investment and overall improvements in the delivery of services and water quality, as noted in the rate case testimony by the Department of Waterworks board.

• As noted by Citigroup (an expert consultant hired by the city), Indianapolis has the THIRD LOWEST combined water and wastewater rates of all major U.S. cities.



David L. Gadis
President, Veolia Water Indianapolis

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