A not-for-profit public trust that wants to buy Indianapolis' water and sewer utilities has agreed to document all of the savings it says the $1.9 billion deal would create. State regulators still must approve the transaction.
Citizens Energy previously said not using the bonds would add about $100 million to the cost of the deal over 30 years.
If Citizens Energy can successfully manage and mitigate over the next two years the city’s lingering legal and contractual
obligations involving the water and sewer utilities Citizens is negotiating to buy, the city can hang onto an extra $25 million
in the deal.
The city's AAA bond rating boosts proceeds to $153.8 million. It originally expected $140 million for street, bridge and
Greater Indianapolis Chamber of Commerce and Builders Association of Greater Indianapolis support sale of water, sewer utilities.
Gem Utilities Inc. and Gem Water Inc. have offered their sewer and water operations to the town of Cumberland for $6 million.
Citizens Energy should have completed the majority of its due diligence of the city’s water and sewer utilities, which
it plans to acquire, by the end of this month.
So far, in discussing his plan to sell the city’s water and sewer utilities, Mayor Greg Ballard has
emphasized the impact on utility rates, the $1.5 billion in city debt Citizens would assume, and the chance
to improve streets and sidewalks. But Ballard also has another key objective: business attraction and
Citizens Energy Group’s plan to buy the city’s water and sewer systems will require the utility to raise $262 million in new
bond debt and inherit $1.5 billion in debt. Yet Citizens executives maintain the financial load should not impair the bond
ratings of its principal utilities, Citizens Gas and Citizens Thermal.
Cost savings from combining three utilities helped give Citizens Energy Group an advantage in the deal to take over Indianapolis’
water and sewer operations, said Michael Huber, the city’s director of enterprise development.
The agreement is expected to generate more than $425 million in funding for local infrastructure improvements, and Citizens
has agreed to assume $1.5 billion in debt associated with the utilities.
Indianapolis Mayor Greg Ballard pulled out his predecessor Steve Goldsmith’s Republican playbook and began exploring a host
of privatization proposals in an effort to save money.
The Town of Bargersville won a legal dispute Monday that will allow it to annex 739 parcels within three miles of Greenwood’s
city limits and become the exclusive sewer-service provider in the area.
The city too often relied on the Department of Waterworks’ board, on consultants and on the private
operator, Veolia Water, rather than on the department’s own staff “to ensure safe and efficient
operation, maintenance and management” of Indianapolis Water. That’s one of several critical
findings of a consultant hired by the department and filed as part of a 35-percent rate-hike request
pending before the Indiana Utility Regulatory Commission.
Officials grappling with a water utility deep in debt and a sewer infrastructure needing upwards of $2 billion in
upgrades were swamped with proposals about how to fix the mess.
Indianapolis’ sewer project will be the city’s biggest public works undertaking since the interstate highway system
City engineers and consultants are fine-tuning plans to build a colossal tunnel to temporarily store water and raw sewage that now shoots into local waterways during rain storms.